EXHIBIT 10

SECOND AMENDMENT TO THE THIRD AMENDED AND RESTATED CREDIT AGREEMENT

This SECOND AMENDMENT TO THE THIRD AMENDED AND
RESTATED CREDIT AGREEMENT (this "Amendment"), dated as of September 30, 2019, by and among
HALLADOR ENERGY COMPANY (the "Borrower"), the Guarantors party hereto, the
lenders listed on the signature pages hereof(the "Lenders") and PNC BANK,
NATIONAL ASSOCIATION, a national banking association, as administrative agent
for the Lenders (the "Administrative Agent") under the Credit Agreement referred
to below:

 

WITNESSETH:

 

WHEREAS, the Borrower, the Lender and the Administrative Agent entered into the
Third Amended and Restated Credit Agreement dated as of May 21, 2018, as amended
by that certain First Amendment to the Third Amended and Restated Credit
Agreement dated as of
March 26, 2019 (and as may be further amended, restated, modified or supplemented, the "Credit
Agreement"), pursuant to which the Lenders have extended credit to the Borrower; and

 

WHEREAS, the Borrower has requested that certain amendments be made as set forth in
more detail herein; and

 

WHEREAS, capitalized terms not otherwise defined herein shall have the meanings
assigned thereto in the Credit Agreement.

 

NOW, THEREFORE, in consideration of their mutual covenants and agreements
hereafter set forth, and intending to be legally bound, the parties hereto agree as follows:

 

ARTICLE I

 

Section 1.1Amendments to Credit Agreement. The Credit Agreement (other
than the Schedules and Exhibits thereto, except to the extent as delivered to the Administrative
Agent simultaneously with this Amendment) is hereby amended to reflect the modifications set
forth in the Credit Agreement attached as Annex A hereto.

 

ARTICLE II

 

Section 2.1No Other Amendments. Except as amended hereby, the terms and
provisions of the Credit Agreement remain unchanged, are and shall remain in
full force and effect unless and until modified or amended in writing in
accordance with their terms, and are hereby ratified and confirmed. Except as
expressly provided herein, this Amendment shall not constitute an amendment,
waiver, consent or release with respect to any provision of any Loan
Document, a waiver of any Potential Default or Event of Default under any Loan Document, or a
waiver or release of any of the Lenders' or Administrative Agent's rights and
remedies (all of which are hereby reserved).

Section 2.2Representations and Warranties. The Borrower hereby represents
and warrants to the Lenders and the Administrative Agent that the representations and warranties
set forth in Article 6 of the Credit Agreement, are true and correct in
all material respects on and as of the date hereof (except for any representation or warranty which was expressly limited to
an earlier date, in which case such representation and warranty shall be true
and correct in all

material respects
on and as of such date), and that no Event of Default, or Potential Default, has
occurred or is continuing or exists on or as of the date hereof.

 

Section 2.3Conditions to Effectiveness. This Amendment shall become effective
upon execution and delivery to the Administrative Agent hereof by the Borrower,
all of the Lenders and the Administrative Agent and the satisfaction of the
following conditions precedents:

 

(a) Amendment. The Administrative Agent shall have received an executed
counterpart of this Amendment from all Lenders, duly executed by a responsible officer of the
Loan Parties.

 

(b) Officer's Certificate. The representations and warranties of the Loan
Parties contained in Section 6 of the Credit Agreement including as amended by
the modifications and additional representations and warranties of this
Amendment, and of each Loan Party in each of the other Loan Documents shall be
true and accurate in all material respects on and as of the date hereof with the
same effect as though such representations and
warranties had been made on and as of such date (except representations and warranties which
relate solely to an earlier date or time, which representations and warranties
shall be true and correct in all material respects on and as of the specific
dates or times referred to therein), and each of the Loan Parties shall have
performed and complied with all covenants and conditions hereof and thereof, no
Event of Default or Potential Default shall have occurred and be
continuing or shall exist; and there shall be delivered to the Administrative Agent for the benefit
of each Lender a certificate of the Borrower dated the date hereof and signed by
the Chief
Executive Officer, President, or Chief Financial Officer of the Borrower to each such effect.

 

(c) Mortgage Amendments. The Administrative Agent shall have received an
executed mortgage amendment for each mortgage that needs to be amended as determined by the
Administrative Agent to reflect the extended Expiration Date, duly executed by a
responsible officer of the applicable Loan Parties.

 

(d) Insurance. Evidence that adequate insurance, including flood insurance, if
applicable, required to be maintained under the Credit Agreement is in full force and effect, with
additional insured, mortgagee and lender loss payable special endorsements
attached thereto in form and substance satisfactory to the Administrative Agent
and its counsel naming the Administrative Agent as additional insured, mortgagee
and lender loss payee, and evidence that the Loan Parties have taken all actions
required under the Flood Laws and/or requested by the Administrative Agent to
assist in ensuring that each Lender is in compliance with the Flood Laws
applicable to the Collateral, including, but not limited to, providing the
Administrative
Agent with the address and/or GPS coordinates of each structure on any real property that will be
subject to a mortgage in favor of the Administrative Agent, for the benefit of the Lenders, and, to
the extent required, obtaining flood insurance for such property, structures and
contents prior to such property, structures and contents becoming Collateral and
the completion of all other necessary FEMA flood zone diligence requirements.

 

(e) Secretary's Certificate. There shall be delivered to the Administrative
Agent for the benefit of each Lender a certificate dated the date hereof and
signed by the
Secretary or an Assistant Secretary of each of the Loan Parties, certifying as appropriate
as to:

 

(i) all action taken by each Loan Party in connection with this Amendment and
the other Loan Documents;

 

(ii) the names of the officer or officers authorized to sign this
Amendment and the other Loan Documents and the true signatures of such officer or officers and
specifying the Authorized Officers permitted to act on behalf of each Loan Party for purposes of
this Amendment
and the true signatures of such officers, on which the Administrative Agent and
each Lender may conclusively rely; and

 

(iii) copies of its organizational documents, including its certificate of
incorporation and bylaws, certificate of limited partnership and limited partnership agreement or
limited liability company certificate and operating agreement, as the case may be, as in effect on
the date hereof and, in the case of the certificate of incorporation of the
Borrower, certified by the appropriate state official where such document is
filed in a state office (or, in the event that no change has been made to such
organizational documents previously delivered to the Administrative Agent, so
certified by the Secretary or Assistant Secretary of such Loan Party),
together with certificates from the appropriate state officials as to the continued existence and

good standing of the Borrower in the state of its formation and the state of its principal
place of business.

 

(f) Opinion. There shall be delivered to the Administrative Agent for the
benefit of each Lender a written opinion of Morgan Lewis & Bockius LLP, dated the date hereof
and in form and substance satisfactory to the Administrative Agent and its
counsel as to such matters incident to the transactions contemplated herein as
the Administrative Agent may reasonably request.

 

(g) No Defaults under Other Obligations. No default under any note, credit
agreement or other document relating to existing Indebtedness of any of the Loan Parties shall
occur as a result of this Amendment.

 

(h) No Actions or Proceedings. No action, proceeding, investigation, regulation
or legislation shall have been instituted, threatened or proposed before any
court,
governmental agency or legislative body to enjoin, restrain or prohibit, or to obtain damages in
respect of, this Amendment, the other Loan Documents or the consummation of the transactions
contemplated hereby or thereby or which, in the Administrative Agent's sole discretion, would
make it inadvisable to consummate the transactions contemplated by this Amendment or any of
the other Loan Documents.

 

(i) Consents. All material consents required to effectuate the transactions
contemplated by this Amendment and the other Loan Documents and shall have been obtained.

 

(j) Confirmation of Guaranty. Each of the Guarantors confirms that they have
read and understand the Amendment. In order to induce the Lenders, the
Administrative
Agent and the other Agents to enter into the Amendment, each of the Guarantors: (i) consents to

 

the Amendment and the transactions contemplated thereby; (ii) ratifies and confirms each of the
Loan Documents to which it is a party; (iii) ratifies, agrees and confirms that
it has been a
Guarantor and a Loan Party at all times since it became a Guarantor and a Loan Party and from
and after the date hereof, each Guarantor shall continue to be a Guarantor and a
Loan Party in
accordance with the terms of the Loan Documents, as the same may be amended in connection
with the Amendment and the transactions contemplated thereby; and (iv) hereby
ratifies and
confirms its obligations under each of the Loan Documents (including all exhibits and schedules
thereto), as the same may be amended in connection with the Amendment and the
transactions contemplated thereby, by signing below as indicated and hereby
acknowledges and agrees that
nothing contained in any of such Loan Documents is intended to create, nor shall it constitute an
interruption, suspension of continuity, satisfaction, discharge of prior duties,
novation or
termination of the indebtedness, loans, liabilities, expenses, guaranty or obligations of any of the
Loan Parties under the Credit Agreement or any other such Loan Document.

 

(k) Legal Details. All legal details and proceedings in connection with the
transactions contemplated by this Amendment and the other Loan Documents shall
be in form
and substance satisfactory to the Administrative Agent and counsel for the Administrative Agent,
and the Administrative Agent shall have received all such other counterpart originals or certified
or other copies of such documents and proceedings in connection with such transactions, in form
and substance satisfactory to the Administrative Agent and its counsel, as the
Administrative Agent or its counsel may reasonably request.

 

(I) Fees. The Borrower shall have paid all fees, costs and expenses for which
the Administrative Agent and the Lenders are entitled to be paid or reimbursed
in accordance with the fee letter dated August 9, 2019, between the Borrower and
the Administrative Agent,
including but not limited to the fees and expenses of the Administrative Agent's legal counsel.

Section 2.4Miscellaneous.

 

(a)

This Amendment shall become effective as provided in Section 2.3.

 

(b) The Credit Agreement, as amended by this Amendment, is in all respects
ratified, approved and confirmed, and shall, as so amended, remain in full force
and effect. From and after the date that the amendments herein described take
effect, all reference to the "Agreement" in the Credit Agreement and in the
other Loan Documents, shall be deemed to be references to the Credit Agreement
as amended by this Amendment.

 

(c) This Amendment shall be deemed to be a contract under the laws of the
Co1U1Uonwealth of Pennsylvania, and for all purposes shall be governed by, construed and
enforced in accordance with the laws of said Commonwealth.

 

(d) Except as amended hereby, all of the terms and conditions of the Credit
Agreement and the other Loan Documents shall remain in full force and effect. Borrower, the
other Loan Parties, each Lender, and Administrative Agent acknowledge and agree
that this Amendment is not intended to constitute, nor does it constitute, a
novation, interruption, suspension of continuity, satisfaction, discharge or
termination of the obligations, loans,
liabilities, or indebtedness under the Credit Agreement or the other Loan Documents.

 

 

(e) This Amendment may be executed in any number of counterparts by the
different parties hereto on separate counterparts. Each of which, when so
executed, shall be
deemed an original, but all such counterparts shall constitute but one in the same instrument.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

 

 

[SIGNATURE PAGE TO SECOND AMENDMENT TO THIRD AMENDED AND RESTATED
CREDIT AGREEMENT]

 

 

IN WITNESS WHEREOF, the parties hereto, by their officers thereunto duly authorized,
have executed this Amendment as of the day and year first above written.

 

BORROWER:

 

HALLADOR ENERGY COMPANY

 

By: /s/ BRENT K. BILSLAND

Name: Brent K. Bilsland

Title: President and Chief Executive officer

 

GUARANTORS:

 

SUNRISE COAL, LLC

 

BY: /s/ LAWRENCE D. MARTIN

Name: Lawrence D. Martin

Title: President

 

SUMMIT TERMINAL, LLC

 

By: /s/ BRENT K. BILSLAND

Name: Brent K. Bilsland

Title: President and Secretary

 

SUNRISE LAND HOLDINGS, LLC

 

By: /s/ BRENT K. BILSLAND 

Name: Brent K. Bilsland

Title: President and Secretary

 

SUNRISE ADMINISTRATIVE SERVICES, LLC

 

By: /s/ BRENT K. BILSLAND

Name: Brent K. Bilsland

Title: President and Secretary

 

[SIGNATURE PAGE TO SECOND AMENDMENT TO THIRD AMENDED AND RESTATED
CREDIT AGREEMENT]

 

 

SYCAMORE COAL, C.\

 

By: /s/ LAWRENCE D. MARTIN

Name: Lawrence D. Martin

Title:  Vice President and Treasurer

 

 

EDWARDSPORT CONSTRUCTION COMPANY, LLC

 

 

By: /s/ LAWRENCE D. MARTIN

Name: Lawrence D. Martin

Title:  Vice President and Treasurer

 

 

GIBSON COUNTY LOGISIC, LLC

 

By: /s/ LAWRENCE D. MARTIN

Name: Lawrence D. Martin

Title: Vice President and Treasurer

 

 

SFI COAL SALES, LLC

 

By: /s/ LAWRENCE D. MARTIN

Name: Lawrence D. Martin

Title: Vice President and Treasurer

 

 

OAKTOWN FUELS MINE NO. 1, LLC

 

By: /s/ LAWRENCE D. MARTIN

Name: Lawrence D. Martin

Title: Vice President and Treasurer

 

 

OAKTOWN FUELS MINE NO. 2, LLC

 

By: /s/ LAWRENCE D. MARTIN

Name: Lawrence D. Martin

Title: Vice President and Treasurer

 

 

[SIGNATURE PAGE TO SECOND AMENDMENT TO THIRD AMENDED AND RESTATED
CREDIT AGREEMENT]

 

 

PROSPERITY  MINE, LLC \'

By: /s/ LAWRENCE D. MARTIN

Name: Lawrence D. Martin

Title: Vice President and Treasurer

 

RAILPOINT  SOLUTIONS, LLC

By:/s/ HEATHER L. TRYON

Name: Heather L. Tryon

Title: Manager

 

 

[SIGNATURE PAGE TO SECOND AMENDMENT TO THIRD AMENDED AND RESTATED
CREDIT AGREEMENT]

 

PNC BANK, NATIONAL ASSOCIATION,

individually and as Administrative Agent

By:/s/ KYLE HELFRICH

Name:  Kyle Helfrich

Title: Vice President

 

 

[SIGNATURE PAGE TO SECOND AMENDMENT TO THIRD AMENDED AND RESTATED CREDIT
AGREEMENT]

 

THE HUNTINGTON NATIONAL BANK

By:/s/ PHIL ANDRESEN

Name: Phil Andersen

Title: Vice President

 

 

 

 

[SIGNATURE PAGE TO SECOND AMENDMENT TO THIRD AMENDED AND RESTATED
CREDIT AGREEMENT]

 

UMB BANK, N.A.

By:/s/ DAVID WALTERS

Name:David Walters

Title:Senior Vice President

 

 

 

 

 

[SIGNATURE PAGE TO SECOND AMENDMENT TO THIRD AMENDED AND RESTATED
CREDIT AGREEMENT]

 

KEYBANK NATIONAL, ASSOCIATION

 

By:/s/ CHRISTOPHER A. SUSOTT

Name:Christopher A. Susott

Title:Senior Vice President

 

 

 

 

 

 

[SIGNATURE PAGE TO SECOND AMENDMENT TO THIRD AMENDED AND RESTATED
CREDIT AGREEMENT]

 

OLD NATIONAL BANK

 

By: /s/ DANIEL G. GIMELICK

Name: Daniel G. Gimelick

Title:  Senior Vice President

 

 

 

[SIGNATURE PAGE TO SECOND AMENDMENT TO THIRD AMENDED AND RESTATED CREDIT
AGREEMENT]

 

FIRST TERMESSEE BANK NATIONAL ASSOCIATION

 

 

By:/s/SHARON SHIPLEY

Name:Sharon Shiplev

Title:Vice President

 

 

 

 

[SIGNATURE PAGE TO SECOND AMENDMENT TO THIRD AMENDED AND RESTATED
CREDIT AGREEMENT]

 

FIRST FINANCIAL BANK, N.A.

 

By: /s/ DAN LAUGHNER

Name:Dan Laughner

Title:Vice President & Senior Commercial Lender

 

[SIGNATURE PAGE TO SECO1''D AMENDMENT TO THIRD AMENDED AND RESTATED CREDIT
AGREEMENT]

 

CHEMICAL BANK, a division of TCF National

Bank

By:/s/ROBERT ROSATI

Name:Robert Rosati

Title:Senior Vice President

 

 

[SIGNATURE PAGE TO SECOND AMENDMENT TO TIDRD AMENDED AND RESTATED
CREDIT AGREEMENT]

 

 

FIRST MERCANTS BANK

By:/s/ADAM M. TREIBEC

Name:Adam M. Treibec

Title:Vice President

 

[SIGNATURE PAGE TO SECOND AMENDMENT TO THIRD AMENDED AND RESTATED CREDIT
AGREEMENT)

 

IROQUOIS FEDERAL SAVINGS & LOAN ASSOCIATION

By:/s/THOMAS J. CHAMBERLAIN

Name:Thomas J. Chamberlain

Title:Executive Vice President &

Chief Lending Officer

 

 

CUSIP Number 40609EAA8

$120,000,000 REVOLVING CREDIT FACILITY

 

$147,000,000 TERM LOAN FACILITY

 

THIRD AMENDED AND RESTATED CREDIT AGREEMENT

 

by and among

HALLADOR ENERGY COMPANY

and

 

THE GUARANTORS PARTY HERETO

 

and

 

THE LENDERS PARTY HERETO

 

and

 

PNC BANK, NATIONAL ASSOCIATION, as Administrative Agent and

PNC CAPITAL MARKETS LLC, as Joint Lead Arranger and Sole Bookrunner and

UMB BANK, N.A. and THE HUNTINGTON NATIONAL BANK, as Joint Lead

Arrangers and Co-Syndication Agents and

KEYBANKNATIONAL ASSOCIATION and OLD NATIONAL BANK, as Co­

Documentation Agents

 

 

Dated as of May 21, 2018, as amended by that certain First Amendment to Credit
Agreement dated March 26, 2019, as amended by that certain Second Amendment to
Credit Agreement dated September 30, 2019

 

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vii

 

 

THIRD AMENDED AND RESTATED CREDIT AGREEMENT

 

THIS THIRD AMENDED AND RESTATED CREDIT AGREEMENT (as hereafter amended, the
"Agreement") is dated as of May 21, 2018, as amended by that certain First
Amendment to Credit Agreement dated as of March 26, 2019, and that certain
Second Amendment to Credit Agreement dated as of September 30, 2019, and is made
by and among HALLADOR ENERGY COMPANY, a Colorado corporation (the "Borrower"),
each of the GUARANTORS (as hereinafter defined), the LENDERS (as hereinafter
defined), and PNC BANK, NATIONAL ASSOCIATION, in its capacity as administrative
agent for the Lenders under this Agreement (hereinafter referred to in such
capacity as the "Administrative Agent").

 

The Borrower has requested the Lenders to provide (i) a revolving credit
facility to the Borrower in an aggregate principal amount not to exceed
$120,000,000 and (ii) a  term loan facility to the Borrower in an aggregate
principal amount not to exceed $147,000,000 (subject  to an increase pursuant to
Section 3.4 [Increase in Term Loans]). In consideration of their mutual
covenants and agreements hereinafter set forth and intending to be legally bound
hereby, the parties hereto covenant and agree as follows:

 

I.

CERTAIN DEFINITIONS

 

5.1
Certain Definitions. In addition to words and terms defined elsewhere in this
Agreement, the following words and terms shall have the following meanings, respectively,
unless the context hereof clearly requires otherwise:

 

2014 Credit Agreement shall mean that certain Second Amended and Restated Credit
Agreement by and among Sunrise Coal, LLC, certain guarantors party thereto,
certain
lenders party thereto and PNC, as administrative agent, dated as of August 29, 2014, as amended.

 

Administrative Agent shall mean PNC Bank, National Association, and its
successors and assigns, in its capacity as administrative agent hereunder.

 

Administrative Agent's Fee shall have the meaning specified in Section 10.9
[Administrative Agent's Fee].

 

Administrative Agent's Letter shall have the meaning specified in Section 10.9
[Administrative Agent's Fee].

 

Affiliate as to any Person shall mean any other Person (i) which directly or
indirectly controls, is controlled by, or is under common control with such
Person, (ii) which
beneficially owns or holds 5% or more of any class of the voting or other equity interests of such
Person, or (iii) 5% or more of any class of voting interests or other equity
interests of which is beneficially owned or held, directly or indirectly, by
such Person. For purposes of this definition, "control" of a Person means the
power, directly or indirectly, to direct or cause the
direction of the management and policies of such Person, whether by contract or otherwise.

 

Ancillary Security Documents shall mean all documents, instruments,
environmental reports, agreements, endorsements, policies and certificates requested by the
Administrative Agent and customarily delivered by any property owner in connection with a

8

mortgage financing. Without limiting the generality of the foregoing, examples
of Ancillary
Security Documents would include insurance policies (other than title insurance) or certificates
regarding any collateral, lien searches, estoppel letters, flood insurance
certifications,
environmental audits which shall meet the Administrative Agent's minimum requirements for
phase I environmental assessments or phase II environmental assessments, as
applicable, opinions of counsel and the like.

 

Anti-Terrorism Laws shall mean any Laws relating to terrorism, trade sanctions
programs and embargoes, import/export licensing, money laundering or bribery,
and any regulation, order, or directive promulgated, issued or enforced pursuant
to such Laws, all as amended, supplemented or replaced from time to time.

 

Applicable Commitment Fee Rate shall mean the percentage rate per annum
based on the Leverage Ratio as of the most recent fiscal quarter ended according to the pricing
grid on Schedule 1.I(A) below the heading "Commitment Fee."

 

Applicable Letter of Credit Fee Rate shall mean the percentage rate per annum
based on the Leverage Ratio as of the most recent fiscal quarter ended according to the pricing
grid on Schedule l.I(A) below the heading "Letter of Credit Fee."

 

Applicable Margin shall mean, as applicable:

 

(A) the percentage spread to be added to the Base Rate applicable to
Revolving Credit Loans under the Base Rate Option based on the Leverage Ratio as of the most
recent fiscal quarter ended according to the pricing grid on Schedule l. l(A)
below the heading "Revolving Credit Base Rate Spread",

 

(B) the percentage spread to be added to the Base Rate applicable to Term Loans
under the Base Rate Option based on the Leverage Ratio as of the most recent
fiscal quarter ended according to the pricing grid on Schedule l.l(A) below
the heading "Term Loan Base Rate Spread",

 

(C) the percentage spread to be added to the LIBOR Rate applicable to
Revolving Credit Loans under the LIBOR Rate Option based on the Leverage Ratio as of the
most recent fiscal quarter ended according to the pricing grid on Schedule 1.1(A) below the
heading "Revolving Credit LIBOR Rate Spread", or

 

(D) the percentage spread to be added to the LIBOR Rate applicable to Term Loans
under the LIBOR Rate Option based on the Leverage Ratio as of the most recent
fiscal
quarter ended according to the pricing grid on Schedule 1.l(A) below the heading "Term Loan
LIBOR Rate Spread".

 

Approved Fund shall mean any Person (other than a natural person) that is
engaged in making, purchasing, holding or investing in bank loans and similar
extensions of
credit in the ordinary course of business and that is administered or managed
by (a) a Lender, (b)
an Affiliate of a Lender or (c) an entity or an Affiliate of an entity that administers or manages a
Lender.

9

Assignment and Assumption means an assignment and assumption entered into by a
Lender and an assignee permitted under Section 11.8 [Successors and Assigns], in
substantially the form of Exhibit l. l(A).

 

Authorized Officer shall mean, with respect to any Loan Party, the Chief
Executive Officer, President, Chief Financial Officer, Treasurer or Assistant
Treasurer of such
Loan Party, any manager in the case of any Loan Party which is a limited liability company, or
such other individuals, designated by written notice to the Administrative Agent
from the Borrower, authorized to execute notices, reports and other documents on
behalf of the Loan
Parties required hereunder. The Borrower may amend such list of individuals from time to time
by giving written notice of such amendment to the Administrative Agent.

 

Availability shall mean, as of the date of determination, an amount, which equals
the smn of (i) the amount of cash or cash equivalents of the Loan Parties as of
such date that is not subject to any Lien or other restriction limiting the
availability of such funds to repay the
Loans, and (ii) the difference (ifa positive number) between the amount of the Revolving Credit
Commitments as of such date, less the Revolving Facility Usage as of such date, which may be
borrowed at such time by the Borrower in accordance
with Section 7.2 and will not result (on a
Pro Forma Basis) in a breach of a financial or other covenant contained in this Agreement.

 

Bail-In Action means the exercise of any Write-Down and Conversion Powers by the
applicable EEA Resolution Authority in respect of any liability of an EEA
Financial Institution.

 

Bail-In Legislation means, with respect to any EEA Member Country
implementing Article 55 of Directive 2014/59/EU of the European Parliament and of the Council
of the European Union, the implementing law for such EEA Member Country from time to time
which is described in the EU Bail-In Legislation Schedule.

 

Base Rate shall mean, for any day, a fluctuating per annum rate of interest equal
to the highest of (i) the Overnight Bank Funding Rate, plus 0.5%, (ii) the Prime Rate, and (iii)
the Daily LIBOR Rate, plus 100 basis points (1.0%). Any change in the Base Rate
(or any
component thereof) shall take effect at the opening of business on the day such change occurs.

 

Base Rate Option shall mean the option of the Borrower  to have Loans bear
interest at the rate and under the terms set forth in either Section 4.1.l(i)
[Revolving Credit Base Rate Option] or Section 4.l.2(i) [Term Loan Base Rate
Options], as applicable.

 

Beneficial Owner shall mean, for the Borrower, each of the following: (a) each
individual, if any, who, directly or indirectly, owns 25% or more of the
Borrower's Equity
Interests; and (b) a single individual with significant responsibility to control, manage, or direct
such Borrower.

 

Benefit Plan shall mean any of(a) an "employee benefit plan" (as defined in
ERISA) that is subject to Title I of ERIS, (b) a "plan" as defined in
Section 4975 of the Code or (c) any Person whose assets include (for purposes of
ERISA Section 3(42) or otherwise for purposes of Title I of ERISA or Section
4975 of the Code) the assets of any such "employee benefit plan" or "plan".

10

Black Lung Act shall mean, collectively, the Black Lung Benefits Revenue Act of
1977, as amended and the Black Lung Benefits Reform Act of 1977, as amended.

 

Borrower shall mean Hallador Energy Company, a corporation organized and
existing under the laws of the State of Colorado.

 

Borrowing Date shall mean, with respect to any Loan, the date for the making
thereof or the renewal or conversion thereof at or to the same or a different Interest Rate Option,
which shall be a Business Day.

 

Borrowing Tranche shall mean specified portions  of  Loans  outstanding  as
follows: (i) any Loans to which a LIBOR Rate Option applies which become subject
to the same Interest Rate Option under the same Loan Request by the Borrower and
which have the same Interest Period shall constitute one Borrowing Tranche, and
(ii) all Loans to which a Base Rate Option applies shall constitute one
Borrowing Tranche.

 

Business Day shall mean any day other than a Saturday or Sunday or a legal
holiday on which commercial banks are authorized or required to be closed for
business in Pittsburgh, Pennsylvania and if the applicable Business Day relates
to the request for, or the
continuation or conversion of, any Loan to which the LIBOR Rate Option applies, such day must
also be a day on which dealings are carried on in the London interbank market.

 

Capital Stock shall mean any and all shares, interests, participations or other
equivalents (however designated) of capital stock of a corporation, any and all
equivalent
ownership interests in a Person (other than a corporation) and any and all warrants, rights or
options to purchase any of the foregoing.

 

Cash Management Agreements shall have the meaning specified in Section 2.6.6
[Swing Loans Under Cash Management Agreements].

 

CEA shall mean the Commodity Exchange Act (7 U.S.C.§1 et seq.), as amended from
time to time, and any successor statute.

 

Certificate of Beneficial Ownership shall mean, for the Borrower, a certificate
in 'substantially the form of Exhibit l.l(B) hereto (as amended or modified by
Administrative Agent from time to time in its reasonable discretion),
certifying, among other things, the Beneficial Owner of the Borrower.

 

CFTC shall mean the Commodity Futures Trading Commission.

 

Change in Law shall mean the occurrence, after the date of this Agreement, of any
of the following: (i) the adoption or taking effect of any Law, (ii) any change
in any Law or in
the administration, interpretation, implementation or application thereof by any Official Body or (iii) the making or issuance
of any request, rule, guideline or directive (whether or not having the force of
Law) by any Official Body; provided that notwithstanding anything herein to the
contrary, (x) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests,
rules, regulations, guidelines, interpretations or directives thereunder or
issued in connection
therewith (whether or not having the force of Law) and (y) all requests, rules, regulations,

11

guidelines, interpretations or directives promulgated by the Bank for International Settlements,
the Basel Committee on Banking Supervision (or any successor or similar
authority) or the
United States or foreign regulatory authorities (whether or not having the force of Law), in each
case pursuant to Basel III, shall in each case be deemed to be a Change in Law regardless of the
date enacted, adopted, issued, promulgated or implemented.

 

Change of Control shall mean any "person" or "group" (as such terms are used in
Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act")), shall become, or obtain rights (whether by means or warrants,
options or otherwise) to become, the "beneficial owner" (as defined in Rules
13(d)-3 and 13(d)-5 under the Exchange
Act), directly or indirectly, of more than 25% of the Capital Stock of the Borrower.

 

CIP Regulations shall have the meaning specified in Section 10.11 [No Reliance
on Administrative Agent's Customer Identification Program].

 

Closing Date shall mean the Business Day on which the first Loan shall be made,
which shall be May 21, 2018.

 

Coal Act shall mean the Coal Industry Retiree Health Benefits Act of 1992,
as amended.

 

Code shall mean the Internal Revenue Code of 1986, as the same maybe
amended or supplemented from time to time, and any successor statute of similar import, and the
rules and regulations thereunder, as from time to time in effect.

 

Collateral shall mean the collateral under the (i) Security Agreement (ii) Pledge
Agreement, (iii) Collateral Assignment or (iv) Mortgages, other than the Excluded Collateral.

 

Collateral Assignment shall mean the Collateral Assignment in the form of
Exhibit I. I(C).

 

Collateral Documents shall have the meaning assigned to that term in
Section [Liens in Collateral].

 

Commitment shall mean as to any Lender the aggregate of its Revolving Credit
Commitment and Term Loan Commitment and, in the case of PNC, its Swing Loan
Commitment, and Commitments shall mean the aggregate of the Revolving Credit
Commitments, Term Loan Commitments and Swing Loan Connnitment of all of the Lenders.

 

Commitment Fee shall have the meaning specified in Section 2.3 [Commitment

Fees].

 

Commodity Hedge shall mean a price protection agreement: (i) related to crude
oil, diesel fuel, gasoline, propane, heating oil, coal, SO2 allowances or other
commodities used
in the ordinary course of business of the Loan Parties and (ii) entered into by the Loan Parties for
hedging purposes in the ordinary course of the operations of their business.

 

12

Compliance Certificate shall have the meaning specified in Section 8.3.3
[Certificates of Borrower].

 

Connection Income Taxes shall mean Other Connection Taxes that are imposed on or
measured by net income (however denominated) or that are franchise Taxes or
branch profits Taxes.

 

Consideration shall mean with respect to any Permitted Acquisition, the aggregate
of (without duplication) (i) the cash paid by any of the Loan Parties, directly or indirectly, to the
seller in connection therewith, (ii) the Indebtedness incurred or assumed by any
of the Loan Parties, whether in favor of the seller or otherwise and whether
fixed or contingent, (iii) any Guaranty given or incurred by any Loan Party in
connection therewith, and (iv) any other
consideration given or obligation incurred by any of the Loan Parties in connection therewith.

 

Consolidated EBIIDA for any period of determination shall mean for the Loan
Parties (i) the sum of Consolidated Net Income (but excluding the effect of
non-cash compensation expenses related to common stock and other equity
securities issued to
employees), depreciation, depletion, amortization, other non-cash charges to net income, interest
expense, and income tax expense, plus (ii) costs and fees incurred in connection with the closing
of the transactions contemplated by this Agreement, minus (iii) non-cash credits
to net income for such period determined and consolidated in accordance with
GAAP. Notwithstanding the · foregoing, (i) the Loan Parties may include the Net
Hallador Sands Distribution Amount in the computation of Consolidated EBITDA for
the trailing twelve month period if such amount is
positive, and (ii) the proceeds of any sales of equity in Hallador Sands or any of its Subsidiaries
made in accordance with Section 8.2.7(vii) [Dispositions of Assets or Subsidiaries] shall not be
included in the computation of Consolidated EBITDA. Consolidated EBITDA shall be
calculated on a Pro Forma Basis except for purposes of calculating Excess Cash
Flow and for purposes of calculating compliance with Section 8.2.S(iii)(c)
[Dividends and Related Distributions] and Section 8.2.15
[Minimum Debt Service Coverage Ratio].

 

Consolidated Funded Debt shall mean, without duplication, total Indebtedness for
Borrowed Money of the Loan Parties, determined and consolidated in accordance
with GA.AP and calculated on a Pro Fonua Basis.

 

Consolidated Net Income shall mean, for any period, the aggregate net income (or
loss) of the Loan Parties for such period determined on a consolidated basis in
conformity with GAAP, provided that the following (without duplication) will be
excluded in computing Consolidated Net Income:

 

(a) the net income (or loss) of any Person other than a Borrower or
Restricted Subsidiary (including any joint venture that is not a Restricted Subsidiary);

(b) the net income (or loss) of any Person (other than any Loan Party) to
the extent that the declaration or payment of dividends or similar distributions by such Person of
its net income is not at the date of determination permitted without any prior
governmental
approval (which has not been obtained) or, directly or indirectly, by the operation of the terms of
its charter or any agreement, instrument, judgment, decree, order, statute, rule, or governmental regulation applicable to that Person or its stockholders, unless such restriction with respect to the
payment of dividends or in similar distributions has been legally waived;

13

(c) any net after-tax gains or losses (less all fees and expenses or charges
relating thereto) attributable to asset sales or other dispositions, in each
case other than in the ordinary course of business;

(d)

any net after-tax extraordinary gains or losses; and

(e)

the cumulative effect of a change in accounting principles.

 

Contamination shall mean the presence or release or threat of release of Regulated
Substances in, on, under or emanating to or from the Real Property, which
pursuant to
Environmental Laws requires notification or reporting to an Official Body, or which pursuant to
Environmental Laws requires the investigation, cleanup, removal, remediation,
containment, abatement of or other response action or which otherwise
constitutes a violation of Environmental Laws.

 

Covered Entity shall mean (a) the Borrower, each of Borrower's Subsidiaries, all
Guarantors and all pledgors of Collateral, and (b) each Person that, directly or
indirectly, is in control of a Person described in clause (a) above. For
purposes of this definition, control of a Person shall mean the direct or
indirect (x) ownership of, or power to vote, 50% or more of the issued and
outstanding equity interests having ordinary voting power for the election  of
directors of such Person or other Persons performing similar functions for such
Person, or (y) power to direct or cause the direction  of the management  and
policies of such Person  whether by ownership of equity interests, contract
or otherwise.

 

Daily LIBOR Rate shall mean, for any day, the rate per annum determined by the
Administrative Agent by dividing (x) the Published Rate by (y) a number equal to 1.00 minus the
LIBOR Reserve Percentage on such day. Notwithstanding the foregoing, if the
Daily LIBOR Rate as determined above would be less than zero (0.00), such rate
shall be deemed to be zero (0.00) for purposes of this Agreement.

 

Debt Service Coverage Ratio shall mean, as of any date of determination, the ratio
of (A) Consolidated EBITDA of the Loan Parties, divided by (B) the sum of (i)
scheduled principal reductions on the Term Loans and principal reductions on
Indebtedness (other than
principal reductions on the Revolving Credit Loans) of the Loan Parties, plus (ii) interest

expense of the Loan Parties, each calculated
as of the end of each fiscal quarter for the four fiscal quarters then ended, in
each case of the Loan Parties for such period determined and consolidated in
accordance with GAAP, as measured on a rolling four quarter basis. Clause (B)
shall be computed as follows: (i) for the fiscal quarter ending June 30, 2018,
four times the amortization and interest expense of such indebtedness for the
fiscal quarter then ending; ii) for
the fiscal quarter ending September 30, 2018, two times the amortization and interest expense of
such indebtedness for the two fiscal quarters then ending; (iii) for the fiscal
quarter ending
December 31, 2018, 4/3 times the amortization and interest expense of such indebtedness for the
three fiscal quarters then ending; and (iv) for the fiscal quarter ending March 31, 2019 and for each fiscal quarter thereafter, the amortization and interest expense of such indebtedness for the
four fiscal quarters then ending.

 

14

Defaulting Lender shall mean any Lender that (a) has failed, within two Business
Days
of the date required to be funded or paid, to (i) fund any portion of its Loans, (ii) fund any
portion of its participations in Letters of Credit or Swing Loans or (iii) pay
over to the
Administrative Agent, the Issuing Lender, PNC Bank (as the Swing Loan Lender) or any Lender
any other amount required to be paid by it hereunder, unless, in the case of clause (i) above, such
Lender notifies the Administrative Agent in writing that such failure is the
result of such Lender's good faith determination that a condition precedent to
funding (specifically identified and including the particular default, if any)
has not been satisfied, (b) has notified the Borrower or the Administrative
Agent in writing, or has made a public statement to the effect, that it does
not intend or expect to comply with any of its funding obligations
under this Agreement (unless
such writing or public statement indicates that such position is based on such Lender's good faith
determination that a condition precedent (specifically identified and including
the particular default, if any) to funding a loan under this Agreement cannot be
satisfied) or generally under other agreements in which it commits to extend
credit, (c) has failed, within two Business Days after request by the
Administrative Agent or the Borrower, acting in good faith, to provide a
certification in writing from an authorized officer of such Lender that it will
comply with its obligations (and is financially able to meet such obligations)
to fund prospective Loans and participations in then outstanding Letters of
Credit and Swing Loans under this Agreement,
provided that such Lender shall cease to be a Defaulting Lender pursuant to this clause (c) upon
the Administrative Agent's or the Borrower's receipt of such certification in
form and substance
satisfactory to the Administrative Agent or the Borrower, as the case may be, (d) has become the
subject of a Bankruptcy Event or (e) has failed at any time to comply with the
provisions of
Section 5.3 [Sharing of Payments by Lenders] with respect to purchasing participations from the
other Lenders, whereby such Lender's share of any payment received, whether by
setoff or otherwise, is in excess of its Ratable Share of such payments due and
payable to all of the Lenders.

As used in this definition and in Section 2.10 [Defaulting Lenders], the term
"Bankruptcy Event" means, with respect to any Person, such Person or such
Person's direct or indirect parent company becoming the subject of a bankruptcy
or insolvency proceeding, or having had a receiver, conservator, trustee,
administrator, custodian, assignee for the benefit of creditors or similar
Person charged with the reorganization or liquidation of its business appointed
for it, or, in the good faith determination of the Administrative Agent, has
taken any action in furtherance of, or indicating its consent to, approval of,
or acquiescence in, any such
proceeding or appointment, provided that a Bankruptcy Event shall not result solely by virtue of
any ownership interest, or the acquisition of any ownership interest, in such
Person or such
Person's direct or indirect parent company by an Official Body or instrumentality thereof if, and
only if, such ownership interest does not result in or provide such Person with immunity from the
jurisdiction of courts within the United States or from the enforcement of
judgments or writs of attachment on its assets or permit such Person (or such
Official Body or instrumentality) to
reject, repudiate, disavow or disaffirm any contracts or agreements made by such Person.

 

Dollar, Dollars, U.S. Dollars and the symbol shall mean lawful money of the
United States of America.

 

Drawing Date shall have the meaniug specified in Section 2.9.3 [Disbursements,
Reimbursement].

 

15

EEA Financial Institution means (a) any credit institution or investment firm
established in any EEA Member Country which is subject to the supervision of an
EEA
Resolution Authority, (b) any entity established in an EEA Member Country which is a parent of
an institution described in clause (a) of this definition, or (c) any financial institution established
in an EEA Member Country which is a subsidiary of an institution
described in clauses (a) or (b)
of this definition and is subject to consolidated supervision with its parent.

 

EEA Member Country means any of the member states of the European Union,
Iceland, Liechtenstein, and Norway.

 

EEA Resolution Authority means any public administrative authority or any
person entrusted with public administrative authority of any EEA Member Country (including
any delegee) having responsibility for the resolution of any EEA Financial Institution.

 

Effective Date means the date indicated in a document or agreement
to be the date on which such document or agreement becomes effective, or, if
there is no such indication, the date of execution of such document
or agreement.

 

Eligible Contract Participant shall mean an "eligible contract participant" as
defined in the CEA and regulations thereunder.

 

Eligibility Date shall mean, with respect to each Loan Party and each Swap, the
date on which this Agreement or any other Loan Document becomes effective with
respect to
such Swap (for the avoidance of doubt, the Eligibility Date shall be the Effective Date of such
Swap if this Agreement or any other Loan Document is then in effect with respect to such Loan
Party, and otherwise it shall be the Effective Date of this Agreement and/or
such other Loan Document (s) to which such Loan Party is a party).

 

Environmental Complaint shall mean any written complaint by any Person or
Official Body setting forth a cause of action for personal injury or property
damage, natural
resource damage, contribution or indemnity for response costs, civil or administrative penalties,
criminal fines or penalties, or declaratory or equitable relief arising under
any Environmental
Laws or any order, notice of violation, citation, subpoena, request for information or other written notice or demand of any type issued by an Official Body pursuant to any Environmental
Laws.

 

Environmental Laws shall mean all federal, state, local and foreign Laws and any
consent decrees, settlement agreements, judgments, orders, directives or
policies or programs having the force and effect of law issued by or entered
into with an Official Body pertaining or
relating to: (i) pollution or pollution control;
(ii) protection of human health or the environment; employee safety in the
workplace; (iv) the presence, use, management, generation, manufacture,
processing, extraction, treatment, recycling, refining, reclamation, labeling,
transport, storage, collection, distribution, disposal or release or threat of release of Regulated
Substances;
(v) the presence of Contamination; (vi) the protection of endangered or threatened
species and (vii) the protection of Environmentally Sensitive Areas.

 

Environmentally Sensitive Area shall mean (i) any wetland as defined by
applicable Environmental Laws; (ii) any area designated as a coastal zone pursuant to applicable

 

16

Laws, including Environmental Laws; (iii) any area of historic or archeological
significance or scenic area as defined or designated by applicable Laws,
including Environmental Laws; (iv)
habitats of endangered species or threatened species as designated by applicable Laws, including
Environmental Laws or (v) a floodplain or other flood hazard area as defined
pursuant to any applicable Laws.

 

Equity Issuances shall mean issuances of equity of a Loan Party that result in
cash proceeds and shall specifically exclude (a) any issuance of equity to
employees, officers, or directors of any Loan Party that is issued in connection
with such person's compensation, (b) the issuance of equity of Borrower in order
to finance  the purchase consideration  (or  a portion thereof) in connection
with a Permitted  Acquisition,  and (c) in the event that any Loan Party or any
of its Subsidiaries forms any Subsidiary in accordance with the terms hereof,
the issuance by such Subsidiary of equity to any such Loan Party or such
Subsidiary, as applicable.

 

ERISA shall mean the Employee Retirement Income Security Act of 1974, as the
same may be amended or supplemented from time to time, and any successor statute
of similar import, and
the rules and regulations thereunder, as from time to time in effect.

 

ERISA Event shall mean (a) with respect to a Pension Plan, a reportable event
under Section 4043 of    ERJSA as to which event (after taking into account
notice waivers provided for in the regulations) there is a duty to give notice
to the PBGC; (b) a withdrawal by Borrower or any member of the ERISA Group from
a Pension Plan subject to Section 4063 of ERJSA during a plan year in which it
was a substantial employer (as defined in Section 400l(a)(2) of ERISA) or a
cessation of operations that is treated as such a withdrawal under Section
4062(e) of ERJSA; (c) a complete or partial withdrawal by Borrower or any member
of the ERJSA Group from a Multiemployer Plan, notification that a Multiemployer
Plan is in
reorganization, or occurrence of an event described in Section 404lA( a) of ERJSA that results in
the termination of a Multiemployer Plan; (d) the filing of a notice of intent to terminate a Pension
Plan, the treatment of a Pension Plan amendment as a Termination under Section
4041(e) of ERJSA, or the commencement of proceedings by the PBGC to terminate a
Pension Plan; (e) an event or condition which constitutes grounds under Section
4042 of ERISA for the termination of, or the appointment of a trustee to
administer, any Pension Plan; or ( f) the imposition of any liability under
Title IV of ERISA, other than for PBGC premiums due but not delinquent under
Section 4007 of ERISA, upon Borrower or any member of the ERISA Group.

 

ERJSA Group shall mean, at any time, the Borrower and all members of a
controlled group of corporations and all trades or businesses (whether or not incorporated) under
common control and all other entities which, together with the Borrower,
are treated as a single employer under Section 414 of the Code or Section
400l(b)(l) of ERISA.

 

Eurocurrency Liabilities shall have the meaning ascribed to such term in the
definition of LIBOR Reserve Percentage set forth herein.

 

Event of Default shall mean any of the events described in Section 9.1 [Events of
Default] and referred to therein as an "Event of Default."

Excess Cash Flow shall be computed as of the close of each fiscal year by taking
the difference between Consolidated EBITDA and the sum of Fixed Charges for such fiscal year.
All determinations of Excess Cash Flow shall be based on the immediately
preceding fiscal year and shall be made following the delivery by the Borrower
to the Administrative Agent of the

17

Borrower's audited financial statements for such preceding year.

 

Excluded Collateral shall mean the following:

 

(1) any lease, license, contract, property rights, equipment, joint venture
interests, or agreement to which a Loan Party is a party or any of its rights or interests thereunder
if and for so long as the grant of a security interest therein shall constitute
or result in (A) the abandonment, invalidation or unenforceability of any right,
title or interest of such Loan Party
therein or (B) a breach or termination pursuant to the terms of, or a default under, any such lease,
license, contract, property rights or agreement (other than to the extent that any such term would
be rendered ineffective pursuant to Sections 9-406, 9-407, 9-408 or 9-409 of the
UCC (or any successor provision or provisions) of any relevant jurisdiction or
any other applicable law (including the Bankruptcy Code) or principles of
equity), provided however that, in the case of either (A) or (B) above, such
security interest shall attach immediately at such time as the condition causing
such abandonment, invalidation or unenforceability shall be remedied and to the
extent severable, shall attach immediately to any portion of such lease,
license, contract,
property rights or agreement that does not result in any of the consequences specified in (A) or

(B) above,

 

(2) any of the outstanding capital stock of any Subsidiary not organized under
the laws of the United States or any State or a political subdivision thereof in
excess of 65% of
the voting power of all classes of capital stock of such Subsidiary entitled to vote,

 

(3) the outstanding capital stock of any Excluded Subsidiary (other than
Hallador Sands and each of its Subsidiaries to the extent owned by a Loan Party
or its Subsidiaries),

 

(4) all assets owned by any Excluded Subsidiary (other than the outstanding
capital stock
of Hallador Sands and each of its Subsidiaries to the extent owned by a Loan Party
or its Subsidiaries),

 

(5) all interests in real property of Summit Terminal, both owned and leased,
and the surface and mineral rights, interests, licenses, easements, rights of way, water rights, and
other interests of Summit Terminal,

 

(6)  assets of the Loan Parties that the Administrative Agent reasonably
determines that the benefits of obtaining such Collateral are outweighed by the costs or burdens
of providing the same,

 

(7) All interests of the borrower in and to an in and to any oil and gas leases
which exist as of the Closing Date.

 

18

Excluded Hedge Liability or Liabilities shall mean, with respect to each Loan
Party, each of its Swap Obligations if, and only to the extent that, all or any portion of this
 Agreement or any other Loan Document that relates to such Swap Obligation is or
becomes illegal under the CEA, or any rule, regulation or order of the CFTC,
solely by virtue of such
Loan Party's failure to qualify as an Eligible Contract Participant on the Eligibility Date for such
Swap. Notwithstanding anything to the contrary contained in the foregoing or in
any other provision of this Agreement or any other Loan Document, the foregoing
is subject to the following provisos: (a) if a Swap Obligation arises under a
master agreement governing more than one Swap, this definition shall apply only
to the portion of such Swap Obligation that is
attributable to Swaps for which such guaranty or security interest is
or becomes illegal under the
CEA, or any rule, regulations or order of the CFTC, solely as a result of the failure by such Loan
Party for any reason to qualify as an Eligible Contract Participant on the Eligibility Date for such
Swap, (b) if a guarantee of a Swap Obligation would cause such obligation to be
an Excluded Hedge Liability but the grant of a security interest would not cause
such obligation to be an Excluded Hedge Liability, such Swap Obligation shall
constitute an Excluded Hedge Liability for purposes of the guaranty but not for
purposes of the grant of the security interest, and (c) if
there is more than one Loan Party executing this Agreement or the other Loan Documents and a
Swap Obligation would be an Excluded Hedge Liability with respect to one or more
of such Persons, but not all of them, the definition of Excluded Hedge Liability
or Liabilities with respect to each such Person shall only be deemed applicable
to (i) the particular Swap Obligations that constitute Excluded Hedge
Liabilities with respect to such Person, and (ii) the particular Person with
respect to which such Swap Obligations constitute Excluded Hedge Liabilities.

 

Excluded Subsidiaries shall mean Sunrise Energy, LLC, an Indiana limited
liability company, Sunrise Indemnity, Inc., a Delaware corporation, and Hallador Sands and its
Subsidiaries, with each being an Excluded Subsidiary.

 

Excluded Taxes shall mean any of the following Taxes imposed on or with respect
to a Recipient or required to be withheld or deducted from a payment to a
Recipient, (i) Taxes imposed on or measured by net income (however denominated),
franchise Taxes, and branch profits Taxes, in each case, (a) imposed as a result
of such Recipient being organized under the laws of, or having its principal
office or, in the case of any Lender, its applicable lending office located in,
the jurisdiction imposing such Tax (or any political subdivision thereof) or (b)
that are Other Connection Taxes, (ii) in the case of a Lender, U.S. federal
withholding Taxes imposed on amounts payable to or for the account of such
Lender with
respect to an applicable interest in a Loan or Commitment pursuant to a law in effect on the date
on which (a) such Lender acquires such interest in such Loan or Commitment
(other than pursuant to an assignment request by the Borrower under Section 5
 .6.2 [Replacement of a Lender]) or (b) such Lender changes its lending office,
except in each case to the extent that,
pursuant to Section 5.9.7, [Status of Lenders], amounts with respect to such Taxes were payable
either to such Lender's assignor immediately before such Lender became a party
hereto or to such Lender immediately before it changed its lending office, (iii)
Taxes attributable to such Recipient's failure to comply with Section 5.9.7
[Status of Lenders], and (iv) any U.S. federal
withholding Taxes imposed under FATCA (except to the extent imposed due to the failure of the
Borrower to provide documentation or information to the IRS).

19

Executive Order No. 13224 shall mean the Executive Order No. 13224 on Terrorist
Financing, effective September 24, 2001, as the same has been, or shall hereafter be,
renewed, extended, amended or replaced.

 

Expiration Date shall mean September 30, 2023.

 

Existing Letters of Credit shall have the meaning assigned to that term in
Section 2.9 [Letter of Credit Subfacility].

 

FATCA shall mean Sections 1471 through 1474 of the Code, as of the date of this
Agreement (or any amended or successor version that is substantively comparable
and not materially more onerous to comply with), any current or future
regulations or official interpretations thereof and any agreements entered into
pursuant to Section 1471(b)(1) of the Code.

 

Federal Funds Effective Rate for any day shall mean the rate per annum (based on
a year of 360 days and actual days elapsed and rounded upward to the nearest
1/100 of 1%) announced by the NYFRB (or any successor) on such day as being the
weighted average of the rates on overnight federal funds transactions arranged
by federal funds brokers on the previous trading day, as computed and announced
by such Federal Reserve Bank (or any successor) in substantially the same manner
as such Federal Reserve Bank computes and announces the weighted average it
refers to as the "Federal Funds Effective Rate" as of the date of this
Agreement; provided, if such Federal Reserve Bank (or its successor) does not
announce such rate on any day, the "Federal Funds Effective Rate" for such day
shall be the FederaJ-Funds
Effective Rate for the last day on which such rate was announced.

 

First Amendment shall mean that certain First Amendment to Credit Agreement
dated as of the First Amendment Closing Date.

 

First Amendment Closing Date shall mean March 26, 2019.

 

Fixed Charge Coverage Ratio shall mean the ratio of (i) Consolidated EBITDA to

(ii) Fixed Charges.

 

Fixed Charges shall mean for any period of determination the sum of the Loan
Parties' (i) interest expense, (ii) income taxes due and payable, (iii) current and other scheduled
principal installments on Indebtedness (as adjusted for prepayments), (iv)
capital expenditure
payments or capitalized lease payments, (v) dividends and distributions payments made by the
Borrower, and (vi) other mandatory prepayments of the Loans made in connection
with any Hallador Sands Distributions in accordance with Section 5.7.1
[Mandatory Prepayments;
Hallador Sands Distributions], for such period determined and consolidated in accordance with
GAAP, and calculated on a Pro Forma Basis.

 

Flood Laws shall mean all applicable Laws relating to policies and procedures
that address requirements placed on federally regulated lenders under the
National Flood Insurance Reform Act of 1994 and other Laws related thereto.

 

20

Foreign Lender shall mean (i) if the Borrower is a U.S. Person, a Lender that is
not a U.S. Person, and (ii) if the Borrower is not a U.S. Person, a Lender that
is resident or
organized under the Laws of a jurisdiction other than that in which the Borrower is resident for
tax purposes. For purposes of this definition, the United States of America, each State thereof
and the District of Columbia shall be deemed to constitute a single jurisdiction.

 

Foreign Subsidiaries shall mean, for any Person, each Subsidiary of such Person
that is incorporated or organized under the laws of any jurisdiction other than the United States
of America or any state or territory thereof.

 

GAAP shall mean generally accepted accounting principles as are in effect from
time to time, subject to the provisions of Section 1.3 [Accounting Principles; Changes in GAAP],
and applied on a consistent basis both as to classification of items and
amounts.

 

Guarantor shall mean each of the Restricted Subsidiaries and each other Person
which joins this Agreement as a Guarantor after the date hereof.

 

Guarantor Joinder shall mean a joinder by a Person as a Guarantor under the Loan
Documents in the form of Exhibit 1.l(G)(l).

 

Guaranty of any Person shall mean any obligation of such Person guaranteeing or
in effect guaranteeing any liability or obligation of any other Person in any
manner, whether
directly or indirectly, including any agreement to indemnify or hold harmless any other Person,
any performance bond or other suretyship arrangement and any other form of assurance against
loss, except endorsement of negotiable or other instruments for deposit or
collection in the ordinary course of business.

 

Guaranty Agreement shall mean the Continuing Agreement of Guaranty and
Suretyship in substantially the form of Exhibit 1.l(G)(2) executed and delivered by each of the
Guarantors to the Administrative Agent for the benefit of the Lenders.

 

Hallador Sands shall mean Hallador Sands, LLC, a Delaware limited liability
company, and any successor or assign.

 

Hallador Sands Distributions shall mean 100% of any cash distribution received
by a Loan Party from Hallador Sands or any Subsidiary of Hallador Sands, except
for such
distributions paid with respect to tax liabilities that have accrued due to such party's ownership
of Hallador Sands or a Subsidiary of Hallador Sands.

 

Hedge Liabilities shall mean the Interest Rate Hedge Liabilities.

 

High Point shall mean High Point Land Holdings, LLC, a Delaware limited
liability company.

 

Hourglass Sands shall mean Hourglass Sands, LLC, a Delaware limited liability

company.

Increasing Lender shall have the meaning assigned to that term in Section 3.4
[Increase in Term Loans].

 

21

Indebtedness shall mean, as to any Person at any time, any and all indebtedness,
obligations or liabilities (whether matured or unmatured, liquidated or
unliquidated, direct or indirect, absolute or contingent, or joint or several)
of such Person for or in respect of: (i) borrowed money, (ii) amounts raised
under or liabilities in respect of any note purchase or acceptance credit
facility, (iii) reimbursement obligations (contingent or otherwise) under any
letter of credit agreement, (iv) obligations under any currency swap
agreement,  interest  rate swap, cap, collar or floor agreement or other
interest rate management device, (v) any other transaction (including forward
sale or purchase agreements, capitalized leases and conditional sales
agreements) having the commercial effect of a borrowing of money entered into by
such Person to finance its operations or capital requirements (but not including
trade payables and accrued expenses incurred in the ordinary course of business
which are not represented by a promissory note or other evidence of indebtedness
and which are not more than thirty (30) days past due), or (vi) any Guaranty of
Indebtedness for borrowed money.

 

Indebtedness for Borrowed Money shall mean, as to any Person at any time, any
and all indebtedness, obligations or liabilities (whether matured or unatured,
liquidated or unliquidated, direct or indirect, absolute or contingent, or joint
or several) of such Person for or in respect of: (i) borrowed money, (ii)
amounts raised under or liabilities in respect of any note purchase or
acceptance credit facility, (iii) the unreimbursed amount of all drafts drawn
under
letters of credit issued for the account of such Person and the undrawn stated amount of all letters
of credit issued for the account of such Person, (iv) obligations with respect to capitalized leases,
or (v) any Guaranty of Indebtedness of the type described in clauses (i) through (iv) above.

 

Indemnified Taxes shall mean (i) Taxes, other than Excluded Taxes, imposed on
or with respect to any payment
made by or on account of any obligation of any Loan Party under any Loan
Document, and (ii) to the extent not otherwise described in the preceding clause
(i), Other Taxes.

 

Indemnitee shall have the meaning specified in Section 11.3.2 [Indemnification
by the Borrower].

 

Indemnity shall mean the Indemnity Agreement in the form of Exhibit 1.l(I)(l)
relating to possible environmental liabilities associated with any of the owned
or leased real property of the Loan Parties or their Subsidiaries.

 

Information shall mean all information received from the Loan Parties or any of
their Subsidiaries relating to the Loan Parties or any of such Subsidiaries or
any of their respective businesses, other than any such information that is
available to the Administrative Agent,
any Lender or the Issuing Lender on a non-confidential basis prior to disclosure by the
Loan Parties or any of their Subsidiaries.

 

Initial Term Loans shall have the meaning ascribed to such term in Section
3.4(i)(e) herein.

 

22

Insolvency Proceeding shall mean, with respect to any Person, (a) a case, action
or proceeding with respect to such Person (i) before any court or any other
Official Body under
any bankruptcy, insolvency, reorganization or other similar Law now or hereafter in effect, or (ii)
for the appointment of a receiver, liquidator, assignee, custodian, trustee,
sequestrator, conservator (or similar official) of any Loan Party or otherwise
relating to the liquidation,
dissolution, winding-up or relief of such Person, or (b) any general assignment for the benefit of
creditors, composition, marshaling of assets for creditors, or other, similar arrangement in respect
of such Person's creditors generally or any substantial portion of its
creditors; undertaken under any Law.

 

Intercompany Subordination Agreement shall mean a Subordination Agreement
among the Loan Parties in the form attached hereto as Exhibit 1.10)(2).

 

Interest Period shall mean the period of time selected by the Borrower in
connection with (and to apply to) any election permitted hereunder by the
Borrower to have
Loans bear interest under the LIBOR Rate Option. Subject to the last sentence of this definition,
such period shall be one, two, three or six Months, as selected by the Borrower.
Such Interest
Period shall commence on the effective date of such Interest Rate Option, which shall be (i) the
Borrowing Date if the Borrower is requesting new Loans, or (ii) the date of
renewal of or conversion to the LIBOR Rate Option if the Borrower is renewing or
converting to the LIBOR Rate Option applicable to outstanding Loans.
Notwithstanding the second sentence hereof: (A) any Interest Period which would
otherwise end on a date which is not a Business Day shall be extended to the
next succeeding Business Day unless such Business Day falls in the next calendar
month, in which case such Interest Period shall end on the next preceding
Business
Day, and (B) the Borrower shall not select, convert to or renew an Interest Period for any portion
of the Loans that would end after the Expiration Date or Maturity Date.

 

Interest Rate Hedge shall mean an interest rate exchange, collar, cap, swap,
adjustable strike cap, adjustable strike corridor or similar agreements entered into by the Loan
Parties or their Subsidiaries in order to provide protection to, or minimize the impact upon, the
Borrower, the Guarantor and/or their Subsidiaries of increasing floating rates
of interest applicable to Indebtedness.

 

Interest Rate Hedge Liabilities shall have the meaning ascribed to such term in the
definition of Lender Provided Interest Rate Hedge.

 

Interest Rate Option shall mean any LIBOR Rate Option or Base Rate Option.

 

IRS shall mean the United States Internal Revenue Service.

 

ISP98 shall have the meaning specified in Section 11.11. I [Governing Law].

 

Issuing Lender means PNC Bank, in its individual capacity as issuer of Letters of
Credit hereunder, and any other Lender that Borrower, Administrative Agent and
such other
Lender may agree may from time to time issue Letters of Credit hereunder.

23

Joint Venture shall mean a corporation, partnership, limited liability company or
other entities in which any Person other than the Loan Parties and their
Subsidiaries holds, directly or indirectly, an equity interest.

 

Law shall mean any law(s) (including common law), constitution, statute, treaty,
regulation, rule, ordinance, opinion, issued guidance, release, ruling, order,
executive order, injunction, writ, decree, bond, judgment, authorization or
approval, lien or award of or any
settlement arrangement, by agreement, consent or otherwise, with any Official Body, foreign or
domestic.

 

Lender Provided Commodity Hedge shall mean a Commodity Hedge which is entered
into with any Lender or its Affiliate and with respect to which such Lender
confirms to Administrative Agent in writing prior to the execution thereof that
it (i) is documented in a standard International Swaps and Derivatives
Association Master Agreement or another reasonable and customary manner, (ii)
provides for the method of calculating the reimbursable amount of the provider's
credit exposure in a reasonable and customary manner, and (iii) is
entered into for hedging purposes (rather than speculative) purposes. The liabilities owing to the
provider of any Lender Provided Commodity Hedge (the "Commodity Hedge Liabilities") by
any Loan Party that is party to such Lender Provided Commodity Hedge shall, for
purposes of
this Agreement and all other Loan Documents be "Obligations" of such Person and of each other
Loan Party, be guaranteed obligations under any Guaranty Agreement and secured
obligations
under any other Loan Document, as applicable, and otherwise treated as Obligations for purposes
of the other Loan Documents, except to the extent constituting Excluded Hedge
Liabilities of such Person. The Liens securing the Commodity Hedge Liabilities
shall be pari passu with the Liens securing all other Obligations under this
Agreement and the other Loan Documents,
subject to the express provisions of Section 9.2.5 [Application of Proceeds].

 

Lender Provided Interest Rate Hedge shall mean an Interest Rate Hedge which is
provided by any Lender or its Affiliate and with respect to which such Lender
confirms to Administrative Agent in writing prior to the execution thereof that
it: (a) is documented in a standard International Swaps and Derivatives
Association Master Agreement or another reasonable and customary manner, (b)
provides for the method of calculating the reimbursable amount of the provider's
credit exposure in a reasonable and customary manner, and (c) is
entered into for hedging (rather than speculative) purposes. The liabilities owing to the provider
of any Lender Provided Interest Rate Hedge (the "Interest Rate Hedge
Liabilities") by any Loan Party that is party to such Lender Provided Interest
Rate Hedge shall, for purposes of this Agreement and all other Loan Documents be
"Obligations" of such Person and of each other Loan Party, be guaranteed
obligations under any Guaranty Agreement and secured obligations
under any other Loan Document, as applicable, and otherwise treated as Obligations for purposes
of the other Loan Documents, except to the extent constituting Excluded Hedge
Liabilities of
such Person. The Liens securing the Hedge Liabilities shall be pari passu with the Liens securing
all other Obligations under this Agreement and the other Loan Documents, subject to the express
provisions of Section 9.2.5 [Application of Proceeds].

 

Lenders shall mean the financial institutions named on Schedule l.l(B) and their
respective successors and assigns as permitted hereunder, each of which is referred to herein as a
Lender. For the purpose of any Loan Document which provides for the granting of a security

24

interest or other Lien to the Lenders or to the Administrative Agent for the benefit of the Lenders
as security for the Obligations, "Lenders" shall include any Affiliate of a
Lender to which such Obligation is owed.

Lessor Consents shall have the meaning specified in Section 7.
I.I(vii) [Deliveries].

 

Letter of Credit shall have the meaning specified in Section-2.9.l [Issuance of
Letters of Credit].

 

Letter of Credit Borrowing shall have the meaning·specified in Section 2.9.3
[Disbursements, Reimbursement].

 

Letter of Credit Fee shall have the meaning specified in Section 2.9.2 [Letter
of Credit Fees].

 

Letter of Credit Obligation means, as of any date of determination, the aggregate
amount available to be drawn under all outstanding Letters of Credit on such
date (if any Letter
of Credit shall increase in amount automatically in the future, such aggregate amount available to
be drawn shall currently give effect to any such future increase) plus the
aggregate Reimbursement Obligations and Letter of Credit Borrowings on
such date.

 

Letter of Credit Sublimit shall have the meaning specified in Section 2.9. I
[Issuance of Letters of Credit].

 

Leverage Ratio shall mean, as of the end of any date of determination, the ratio
of Consolidated Funded Debt of the Loan Parties on such date to (B) Consolidated EBITDA (i)
for the four fiscal quarters then ending if such date is a fiscal quarter end or (ii) for the four fiscal
quarters most recently ended if such date is not a fiscal quarter end.

 

LIBOR Rate shall mean, with respect to the Loans comprising any Borrowing
Tranche to which the LIBOR Rate Option applies for any Interest Period, the
interest rate per annum determined by the Administrative Agent by dividing (the
resulting quotient rounded
upwards, if necessary, to the nearest 11100th of 1% per annum) (i) the rate which appears on the
Bloomberg Page BBAMI (or on such other substitute Bloomberg page that displays
rates at
which US dollar deposits are offered by leading banks in the London interbank deposit market),
or the rate which is quoted by another source selected by the Administrative
Agent as an
authorized information vendor for the purpose of displaying rates at which US dollar deposits are
offered by leading banks in the London interbank deposit market (a "LIBOR Alternate Source"),
at approximately 11:00 a.m., London time, two (2) Business Days prior to the commencement of
such Interest Period as the London interbank offered rate for U.S. Dollars for
an amount
comparable to such Borrowing Tranche and having a borrowing date and a maturity comparable
to such Interest Period (or if there shall at any time, for any reason, no longer exist a Bloomberg
Page BBAMl (or any substitute page) or any LIBOR Alternate Source, a comparable
replacement rate determined by the Administrative Agent at such time (which
determination shall be conclusive absent manifest error)), by (ii) a number
equal to 1.00 minus the LIBOR
Reserve Percentage. Notwithstanding the foregoing, if the LIBOR Rate as determined under any

 

25

method above would be less than zero (0.00), such rate shall be deemed to be zero (0.00) for
purposes of this Agreement.

 

The LIBOR Rate shall be adjusted with respect to any Loan to which the LIBOR
Rate Option applies that is outstanding on the effective date of any change in the LIBOR Reserve
Percentage as of such effective date. The Administrative Agent shall give prompt
notice to the Borrower of the LIBOR Rate as determined or adjusted in accordance
herewith, which determination shall be conclusive absent manifest error.

 

LIBOR Rate Option shall mean the option of the Borrower to have Loans bear
interest at the rate and under the terms set forth in Section 4.1.l(ii) [Revolving Credit LIBOR
Rate Option] or Section 4.1.2(ii) [Term Loan LIBOR Rate Option], as applicable.

 

LIBOR Reserve Percentage shall mean as of any day the maximum percentage in
effect on such day, as prescribed by the Board of Governors of the Federal
Reserve System (or
any successor) for determining the reserve requirements (including supplemental, marginal and
emergency reserve requirements) with respect to Eurocurrency funding (currently referred to as
"Eurocurrency Liabilities").

 

LIBOR Termination Date shall have the meaning specified in Section 4.5.4
[Successor LIBOR Rate Index].

 

Lien shall mean any mortgage, deed of trust, pledge, lien, security interest, charge
or other encumbrance or security arrangement of any nature whatsoever, whether voluntarily or
involuntarily given, including any conditional sale or title retention
arrangement, and any assignment, deposit arrangement or lease intended as, or
having the effect of, security and any filed financing statement or other notice
of any of the foregoing (whether or not a lien or other
encumbrance is created or exists at the time of the filing).

 

Loan Documents shall mean this Agreement, the Administrative Agent's Letter, the
Collateral Assignment, the Guaranty Agreement, the Indemnity, the Intercompany
Subordination Agreement, the Mortgages, the Notes, the Pledge Agreement, the
Security Agreement, and any other instruments, certificates or documents
delivered in connection herewith or therewith

 

Loan Parties shall mean the Borrower and the Guarantors.

 

Loan Request shall have the meaning specified in Section 2.5 [Revolving Credit
Loan Requests; Swing Loan Requests].

 

Loans shall mean collectively, and Loan shall mean separately all Revolving
Credit Loans, Swing Loans and the Term Loans or any Revolving Credit Loan, Swing Loan or
the Term Loan.

 

Material Adverse Change shall mean any set of circumstances or events which (a)
has or could reasonably be expected to have any material adverse effect
whatsoever upon the validity or enforceability of this Agreement or any other
Loan Document, (b) is or could
reasonably be expected to be material and adverse to the business, properties, assets, financial

 

26

condition, results of operations of the Loan Parties taken as a whole, (c)
impairs materially or
could reasonably be expected to impair materially the ability of the Loan Parties taken as a whole
to duly and punctually pay or perform any of the Obligations, or (d) impairs
materially or could
reasonably be expected to impair materially the ability of the Administrative Agent or any of the
Lenders, to the extent permitted, to enforce their legal remedies pursuant to
this Agreement or any other Loan Document.

 

Maturity Date shall mean March 31, 2023.

 

Month, with respect to an Interest Period under the LIBOR Rate Option, shall
mean the interval between the days in consecutive calendar months numerically corresponding to
the first day of such Interest Period. If any LIBOR Rate Interest Period begins
on a day of a
calendar month for which there is no numerically corresponding day in
the month in which such Interest Period is to end, the final month of such
Interest Period shall be deemed to end on the last Business Day of such
final month.

 

Mortgage or Mortgages shall mean each Mortgage and each Mortgage Amendment in
substantially the form of Exhibit l.l(M)(l) and Exhibit I.l(M)(2) executed and
delivered by the Loan Parties to the Administrative Agent for the benefit of the
Lenders with
respect to the Real Property that is owned by any of the Loan Parties, or with respect to the Real
Property that is leased by any of the Loan Parties and that includes surface rights and significant
facilities of any of the Loan Parties, including any amendments thereto but not
including any leased office space.

 

Multiemployer Plan shall mean any employee benefit plan which is a
"multiemployer plan" within the meaning of Section 400l(a)(3) of ERISA and to
which the
Borrower or any member of the ERISA Group is then making or accruing an obligation to make
contributions or, within the preceding five Plan years, has made or had an
obligation to make such contributions.

 

Net Hallador Sands Distribution Amount shall mean, for any period of time, an
amount equal to the difference between the Hallador Sands Distributions less the
aggregate
amount of investments made into Hallador Sands or any Subsidiary of Hallador Sands by any
Loan Party.

 

New Lender shall have the meaning assigned to that term in Section 3.4 [Increase
in Term Loans].

 

Non-Consenting Lender shall have the meaning specified in Section 11.1
[Modifications, Amendments or Waivers].

 

Non-Qualifying Party shall mean any Loan Party that fails for any reason to
qualify as au Eligible Contract Participant on the Effective Date of the applicable Swap.

 

Notes shall mean, collectively, and Note shall mean separately, the promissory
notes in the form of Exhibit l. l(N)(l) evidencing the Revolving Credit Loans,
in the form of Exhibit l.l(N)(2) evidencing the Swing Loan, and in the form of
Exhibit l.l(N)(3) evidencing the Term Loans.

27

notices shall have the meaning specified in Section 11.5 [Notices; Effectiveness;
Electronic Communication].

 

NYFRB shall mean the Federal Reserve Bank of New York.

 

Obligation shall mean any obligation or liability of any of the Loan Parties,
howsoever created, arising or evidenced, whether direct or indirect, absolute or contingent, now
or hereafter existing, or due or to become due, under or in connection with (i)
this Agreement, the Notes, the Letters of Credit, the Administrative Agent's
Letter or any other Loan Document whether to the Administrative Agent, any of
the Lenders or their Affiliates or other persons
provided for under such Loan Documents, (ii) any Lender Provided Interest Rate Hedge, and (iii)
any Other Lender Provided Financial Service Products. Notwithstanding anything
to the contrary contained in the foregoing, the Obligations shall not include
any Excluded Hedge Liabilities.

 

Official Body shall mean the government of the United States of America or any
other nation, or of any political subdivision thereof, whether state or local,
and any agency, authority, instrumentality, regulatory body, court, central bank
or other entity exercising executive, legislative, judicial, taxing, regulatory
or administrative powers or functions of or pertaining to government (including
any supra-national bodies such as the European Union or
the European Central Bank) and any group or body charged with setting financial accounting or
regulatory capital rules or standards (including, the Financial Accounting Standards Board, the
Bank for International Settlements or the Basel Committee on Banking Supervision
or any successor or similar authority to any of the foregoing).

 

Order shall have the meaning specified in Section 2.9.9 [Liability for Acts
and Omissions].

 

Other Connection Taxes shall mean, with respect to any Recipient, Taxes imposed
as a result of a present or former connection between such Recipient (or an
agent or
affiliate thereof) and the jurisdiction imposing such Tax (other than connections arising solely
from such Recipient having executed, delivered, become a party to, performed its
obligations
under, received payments under, received or perfected a security interest under, engaged in any
other transaction pursuant to or enforced any Loan Document, or sold or assigned an interest in
any Loan or Loan Document).

 

Other Lender Provided Financial Service Products shall mean agreements or other
arrangements under which any Lender or Affiliate of a Lender provides any of the
following products  or  services to any of the Loan Parties: (a) credit cards,
(b) credit card processing  services, (c) debit cards, (d) purchase cards,  (e)
ACH transactions,  (f) cash  management, including controlled disbursement,
accounts or services, (g) foreign currency exchange, or (h) Lender Provided
Commodity Hedge.

 

Other Taxes shall mean all present or future stamp, court or documentary,
intangible, recording, filing or similar Taxes that arise from any payment made under, from the
execution, delivery, performance, enforcement or registration of, from the receipt or perfection
of a security interest under, or otherwise with respect to, any Loan Document, except any such

 

28

 

Taxes that are Other Connection Taxes imposed with respect to an assignment (other than an
assignment made pursuant to Section 5.6.2 [Replacement of a Lender]).

 

Overnight Bank Funding Rate shall mean, for any day, the rate comprised of both
overnight federal funds and overnight Eurocurrency borrowings by U.S.-managed
banking offices of depository institutions, as such composite rate shall be
determined by the NYFRB, as set forth on its public website from time to time,
and as published on the next succeeding Business Day as the overnight bank
funding rate by the NYFRB (or by such other recognized electronic source (such
as Bloomberg) selected by the Administrative Agent for the purpose of displaying
such rate); provided, that if such day is not a Business Day, the Overnight Bank
Funding Rate for such day shall be such rate on the immediately preceding
Business Day;
provided, further, that if such rate shall at any time, for any reason, no longer exist, a comparable
replacement rate determined by the Administrative Agent at such time (which
determination shall be conclusive absent manifest error). If the Overnight Bank
Funding Rate determined as above would be less than zero, then such rate shall
be deemed to be zero. The rate of interest charged shall be adjusted as of each
Business Day based on changes in the Overnight Bank Funding Rate without notice
to the Borrower.

 

Participant has the meaning specified in Section 11.8.4 [Participations].

 

Participant Register shall have the meaning specified in Section 11.8.4
[Participations].

 

Participation Advance shall have the meaning specified in Section 2.9.3
[Disbursements, Reimbursement].

 

Payment Date shall mean the first day of each calendar quarter after the date
hereof and on the Expiration
Date, Maturity Date, or upon acceleration of the Notes.

 

Payment In Full and Paid In Full shall mean payment in full in cash of the Loans
and other Obligations hereunder (other than Unasserted Obligations), termination
of the
Commitments and expiration or termination of all Letters of Credit or cash collateralization of
any unexpired Letters of Credit.

 

PBGC shall mean the Pension Benefit Guaranty Corporation established pursuant to
Subtitle A of Title N  of ERISA or any successor.

 

Pension Plan shall mean at any time an "employee pension benefit plan" (as such
term is defined in Section 3(2) of
ERISA) (including a "multiple employer plan" as described in Sections 4063 and
4064 of ERISA, but not a Multiemployer Plan) which is covered by Title N  of
ERISA or is subject to the minimum funding standards under Section 412 or
Section 430 of
the Code and either (i) is sponsored, maintained or contributed to by any member of the ERISA
Group for employees of any member of the ERISA Group or (ii) has at any time
within the preceding five years been sponsored, maintained or contributed to by
any entity which was at such time a member of the ERISA Group for employees of
any entity which was at such time a
member of the ERISA Group, or in the case of a "multiple employer" or other plan described
in Section 4064(a) of ERISA, has made contributions
at any time during the immediately preceding

29

five plan years.

30

Permitted Acquisition shall have the meaning assigned to that term in Section

5.7.6

[Liquidations, Mergers, Consolidations, Acquisitions].

 

Permitted Investments shall mean:

 

(i) direct obligations of the United States of America or any agency or
instrumentality thereof or obligations backed by the full faith and credit of the United States of
America maturing in twelve (12) months or less from the date of acquisition;

 

(ii) commercial paper maturing in 180 days or less rated not lower than A-1,
by Standard & Poor's or P-1 by Moody's Investors Service, Inc. on the date of acquisition;

(iii) demand deposits, time deposits or certificates of deposit maturing within
one year in commercial banks whose obligations are rated A-1, A or the equivalent or better by·
Standard &  Poor's on the date of acquisition;

 

(iv) money market or mutual funds whose investments are limited to those types
of investments described in clauses (i) (iii) above;

 

(v) investments made under the Cash Management Agreements or under cash
management agreements with any other Lenders; and

 

(vi)

Permitted Acquisitions.

 

Permitted Liens shall mean:

 

(i) Liens for taxes, assessments, or similar charges, incurred in the ordinary
course of business and which are not yet due and payable;

 

(ii) Pledges or deposits made in the ordinary course of business to secure
payment of workmen's compensation, or to participate in any fund in connection with workmen's
compensation, unemployment
insurance, old-age pensions or other social security programs;

 

(iii) Liens of mechanics, materialmen, warehousemen, carriers, or other like
Liens, securing obligations incurred in the ordinary course of business that are not yet due and
payable and Liens of landlords securing obligations to pay lease payments that are not yet due
and payable or in default;

 

(iv) Good-faith pledges or deposits made in the ordinary course of business to
secure performance of bids, tenders, contracts (other than for the repayment of borrowed money)
or leases, not in excess of the aggregate amount due thereunder, or to secure
statutory obligations, or surety, appeal, indemnity, performance or other
similar bonds required in the ordinary course of business;

 

(v) Encumbrances consisting of zoning restrictions, easements or other
restrictions on the use of real property, none of which materially impairs the intended use of such
property or the value thereof, and none of which is
violated in any material respect by existing or proposed structures or land use;

 

31

(vi) Liens, security interests and mortgages in favor of the Administrative
Agent for the benefit of the Lenders and their Affiliates securing the
Obligations (including
obligations in connection with Lender Provided Interest Rate Hedges and Other Lender Provided
Financial Service Products);

 

(vii) Liens on property leased by any Loan Party or Subsidiary of such Loan
Party under capital and operating leases;

 

(viii) Any Lien existing on the date of this Agreement and described on
Schedule 1.l(P). provided that the principal amount secured thereby is not hereafter increased,
and no additional assets become subject to such Lien;

 

(ix) Purchase Money Security Interests; provided that the aggregate amount of
loans and deferred payments secured by such Purchase Money Security Interests shall not exceed

$5,000,000 (excluding for the purpose of this computation any loans or deferred payments
secured by Liens described on Schedule 1.1(P));

 

(x) The following, (A) if the validity or amount thereof is being contested in
good faith by appropriate and lawful proceedings diligently conducted so long as
levy and
execution thereon either has not commenced or have been stayed and continue to be stayed or

(A) if a final judgment is entered and such judgment is discharged within thirty
(30) days of entry,
and in either case they do not in the aggregate, materially impair the ability of any Loan
Party to perform its Obligations hereunder or under the other Loan Documents:

 

(1) Claims or Liens for taxes, assessments or charges due and payable and
subject to interest or penalty; provided that the applicable Loan Party
maintains such reserves or other appropriate provisions as shall be required by
GAAP and pays all such taxes,
assessments or charges forthwith upon the commencement of proceedings
to foreclose any such Lien;

 

(2)

Defects of title to, real or personal property;

 

(3) Claims or Liens of mechanics, materialmen, warehousemen,
carriers, or other statutory nonconsensual Liens incurred in the ordinary course of business or the
ordinary course of construction, and in either case such claims or liens do not result in a Material
Adverse Change; or

 

(4)

Liens resulting from final judgments or orders described in Section

9.1.7 [Final Judgments or Orders];

 

(xi)

Judgment Liens not constituting an Event of Default;

 

(xii) Liens securing Indebtedness that will be repaid with the first advances
under this Agreement;

 

(xiii) Liens existing on any property prior to the acquisition thereof by a Loan
Party or any Subsidiary thereof including pursuant to a Permitted Acquisition; provided that (1)
such Lien is not created in contemplation of or in connection with such
acquisition or such

32

Permitted Acquisition, as applicable, (2) such Lien shall not apply to any other
property of the Loan Parties or any Subsidiary thereof and (3) such Lien secures
only Indebtedness permitted under Sections 8.2.l(xiii) and 8.2.l(xiv) on the
date of such acquisition or Permitted Acquisition, as the case may be; and

 

(xiv) Liens that are replacements of Permitted Liens so long as the replacement
Liens only encumber those assets that secured the original Indebtedness.

 

Person shall mean any individual, corporation, partnership, limited liability
company, association, joint-stock company, trust, unincorporated organization, joint venture,
government or political subdivision or agency thereof, or any other entity.

 

Pledge Agreement shall mean the Pledge Agreement in substantially the form of
Exhibit 1.1(P) executed and delivered by the Loan Parties and Hallador Sands and certain of its
Subsidiaries to the Administrative Agent for the benefit of the Lenders.

 

image8.png [hnrg20190930ex1015bf182008.jpg]PNC Bank shall mean PNC Bank,
National Association, its successors and

Potential Default shall mean any event or condition which with notice or passage
of time, or both, would constitute an Event of Default.

 

Prime Rate shall mean the interest rate per annum announced from time to time
by the Administrative Agent at its Principal
Office as its then prime rate, which rate may not be the lowest or most
favorable rate then being charged commercial borrowers or others by the
Administrative Agent. Any change in the Prime Rate shall take effect at the opening of business
on the day such change is announced.

 

Principal Office shall mean the main banking office of the Administrative Agent
in Pittsburgh, Pennsylvania.

 

Prior Security Interest shall mean a valid and enforceable perfected first-priority
security interest under the Uniform Commercial Code in the Collateral which is subject only to
statutory Liens for taxes not yet due and payable or Purchase
Money Security Interests.

 

Pro Forma Basis shall mean:

 

(a) any material investment, Permitted Acquisition or
disposition of all or substantially all of the assets or Capital Stock of any Restricted Subsidiary or
of any division or product line or coal or other mine or mineral reserves, and
any dividend or distribution on, or re-purchases of, Capital Stock of the
Borrower made or to be made by any
Loan Party during the applicable reference period or subsequent to such reference period and on
or prior to the date of determination will be given pro forma effect as if it
had occurred on the first day of the applicable reference period;

 

(b) any Person that is a Restricted Subsidiary on the
date of determination will be deemed to have been a Restricted Subsidiary at all times during
such reference period;

 

33

(c) any Person that is not a Restricted Subsidiary on the date of determination
will be deemed not to have been a Restricted Subsidiary at any time during such
reference period;

 

(d) Fixed Charges shall be calculated after giving pro
forma effect to incurrences and repayments of Indebtedness (other than ordinary course working
capital borrowings and repayments under revolving credit facilities) during the
applicable reference period or subsequent to such reference period and on or
prior to the date of
determination to the extent in connection with any transaction referred to in clause (a) above as if
it had occurred on the first day of the applicable reference period; and

(e) if any Indebtedness bears a floating rate of interest, the interest expense
on such Indebtedness will be calculated as if the rate in effect on the
calculation date had been the applicable rate for the entire period (taking into
account the effect
on such interest rate of any Lender Provided Interest Rate Hedge or Lender Provided Commodity
Hedge applicable to such Indebtedness).

 

For purposes of this definition, whenever proforma effect is given to a
transaction, the proforma calculations shall be made in good faith by an
Authorized Officer of the Borrower and in a manner consistent with Article 11 of
Regulation S-X of the Securities Act, as set forth in a certificate of an
Authorized Officer of Borrower (with supporting calculations) and reasonably
acceptable to the Administrative Agent. For purposes of making the computation
referred to above, interest on any Indebtedness under a revolving credit
facility (to the extent required to be computed on a pro forma basis) shall be
computed based upon the average daily balance of such Indebtedness during the
applicable period. Interest on Indebtedness that may optionally be determined at
an interest rate based upon a factor of a prime or similar rate, a eurocurrency
interbank offered rate, or other rate shall be deemed to have been based upon
the rate actually chosen, or, if none, then based upon such optional rate chosen
as the Borrower may designate.

For the avoidance of doubt, Fixed Charges for purposes of calculating Excess Cash Flow shall
not be calculated on a Pro Forma Basis.

 

Published Rate shall mean the rate of interest published each Business Day in The
Wall Street Journal "Money Rates" listing under the caption "London Interbank Offered Rates"
for a one month period (or, if no such rate is published therein for any reason, then the Published
Rate shall be the rate at which U.S. dollar deposits are offered by leading
banks in the London
interbank deposit market for a one month period as published in another publication selected by
the Administrative Agent).

 

Purchase Money Security Interest shall mean Liens upon tangible personal
property securing loans (or capital leases) to any Loan Party or Subsidiary of such Loan Party or
deferred payments by such Loan Party or Subsidiary for the purchase of such tangible personal
property.

 

Qualified ECP Loan Party shall mean each Loan Party that on the Eligibility Date
is (a) a corporation, partnership, proprietorship, organization, trust, or other
entity other than a "commodity pool" as defined in Section la(l0) of the CEA and
CFTC regulations thereunder
that has total assets exceeding $10,000,000, or (b) an Eligible Contract Participant that can cause

 

34

another person to qualify as an Eligible Contract Participant on the Eligibility Date under Section
la(l8)(A)(v)(II) of the CEA by entering into or otherwise providing a "letter of
credit or
keepwell, support, or other agreement" for purposes of Section la(l8)(A)(v)(II) of the CEA.

 

Ratable Share shall mean:

 

(i) with respect to a Lender's obligation to make Revolving Credit Loans,
participate in Letters of Credit and other Letter of Credit Obligations, and receive payments,
interest, and fees related thereto, the proportion that such Lender's Revolving
Credit Commitment bears to the Revolving Credit Commitments of all of the
Lenders, provided
however that if the Revolving Credit Commitments have terminated or
expired, the Ratable Shares for purposes of this clause shall be determined
based upon the Revolving Credit
Commitments most recently in effect, giving effect to any assignments.

 

(ii) with respect to a Lender's obligation to make Term Loans and receive
payments, interest, and fees related thereto, the proportion that such Lender's Term Loans bears
to the Term Loans of all of the Lenders.

 

(iii) with respect to all other matters as to a particular Lender, the
percentage obtained by dividing (i) such Lender's Revolving Credit Commitment
plus Term Loan Commitment, by (ii) the sum of the aggregate amount of the
Revolving Credit Commitments plus Term Loans of all Lenders; provided however
that if the Revolving Credit Commitments have terminated or expired, the
computation in this clause shall be determined based upon the
Revolving Credit Commitments most recently in effect, giving effect to any assignments, and not
on the current amount of the Revolving Credit Commitments and provided further in the case of
Section 2.10 [Defaulting Lenders] when a Defaulting Lender shall exist, "Ratable
Share" shall mean the percentage of the aggregate Commitments (disregarding any
Defaulting Lender's Commitment) represented by such Lender's Commitment.

 

Real Property shall mean all interests in real property, both owned and leased, and
the surface, coal, and mineral rights, interests, licenses, easements, right of
ways, water rights,
coal leases, and other interests of each Loan Party (other than Summit Terminal) associated with
the properties described on Schedule 1.1(R), which shall be encumbered by a
Mortgage, as described on Schedule I. l(R).

 

Recipient shall mean (i) the Administrative Agent, (ii) any Lender and (iii) the
Issuing Lender, as applicable.

 

Regulated Substances shall mean, without limitation, any substance, material or
waste, regardless of its form or nature, defined under Environmental Laws as a
“hazardous substance”, “pollutant”, “contaminant”, “hazardous or toxic
substance”, “extremely hazardous substance”, “toxic chemical”, “toxic
substance”, toxic waste”, "hazardous waste" "special handling waste" "industrial
waste" "residual waste" "solid waste" "municipal waste”  "mixed waste",
"infectious waste", "chemotherapeutic waste", "medical waste", "regulated
substance" or any other material, substance or waste, regardless of its form or nature, which
otherwise is regulated by Environmental Laws.

35

Reimbursement Obligation shall have the meaning specified in Section 2.9.3
[Disbursements, Reimbursement].

 

Related Parties shall mean, with respect to any Person, such Person's Affiliates
and the partners, directors, officers, employees, agents and advisors of such Person and of such
Person's Affiliates.

 

Relief Proceeding shall mean any proceeding seeking a decree or order for relief
in respect of any Loan Party or Subsidiary of a Loan Party in a voluntary or
involuntary case under any applicable bankruptcy, insolvency, reorganization or
other similar law now or hereafter in effect, or for the appointment of a
receiver, liquidator, assignee, custodian, trustee,
sequestrator, conservator (or similar official) of any Loan Party or Subsidiary of a Loan Party for
any substantial part of its property, or for the winding-up or liquidation of
its affairs, or an assignment for the benefit of its creditors.

 

Reportable Compliance Event shall mean that any Covered Entity becomes a
Sanctioned Person, or is charged by indictment, criminal complaint or similar
charging
instrument, arraigned, or custodially detained in connection with any Anti-Terrorism Law or any
predicate crime to any Anti-Terrorism Law, or has knowledge of facts or
circumstances to the
effect that it is reasonably likely that any aspect of its operations is in actual or probable violation
of any Anti-Terrorism Law.

 

Required Environmental Notices shall mean all notices, reports, plans, forms or
other filings which are required pursuant to Environmental Laws or Required
Environmental Permits to
be submitted to an Official Body or which otherwise must be maintained.

 

Required Environmental Permits shall mean all permits, licenses, bonds, consents,
approvals or authorizations required under Environmental Laws to own, occupy or maintain the
Real Property.

 

Required Lenders shall mean

 

(A) If there exists fewer than three (3) Lenders, all Lenders (other than any
Defaulting Lender), and

(B) If there exist three (3) or more Lenders, Lenders (other than any Defaulting
Lender) having more than 50% of the sum of (a) the aggregate amount of the
Revolving Credit Commitments
of the Lenders (excluding any Defaulting Lender) or, after the
termination of the Revolving Credit Commitments, the outstanding Revolving Credit Loans and
Ratable Share of Letter of Credit Obligations of the Lenders (excluding any Defaulting Lender),
and (b) the aggregate outstanding amount of any Term Loans.

 

Required Mining Permits shall mean all permits, licenses, authorizations, plans,
approvals and bonds necessary under the Environmental Laws for the Loan Parties
or any Subsidiary to continue to conduct coal mining and related operations on,
in or under the Real Property, and any and all other mining properties owned or
leased by any such Loan Party or
Subsidiary (collectively "Mining Property") substantially in the manner as such operations had
been authorized immediately prior to such Loan Party's acquisition of its interests in the Real

36

Property and as may be necessary for such Loan Party to conduct coal mining and related
operations on, in or under the Mining Property as described in any plan of operation.

 

Required Share shall have the meaning assigned to such term in Section 5.11
[Settlement Date Procedures].

 

Restricted Subsidiaries shall mean any and all existing and hereinafter acquired or
created Subsidiaries of the Borrower or any other Loan Party other than the
Excluded Subsidiaries.

 

Revolver Lenders shall mean the financial institutions named on Schedule 1.1(B)
and their respective successors and assigns as permitted hereunder and
designated as having a
Revolving Credit Loan Commitment, each of which is referred to herein as a Revolver Lender.

 

Revolving Credit Commitment shall mean, as to any Lender at any time, the amount
initially set forth opposite its name on Schedule l.l(B) in the column labeled
"Amount of Commitment for Revolving Credit Loans," as such Commitment is
thereafter assigned or modified, and Revolving Credit Commitments shall mean the
aggregate Revolving Credit Commitments of all of the Lenders.

 

Revolving Credit Loans shall mean collectively and Revolving Credit Loan shall
mean separately all Revolving Credit Loans or any Revolving Credit Loan made by the Lenders
or one of the Lenders to the Borrower pursuant to Section 2.1 [Revolving Credit Commitments]
or 2.9.3 [Disbursements, Reimbursement].

 

Revolving Facility Usage shall mean at any time the sum of the outstanding
Revolving Credit Loans, Swing Loans and the Letter of Credit Obligations.

 

Sanctioned Country shall mean a country subject to a sanctions program
maintained under any Anti-Terrorism Law.

 

Sanctioned Person shall mean any individual person, group, regime, entity or
thing listed or otherwise recognized as a specially designated, prohibited, sanctioned or debarred
person, group, regime, entity or thing, or subject to any limitations or prohibitions (including but
not limited to the blocking of property or rejection of transactions), under any
Anti-Terrorism Law.

 

Second Amendment shall mean that certain Second Amendment to Credit Agreement
dated as of the Second Amendment Closing Date.

 

Second Amendment Closing Date shall mean September 30, 2019.

 

Securities Act shall mean the Securities Act of 1933.

 

Security Agreement shall mean the Security Agreement in substantially the form
of Exhibit 1.1(S) executed and delivered by each of the Loan Parties to the Administrative Agent
for the benefit of the Lenders.

 

37

Security Documents shall mean the Security Agreement, the Pledge Agreement, the
Collateral Assignment, the Mortgages, deeds of trust, and all other documents,
instruments,
and agreements sufficient to provide the Administrative Agent for the benefit of the Lenders with
a first priority perfected Lien, subject only to Permitted Liens, on the Collateral.

 

Settlement Date shall mean any Business Day on which the Administrative Agent
elects
to effect settlement pursuant to Section 5.11 [Settlement Date Procedures].

 

Solvent shall mean, with respect to any Person on any date of determination,
taking into account any right of reimbursement, contribution or similar right
available to such Person from other Persons, that on such date (i) the fair
value of the property of such Person is greater than the total amount of  
 liabilities, including, without limitation, contingent liabilities, of such
Person, (ii) the present fair saleable value of the assets of such Person is not
less than the amount that will be required to pay the probable liability of such
Person on its debts as they
become absolute and matured, (iii) such Person is able to realize upon its assets and pay its debts
and other liabilities, contingent obligations and other commitments as they mature in the normal
course of business, (iv) such Person does not intend to, and does not believe
that it will, incur debts or liabilities beyond such Person's ability to
pay as such debts and liabilities mature, and (v) such Person is not engaged in
business or a transaction, and is not about to engage in business or a
transaction, for which such Person's property would constitute  unreasonably
small capital after giving due consideration to the prevailing practice in the
industry in which such Person is engaged. In computing the amount of contingent
liabilities at any time, it is intended that such liabilities will be computed
at the amount which, in light of all the facts and circumstances existing at
such time, represents the amount that can reasonably be expected to become an
actual or matured liability.

 

Standard &  Poor's shall mean Standard &  Poor's Ratings Services, a division of
The McGraw-Hill Companies, Inc.

 

Statements shall have the meaning specified in Section 6.1.6(i)
[Historical Statements].

 

Subsidiary of any Person at any time shall mean any corporation, trust,
partnership, any limited liability company or other business entity (i) of which 50% or more of
the outstanding voting securities or other interests normally entitled to vote
for the election of
one or more directors or trustees (regardless of any contingency which does or may suspend or
dilute the voting rights) is at such time owned directly or indirectly by such
Person or one or
more of such Person's Subsidiaries, or (ii) which is controlled or capable of being controlled by
such Person or one or more of such Person's Subsidiaries.

 

Subsidiary Equity Interests shall have the meaning specified in Section 6.1.2
[Subsidiaries and Owners; Investment Companies].

 

Summit Terminal shall mean Summit Terminal, LLC, a Delaware limited
liability company.

 

Swap shall mean any "swap" as defined in Section la(47) of the CEA and
regulations thereunder, other than (a) a swap entered into, or subject to the rules of, a board of

38

trade designated as a contract market under Section 5 of the CEA, or (b) a commodity option
entered into pursuant to CFTC Regulation 32.3(a).

 

Swap Obligation shall mean any obligation to pay or perform under any
agreement, contract or transaction that constitutes a Swap which is also a Lender Provided
Interest Rate Hedge or Lender Provided Commodity Hedge.

 

Swing Loan Commitment shall mean PNC Bank's commitment to make Swing Loans to
the Borrower pursuant to Section 2.1.2 [Swing Loan Commitment] hereof in an
aggregate principal amount up to $15,000,000.

 

Swing Loan Lender shall mean PNC Bank, in its capacity as a lender of Swing

Loans.

 

Swing Loan Note shall mean the Swing Loan Note of the Borrower in the form of
Exhibit l.l(N)(2) evidencing the Swing Loans, together with all amendments,
extensions, renewals, replacements, refinancings or refundings thereof in whole
or in part.

 

Swing Loan Request shall mean a request for Swing Loans made in accordance with
Section 2.5.2 [Swing Loan Request] hereof.

 

Swing Loans shall mean collectively and Swing Loan shall mean separately all
Swing Loans or any Swing Loan made by PNC Bank to the Borrower pursuant to Section 2.1.2
[Swing Loan Commitment] hereof.

 

Taxes shall mean all present or future taxes, levies, imposts, duties, deductions,
withholdings (including backup withholdings), assessments, fees or other charges imposed by
any Official Body, including any interest, additions to tax or penalties applicable thereto.

 

Term Loan shall have the meaning specified in Section 3.1 [Term Loan
Commitments]; Term Loans shall mean collectively all of the Term Loans.

 

Term Loan Commitment shall mean, as to any Lender at any time, the amount
initially set forth opposite its name on Schedule 1.l(B) in the column labeled
"Amount of Commitment for Term Loans," as such Commitment is thereafter assigned
or modified,
including any amounts by which such Lender agrees to increase its Commitment pursuant to
Section 3.4 [Increase in Term Loans], and Term Loan Commitments shall mean the aggregate
Term Loan Commitments of all of the Lenders.

 

Term Loan Lenders shall mean the financial institutions named on Schedule I.
I (B) (as amended or supplemented from time to time) and their respective successors and assigns
as permitted hereunder and designated as having a Term Loan Commitment, each of
which is referred to herein as a Term Loan Lender.

 

UCP shall have the meaning specified in Section 11.11.1 [Governing Law].

39

Unasserted Obligations shall mean contingent indemnification obligations (other
than Letter of Credit Obligations) under the Loan Documents to the extent no claim giving rise
thereto has been asserted.

 

USA Patriot Act shall mean the Uniting and Strengthening America by Providing
Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001,
Public Law 107- 56, as the same has been, or shall hereafter be, renewed,
extended, amended or replaced.

 

U.S. Person shall mean any Person that is a "United States Person" as defined in
Section 770l(a)(30) of the Code.

U.S. Tax Compliance Certificate shall have the meaning specified in Section 5.9.7
[Status of Lenders].

Weighted Average Life to Maturity means, when applied to any Indebtedness on any
date, the number of years obtained by dividing: (a) the sum of the products
obtained by multiplying (i) the amount of each then remaining installment,
sinking fund, serial maturity or
other required payments of principal, including payment at final maturity, in respect thereof, by (ii) the number of years (calculated to the nearest one-twelfth) that will elapse between such date
and the making of such payment; by (b) the then outstanding principal amount of
such Indebtedness.

 

Withholding Agent shall mean any Loan Party and the Administrative Agent.

 

Write-Down and Conversion Powers means, with respect to any EEA Resolution
Authority, the write-down and conversion powers of such EEA Resolution Authority from time
to time under the Bail-In Legislation for the applicable EEA Member Country,
which write­ down and conversion powers are described
in the EU Bail-In Legislation Schedule.

 

3.2

Construction. Unless the context of this Agreement otherwise clearly requires,
the following rules of construction shall apply to this Agreement and each of
the other Loan Documents:
(i) references to the plural include the singular, the plural, the part and the whole and
the words "include," "includes" and "including" shall be deemed to be followed by the phrase "without
limitation"·'  (ii) the words "hereof'" "here,in "  "hereunder'"  "hereto" and
similar terms in this Agreement or any other Loan Document refer to this
Agreement or such other
Loan Document as a whole; (iii) article, section, subsection, clause, schedule and exhibit references
are to this Agreement or other Loan Document, as the case may be, unless otherwise specified; (iv) reference to any Person includes such Person's successors and assigns; (v) reference to any
agreement, including this Agreement and any other Loan Document together with the schedules
and exhibits hereto or thereto, document or instrument means such agreement,
document or
instrument as amended, modified, replaced, substituted for, superseded or restated; (vi) relative
to the determination of any period of time, "from" means "from and including," "to" means "to
but excluding," and "through" means "through and including"; (vii) the words
"asset" and "property" shall be construed to have the same meaning and effect
and to refer to any and all tangible and intangible assets and properties,
including cash, securities, accounts and contract rights, (viii) section
headings herein and in each other Loan Document are included for
convenience and shall not affect the interpretation of this Agreement or such Loan Document,

 

40

and (ix) unless otherwise specified, all references herein to times of day shall be references to
Eastern Standard Time or Eastern Daylight Time, as applicable.

 

3.3 Accounting Principles: Changes in GAAP. Except as otherwise provided in this
Agreement, all computations and determinations as to accounting or financial
matters and all financial statements to be delivered pursuant to this Agreement
shall be made and prepared in accordance with GAAP (including principles of
consolidation where appropriate), and all accounting or financial terms shall
have the meanings ascribed to such terms by GAAP; provided, however, that all
accounting Terms used in Section 8.2 [Negative Covenants] (and all defined Terms
used in the definition of any accounting term used in Section 8.2 [Negative
Covenants] shall have the meaning given to such terms (and defined terms) under
GAAP as in effect on the date hereof applied on a basis consistent with those
used in preparing Statements referred to in Section 6.1.6(i) [Historical
Statements]. Notwithstanding the foregoing, if the Borrower notifies the
Administrative Agent in writing that the Borrower wishes to amend any
financial covenant in Section 8.2 [Negative Covenants] of this Agreement, any related definition
and/or the definition of the term Leverage Ratio for purposes of interest and Letter of Credit Fee
determinations to eliminate the effect of any change in GAAP occurring after the
Closing Date on the operation of such financial covenants and/or interest or
Letter of Credit Fee
determinations (or if the Administrative Agent notifies the Borrower in writing that the Required
Lenders wish to amend any financial covenant in Section 8.2 [Negative Covenants], any related
definition and/or the definition of the term Leverage Ratio for purposes of interest and Letter of
Credit Fee determinations to eliminate the effect of any such change in GAAP),
then the
Administrative Agent, the Lenders and the Borrower shall negotiate in good faith to amend such
ratios or requirements to preserve the original intent thereof in light of such
change in GAAP (subject to the approval of the Required Lenders); provided that,
until so amended, the Loan Parties' compliance with such covenants and/or the
definition of the term Leverage Ratio for purposes of interest and Letter of
Credit Fee determinations shall be determined on the basis of
GAAP in effect immediately before the relevant change in GAAP became effective, until either
such notice is withdrawn or such covenants or definitions are amended in a manner satisfactory
to the Borrower and the Required Lenders, and the Loan Parties shall provide to
the Administrative Agent, when they deliver their financial statements pursuant
to Sections 8.3.1 [Quarterly Financial Statements] and 8.3.2 [Annual Financial
Statements] of this Agreement, such reconciliation statements
as shall be reasonably requested by the Administrative Agent.

3.4 LIBOR Notification. Section 4.5.4 [Successor LIBOR Rate Index] of this
Agreement provides a mechanism for determining an alternative rate of interest in the event that
the London interbank offered rate is no longer available or in certain other
circumstances. The
Administrative Agent will notify the Borrower that the Administrative Agent has determined that
the circumstances under Section 4.5.4(i) exist as promptly as practicable
thereafter and in advance of any change to the reference rate upon which the
interest rate on Loans under the LIBOR Rate Option is based. The Administrative
Agent does not warrant or accept any responsibility for and shall not have any
liability with respect to, the administration, submission
or any other matter related to the London interbank offered rate or other rates in the definition of
"LIBOR Rate" or with respect to any alternative or successor rate thereto, or
replacement rate therefor.

2.

·  REVOLVING CREDIT AND SWING LOAN FACILITIES

 

2.1

Revolving Credit Commitments.

41

 

2.1.1 Revolving Credit Loans. Subject to the terms and conditions hereof and
relying upon the representations and warranties herein set forth, each Lender severally agrees to
make Revolving Credit Loans to the Borrower at any time or from time to time on
or after the date hereof to the Expiration Date: provided that after giving
effect to such Loan (i) the aggregate amount of Revolving Credit Loans from such
Lender shall not exceed such Lender's Revolving Credit Commitment minus such
Lender's Ratable Share of the outstanding Swing
Loans and Letter of Credit Obligations and (ii) the Revolving Facility Usage shall not exceed the
Revolving Credit Commitments. Within such limits of time and amount
and subject to the other provisions of this Agreement, the Borrower may borrow,
repay and reborrow pursuant to this Section 2.1.

 

2.1.2 Swing Loan Commitment. Subject to the terms and conditions hereof and
relying upon the representations and warranties herein set forth, and in order
to facilitate
loans and repayments between Settlement Dates, PNC Bank may, at its option, cancelable at any
time for any reason whatsoever, make swing loans (the "Swing Loans") to the
Borrower at any time or from time to time after the date hereof to, but not
including, the Expiration Date, in an aggregate principal amount up to but not
in excess of the Swing Loan Commitment, provided
that the aggregate principal amount of PNC Bank's Swing Loans and the Revolving Credit Loans
of all the Lenders at any one time outstanding shall not exceed the Revolving
Credit
Commitments of all the Lenders. Within such limits of time and amount and subject to the other
provisions of this Agreement, the Borrower may borrow, repay and reborrow
pursuant to this Section 2.1.2.

 

2.2 Nature of Lenders' Obligations with Respect to Revolving Credit Loans. Each
Lender shall be obligated to participate in each request for Revolving Credit
Loans pursuant to Section 2.5 [Revolving Credit Loan Requests; Swing Loan
Requests] in accordance with its
Ratable Share. The aggregate of each Lender's Revolving Credit Loans outstanding hereunder to
the Borrower at any time shall never exceed its Revolving Credit Commitment minus its Ratable
Share of the outstanding Swing Loans and Letter of Credit Obligations. The
obligations of each Lender hereunder are several. The failure of any Lender to
perform its obligations hereunder shall not affect the Obligations of the
Borrower to any other party nor shall any other party be
liable for the failure of such Lender to perform
its obligations hereunder. The Lenders shall have
no obligation to make Revolving Credit Loans hereunder on or after the Expiration Date.

 

2.3
Commitment Fees. Accruing from the date hereof until the Expiration Date, the
Borrower agrees to pay to the Administrative Agent for the account of each Lender according to
its Ratable Share, a nonrefundable Commitment fee (the "Commitment Fee") equal
to the Applicable Commitment Fee Rate (computed on the basis of a year of 365 or
366 days, as the
case may be, and actual days elapsed) times the average daily difference between the amount of the
Revolving Credit Commitments and (ii) the Revolving Facility Usage (provided
however, that solely in connection with determining the share of each Lender in
the Commitment Fee, the Revolving Facility Usage with respect to the portion of
the Commitment Fee allocated to PNC
shall include the full amount of the outstanding Swing Loans, and with respect to the portion of the Commitment Fee allocated by the Administrative Agent to all of the Lenders other than PNC,
such portion of the Commitment Fee shall be calculated (according to each such Lender's Ratable
Share) as if the Revolving Facility Usage excludes the outstanding Swing Loans);
provided, further, that any Commitment Fee accrued with respect to the Revolving
Credit Commitment of a Defaulting

42

Lender during the period prior to the time such Lender became a
Defaulting Lender and unpaid at such time shall not be payable by the Borrower
so long as such Lender shall be a Defaulting Lender except to the extent that
such Commitment Fee shall otherwise have been due and payable by the Borrower
prior to such time; and provided further that no Commitment Fee shall accrue
with respect to the Revolving Credit Commitment of a
Defaulting Lender so long as such Lender shall be a Defaulting Lender. Subject to the proviso in
the directly preceding sentence, all Commitment Fees shall be payable in arrears
on each Payment Date.

2.4 Reduction or Termination of Revolving Credit Commitments. The Borrower shall
have the right, upon not less than three (3) Business Days' notice to the
Administrative Agent, from time to time, to terminate or reduce the aggregate
amount of the Revolving Credit Commitments (ratably among the Lenders in
proportion to their Ratable Shares); provided that no such reduction of
Revolving Credit Commitments shall be permitted if, after giving effect thereto
and to any prepayments of the Revolving Credit Loans made on the effective date
thereof, the Revolving Facility Usage would exceed the aggregate Revolving
Credit Commitments of the Lenders. Any such reduction shall be in an amount
equal to $10,000,000, or a whole multiple thereof, and shall reduce permanently
the Revolving Credit Commitments then in effect. Any such termination or
reduction shall be accompanied by prepayment of the Notes, together with
outstanding Commitment Fees, and the full amount of interest accrued on the
principal sum to be prepaid (and all amounts referred to in Section 5.10
[Indemnity] hereof) to the extent necessary to cause the aggregate Revolving
Facility Usage after giving effect to
such prepayments to be equal to or less than the Revolving Credit Commitments as so reduced or
terminated. Any notice to terminate or reduce the Revolving Credit Commitments
under this Section 2.4 shall be irrevocable.

2.5

Revolving Credit Loan Requests: Swing Loan Requests.

 

2.5.1 Revolving Credit Loan Requests. Except as otherwise provided herein
(and subject to Section 4.6 [Selection of Interest Rate Options]), the Borrower may from time to
time prior to the Expiration Date request the Lenders to make Revolving Credit Loans, or renew
or convert the Interest Rate Option applicable to existing Revolving Credit
Loans pursuant to Section 4.3 [Interest Periods], by delivering to the
Administrative Agent, not later than 10:00 a.m., (i) three (3) Business Days
prior to the proposed Borrowing Date with respect to the
making of Revolving Credit Loans to which the LIBOR Rate Option applies or the conversion to
or the renewal of the LIBOR Rate Option for any Loans; and (ii) one (1) Business
Day prior to either the proposed Borrowing Date with respect to the making of a
Revolving Credit Loan to
which the Base Rate Option applies or the last day of the preceding Interest Period with respect
to the conversion to the Base Rate Option for any Loan, of a duly completed
request therefor substantially in the form of Exhibit 2.5.1 or a request by
telephone immediately confirmed in
writing by letter, facsimile or telex in such form (each, a "Loan Request"), it being understood
that the Administrative Agent may rely on the authority of any individual making
such a
telephonic request without the necessity of receipt of such written confirmation Each Loa Request
shall be irrevocable and shall specify the aggregate amount of the proposed Loa
comprising each Borrowing Tranche, and
 applicable, the Interest Period, which amounts shall be in integral multiples
of$500,000 and not less than  $1,000,000 for each Borrowing Trauche under
the LlBOR Rate Option and
in integral multiples of $100,000 and not less than the lesser of $500,000 or
the maximum amount available for Borrowing Trauches under the Base Rate Option.

43

 

2.5.2 Swing Loan Requests. Except as otherwise provided herein, the
Borrower may from time to time prior to the Expiration Date request PNC Bank to make Swing
Loans by delivery to PNC Bank not later than 12:00 p.m. Pittsburgh time on the
proposed Borrowing Date of a duly completed request therefor substantially in
the form of Exhibit 2.5.2 hereto or a request by telephone immediately confirmed
in writing by letter, facsimile or telex
(each, a "Swing Loan Request"), it being understood that the Administrative Agent may rely on
the authority of any individual making such a telephonic request without the necessity of receipt
of such written confirmation. Each Swing Loan Request shall be irrevocable and
shall specify
the proposed Borrowing Date and the principal amount of such Swing Loan, which shall be not
less than $100,000.

 

2.6 Making Revolving Credit Loans and Swing Loans; Presumptions by the
Administrative Agent; Repayment of Revolving Credit Loans; Borrowings to Repay Swing
Loans.

 

2.6.1 Making Revolving Credit Loans. The Administrative Agent shall, promptly
after receipt by it of a Loan Request pursuant to Section 2.5 [Revolving Credit
Loan Requests; Swing Loan Requests], notify the Lenders of its receipt of such
Loan Request
specifying the information provided by the Borrower and the apportionment among the Lenders
of the requested Revolving Credit Loans as determined by the Administrative
Agent in
accordance with Section 2.2 [Nature of Lenders' Obligations with Respect to Revolving Credit
Loans]. Each Lender shall remit the principal amount of each Revolving Credit
Loan to the Administrative Agent such that the Administrative Agent is able to,
aid the Administrative Agent shall, to the extent the Lenders have made funds
available to it for such purpose and
subject to Section 7.2 [Each Loan or Letter of Credit], fund such Revolving Credit Loans to the
Borrower in U.S. Dollars and immediately available funds at the Principal Office prior to 2:00
p.m., on the applicable Borrowing Date: provided
that if any Lender fails to remit such funds to the Administrative Agent in a
timely manner, the Administrative Agent may elect in its sole discretion to fund
with its own funds the Revolving Credit Loans of such Lender on such
Borrowing Date, and such Lender shall be subject to the repayment obligation in Section 2.6.2
[Presumptions by the Administrative Agent].

 

2.6.2 Presumptions by the Administrative Agent. Unless the Administrative
Agent shall have received notice from a Lender prior to the proposed date of any Loan that such
Lender will not make available to the Administrative Agent such Lender's share
of such Loan,
the Administrative Agent may assume that such Lender has made such share available on such
date in accordance with Section 2.6.1 [Making Revolving Credit Loans] and may,
in reliance
upon such assumption, make available to the Borrower a corresponding amount. In such event,
if a Lender has not in fact made its share of the applicable Loan available to the Administrative
Agent, then the applicable Lender and the Borrower severally agree to pay to the Administrative

 

44

Agent forthwith on demand such corresponding amount with interest thereon, for each day from
and including the date such amount is made available to the Borrower to but excluding the date
of payment to the Administrative Agent, at (i) in the case of a payment to be
made by such Lender, the greater of the Federal Funds Effective Rate and a rate
determined by the
Administrative Agent in accordance with banking industry rules on interbank compensation and in
the case of a payment to be made by the Borrower, the interest rate applicable
to Loans under the Base Rate Option. If such Lender pays its share of the
applicable Loan to the Administrative Agent, then the amount so paid shall
constitute such Lender's Loan. Any
payment by the Borrower shall be without prejudice to any claim the Borrower may have against
a Lender that shall have failed to make such payment to the Administrative Agent.

 

2.6.3 Making Swing Loans. So long as PNC Bank elects to make Swing Loans, PNC
Bank shall, after receipt by it of a Swing Loan Request pursuant to Section
2.5.2,
[Swing Loan Requests] fund such Swing Loan to the Borrower in U.S. Dollars and immediately
available funds at the Principal Office prior to 2:00 p.m. Pittsburgh time on the Borrowing Date.

 

2.6.4 Repayment of Revolving Credit Loans. The Borrower shall repay the
Revolving Credit Loans together with all outstanding interest thereon on the Expiration Date.

 

2.6.5 Borrowings to Repay Swing Loans. PNC Bank may, at its option, exercisable
at any time for any reason whatsoever, demand repayment of the Swing Loans, and
each Lender shall make a Revolving Credit Loan in an amount equal to such
Lenders' Ratable Share of the aggregate principal amount of the outstanding
Swing Loans, plus, if PNC Bank so requests, accrued interest thereon, provided
 that no Lender shall be obligated  in any event  to make Revolving Credit Loans
in excess of its Revolving Credit Commitment minus its Ratable Share of Letter
of Credit Obligations. Revolving Credit Loans made pursuant to the preceding
sentence shall bear interest at the Base Rate Option and shall be deemed to have
been properly requested in accordance with Section 2.5.1 [Revolving Credit Loan
Requests] without regard to any of the requirements of that provision. PNC Bank
shall provide notice to the Lenders (which may be telephonic
or  written  notice  by letter, facsimile or  telex) that such Revolving Credit
Loans are to be made under this Section 2.6.5 and of the apportionment among the
Lenders,  and the Lenders shall be unconditionally obligated to fund such
Revolving Credit Loans (whether or not the conditions specified in Section 2.5.1
[Revolving Credit Loan Requests] are then satisfied) by the time PNC Bank
so  requests, which shall  not be earlier than 3:00 p.m. Pittsburgh time on the
Business Day next after the date the Lenders receive such notice from PNC Bank.

 

2.6.6 Swing Loans Under Cash Management Agreements. In addition to making Swing
Loans pursuant to the foregoing provisions of Section 2.6.3 [Making Swing
Loans], without the requirement for a specific request from the Borrower pursuant to Section 2.5.2
[Swing Loan Requests], PNC Bank may make Swing Loans to the Borrower in
accordance with the provisions of the agreements between the Borrower and PNC
Bank relating to the Borrower's deposit, sweep and other accounts at PNC Bank
and related arrangements and agreements regarding the management and investment
of the Borrower's cash assets as in effect from time to time (the "Cash
Management Agreements") to the extent of the daily aggregate net negative
balance in the Borrower's accounts which are subject to the provisions of the
Cash Management Agreements.  Swing Loans made pursuant to this Section 2.6.6 in
accordance with the provisions of the Cash Management Agreements shall (i) be
subject to the limitations as to

 

45

 

46

aggregate amount set forth in Section 2.1.2 [Swing Loan Commitment], (ii) not be subject to the
limitations as to individual amount set forth in Section 2.5.2 [Swing Loan
Requests], (iii) be payable by the Borrower, both as to principal and interest,
at the rates and times set forth in the
Cash Management Agreements (but in no event later than the Expiration Date), (iv) not be made
at any time after PNC Bank has received
written notice of the occurrence of an Event of Default and so long as such
Event of Default shall continue to exist, or, unless consented to by the
Required Lenders, a Potential Default and so long as such shall continue to exist, (v) if not repaid
by the Borrower in accordance with the provisions of the Cash Management
Agreements, be subject to each Lender's obligation pursuant to Section 2.6.5
[Borrowings to Repay Swing
Loans], and (vi) except as provided in the foregoing subsections (i) through (v), be subject to all
of the terms and conditions of this Section 2.6.6.

 

2.7 Notes. The Obligation of the Borrower to repay the aggregate unpaid
principal amount of the Revolving Credit Loans and Swing Loans made to it by
each Lender, together with interest thereon, shall be evidenced by
a revolving credit Note and a swing Note, dated the
Closing Date payable to the order of such Lender in a face amount equal to the Revolving Credit
Commitment or Swing Loan Commitment, as applicable, of such Lender.

 

2.8
Use of Proceeds. The proceeds of the Loans shall be used to refinance existing
Indebtedness under the 2014 Credit Agreement and for general corporate purposes including
ongoing working capital, capital expenditures, Permitted Acquisitions and to pay
fees and expenses related to the closing of this Agreement.

 

2.9

Letter of Credit Subfacility.

 

2.9.1 Issuance of Letters of Credit. On the Closing Date, the outstanding
letters of credit previously issued by any Lender under the 2014 Credit
Agreement that are set
forth on Schedule 2.9 (the "Existing Letters of Credit") will automatically, without any action on
the part of any Person, be deemed to be Letters of Credit issued hereunder for the account of the
Borrower for all purposes of this Agreement and the other Loan Documents.
Borrower may at any time prior to the Expiration Date request the issuance of a
standby or trade letter of credit (each a "Letter of Credit") on behalf of
itself or another Loan Party, or the amendment or
extension of an existing Letter of Credit, by delivering or having such other Loan Party deliver to
the Issuing Lender (with a copy to the Administrative Agent) a completed
application and agreement for letters of credit, or request for such amendment
or extension, as applicable, in such form as
the Issuing Lender may specify from time to time by no later than 10:00 a.m. at least five (5) Business Days, or such shorter period as may be agreed to by the Issuing Lender, in advance
of the proposed date of issuance. Promptly after receipt of any letter of credit
application, the
Issuing Lender shall confirm with the Administrative Agent (by telephone or in writing) that the
Administrative Agent has received a copy of such Letter of Credit application
and if not, such
Issuing Lender will provide Administrative Agent with a copy thereof.

 

Unless the Issuing Lender has received notice from any Lender, Administrative
Agent or any Loan Party, at least one day prior to the requested date of issuance, amendment or
extension of the applicable Letter of Credit, that one or more applicable conditions in Section 7
[Conditions of Lending and Issuance of Letters of Credit] is not satisfied,
then, subject to the
terms and conditions hereof and in reliance on the agreements of the other Lenders set forth in

 

47

this Section 2.9, the Issuing Lender or any of the Issuing Lender's Affiliates will issue a Letter of
Credit or agree to such amendment or extension, provided that each Letter of
Credit shall (A)
have a maximum maturity of twelve (12) months from the date of issuance,
and (B) in no event expire later than the Expiration Date and provided further
that in no event shall (i) the Letter of
Credit Obligations exceed, at any one time, $25,000,000 (the "Letter of Credit Sublimit") or (ii)
the Revolving Facility Usage exceed, at any one time, the Revolving Credit
Commitments. Each request by the Borrower for the issuance, amendment or
extension of a Letter of Credit shall be deemed to be a representation by the
Borrower that it shall be in compliance with the
preceding sentence and with Section 7 [Conditions of Lending and Issuance of Letters of Credit]
after giving effect to the requested issuance, amendment or extension of such
Letter of Credit.
Promptly after its delivery of any Letter of Credit or any amendment to a Letter of Credit to the
beneficiary thereof, the applicable Issuing Lender will also deliver to Borrower
and
Administrative Agent a true and complete copy of such Letter of Credit or amendment.

 

Notwithstanding Section 2.9.1, the Issuing Lender shall not be under any
obligation to issue any Letter of Credit if (i) any order, judgment or decree of any Official Body
or arbitrator shall by its terms purport to enjoin or restrain the Issuing
Lender from issuing the
Letter of Credit, or any Law applicable to the Issuing Lender or any request or directive (whether
or not having the force of law) from any Official Body with jurisdiction over the Issuing Lender
shall prohibit, or request that the Issuing Lender refrain from, the issuance of
letters of credit generally or the Letter of Credit in particular or shall
impose upon the Issuing Lender with respect to the Letter of Credit any
restriction, reserve or capital requirement (for which the Issuing Lender is not
otherwise compensated hereunder) not in effect on the Closing Date, or shall
impose upon the Issuing Lender any unreimbursed loss, cost or expense which was
not applicable on the Closing Date and which the Issuing Lender in good faith
deems material to it, or (ii) the issuance of the Letter of Credit would violate
one or more policies of the Issuing Lender applicable to letters of
credit generally.

2.9.2 Letter of Credit Fees. The Borrower shall pay (i) to the Administrative
Agent for the ratable account of the Lenders a fee (the "Letter of Credit Fee")
equal to the
Applicable Letter of Credit Fee Rate, and (ii) to the Issuing Lender for its own account a fronting
fee equal to 0.25% per annum (in each case computed on the basis of a year of
360 days and actual days elapsed), which fees shall be computed on the daily
average Letter of Credit
Obligations and shall be payable quarterly in arrears on each Payment Date following issuance of
each Letter of Credit. The Borrower shall also pay to the Issuing Lender for the Issuing Lender's
sole account the Issuing Lender's then in effect customary fees and
administrative expenses
payable with respect to the Letters of Credit as the Issuing Lender may generally charge or incur
from time to time in connection with the issuance, maintenance, amendment (if any), assignment
or transfer (if any), negotiation, and administration of Letters of Credit.

 

2.9.3 Disbursements, Reimbursement. Immediately upon the issuance of each Letter
of Credit, each Lender shall be deemed to, and hereby irrevocably and
unconditionally agrees to, purchase from the Issuing Lender a participation in
such Letter of
Credit (including the Existing Letters of Credit) and each drawing thereunder in an amount equal
to such Lender's Ratable Share of the maximum amount available to be drawn under such Letter
of Credit and the amount of such drawing, respectively.

 

48

2.9.3.1 In the event of any request for a drawing under a Letter of Credit by
the beneficiary or transferee thereof, the Issuing Lender will promptly notify
the
Borrower and the Administrative Agent thereof. Provided that it shall have received such notice,
the Borrower shall reimburse (such obligation to reimburse the Issuing Lender
shall sometimes be referred to as a "Reimbursement Obligation") the Issuing
Lender prior to 12:00 noon, Pittsburgh time on each date that an amount is paid
by the Issuing Lender under any Letter of Credit (each such date, a "Drawing
Date") by paying to the Administrative Agent for the account of the Issuing
Lender an amount equal to the amount so paid by the Issuing Lender. In
the event the Borrower fails to reimburse the Issuing Lender (through the Administrative Agent)
for the full amount of any drawing under any Letter of Credit by 12:00 noon, Pittsburgh time, on
the Drawing Date, the Administrative Agent will promptly notify each Lender
thereof, and the Borrower shall be deemed to have requested that Revolving
Credit Loans be made by the Lenders under the Base Rate Option to be disbursed
on the Drawing Date under such Letter of
Credit, subject to the amount of the unutilized portion of the Revolving Credit Commitment and
subject to the conditions set forth in Section 7.2 [Each Loan or Letter of
Credit] other than any notice requirements. Any notice given by the
Administrative Agent or Issuing Lender pursuant
to this Section 2.9.3.1 may be oral if
immediately confirmed in writing; provided that the lack of such an immediate
confirmation shall not affect the conclusiveness or binding effect of such
notice.

2.9.3.2

Each Lender shall upon any notice pursuant to Section

2.9.3.1 make available to the Administrative Agent for the account of the
Issuing Lender an amount in immediately available funds
equal to its Ratable Share of the amount of the drawing, whereupon the
participating Lenders shall (subject to Section 2.9.3 [Disbursement;
Reimbursement]) each be deemed to have made a Revolving Credit Loan under the
Base Rate Option to the Borrower in that amount. If any Lender so notified fails
to make available to the
Administrative Agent for the account of the Issuing Lender the amount of such Lender's Ratable
Share of such amount by no later than 2:00 p.m., Pittsburgh time on the Drawing
Date, then
interest shall accrue on such Lender's obligation to make such payment, from the Drawing Date
to the date on which such Lender makes such payment (i) at a rate per annum
equal to the
Federal Funds Effective Rate during the first three (3) days following the Drawing Date and (ii)
at a rate per annum equal to the rate applicable to Loans under the Base Rate Option on and after
the fourth day following the Drawing Date. The Administrative Agent and the
Issuing Lender will promptly give notice (as described in Section 2.9.3.1 above)
of the occurrence of the Drawing Date, but failure of the Administrative Agent
or the Issuing Lender to give any such
notice on the Drawing Date or in sufficient time to enable any Lender
to effect such payment on
such date shall not relieve such Lender from its obligation under this Section 2.9.3.2.

 

2.9.3.3With respect to any unreimbursed drawing that is not
converted into Revolving Credit Loans under the Base Rate Option to the Borrower in whole or
in part as contemplated by Section 2.9.3.1, because of the Borrower's failure to
satisfy the conditions set forth in Section 7.2 [Each Loan or Letter of Credit]
other than any notice requirements, or for any other reason, the Borrower shall
be deemed to have incurred from the Issuing Lender a borrowing (each a "Letter
of Credit Borrowing") in the amount of such drawing. Such Letter of Credit
Borrowing shall be due and payable on demand (together with interest) and shall
bear interest at the rate per annum applicable to the Revolving Credit Loans
under the Base Rate Option. Each Lender's payment to the Administrative Agent for the account

 

49

of the Issuing Lender pursuant to Section 2.9.3 [Disbursements, Reimbursement]
shall be deemed to be a payment in respect of its participation in such Letter
of Credit Borrowing (each a "Participation Advance") from such Lender in
satisfaction of its participation obligation under this Section 2.9.3.

 

2.9.4

Repayment of Participation Advances.

 

2.9.4.1 Upon (and only upon) receipt by the Administrative
Agent for the account of the Issuing Lender of immediately available funds from the Borrower
(i} in reimbursement of any payment made by the Issuing Lender under the Letter of Credit with
respect to which any Lender has made a Participation Advance to the Administrative Agent, or (ii) in payment of interest
on such a payment made by the Issuing Lender under such a Letter of
Credit, the Administrative Agent on behalf of the Issuing Lender will pay to each Lender, in the
same funds as those received by the Administrative Agent, the amount of such Lender's Ratable
Share of such funds, except the Administrative Agent shall retain for the account of the Issuing
Lender the amount of the Ratable Share of such funds of any Lender that did not
make a Participation Advance in respect of such payment by the Issuing Lender.

 

2.9.4.2 If the Administrative Agent is required at any time to return to any
Loan Party, or to a trustee, receiver, liquidator, custodian, or any official in
any Insolvency Proceeding, any  portion of any payment  made by any Loan Party
to the Administrative Agent for the account of the Issuing Lender pursuant to
this Section in reimbursement of a payment made under the Letter of Credit or
interest or fee thereon, each  Lender shall, on demand of the Administrative
Agent, forthwith return to  the Administrative Agent for the account of the
Issuing Lender the amount of its Ratable Share of any amounts so returned by the
Administrative Agent plus interest thereon from the date such demand is made to
the date such amounts are returned by such Lender to the Administrative Agent,
at a rate per annum equal to the Federal Funds Effective Rate in effect from
time to time.

 

2.9.5 Documentation. Each Loan Party agrees to be bound by the Terms of the
Issuing Lender's application and agreement for letters of credit and the Issuing
Lender's written regulations and customary practices relating to letters of
credit, though such interpretation may be different from such Loan Party's own.
In the event of a conflict between
such application or agreement and this Agreement, this Agreement shall govern. It is understood
and agreed that, except in the case of gross negligence or willful misconduct, the Issuing Lender
shall not be liable for any error, negligence and/or mistakes, whether of omission or commission,
in following any Loan Party's instructions or those contained in the Letters of
Credit or any modifications, amendments or supplements thereto.

 

2.9.6 Determinations to Honor Drawing Requests. In determining whether to honor
any request for drawing under any Letter of Credit by the beneficiary thereof,
the Issuing Lender shall be responsible only to determine that the documents and
certificates required to be
delivered under such Letter of Credit have been delivered and that they comply on their face with
the requirements of such Letter of Credit.

 

2.9.7 Nature of Participation and Reimbursement Obligations. Each Lender's
obligation in accordance with this Agreement to make the Revolving Credit Loans or

 

48

Participation Advances, as contemplated by Section 2.9.3 [Disbursements, Reimbursement], as a
result of a drawing under a Letter of Credit, and the Obligations of the Borrower to reimburse the
Issuing Lender upon a draw under a Letter of Credit, shall be absolute,
unconditional and irrevocable, and shall be performed strictly in accordance
with the terms of this Section 2.9 under all circumstances, including the
following circumstances:

 

(i) any set-off, counterclaim, recoupment, defense or other right which such
Lender may have against the Issuing Lender or any of its Affiliates, the
Borrower or any other Person for any reason whatsoever, or which any Loan Party
may have
against the Issuing Lender or any of its Affiliates, any Lender or any other Person for any reason
whatsoever;

 

(ii) the failure of any Loan Party or any other Person to comply, in connection
with a Letter of Credit Borrowing, with the conditions set forth in Sections 2.1
[Revolving Credit Commitments], 2.5 [Revolving Credit Loan Requests; Swing
Loan Requests], 2.6 [Making Revolving
Credit Loans and Swing Loans; Etc.] or 7.2 [Each Loan or Letter of Credit] or as
otherwise set forth in this Agreement for the making of a Revolving Credit Loan,
it being acknowledged that such conditions are not required for the making of a
Letter of Credit Borrowing and the obligation of the Lenders to make
Participation Advances under Section 2.9.3 [Disbursements, Reimbursement];

 

(iii)

any lack of validity or enforceability of any Letter of

Credit;

 

(iv) any claim of breach of warranty that might be made by any Loan Party or any
Lender against any beneficiary of a Letter of Credit, or the existence of any
claim, set-off, recoupment, counterclaim, crossclaim, defense or other right
which any Loan Party or any Lender may have at any time against a beneficiary,
successor beneficiary any transferee or assignee of any Letter of Credit or the
proceeds thereof (or any Persons for whom any such transferee may be acting),
the Issuing Lender or its Affiliates or any Lender or any other Person, whether
in connection with this Agreement, the transactions contemplated herein or any
unrelated transaction (including any underlying transaction between any Loan
Party or
Subsidiaries of a Loan Party and the beneficiary for which any Letter of Credit was procured);

 

(v) the lack of power or authority of any signer of (or any defect in or forgery
of any signature or endorsement on) or the form of or lack of validity,
sufficiency, accuracy, enforceability or genuineness of any draft, demand, instrument, certificate
or other document presented under or in connection with any Letter of Credit, or
any fraud or alleged fraud in connection with any Letter of Credit, or the
transport of any property or
provision of services relating to a Letter of Credit, in each case even if the Issuing Lender or any
of its Affiliates has been notified thereof;

 

(vi) payment by the Issuing Lender or any of its Affiliates under any Letter of
Credit against presentation of a demand, draft or certificate or other document
which does not comply with the terms of such Letter of Credit;

 

49

(vii) the solvency of, or any acts or omissions by, any beneficiary of any
Letter of Credit, or any other Person having a role in any transaction or
obligation relating to a Letter of Credit, or the existence, nature, quality, quantity, condition,
value or other characteristic of any property or services relating to a Letter of Credit;

 

(viii) any failure by the Issuing Lender or any of its Affiliates to
issue any Letter of Credit in the form requested by any Loan Party, unless the Issuing Lender has
received written notice from such Loan Party of such failure within three Business Days after the
Issuing Lender shall have furnished such Loan Party and the Administrative Agent
a copy of such Letter of Credit and such error is material and no drawing has
been made thereon prior to receipt of such notice;

 

(ix) any adverse change in the business, operations, properties, assets,
condition (financial or otherwise) or prospects of any Loan Party or
Subsidiaries of a Loan Party;

 

(x)

any breach of this Agreement or any other Loan Document by any party thereto;

 

(xi) the occurrence or continuance of an Insolvency Proceeding with respect to
any Loan Party;

 

(xii) the fact that an Event of Default or a Potential Default shall have
occurred and be continuing;

 

(xiii) the fact that the Expiration Date shall have passed or this Agreement or
the Commitments hereunder shall have been terminated; and

 

(xiv) any other circumstance or happening whatsoever, whether or not similar to
any of the foregoing.

 

14.9.1 Indemnity. The Borrower hereby agrees to protect, indemnify, pay and save
harmless the Issuing Lender and any of its Affiliates that has issued a Letter
of Credit from and against any and all claims, demands,  liabilities,
damages,  taxes, penalties,  interest, judgments, losses, costs, charges and
expenses (including reasonable fees, expenses and disbursements of counsel and
allocated  costs of internal  counsel) which the Issuing Lender  or any of its
Affiliates may incur or be subject to as a consequence,  direct or indirect,  of
the  issuance of any Letter of Credit, other than as a result of (A) the gross
negligence or willful misconduct of the Issuing Lender as determined by a final
non-appealable judgment of a court of competent jurisdiction or (B) the wrongful
dishonor by the Issuing Lender or any of  Issuing Lender's Affiliates of a
proper demand for payment made under any Letter of Credit, except if  such
dishonor resulted from any act or omission, whether rightful or wrongful, of any
present or future de jure or de facto government or Official Body.

 

14.9.2 Liability for Acts and Omissions. As between any Loan Party and the
Issuing Lender, or the Issuing Lender's Affiliates, such Loan Party assumes all risks of the acts
and omissions of, or misuse of the Letters of Credit by, the respective
beneficiaries of such
Letters of Credit. In furtherance and not in limitation of the foregoing, the Issuing Lender shall

 

50

not be responsible
for any of the following, including any losses or damages to any Loan Party or
other Person or property relating therefrom: (i) the form, validity,
sufficiency, accuracy, genuineness or legal effect of any document submitted by
any party in connection with the application for an issuance of any such Letter
of Credit, even if it should in fact prove to be in any or all respects invalid,
insufficient, inaccurate, fraudulent or forged (even if the Issuing Lender or
its Affiliates shall have been notified thereof); (ii) the validity or
sufficiency of any instrument transferring or assigning or purporting to
transfer or assign any such Letter of Credit or the rights or benefits
thereunder or proceeds thereof, in whole or in part, which may prove to be
invalid or ineffective for any reason; (iii) the failure of the beneficiary of
any such Letter of
Credit, or any other party to which such Letter of Credit may be transferred,
to comply fully with any conditions required in order to draw upon such Letter
of Credit or any other claim of any
Loan Party against any beneficiary of such Letter of Credit, or any such transferee, or any dispute
between or among any Loan Party and any beneficiary of any Letter of Credit or
any such transferee;
(iv) errors, omissions, interruptions or delays in transmission or delivery of any
messages, by mail, cable, telegraph, telex or otherwise, whether or not they be
in cipher; (v)
errors in interpretation of technical terms; (vi) any loss or delay in the transmission or otherwise
of any document required in order to make a drawing under any such Letter of
Credit or of the proceeds thereof; (vii) the misapplication by the beneficiary
of any such Letter of Credit of the proceeds of any drawing under such Letter of
Credit; or (viii) any consequences arising from
causes beyond the control of the Issuing Lender or the its Affiliates, as applicable, including any
act or omission of any Official Body, and none of the above shall affect or impair, or prevent the
vesting of, any of the Issuing Lender's or its Affiliates rights or powers
hereunder. Nothing in the preceding sentence shall relieve the Issuing Lender
from liability for the Issuing Lender's
gross negligence or willful misconduct in connection with actions or omissions described in such
clauses (i) through (viii) of such sentence. In no event shall the Issuing
Lender or its Affiliates be liable to any Loan Party for any indirect,
consequential, incidental, punitive, exemplary or special damages or expenses
(including without limitation attorneys' fees), or for any damages
resulting from any change in the value of any property relating to a Letter of Credit.

 

Without limiting the generality of the foregoing, the Issuing Lender and each of
its Affiliates (i) may rely on any oral or other communication believed in good
faith by the Issuing Lender or such Affiliate to have been authorized
or given by or on behalf of the applicant
for a Letter of Credit, (ii) may honor any presentation if the documents
presented appear on their face substantially to comply with the terms and
conditions of the relevant Letter of Credit; (iii)
may honor a previously dishonored presentation under a Letter of Credit, whether such dishonor
was pursuant to a court order, to settle or compromise any claim of wrongful
dishonor, or otherwise, and shall be entitled to reimbursement to the same
extent as if such presentation had initially been honored, together with any
interest paid by the Issuing Lender or its Affiliate; (iv) may honor any drawing
that is payable upon presentation of a statement advising negotiation or
payment, upon receipt of such statement (even if such statement indicates that a
draft or other document is being delivered separately), and shall not be liable
for any failure of any such draft
or other document to arrive, or to conform in any way with the relevant
Letter of Credit; (v) may
pay any paying or negotiating bank claiming that it rightfully honored under the laws or practices
of the place where such bank is located; and (vi) may settle or adjust any claim or demand made
on the Issuing Lender or its Affiliate in any way related to any order issued at
the applicant's request to an air carrier, a letter of guarantee or of indemnity
issued to a carrier or any similar
document (each an "Order") and honor any drawing in connection with any Letter of Credit that 

51

is the subject of such Order, notwithstanding that any drafts or other documents presented in
connection with such Letter of Credit fail to conform in any way with such Letter of Credit.

In furtherance and extension and not in limitation of the specific provisions set
forth above, any action taken or omitted by the Issuing Lender or its Affiliates
under or in
connection with the Letters of Credit issued by it or any documents and certificates delivered
thereunder, if taken or omitted in good faith, shall not put the Issuing Lender or its Affiliates
under any resulting liability to the Borrower or any Lender.

 

14.9.3 Issuing Lender Reporting Requirements. Each Issuing Lender shall, on
the first Business Day of each month, provide to Administrative Agent and Borrower a schedule
of the Letters of Credit issued by it, in form and substance satisfactory to Administrative Agent,
showing the date of issuance of each Letter of Credit, the account party, the original face amount
(if any), and the expiration date of any Letter of Credit outstanding at any
time during the preceding month, and any other information relating to such
Letter of Credit that the Administrative Agent may request.

 

14.10 Defaulting Lenders. Notwithstanding any provision of this Agreement to the
contrary, if any Lender becomes a Defaulting Lender, then the following provisions shall apply
for so long as such Lender is a Defaulting Lender:

 

(i) fees shall cease to accrue on the unfunded portion of the
Commitment of such Defaulting Lender pursuant to Section 2.3 [Commitment Fees];

 

(ii) the Commitment and outstanding Loans of such Defaulting Lender shall not be
included in determining whether the Required Lenders have taken or may take any
action hereunder (including any consent to any amendment, waiver or other
modification pursuant to Section 11.1 [Modifications, Amendments or Waivers]); provided, that
this clause (ii) shall not apply to the vote of a Defaulting Lender in the case
of an amendment, waiver or other modification requiring the consent of such
Lender or each Lender directly affected thereby;

 

(iii) if any Swing Loans are outstanding or any Letter of Credit Obligations
exist at the time such Lender becomes a Defaulting Lender, then:

 

(a) all or any part of the outstanding Swing Loans and Letter of Credit
Obligations of such Defaulting Lender shall be reallocated among the non-­
Defaulting Lenders in accordance with their respective Ratable Shares but only to the extent that (x)
the Revolving Facility Usage does not exceed the total of all non-Defaulting
Lenders'
Revolving Credit Commitments, and (y) no Potential Default or Event of Default has occurred
and is continuing at such time;

 

(b) if the reallocation described in clause (a) above
cannot, or can only partially, be effected, the Borrower shall within one Business Day following
notice by the Administrative Agent (x) first, prepay such outstanding Swing
Loans, and (y) second, cash collateralize for the benefit of the Issuing Lender
the Borrower's obligations
corresponding to such Defaulting Lender's Letter of Credit Obligations (after giving effect to any

 

52

 

 

 

partial reallocation pursuant to clause (a) above) in a deposit account held at the Administrative
Agent for so long as such Letter of Credit Obligations are outstanding;

 

(c) if the Borrower cash collateralizes any portion of
such Defaulting Lender's Letter of Credit Obligations pursuant to clause (b) above, the Borrower
shall not be required to pay any fees to such Defaulting Lender pursuant to Section 2.9.2 [Letter
of Credit Fees] with respect to such Defaulting Lender's Letter of Credit Obligations during the
period such Defaulting Lender's Letter of Credit Obligations are cash
collateralized;

 

(d) if the Letter of Credit Obligations of the non-
Defaulting Lenders are reallocated pursuant to clause (a) above, then the
fees payable to the
Lenders pursuant to Section 2.9.2 [Letter of Credit Fees] shall be adjusted in accordance with
such non-Defaulting Lenders' Ratable Share; and

 

(e) if all or any portion of such Defaulting Lender's
Letter of Credit Obligations are neither reallocated nor cash collateralized pursuant to clause (a)
or (b) above, then, without prejudice to any rights or remedies of the Issuing Lender or any other
Lender hereunder, all Letter of Credit Fees payable under Section 2.9.2 [Letter
of Credit Fees] with respect to such Defaulting Lender's Letter of Credit
Obligations shall be payable to the Issuing Lender (and not to such Defaulting
Lender) until and to the extent that such Letter of Credit Obligations are
reallocated and/or cash collateralized; and

 

(iv)so long as such Lender is a Defaulting Lender, PNC Bank shall not be
required to fund any Swing Loans and the Issuing Lender shall not be required to
issue, amend or increase any Letter of Credit, unless the Issuing Lender is
satisfied that the
related exposure and the Defaulting Lender's then outstanding Letter of Credit Obligations will
be 100% covered by the Revolving Credit Commitments of the non-Defaulting Lenders and/or
cash collateral will be provided by the Borrower in accordance with Section
2.1O(iii), and
participating interests in any newly made Swing Loan or any newly issued or increased Letter of
Credit shall be allocated among non-Defaulting Lenders in a manner consistent
with Section 2.IO(iii)(a) (and such Defaulting Lender shall not
participate therein).

 

If (i) a Bankruptcy Event with respect to a parent company of any Lender shall
occur following the date hereof and for so long as such event shall continue, or
(ii) PNC Bank or the Issuing
Lender has a good faith belief that any Lender has defaulted in fulfilling its obligations under one
or more other agreements in which such Lender commits to extend credit, PNC Bank shall not be
required to fund any Swing Loan and the Issuing Lender shall not be required
to issue, amend or increase any Letter of Credit, unless PNC Bank or the Issuing
Lender, as the case may be, shall have entered into arrangements with the
Borrower or such Lender, satisfactory to PNC Bank or the Issuing Lender, as the
case may be, to defense any risk to it in respect of such Lender hereunder.

 

In the event that the Administrative Agent, the Borrower, PNC Bank and the
Issuing Lender agree in writing that a Defaulting Lender has adequately remedied
all matters that caused such
Lender to be a Defaulting Lender, then the Administrative Agent will so notify the parties hereto,

54

and the Ratable Share of the Swing Loans and Letter of Credit Obligations of the
Lenders shall
be readjusted to reflect the inclusion of such Lender's Commitment, and on such date such

 

55

Lender shall purchase at par such of the Loans of the other Lenders (other than Swing Loans) as
the Administrative Agent shall determine may be necessary in order for such Lender to hold such
Loans in accordance with its Ratable Share.

 

3.

TERM LOANS

 

3.1 Term Loan Commitments. Subject to the terms and conditions hereof and
relying upon the representations and warranties herein set forth, each Lender severally agrees to
make a term loan (the "Term Loan") to the Borrower on the Closing Date in such
principal amount as the Borrower shall request up to, but not exceeding such
Lender's Term Loan Commitment.

 

3.2 Nature of Lenders' Obligations with Respect to Term Loans: Repayment Terms.
The obligations of each Lender to make a Term Loan to the Borrower shall be in the proportion
that such Lender's Term Loan Commitment bears to the Term Loan Commitments of all Lenders
to the Borrower, but each Lender's Term Loan to the Borrower shall never exceed its Term Loan
Commitment. The failure of any Lender to make a Term Loan shall not relieve any other Lender
of its obligations to make a Term Loan nor shall it impose any additional
liability on any other Lender hereunder. The Lenders shall have no obligation to
make Term Loans hereunder after the Closing Date. The Term Loan Commitments are
not revolving credit commitments, and the Borrower shall not have the right to
borrow, repay and reborrow under Section 3.1 [Term Loan Commitments]. Payments
of principal on the Term Loans shall be on the first Business Day following each
fiscal quarter end of the Borrower and on the Maturity Date in the amount
indicated below:

 

Fiscal Quarters Ending

Amount Equal to the Applicable Percentage Set Forth Below of the Initial Term
Loan

June 30, 2018 through March 31, 2019

3.75%

June 30, 2019 through March 31, 2020

5.00%

June 30, 2020 through March 31, 2022

6.25%

June 30, 2022 through March 31, 2023

3.75%

Maturity Date

Any and all outstanding principal and interest

 

3.3 Incremental Term Loans. In the event that the Borrower exercises its option
to increase the Term Loans or incur Incremental Term Loans pursuant to Section
3.4 [Increase in Term Loans], the repayment amounts shall be increased to
reflect the repayment of any new Term Loans or Incremental Term Loans.

 

3.4

Increase in Term Loans.

 

56

(i) Increasing Lenders and New Lenders. The Borrower may
make a one-time request that (1) the current Lenders provide one or more additional tranches of
Term Loans (each an "Incremental Term Loan" and, collectively, the "Incremental
Term Loans"), or (2) one or more new lenders (each a "New Lender")join this
Agreement and provide a Term Commitment hereunder, in each case subject to the
following terms and
conditions (any current Term Loan Lender which elects to increase its Term Loan Commitment,
as applicable, shall be referred to as an "Increasing Lender"):

 

(a) No Obligation to Increase. No Lender shall be obligated to (x) increase its
Term Loan Commitment and any increase in the Term Loan
Commitment by any current Lender shall be in the sole discretion
of such Lender or (y) provide
an Incremental Term Loan and any Incremental Term Loan provided by any Lender shall be in
the sole discretion of such Lender.

 

(b) Defaults. There shall exist no Event of Default or
Potential Default on the effective date of such increase after giving effect to such increase.

 

(c) Compliance. The Borrower shall certify that it shall be in compliance on a
Pro Forma Basis with the covenants contained in Section 8.2.15 [Minimum Debt
Service Coverage Ratio] and Section 8.2.16 [Maximum Leverage Ratio] by
delivering, at least five (5) Business Days prior to the issuance of any new
Loans or increase in
Term Commitments, a Compliance Certificate evidencing such compliance.·

 

(d) Aggregate Term Commitments. The increase in the Term Commitments
shall not be more than $50,000,000 in the aggregate, and after giving effect
to such increase, the total Term Commitments shall not exceed $175,000,000.

 

(e) Terms of Incremental Term Loans. (i) The
Incremental Term Loans (A) shall rank pari passu in right of payment and of security with the
initial Term Loans incurred on the Closing Date (the "Initial Term Loans"), (B)
shall not
mature earlier than the Initial Term Loans, and (C) shall not have a shorter Weighted Average
Life to Maturity than the Initial Term Loans.

 

(f) Minimum Commitments. The minimum amount of the increase in the Term Loan
Commitments shall be $5,000,000.

 

(g) Resolutions: Opinion. The Loan Parties shall
deliver to the Administrative Agent on or before the effective date of such increase the following
documents in a form reasonably acceptable to the Administrative Agent: (1)
certifications of their corporate secretaries with attached resolutions
certifying that the increase in the Term Commitments has been approved by such
Loan Parties, (2) an opinion of counsel addressed to the Administrative Agent
and the Lenders addressing the authorization and execution of the
Loan Documents by, and enforceability of the Loan Documents against, the Loan Parties, and (3)

such other loan documentation reasonably satisfactory to the Administrative
Agent.

 

(h) Notes. The Borrower shall execute and deliver (1)
to each Increasing Lender a replacement term Note reflecting the new amount of such Increasing
Lender's Term Commitment after giving effect to the increase (and the prior Note issued to such

57

58

Increasing Lender shall be deemed to be terminated and returned to the Borrower
as soon as possible)
and (2) to each New Lender a term Note reflecting the amount of such New Lender's
Term Commitment.

 

(i) Approval of New Lenders. Any New Lender shall be subject to the approval of
the Administrative Agent (such approval not to be unreasonably withheld
or delayed).

 

G)Increasing Lenders. Each Increasing Lender shall confirm its agreement to
increase its Term Commitment pursuant to an acknowledgement in a
form acceptable to the Administrative Agent, signed by it and the Borrower and delivered to the
Administrative Agent at least five (5) days before the effective date of such increase.

 

(k) New Lenders--Joinder. Each New Lender shall
execute a lender joinder in substantially the form of Exhibit 3.4 pursuant to which such New
Lender shall join and become a party to this Agreement and the other Loan Documents with a
Term Commitment in the amount set forth in such lender joinder.

 

(1) Amendment. Incremental Term Loans shall be effected by an amendment to this
Agreement setting forth the terms of the Incremental Term Loans executed by (x)
the Administrative Agent, (y) each Lender or New Lender agreeing to
provide any portion of such Incremental Term Loan and (z) the Loan Parties, and reaffirmations
of the Loan Documents executed by the Loan Parties, in each case in form and
substance
reasonably satisfactory to the Administrative Agent. Such amendment may, without the consent
of any other Lenders, effect such amendments to this Agreement and the other Loan Documents
as may be necessary or appropriate, in the reasonable opinion of the
Administrative Agent and the Borrower, to effect the provisions of this
Section 3.4.

 

4.

INTEREST RATES

 

4.1 Interest Rate Options. The Borrower shall pay interest in respect of the
outstanding unpaid principal amount of the Loans as selected by it from the Base Rate Option or
LIBOR Rate Option set forth below applicable to the Loans, it being understood that, subject to
the provisions of this Agreement, the Borrower may select different Interest
Rate Options and different Interest Periods to apply simultaneously to the Loans
comprising different Borrowing Tranches and may convert to or renew one or more
Interest Rate Options with respect to all or
any portion of the Loans comprising any Borrowing Tranche: provided that there shall not be at
any one time outstanding more than five (5) Borrowing Tranches in the aggregate among all of
the Loans that bear interest under the LIBOR Rate Option, and provided further that if an Event
of Default or Potential Default exists and is continuing, the Borrower may not
request, convert
to, or renew the LIBOR Rate Option for any Loans and the Required Lenders may demand that
all existing Borrowing Tranches bearing interest under the LIBOR Rate Option
shall be
converted immediately to the Base Rate Option, subject to the obligation of the Borrower to pay
any indemnity under Section 5.IO [Indemnity] in connection with such conversion.
If at any
time the designated rate applicable to any Loan made by any Lender exceeds such Lender's

 

59

highest lawful rate, the rate of interest on such Lender's Loan shall be limited to such Lender's
highest lawful rate.

 

4.1.1 Revolving Credit Interest Rate Options: Swing Line Interest Rate. The
Borrower shall have the right to select from the following Interest Rate Options applicable to the
Revolving Credit Loans:

 

(i) Revolving Credit Base Rate Option: A fluctuating rate per
annum (computed on the basis of a year of 365 or 366 days, as the case may be, and actual days
elapsed) equal to the Base Rate plus the Applicable Margin, such interest rate
to change automatically from time to time effective as of the effective date of
each change in the Base Rate; or

 

(ii) Revolving Credit LlBOR Rate Option: A rate per annum
(computed on the basis of a year of 360 days and actual days elapsed) equal to the LlBOR Rate
as determined for each applicable Interest Period plus the Applicable Margin.

 

Subject to Section 4.4 [Interest After Default], only the Base Rate Option applicable to
Revolving Credit Loans shall apply to the Swing Loans.

 

4.1.2 Term Loan Interest Rate Options. The Borrower shall have the right to
select from the following Interest Rate Options applicable to the Term Loans:

 

(i) Term Loan Base Rate Option: A fluctuating rate per
annum (computed on the basis of a year of 365 or 366 days, as the case may be, and actual days
elapsed) equal to the Base Rate plus the Applicable Margin, such interest rate
to change automatically from time to time effective as of the effective date of
each change in the Base Rate; or

 

(ii) Term Loan LlBOR Rate Option: A rate per annum
(computed on the basis of a year of 360 days and actual days elapsed) equal to the LlBOR Rate
as determined for each applicable Interest Period plus the Applicable Margin.

 

4.2 Rate Quotations. The Borrower may call the Administrative Agent on or before
the date on which a Loan Request is to be delivered to receive an indication of the rates then in
effect, but it is acknowledged that such projection shall not be binding on the
Administrative
Agent or the Lenders nor affect the rate of interest which thereafter is actually in effect when the
election is made.

 

4.3
Interest Periods. At any time when the Borrower shall select, convert to or renew
a LlBOR Rate Option, the Borrower shall notify the Administrative Agent thereof at least three

(3) Business Days prior to the effective date of such LlBOR Rate Option by
delivering a Loan
Request. The notice shall specify an Interest Period during which such Interest Rate Option shall
apply. Notwithstanding the preceding sentence, the following provisions shall
apply to any selection of, renewal of, or conversion to a LlBOR Rate Option:

 

60

4.3.1 Amount of Borrowing Tranche. Each Borrowing Tranche of Loans under
the LIBOR Rate Option shall be in integral multiples of $500,000 and not less than

$1,000,000; and

 

4.3.2 Renewals. In the case of the renewal of a LIBOR Rate Option at the end of
an Interest Period, the first day of the new Interest Period shall be the last
day of the preceding Interest Period,
without duplication in payment of interest for such day.

 

4.4
Interest After Default. To the extent permitted by Law, upon the occurrence of an
Event of Default and until such time such Event of Default shall have been cured
or waived, at the discretion of the Administrative Agent or upon written demand
by the Required Lenders to the Administrative Agent:

4.4.1 Letter of Credit Fees, Interest Rate. The Letter of Credit Fees and the
rate of interest for each Loan otherwise applicable pursuant to Section 2.9.2
[Letter of Credit
Fees] or Section 4.1 [Interest Rate Options], respectively, shall be increased by 2.0% per annum;

 

4.4.2 Other Obligations. Each other Obligation hereunder if not paid when
due shall bear interest at a rate per annum equal
to the sum of the rate of interest applicable under
the Base Rate Option plus an additional 2.0% per annum from the time such Obligation becomes
due and payable and until it is Paid In Full; and

 

4.4.3 Acknowledgment. The Borrower acknowledges that the increase in
rates referred to in this Section 4.4 reflects, among other things, the fact that such Loans or other
amounts have become a substantially greater risk given their default status and that the Lenders
are entitled to additional compensation for such risk; and all such interest
shall be payable by Borrower upon demand by Administrative Agent.

 

4.5

LIBOR Rate Unascertainable; Illegality: Increased Costs: Deposits Not Available.

 

4.5.1 Unascertainable.  If on any date on which a LIBOR Rate would
otherwise be determined, the Administrative Agent shall have determined that:

 

(i)

adequate and reasonable means do not exist for ascertaining

such LIBOR Rate, or

 

(ii) a contingency has occurred which materially and adversely
affects the London interbank market relating to the establishment of the LIBOR Rate,

 

then the Administrative Agent shall have the rights specified in Section 4.5.3 [Administrative
Agent's and Lender's Rights].

 

4.5.2 Illegality: Increased Costs; Deposits Not Available. If at any time any
Lender shall have determined that:

 

(i) the making, maintenance or funding of any Loan to which a LIBOR Rate Option
applies has been made impracticable or unlawful by compliance by such
Lender in good faith with any Law or any interpretation or application thereof by any Official

61

Body or with any request or directive of any such Official Body (whether or not having the force
of Law), or

 

(ii) such LIBOR Rate Option will not adequately and fairly
reflect the cost to such Lender of the establishment or maintenance of any such Loan, or

 

(iii) after making all reasonable efforts, deposits of the relevant amount in
Dollars for the relevant Interest Period for a Loan, or to banks generally, to
which a
LIBOR Rate Option applies, respectively, are not available to such Lender with respect to such
Loan, or to banks generally, in the interbank Eurodollar market,

 

then the Administrative Agent shall have the rights specified in Section 4.5.3 [Administrative
Agent's and Lender's Rights].

 

4.5.3 Administrative Agent's and Lender's Rights. In the case of any event
specified in Section 4.5.1 [Unascertainable] above, the Administrative Agent shall promptly so
notify the Lenders and the Borrower
thereof, and in the case of an event specified in Section

4.5.2 [Illegality; Increased Costs; Deposits Not Available] above, such Lender shall promptly so
notify the Administrative Agent and endorse a certificate to such notice as to
the specific
circumstances of such notice, l1Ud the Administrative Agent shall promptly send copies of such
notice and certificate to the other Lenders and the Borrower. Upon such date as
shall be specified in such notice (which shall not be earlier than the date such
notice is given), the
obligation of (A) the Lenders, in the case of such notice given by the Administrative Agent, or

(B) such Lender, in the case of such notice given by such Lender, to allow the
Borrower to select, convert to or renew a LIBOR Rate Option shall be suspended
until the Administrative Agent shall have later notified the Borrower, or such
Lender shall have later notified the Administrative Agent, of the Administrative
Agent's or such Lender's, as the case may be, determination that the
circumstances giving rise to such previous determination no longer exist. If at
any time the Administrative Agent makes a determination under Section 4.5.1
[Unascertainable] and the Borrower has previously notified the Administrative
Agent of its
selection of, conversion to or renewal of a LIBOR Rate Option and such Interest Rate Option has
not yet gone into effect, such notification shall be deemed to provide for selection of, conversion
to or renewal of the Base Rate Option otherwise available with respect to such
Loans. If any Lender notifies the Administrative Agent of a determination under
Section 4.5.2 [Illegality; Increased Costs; Deposits Not Available], the
Borrower shall, subject to the Borrower's indemnification Obligations under
Section 5.10 [Indemnity], as to any Loan of the Lender to which a LIBOR Rate
Option applies, on the date specified in such notice either convert such
Loan to the Base Rate Option otherwise available with respect to such Loan or prepay such Loan
in accordance with Section 5.6 [Voluntary Prepayments]. Absent due notice from
the Borrower of conversion or prepayment, such Loan shall automatically be
converted to the Base Rate
Option otherwise available with respect to such Loan upon such specified date.

4.5.4

Successor LIBOR Rate Index.

 

(i) If the Administrative Agent determines (which determination shall be final
and conclusive, absent manifest error) that either (a) (i) the
circumstances set forth in Section 4.5.1 have arisen and are unlikely to be temporary, or (ii) the
 circumstances set forth in Section 4.5.1 have not arisen but the applicable
supervisor or

62

administrator (if any) of the LIBOR Rate or an Official Body having jurisdiction
over the Administrative Agent has made a public statement identifying the
specific date after which the LIBOR Rate shall no longer be used for determining
interest rates for loans (either such date, a "LIBOR Termination Date"), or (b)
a rate other than the LIBOR Rate has become a widely recognized benchmark rate
for newly originated loans in Dollars in the U.S. market, then the
Administrative Agent may (in consultation with the Borrower) choose a
replacement index for the LIBOR Rate and make adjustments to applicable margins
and related amendments to this
Agreement as referred to below such that, to the extent practicable, the all-in interest rate based
on the replacement index will be substantially equivalent to the all-in LIBOR Rate-based interest
rate in effect prior to its replacement.

 

(ii) The Administrative Agent and the Borrower shall enter into
an amendment to this Agreement to reflect the replacement index, the adjusted margins and such
other related amendments as may be appropriate, in the discretion of the
Administrative Agent,
for the implementation and administration of the replacement index-based rate. Notwithstanding
anything to the contrary in this Agreement or the other Loan Documents
(including, without limitation, Section 11.1 [Modifications, Amendments or
Waivers], such amendment shall become effective without any further action or
consent of any other party to this Agreement at 5:00 p.m. Eastern Time on the
tenth (10th)  Business Day after the date a draft of the amendment
is provided to the Lenders, unless the Administrative Agent receives, on or before such tenth (10th Business
Day, a written notice from the Required Lenders stating that such Lenders object

to such amendment.

 

(x) Selection of the replacement index, adjustments to the applicable margins,
and amendments to this Agreement (i) will be determined with due consideration
to the then-current market practices for determining and implementing a rate of
interest for newly originated loans in the United States and loans converted from a LIBOR Rate­
based rate to a replacement index-based rate, and (ii) may also reflect adjustments to account for the
effects of the transition from the LIBOR Rate to the replacement index and (y)
yield- or
risk-based differences between the LIBOR Rate and the replacement index.

 

(iv) Until an amendment reflecting a new replacement index in
accordance with this Section 4.5.4 is effective, each advance, conversion and renewal of a Loan
under the LIBOR Rate Option will continue to bear interest with reference to the LIBOR Rate;
provided however, that if the Administrative Agent determines (which
determination shall be
final and conclusive, absent manifest error) that a LIBOR Termination Date has occurred, then
following the LIBOR Termination Date, all Loans as to which the LIBOR Rate
Option would otherwise apply shall automatically be converted to the Base Rate
Option until such time as an amendment reflecting a replacement index and
related matters as described above is implemented.

 

(v) Notwithstanding anything to the contrary contained herein,
if at any time the replacement index is less than zero, at such times, such index shall be deemed
to be zero for purposes of this Agreement.

 

63

10.6
Selection of Interest Rate Options. If the Borrower fails to select a new Interest
Period to apply to any Borrowing Tranche of Loans under the LIBOR Rate Option at
the expiration of an existing Interest Period applicable to such Borrowing
Tranche in accordance with the provisions of Section 4.3 [Interest Periods], the
Borrower shall be deemed to have
converted such Borrowing Tranche to the Base Rate Option, as applicable to Revolving Credit
Loans or Term Loans as the case may be, commencing upon the last day of the existing Interest
Period.

 

5.

PAYMENTS

 

5.1 Payments. All payments and prepayments to be made in respect of principal,
interest, Commitment Fees, Letter of Credit Fees, Administrative Agent's Fee or
other fees or amounts due from the Borrower hereunder shall be payable prior to
1:00 p.m. on the date when due without presentment, demand, protest or notice of
any kind, all of which are hereby expressly waived by the Borrower, and without
set-off, counterclaim or other deduction of any nature, and an action therefor
shall immediately accrue. Such payments shall be made to the Administrative
Agent at the Principal Office for the account of PNC Bank with respect to the
Swing Loans and for the ratable accounts of the Lenders with respect to the
Revolving Credit
Loans or Term Loans in U.S. Dollars and in immediately available funds, and the Administrative
Agent shall promptly distribute such amounts to the Lenders in immediately
available funds;
provided that in the event payments are received by 1:00 p.m. by the Administrative Agent with
respect to the Loans and such payments are not distributed to the Lenders on the
same day
received by the Administrative Agent, the Administrative Agent shall pay the Lenders interest at
the Federal Funds Effective Rate with respect to the amount of such payments for each day held
by the Administrative Agent and not distributed to the Lenders. The Administrative Agent's and
each Lender's statement of account, ledger or other relevant record shall, in
the absence of manifest error, be conclusive as the statement of the amount of
principal of and interest on the
Loans and other amounts owing under this Agreement and shall be deemed an "account stated".

5.2
Pro Rata Treatment of Lenders. Each borrowing of Revolving Credit Loans shall be
allocated to each Lender according to its Ratable Share, and each selection of,
conversion to or renewal of any Interest Rate Option and each payment or
prepayment by the Borrower with respect to principal, interest, Commitment Fees,
Letter of Credit Fees, or other fees (except for
the Administrative Agent's Fee and the Issuing Lender's fronting fee) shall (except as otherwise
may be provided with respect to a Defaulting Lender and except as provided in
Section 4.5.3 [Administrative Agent's and Lender's Rights] in the case of an
event specified in Sections 4.5
[LIBOR Rate Unascertainable; Etc.], 5.6.2 [Replacement of a Lender] or 5.8 [Increased Costs])
be payable ratably among the Lenders entitled to such payment in accordance with the amount of
principal, interest, Commitment Fees and Letter of Credit Fees, as set forth in
this Agreement. Notwithstanding any of the foregoing, each borrowing or payment
or prepayment by the Borrower of principal, interest, fees or other amounts from
the Borrower with respect to Swing
Loans shall be made by or to PNC Bank according to Section 2.6.5 [Borrowings to Repay Swing
Loans].

 

5.3
Sharing of Payments by Lenders. If any Lender shall, by exercising any right of
setoff, counterclaim or banker's lien, by receipt of voluntary payment, by
realization upon
security, or by any other non-pro rata source, obtain payment in respect of any principal of or

 

64

interest on any of its Loans or other obligations hereunder resulting in such
Lender's receiving payment of a proportion of the aggregate amount of its Loans
and accrued interest thereon or other such obligations greater than the pro rata
share of the amount such Lender is entitled thereto, then the Lender receiving
such greater proportion shall (a) notify the Administrative
Agent of such fact, and (b) purchase (for cash at face value) participations in the Loans and such
other obligations of the other Lenders, or make such other adjustments as shall be equitable, so
that the benefit of all such payments shall be shared by the Lenders ratably in
accordance with the aggregate amount of principal of and accrued interest on
their respective Loans and other amounts owing them, provided that:

 

(i) if any such participations are purchased and all or any
portion of the payment giving rise thereto is recovered, such participations shall be rescinded and
the purchase price restored to the extent of such recovery, together with
interest or other amounts, if any, required by Law (including court order) to be
paid by the Lender or the holder making such purchase; and

 

(ii) the provisions of this Section 5.3 shall not be construed to apply to (x)
any payment made by the Loan Parties pursuant to and in accordance with the
express terms of the Loan Documents or (y) any payment obtained by a Lender as consideration
for the assignment of or sale of a participation in any of its Loans or
Participation Advances to
any assignee or participant, other than to any Loan Party thereof (as to which the provisions of
this Section 5.3 shall apply).

Each Loan Party consents to the foregoing and agrees, to the extent it may
effectively do so under applicable Law, that any Lender acquiring a
participation pursuant to the foregoing arrangements may exercise against each
Loan Party rights of setoff and counterclaim with
respect to such participation as fully as if such Lender were a direct creditor of each Loan Party
in the amount of such participation.

 

5.4 Presumptions by Administrative Agent. Unless the Administrative Agent shall
have received notice from the Borrower prior to the date on which any payment is
due to the Administrative Agent for the account of the Lenders or the Issuing
Lender hereunder that the
Borrower will not make such payment, the Administrative Agent may assume that the Borrower
has made such payment on such date in accordance herewith and may, in reliance
upon such assumption, distribute to the Lenders
or the Issuing Lender, as the case may be, the amount due.
In such event, if the Borrower has not in fact made such payment, then each of the Lenders or the
Issuing Lender, as the case may be, severally agrees to repay to the
Administrative Agent forthwith on demand the amount so distributed to such
Lender or the Issuing Lender, with interest thereon, for each day from and
including the date such amount is distributed to it to but excluding the date of
payment to the Administrative Agent, at the greater of the Federal Funds
Effective Rate and a rate determined by the Administrative Agent in accordance
with banking industry rules on interbank compensation.

 

5.5
Interest Payment Dates. Interest on Loans to which the Base Rate Option applies
shall be due and payable in arrears on each Payment Date. Interest on Loans to
which the
LIBOR Rate Option applies shall be due and payable on the last day of each Interest
Period for
those Loans and, if such Interest Period is longer than three (3) Months, also on the 90th day of

 

65

such Interest Period. Interest on mandatory prepayments of principal under
Section 5.7
[Mandatory Prepayments] shall be due on the date such mandatory prepayment is due. Interest
on the principal amount of each Loan or other monetary Obligation shall be due and payable on
demand after such principal amount or other monetary Obligation becomes due and
payable
(whether on the stated Expiration Date, Maturity Date, upon acceleration or otherwise).

 

5.6

Voluntary Prepayments.

 

5.6.1 Right to Prepay. The Borrower shall have the right at its option from time
to time to prepay the Loans in whole or part without premium or penalty (except
as provided in Section 5.6.2 [Replacement of
a Lender] below, in Section 5.8 [Increased Costs] and Section 5.10 [Indemnity]).
Whenever the Borrower desires to prepay any part of the Loans, it shall provide
a prepayment notice to the Administrative Agent by I :00 p.m. at least one (I)
Business Day prior to the date of prepayment of the Revolving Credit Loans or
Term Loans or
no later than I:00 p.m., Pittsburgh time, on the date of prepayment of Swing Loans, setting forth
the following information:

 

(i) the date, which shall be a Business Day, on which the proposed prepayment is
to be made;

 

(a) a statement indicating the application of the
prepayment between the Revolving Credit Loans, Term Loans and Swing Loans;

 

(b) with respect to any prepayment of any Loans
subject to the LIBOR Rate Option, a statement indicating the application of the prepayment
between the LIBOR Rate Option tranches; and

 

(c) the total principal amount of such prepayment, which shall not be less than:
(i) $100,000 for any Swing Loan, or (ii) $100,000 for any Revolving Credit Loan.

 

All prepayment notices shall be irrevocable. The principal amount of the Loans
for which a prepayment notice is given, together with interest on such principal amount except
with respect to Loans to which the Base Rate Option applies, shall be due and
payable on the
date specified in such prepayment notice as the date on which the proposed prepayment is to be
made. All Term Loan prepayments permitted pursuant to this Section 5.6.1 [Right
to Prepay] shall be applied to the unpaid installments of principal
of the Term Loans in the inverse order of
scheduled maturities. Except as provided in Section 4.5.3 [Administrative Agent's and Lender's
Rights], if the Borrower prepays a Loan but fails to specify the applicable
Borrowing Tranche which the Borrower is prepaying, the prepayment shall be
applied first to Loans to which the Base Rate Option applies, then to Loans to
which the LIBOR Rate Option applies. Any prepayment hereunder shall be subject
to the Borrower's Obligation to indemnify the Lenders under Section
5.10 [Indemnity].

 

5.6.2 Replacement of a Lender. In the event any Lender (i) gives notice under
Section 4.5 [LIBOR Rate Unascertainable, Etc.], (ii) requests compensation under
Section 5.8 [Increased Costs], or requires the Borrower to pay any Indemnified
Taxes or additional amount
to any Lender or any Official Body for the account of any Lender pursuant to Section 

66

[Taxes], (iii) is a Defaulting Lender, (iv) becomes subject to the control of an
Official Body
(other than normal and customary supervision), or (v) is a Non-Consenting Lender referred to in
Section 11.1 [Modifications, Amendments or Waivers] then in any such event the Borrower may,
at its sole expense, upon notice to such Lender and the Administrative Agent,
require such Lender to assign and delegate, without recourse (in accordance with
and subject to the
restrictions contained in, and consents required by, Section 11.8 [Successors and Assigns]), all of
its interests, rights (other than existing rights to payment pursuant to
Sections 5.8 [Increased Costs] or 5.9 [Taxes]) and obligations under this
Agreement and the related Loan Documents to an assignee that shall assume such
obligations (which assignee may be another Lender, if a Lender accepts such
assignment), provided that:

(i) the Borrower shall have paid to the Administrative Agent the assignment fee
specified in Section I1.8 [Successors and Assigns];

 

(ii) such Lender shall have received  payment of an amount equal to  the
outstanding principal of its Loans and Participation  Advances, accrued interest
thereon, accrued fees and all other amounts payable to it hereunder and under
the other Loan Documents (including any amounts under  Section 5.10 [Indemnity])
from the assignee (to the extent of such outstanding principal and accrued
interest and fees) or the Borrower  (in the case of all other amounts);

 

(iii) in the case of any such assignment resulting from a claim
for compensation under Section 5.8.1 [Increased Costs Generally] or payments required to be
made pursuant to Section 5.9 [Taxes], such assignment will result in a reduction
in such compensation or payments thereafter; and

 

(iv)

such assignment does not conflict with applicable Law.

 

A Lender shall not be required to make any such assignment or delegation if, prior thereto, as a
result of a waiver by such Lender or otherwise, the circumstances entitling the
Borrower to require such assignment and delegation cease to apply.

 

5.6.3 Designation of a Different Lending Office.  If any Lender requests
compensation under Section 5.8 [Increased Costs], or the Borrower is or will be
required to pay
any Indemnified Taxes or additional amounts to any Lender or any Official Body for the account
of any Lender pursuant to Section 5.9 [Taxes], then such Lender shall (at the
request of the
Borrower) use reasonable efforts to designate a different lending office for funding or booking its
Loans hereunder or to assign its rights and obligations hereunder to another of
its offices, branches or affiliates, if, in the reasonable judgment of such
Lender, such designation or assignment (i) would eliminate or reduce amounts
payable pursuant to Section 5.8 [Increased Costs] or Section 5.9 [Taxes], as the
case may be, in the future, and (ii) would not subject such Lender to any
material unreimbursed cost or expense and would not otherwise be materially
disadvantageous to such Lender. The Borrower hereby agrees to pay all reasonable
costs and expenses incurred by any Lender
in connection with any such designation or assignment.

 

67

5.7

Mandatory Prepayments.

 

5.7. IHallador Sands Distributions. At any time when the Leverage Ratio as
determined as of the end of the most recent fiscal quarter is greater than or equal to 2.0 to 1.0, the
Borrower shall make a mandatory prepayment of principal equal to all Hallador
Sands Distributions within ten (IO) days of the receipt
of such cash distributions.

 

5.7.2 Excess Cash Flow. Commencing with the fiscal year ending December 31,
2018, and for each fiscal year thereafter, and at such times as when the
Leverage Ratio as determined as of the end of the most recent fiscal year is
greater than or equal to 2.0 to 1.0, the Borrower shall make a mandatory
prepayment of principal equal to 50% of Excess Cash Flow
for the immediately preceding fiscal year together with accrued interest on such principal amount
within ten (I 0) days of delivery of the Borrower's audited annual financial
statements for the preceding fiscal year.

 

5.7.3 Equity Issuances. At any time when the Leverage Ratio as determined
as of the end of the most recent fiscal quarter is greater than or equal to 2.0 to 1.0, the Borrower
shall make a mandatory prepayment of principal equal to I00% of the after tax net cash proceeds
received by any Loan Party in connection
with any Equity Issuances within ten (10) days of the receipt of such proceeds.

 

5.7.4 Dispositions of Hallador Sands or any Subsidiary of Hallador Sands. At
any time when the Leverage Ratio as determined as of the end of the most recent fiscal quarter is
greater than or equal to 2.0 to 1.0, the Borrower shall make a mandatory prepayment of principal
equal to I 00% of the after tax net cash proceeds received by any Loan Party in
connection with
the sale of such party's interest in Hallador Sands or any Subsidiary of Hallador Sands within I0
days of the receipt of such proceeds.

 

5.7.5 Application Among Interest Rate Options. All prepayments required
pursuant to this Section 5.7 shall first be applied to the outstanding principal balance of the Term
Loans in inverse order to the scheduled principal payments and then to the outstanding principal
balance of the Revolving Credit Loans. After giving effect to the first sentence
of this Section
5.7.5, all such prepayments shall next be applied among the Interest Rate Options to the principal
amount of the Loans subject to the Base Rate Option, then to Loans subject to a
LIBOR Rate
Option. In accordance with Section 5.10 [Indemnity], the Borrower shall indemnify the Lenders
for any loss or expense, incurred with respect to any such prepayments applied
against Loans subject to a LIBOR Rate Option on any day other than the last day
of the applicable Interest Period. All prepayments of the Term Loans required
pursuant to this Section 5.7 may not be reborrowed.

 

5.8

Increased Costs.

 

5.8.1

Increased Costs Generally. If any Change in Law shall:

 

(i) impose, modify or deem applicable any reserve, special
deposit, compulsory loan, insurance charge or similar requirement against assets of, deposits
with or for the account of, or credit extended or participated in by, any Lender
(except any
reserve requirement reflected in the LIBOR Rate) or the Issuing Lender;

 

68

(ii) subject any Recipient to any Taxes (other than (A)
Indemnified Taxes, (B) Taxes described in clauses (ii) through (iv) of the definition of Excluded
Taxes and (C) Connection Income Taxes) on its loans, loan principal, letters of
credit,
commitments, or other obligations, or its deposits, reserves, other liabilities or capital attributable
thereto; or

 

(iii) impose on any Lender, the Issuing Lender or the London interbank market
any other condition, cost or expense (other than Taxes) affecting this
Agreement or Loans made by such Lender or any Letter of Credit or participation therein;

 

and the result of any of the foregoing shall be to increase the cost to such
Lender or such other Recipient of making, converting to, continuing or
maintaining any Loan or of maintaining its obligation to make any such Loan, or
to increase the cost to such Lender, the Issuing Lender or such other Recipient
of participating in, issuing or maintaining any Letter of Credit (or of
maintaining its obligation to participate in or to issue any Letter of Credit),
or to reduce the
amount of any sum received or receivable by such Lender, the Issuing Lender or other Recipient
hereunder (whether of principal, interest or any other amount) then, upon request of such Lender,
the Issuing Lender or other Recipient, the Borrower will pay to such Lender, the Issuing Lender
or other Recipient, as the case may be, such additional amount or amounts as
will compensate such Lender or the Issuing Lender, as the case may be, for such
additional costs incurred or reduction suffered.

 

5.8.2 Capital Requirements. If any Lender or the Issuing Lender determines that
any Change in Law affecting such Lender or the Issuing Lender or any lending
office of
such Lender or such Lender's or the Issuing Lender's holding company, if any, regarding capital
or liquidity requirements has or would have the effect of reducing the rate of
return on such Lender's
or the Issuing Lender's capital or on the capital of such Lender's or the Issuing Lender's
holding company, if any, as a consequence of this Agreement, the Commitments of such Lender
or the Loans made by, or participations in Letters of Credit or Swing Loans held
by, such Lender, or the Letters of Credit issued by the Issuing Lender, to a
level below that which such Lender or the Issuing Lender or such Lender's or the
Issuing Lender's holding company could have achieved but for such Change in Law
(taking into consideration such Lender's or the Issuing Lender's policies and
the policies of such Lender's or the Issuing Lender's holding
company with respect to capital adequacy), then from time to time the Borrower will pay to such
Lender or the Issuing Lender, as the case may be, such additional amount or
amounts as will
compensate such Lender or the Issuing Lender or such Lender's or the Issuing Lender's holding
company for any such reduction suffered.

 

5.8.3 Certificates for Reimbursement: Repayment of Outstanding Loans: Borrowing
of New Loans. A certificate of a Lender or the Issuing Lender setting forth the
amount or amounts necessary to compensate such Lender or the Issuing Lender or
its holding
company, as the case may be, as specified in Sections 5.8.1 [Increased Costs Generally] or 5.8.2
[Capital Requirements] and delivered to the Borrower shall be conclusive absent manifest error.
The Borrower shall pay such Lender or the Issuing Lender, as the case may be,
the amount shown as due on any such certificate within ten (10) days
after receipt thereof.

 

69

5.8.4 Delay in Requests. Failure or delay on the part of any Lender or the
Issuing Lender to demand compensation pursuant to this Section 5.8.4 shall not
constitute a waiver of such Lender's or the Issuing Lender's right to demand
such compensation, provided
that the Borrower shall not be required to compensate
a Lender or the Issuing Lender pursuant to
this Section 5.8.4 for any increased costs incurred or reductions suffered more than nine months
prior to the date that such Lender or the Issuing Lender, as the case may be,
notifies the Borrower of the Change in Law giving rise to such increased costs
or reductions and of such Lender's or the Issuing Lender's intention to claim
compensation therefor (except that, if the Change in Law giving rise to such
increased costs or reductions is retroactive, then the nine (9) month period
referred to above shall be extended to include the period of retroactive effect
thereof).

 

5.9

Taxes.

 

5.9.1 Issuing Lender. For purposes of this Section 5.9, the term "Lender"
includes the Issuing Lender and the term "applicable Law" includes FATCA.

 

5.9.2 Payments Free of Taxes. Any and all payments by or on account of any
obligation of any Loan Party under any Loan Document shall be without deduction
or withholding for any Taxes, except as required by applicable Law. If any
applicable Law (as determined in the good faith discretion of an applicable
Withholding Agent) requires the deduction or withholding of any Tax from any
such payment by a Withholding Agent, then the
applicable Withholding Agent shall be entitled to make such deduction or withholding and shall
timely pay the full amount deducted or withheld to the relevant Official Body in accordance with
applicable Law and, if such Tax is an Indemnified Tax, then the sum payable by
the applicable Loan Party shall be increased as necessary so that after such
deduction or withholding has been made (including such deductions and
withholdings applicable to additional sums payable under this Section 5.9) the
applicable Recipient receives an amount equal to the sum it would have received
had no such deduction or withholding been made.

 

5.9.3 Payment of Other Taxes by the Loan Parties. The Loan Parties shall
timely pay to the relevant Official Body in accordance with applicable Law, or at the option of
the Administrative Agent timely reimburse
it for the payment of, any Other Taxes.

 

5.9.4 Indemnification by the Loan Parties. The Loan Parties shall jointly and
severally indemnify each Recipient, within ten (10) days after demand therefor,
for the full amount of any Indemnified Taxes (including Indemnified Taxes
imposed or asserted on or attributable to amounts payable under this Section
5.9) payable or paid by such Recipient or required to be withheld or deducted
from a payment to such Recipient and any reasonable
expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes were
correctly or legally imposed or asserted by the relevant Official Body. A
certificate as to the amount of such payment or liability delivered to the
Borrower by a Lender (with a copy to the Administrative Agent), or by the
Administrative Agent on its own behalf or on behalf of a Lender, shall be
conclusive absent manifest error.

 

5.9.5 Indemnification by the Lenders. Each Lender shall severally indemnify
the Administrative Agent, within ten (10) days after demand therefor, for (i) any Indemnified

 

70

Taxes attributable to such Lender (but only to the extent that any Loan Party
has not already indemnified the Administrative Agent for such Indemnified Taxes
and without limiting the
obligation of any of the Loan Parties to do so), (ii) any Taxes attributable to such Lender's failure
to comply with the provisions of Section 11.8.4 [Participations] relating to the maintenance of a
Participant Register, and (iii) any Excluded Taxes attributable to such Lender, in each case, that
are payable or paid by the Administrative Agent in connection with any Loan
Document, and any reasonable expenses arising therefrom or with respect thereto,
whether or not such Taxes were correctly or legally imposed or asserted by the
relevant Official Body. A certificate as to the amount of such payment or
liability delivered to any Lender by the Administrative Agent shall be
conclusive absent manifest error. Each Lender hereby authorizes the
Administrative
Agent to set off and apply any and all amounts at any time owing to such Lender under any Loan
Document or otherwise payable by the Administrative Agent to the Lender from any
other
source against any amount due to the Administrative Agent under this Section 5.9.5.

 

5.9.6 Evidence of Payments. As soon as practicable after any payment of
Taxes by any Loan Party to an Official Body pursuant to
 this Section 5.9, such Loan Party shall deliver to the Administrative Agent the
original or a certified copy of a receipt issued by such Official Body
evidencing such payment, a copy of the return reporting such payment or other
evidence of such payment reasonably satisfactory to the Administrative Agent.

 

5.9.7

Status of Lenders.

 

(i) Any Lender that is entitled to an exemption from or reduction of withholding
Tax with respect to payments made under any Loan Document shall
deliver to the Borrower and the Administrative Agent, at the time or times reasonably requested
by the Borrower or the Administrative Agent, such properly completed and
executed
documentation reasonably requested by the Borrower or the Administrative Agent as will permit
such payments to be made without withholding or at a reduced rate of withholding. In addition,
any Lender, if reasonably requested by the Borrower or the Administrative Agent,
shall deliver
such other documentation prescribed by applicable Law or reasonably requested by the Borrower
or the Administrative Agent as will enable the Borrower or the Administrative
Agent to
determine whether or not such Lender is subject to backup withholding or information reporting
requirements. Notwithstanding anything to the contrary in the preceding two
sentences, the
completion, execution and submission of such documentation (other than such documentation set
forth in Sections 5.9.7(ii)(b)(A), (ii)(b)(B) and (ii)(b)(D) below) shall not be
required if in the Lender's reasonable judgment such completion, execution or
submission would subject such Lender to any material unreimbursed cost or
expense or would materially prejudice the legal or commercial position of
such Lender.

 

(ii) Without limiting the generality of the foregoing, in the event that the
Borrower is a U.S. Borrower,

 

(a) any Lender that is a U.S. Person shall deliver to the Borrower and the
Administrative Agent on or prior to the date on which such Lender becomes a
Lender under this Agreement (and from time to time thereafter upon the
reasonable request of
the Borrower or the Administrative Agent), executed originals of IRS Form W-9 certifying that
such Lender is exempt from U.S. federal backup withholding tax;

 

71

(b) any Foreign Lender shall, to the extent it is legally entitled to do so,
deliver to the Borrower and the Administrative Agent (in such number of copies
as shall be requested by the recipient) on or prior to the date on which such
Foreign Lender becomes a Lender under this Agreement (and from time to time
thereafter upon the
reasonable request of the Borrower or the Administrative Agent), whichever of the following is
applicable:

 

(A) in the case of a Foreign Lender claiming the benefits of an income tax
treaty to which the United States is a party (x) with respect to payments of
interest under any Loan Document, executed originals of
IRS Fo1m W-8BEN establishing an exemption from, or reduction of, U.S. federal
withholding Tax pursuant to the "interest" article of such tax treaty and (y)
with respect to any other applicable payments under any Loan Document, IRS Form
W-8BEN establishing an exemption from, or reduction of, U.S. federal withholding
Tax pursuant to the "business profits" or "other income" article of such
tax treaty;

 

(B)

executed originals of IRS Form W-8ECI;

 

(C) in the case of a Foreign Lender claiming the
benefits of the exemption for portfolio interest under Section 881(c) of the Code, (x) a certificate substantially in the form of Exhibit 5.9.7(A) to the effect that such
Foreign Lender is not (A) a "bank" within the meaning of Section 881(c)(3)(A) of
the Code, (B) a "10 percent shareholder" of the Borrower within the meaning of
Section 881(c)(3)(B) of the Code, or (C) a "controlled foreign corporation"
described in Section 881(c)(3)(C) of the Code (a "U.S. Tax Compliance
Certificate") and (y) executed originals of IRS Form W-8BEN; or

 

(D) to the extent a Foreign Lender is not the
beneficial owner, executed originals of IRS Form W-8IMY, accompanied by IRS Form
W-8ECI, IRS Form W-8BEN, a U.S. Tax Compliance Certificate
substantially in the form of Exhibit 5.9.7(B) or Exhibit 5.9.7(C). IRS Form W-9,
and/or other certification documents from each beneficial owner, as applicable;
provided that if the Foreign Lender is a partnership and one or more direct or
indirect partners of such Foreign Lender are claiming the portfolio interest
exemption, such Foreign Lender may provide a U.S. Tax Compliance Certificate
substantially in the form of Exhibit 5.9.7(D) on behalf of each such direct and
indirect partner;

 

(c) any Foreign Lender shall, to the extent it is legally entitled to do so,
deliver to the Borrower and the Administrative Agent (in such number of copies
as shall be requested by the recipient) on or prior to the date on which such
Foreign Lender becomes a Lender under this Agreement (and from time to time
thereafter upon the
reasonable request of the Borrower or the Administrative Agent), executed originals of any other
form prescribed by applicable Law as a basis for claiming exemption from or a reduction in U.S.
federal withholding Tax, duly completed, together with such supplementary documentation as

 

72

may be prescribed by applicable Law to permit the Borrower or the Administrative Agent to
determine the withholding or deduction required to be made; and

(d) if a payment made to a Lender under any Loan
Document would be subject to U.S. federal withholding Tax imposed by FATCA if such Lender
were to fail to comply with the applicable reporting requirements of FATCA
(including those
contained in Section 147l(b) or 1472(b) of the Code, as applicable), such Lender shall deliver to
the Borrower and the Administrative Agent at the time or times prescribed by law
and at such time or times reasonably requested by the Borrower or the
Administrative Agent such
documentation prescribed by applicable law (including as prescribed by Section 147l(b)(3)(C)(i)
of the Code) and such additional documentation reasonably requested by the
Borrower or the Administrative Agent as may be necessary for the Borrower and
the Administrative Agent to comply with their obligations under FATCA and to
determine that such Lender has complied
with such Lender's obligations under FATCA or to determine the amount to deduct and withhold
from such payment. Solely for purposes of this clause (D), "FATCA" shall include
any amendments made to FATCA after the date of this Agreement.

Each Lender agrees that if any form or certification it previously delivered
expires or becomes obsolete or inaccurate in any respect, it shall update such
form or certification or
promptly notify the Borrower and the Administrative Agent in writing of its legal inability to do
so.

 

5.9.8 Treatment of Certain Refunds. If any party determines, in its sole
discretion exercised in good faith, that it has received a refund of any Taxes
as to which it has been indemnified pursuant to this Section 5.9 (including by
the payment of additional amounts pursuant to this Section 5.9), it shall pay to
the indemnifying party an amount equal to such
refund (but only to the extent of indemnity payments made under this Section 5.9 with respect to
the Taxes giving rise to such refund), net of all out-of-pocket expenses (including Taxes) of such
indemnified party and without interest (other than any interest paid by the relevant Official Body
with respect to such refund). Such indemnifying party, upon the request of such
indemnified party incurred in connection with obtaining such refund, shall repay
to such indemnified party
the amount paid over pursuant to this Section 5.9.8 (plus any penalties, interest or other charges
imposed by the relevant Official Body) in the event that such indemnified party
is required to repay such refund to such Official Body. Notwithstanding anything
to the contrary in this Section 5.9.8), in no event will the indemnified party
be required to pay any amount to an indemnifying party pursuant to this Section
5.9.8 the payment of which would place the indemnified party in a less favorable
net after-Tax position than the indemnified party would have been in if the Tax
subject to indemnification and giving rise to such refund had not been deducted,
withheld or otherwise imposed and the indemnification payments or additional
amounts with respect to such Tax had never been paid. This paragraph shall not
be construed to
require any indemnified party to make available its Tax returns (or any other information relating
to its Taxes that it deems confidential) to the indemnifying party or any other
Person.

 

5.9.9 Survival. Each party's obligations under this Section 5.9 shall survive
the resignation of the Administrative Agent or any assignment of rights by, or
the replacement of, a Lender, the termination of the Commitments
and the repayment, satisfaction or discharge of all Obligations.

 

73

5.10
Indemnity. In addition to the compensation or payments required by Section 5.8
[Increased Costs] or Section 5.9 [Taxes], the Borrower shall indemnify each Lender against all
liabilities, losses or expenses (including loss of anticipated profits, any foreign exchange losses
and any loss or expense arising from the liquidation or reemployment of funds obtained by it to
maintain such Loan, from fees payable to terminate the deposits from which such
funds were
obtained or from the performance of any foreign exchange contract) which such Lender sustains
or incurs as a consequence of any:

 

(i) payment, prepayment, conversion or renewal of any Loan to which a LIBOR Rate
Option applies on a day other than the last day of the corresponding Interest
Period (whether or not such payment or prepayment is mandatory, voluntary or
automatic and whether or not such payment or prepayment is then due),

 

(ii) attempt by the Borrower to revoke (expressly, by later inconsistent notices
or otherwise) in whole or part any Loan Requests under Section 2.5
[Revolving Credit Loan Requests; Swing Loan Requests] or Section4.3 [Interest Periods] or
notice relating to prepayments under Section 5.6 [Voluntary Prepayments], or

 

(iii) default by the Borrower in the performance or observance of any covenant
or condition contained in this Agreement or any other Loan Document, including
any failure of the Borrower to pay when due (by acceleration or otherwise) any
principal, interest, Commitment Fee or any other amount due hereunder.

 

If any Lender sustains or incurs any such loss or expense, it shall from time to
time notify the Borrower of the amount determined in good faith by such Lender
(which
determination may include such assumptions, allocations of costs and expenses and averaging or
attribution methods as such Lender shall deem reasonable) to be necessary to
indemnify such Lender for such loss or expense. Such notice shall set forth in
reasonable detail the basis for
such determination. Such amount shall be due and payable by the Borrower to such Lender ten

(10) Business Days after such notice is given.

 

5.11 Settlement Date Procedures. In order to minimize the transfer of funds
between
the Lenders and the Administrative Agent, the Borrower may borrow, repay and reborrow Swing
Loans and PNC Bank may make Swing Loans as provided in Section 2.1.2 [Swing Loan
Commitments] hereof during the period between Settlement Dates. The
Administrative Agent shall notify each Lender of its Ratable Share of the total
of the Revolving Credit Loans and the
Swing Loans (each a "Required Share"). On such Settlement Date, each Lender shall pay to the
Administrative Agent the amount equal to the difference between its Required
Share and its
Revolving Credit Loans, and the Administrative Agent shall pay to each Lender its Ratable

Share of all payments made by the Borrower to the Administrative Agent with
respect to the Revolving Credit Loans. The Administrative Agent shall also
effect settlement in accordance with the foregoing sentence on the proposed
Borrowing Dates for Revolving Credit Loans and
on any mandatory prepayment date as provided for herein and may at its option effect settlement
on any other Business Day. These settlement procedures are established solely as
a matter of
administrative convenience, and nothing contained in this Section 5.11 shall relieve the Lenders
of their obligations to fund Revolving Credit Loans on dates other than a
Settlement Date
pursuant to Section 2.1.2 [Swing Loan Commitment]. The Administrative Agent may at any

 

74

time at its option for any reason whatsoever require each Lender to pay
immediately to the Administrative Agent such Lender's Ratable Share of the
outstanding Revolving Credit Loans and each Lender may at any time require the
Administrative Agent to pay immediately to such
Lender its Ratable Share of all payments made by the Borrower to the Administrative Agent with
respect to the Revolving Credit Loans.

 

6.

REPRESENTATIONS AND WARRANTIES

 

6.1 Representations and Warranties. The Loan Parties, jointly and severally,
represent and warrant to the Administrative Agent and each of the Lenders as follows:

6.1.1 Organization and Qualification; Power and Authority; Compliance With Laws;
Title to Properties; Event of Default. Each Loan Party, Hallador Sands, and each
Subsidiary of Hallador Sands (i) is a corporation, partnership or limited
liability company duly
organized, validly existing and in good standing under the laws of its jurisdiction of organization,

(ii) has the lawful power
to own or lease its properties and to engage in the business it presently
conducts or proposes to conduct, (iii) is duly licensed or qualified and in good
standing in each jurisdiction listed on Schedule 6.1.1 and in all other
jurisdictions where the property owned or leased by it or the nature of the
business transacted by it or both makes such licensing or qualification
necessary, except where such failure would not constitute a Material Adverse
Change (iv) has full power to enter into, execute, deliver and carry out this
Agreement and the
other Loan Documents to which it is a party, to incur the Indebtedness contemplated by the Loan
Documents and to perform its Obligations
under the Loan Documents to which it is a party, and all such actions have been
duly authorized by all necessary proceedings on its part, (v) is in compliance
in all material respects with all applicable Laws (other than Environmental Laws
which are specifically addressed in Section 6.1.14 [Environmental Matters]) in all jurisdictions in
which such Loan Party, Hallador Sands, or any Subsidiary of Hallador Sands is presently or will
be doing business except where the failure to do so would not constitute a
Material Adverse Change, and (vi) has good and marketable title to or valid
leasehold interest in all material properties, assets and other rights which it
purports to own or lease or which are reflected as owned or leased on its books
and records, free and clear of all Liens and encumbrances except Permitted
Liens. No Event of Default or Potential Default exists or is continuing.

 

6.1.2

Subsidiaries and Owners; Investment Companies. Schedule 6.1.2 states

(i)
the name of each of the Borrower's and each other Loan Party's Subsidiaries, its jurisdiction
of organization and the amount, percentage and type of equity interests in such Subsidiary (the
"Subsidiary Equity Interests"), (ii) the name of each holder of an equity
interest in the Borrower, the amount, percentage and type of such equity
interest (the "Borrower Equity Interests"), and (iii) any options, warrants or
other rights outstanding to purchase any such equity interests referred to in
clause (i) or (ii) (collectively the "Equity Interests"). The Borrower, each
other Loan Party, Hallador Sands, and each Subsidiary of Hallador Sands has good
and marketable title to all of the Subsidiary Equity Interests it purports to
own, free and
clear in each case of any Lien and all such Subsidiary Equity Interests have been validly issued,
fully paid and nonassessable. None of the Loan Parties or Hallador Sands, or any Subsidiary of
Hallador Sands is an "investment company" registered or required to be
registered under the Investment Company Act of 1940 or under the "control" of an
"investment company" as such
terms are defined in the Investment Company Act of 1940 and shall not become such an

 

75

"investment company" or under such "control." None of the Loan Parties is a
"holding
company" or any "affiliate" of a "holding company" or of a "subsidiary company" of a "holding
company" within the meaning of the Public Utility Holding Company Act of 2005, as amended.
None
of the Loan Parties is subject to any other federal or state statute or regulation limiting its
ability to incur Indebtedness for borrowed money.

 

1.1.1 Validity and Binding Effect. This Agreement and each of the other
Loan Documents (i) has been duly and validly executed and delivered by each Loan Party, and

(ii) constitutes, or will constitute, legal, valid and binding obligations of
each such Loan Party which is or will be a party thereto, enforceable against
such Loan Party in accordance with its Terms, except as the same may be limited
by applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws in effect from time to time relating to or affecting the enforcement of
creditors' rights generally and by general principles of equity.

 

2.1.1 No Conflict; Material Agreements: Consents. Neither the execution and
delivery of this Agreement or the other Loan Documents by any Loan Party nor the
consummation of the transactions herein or therein contemplated or compliance
with the terms and provisions hereof or thereof by any of them will conflict
with, constitute a default under or result in any breach of (i) the terms and
conditions of the certificate of incorporation, bylaws,
certificate of limited partnership, partnership agreement, certificate of formation, limited liability
company agreement
or other organizational documents of such Loan Party or (ii) any Law or any
material agreement or instrument or order, writ, judgment, injunction or decree
to which such Loan Party, Hallador Sands, or any Subsidiary of Hallador Sands is
a party or by which it, Hallador Sands, or any Subsidiary of Hallador Sands is
bound or to which it is subject, or result in the creation or enforcement of any
Lien, charge or encumbrance whatsoever upon any property (now or hereafter
acquired) of such Loan Party, Hallador Sands, or any Subsidiary of
Hallador Sands (other than Liens granted under the Loan Documents). There is no default under
such material agreement (referred to above) and none of the Loan Parties, Hallador Sands, or any
Subsidiary of
Hallador Sands is bound by any contractual obligation, or subject to any restriction
in any organization document, or any requirement of Law which could result in a
Material Adverse Change. Except as set forth on Schedule 6.1.4, no consent,
approval, exemption, order or authorization of, or a registration or filing
with, any Official Body or any other Person is required by any Law or any
agreement in connection with the execution, delivery and carrying out of this
Agreement and the other Loan Documents.

2.1.2 Litigation. There are no actions, suits, proceedings or investigations
pending or, to the knowledge of any Loan Party, threatened against such Loan
Party, Hallador Sands, or any Subsidiary of Hallador Sands at law or in equity
before any Official Body which individually or in the aggregate may result in
any Material Adverse Change. None of the Loan Parties, Hallador Sands, or any
Subsidiary of Hallador Sands is in violation of any order, writ,
injunction or any decree of any Official Body which may result in any Material Adverse Change.

 

2.1.3

Financial Statements.

 

(i) Historical Statements. The Borrower has delivered to the
Administrative Agent copies of its production reports, balance sheet, income statement and cash
flow statement for and as of the end of the fiscal year ended December 31, 2017 (all such annual

 

76

reports and statements being collectively referred to as the "Statements"). The Statements were
compiled from the books and records maintained by the Borrower's management, are correct and
complete and fairly represent the financial condition of the Borrower and its
Subsidiaries as of the respective dates thereof and the results of operations
for the fiscal periods then ended and have been prepared in accordance with GAAP
consistently applied, subject (in the case of the interim statements) to normal
year-end audit adjustments.

 

(ii) Accuracy of Financial Statements. None of the Loan
Parties, Hallador Sands, or any Subsidiary of Hallador Sands have any liabilities, contingent or
otherwise, or forward or long-term commitments that are not disclosed in the Statements or in
the notes thereto, and except as disclosed therein there are no unrealized or
anticipated losses
from any commitments of any Loan Party which may cause a Material Adverse Change. Since
December 31, 2017, no Material Adverse Change has occurred.

 

2.1.4 Margin Stock. None of the Loan Parties, Hallador Sands, or any
Subsidiary of
Hallador Sands engages or intends to engage principally, or as one of its important
activities, in the business of extending credit for the purpose, immediately,
incidentally or
ultimately, of purchasing or carrying margin stock (within the meaning of Regulation U, Tor X
as promulgated by the Board of Governors of the Federal Reserve System). No part
of the proceeds of any Loan has been or will be used, immediately, incidentally
or ultimately, to
purchase or carry any margin stock or to extend credit to others for the purpose of purchasing or
carrying any margin stock or which is inconsistent with the provisions of the
regulations of the Board of Governors of the Federal Reserve System. None of the
Loan Parties, Hallador Sands,
or any Subsidiary of Hallador Sands holds or intends to hold margin stock in such amounts that
more than 25% of the reasonable value of the assets of any such Loan Party, Hallador Sands, or
any Subsidiary of Hallador Sands are or will be represented by margin stock.

2.1.5 Full Disclosure. Neither this Agreement nor any other Loan Document, nor
any certificate, statement, agreement or other documents furnished to the
Administrative Agent or any Lender in connection herewith or therewith, contains
any untrue statement of a
material fact or omits to state a material fact necessary in order to make the statements contained
herein and therein, in light of the circumstances under which they were made,
not misleading. There is no fact known to any Loan Party which materially
adversely affects the business, property, assets, financial condition, or
results of operations of any such Loan Party, Hallador
Sands, or any Subsidiary of Hallador Sands which has not been set forth in this Agreement or in
the certificates, statements, agreements or other documents furnished in writing
to the Administrative Agent and the Lenders prior to or at the date hereof in
connection with the transactions contemplated hereby.

 

2.1.6
Taxes. All material federal, state, local and other tax returns required to have
been filed with respect to each Loan Party, Hallador Sands, or any Subsidiary of
Hallador
Sands have been filed, and payment or adequate provision has been made for the payment of all
taxes, fees, assessments and other governmental charges which have or may become
due pursuant to said returns or to assessments received, except to the extent
that such taxes, fees, assessments and other charges are being contested in good
faith by appropriate proceedings
diligently conducted and for which such reserves or other appropriate provisions, if any, as shall
be required by GAAP shall have been made.

 

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2.1.7 Patents, Trademarks, Copyrights, Licenses, Etc. None of the Loan Parties,
Hallador Sands, or any Subsidiary of Hallador Sands owns or possesses any
material patents, trademarks, service marks, trade names, or copyrights. Each
Loan Party owns or
possesses all the material licenses, registrations, franchises, permits and rights necessary to own
and operate its properties and to carry on its business as presently conducted and planned to be
conducted by such Loan Party, Hallador Sands, or any Subsidiary of Hallador
Sands, without known possible, alleged or actual conflict with the rights
of others.

 

2.1.8 Liens in the Collateral. The Liens in all material Collateral granted to
the Administrative Agent for the benefit of the Lenders pursuant to the Collateral Assignment,
the Pledge Agreement, the Security Agreement and the Mortgages (collectively, the "Collateral
Documents") constitute and will continue to constitute first priority perfected Liens subject to
Permitted Liens. All filing fees and other expenses in connection with the
perfection of such Liens have been or will be paid by the Borrower.

 

2.1.9 Insurance. The properties of each Loan Party, Hallador Sands, and all
Subsidiaries of Hallador Sands are insured pursuant to policies and other bonds which are valid
and in full force and effect and which provide adequate coverage from reputable and financially
sound insurers in amounts sufficient to insure the assets and risks of each such
Loan Party, Hallador Sands, and all Subsidiaries of Hallador Sands in accordance
with prudent business practice in the industry of such Loan Parties, Hallador
Sands, and all Subsidiaries of Hallador
Sands. Each Loan Party has taken all actions required under the Flood Laws and/or requested by
the Administrative Agent to assist in ensuring that each Lender is in compliance with the Flood
Laws applicable to the Collateral, including, but not limited to, providing the
Administrative Agent with the address and/or GPS coordinates
of each structure located upon any real property that will be subject to a
mortgage in favor of the Administrative Agent, for the benefit of the
Lenders, and, to the extent required, obtaining flood insurance for such property, structures and
contents prior to such property, structures and contents becoming Collateral.

 

2.1.10 ERISA Compliance. (i) Each Pension Plan is in compliance in all material
respects with the applicable provisions of ERISA, the Code and other federal or
state Laws.  Each Pension Plan that is intended  to qualify under
Section  40l(a) of the Code has received from the IRS a favorable determination
or opinion letter, which has not by its terms expired, that such Pension Plan is
so qualified, or such Pension Plan is entitled to rely on an IRS advisory or
opinion letter with respect to an IRS-approved master and prototype or volume
submitter plan, or a timely application for such determination or opinion letter
is currently being processed by the IRS with respect thereto; and, to the best
knowledge of Borrower, nothing has occurred which would prevent, or cause the
loss of, such qualification. Borrower and each member of the ERISA Group have
made all required contributions to each Pension Plan subject to Sections 412 or
430 of the Code, and no application for a funding waiver or an extension of any
amortization period pursuant to Sections 412 or 430 of the Code has been made
with respect to any Pension Plan.

 

(ii)No ERISA Event has occurred or is reasonably expected to occur; (a) no
Pension Plan has any unfunded pension liability (i.e. excess of benefit
liabilities over the current value of that Pension Plan's assets, determined in
accordance with the
assumptions used for funding the Pension Plan for the applicable plan year); (b) neither

 

78

Borrower nor any member of the ERISA Group has incurred, or reasonably expects to incur, any
liability under Title IV of ERISA with respect to any Pension Plan (other than premiums due and
not delinquent under Section 4007 of ERISA); (c) neither Borrower nor any member
of the ERISA Group has incurred, or reasonably expects to incur, any liability
(and no event has occurred which, with the giving of notice under Section 4219
of ERISA, would result in such liability) under Section 4201 of ERISA with
respect to a Multiemployer Plan; (d) neither Borrower nor any member of the
ERISA Group has received notice pursuant to Section 4242(a)(l )(B) of ERISA that
a Multiemployer Plan is in reorganization and that additional contributions are
due to the Multiemployer Plan pursuant to Section 4243 of ERISA; and (e) neither
Borrower nor any member of the ERISA Group has engaged in a transaction that
could be subject to Sections 4069 or 4212(c) of ERISA.

 

2.1.11

Environmental Matters. Except for those items described on

Schedule 6.1.14, none of which items, individually or collectively, could be reasonably expected
to result in a Material Adverse Change:

 

(i) None of the Loan Parties has received any Environmental Complaint, whether
directed or issued to any such  Loan  Party or relating  or pertaining  to
activities undertaken by any prior owner, operator or occupant of the Real
Property, which would result in a Material Adverse Change, and has no reason to
believe that it might receive an Environmental Complaint that would result in a
Material Adverse Change.

 

(ii) No activity of any Loan Party at the Real Property is being conducted in
violation of any Environmental Law or Required Environmental Permit, which
such activity would result in a Material Adverse Change, and to the knowledge of any such Loan
Party, no activity of any prior owner, operator or occupant of the Real Property has caused an

on-going violation of any Environmental Law, which such activity would result in a Material
Adverse Change.

 

(iii) There are no Regulated Substances present on, in, under, or
emanating from, or, to any such Loan Party's knowledge, emanating to, the Real Property or any
portion thereof which result in Contamination, which such Contamination would
result in a Material Adverse Change.

 

(iv) Each Loan Party has all Required Environmental Permits, the absence of
which would result in a Material Adverse Change, and all such Required
Environmental Permits are in full force and effect.

 

(v) Each Loan Party has submitted to an Official Body and/or
maintains, as appropriate, all Required Environmental Notices where the failure to submit and/or
maintain such Required Environmental Notices would result in a Material Adverse Change.

 

(vi) No structures, improvements, equipment, fixtures,
impoundments, pits, lagoons or aboveground or underground storage tanks located on the Real
Property contain or use, except in compliance with Environmental Laws and
Required
Environmental Permits, Regulated Substances or otherwise are operated or maintained except in
compliance with Environmental Laws and Required Environmental Permits where such failure

 

79

to contain, or the use of, Regulated Substances or the noncompliance with Environmental Laws
or Required Environmental Permits, would result in a Material Adverse Change. To
the knowledge of each Loan Party, no structures, improvements, equipment,
fixtures, impoundments, pits, lagoons or aboveground or underground storage
tanks of prior owners, operators or occupants of the Real Property contained or
used, except in compliance with Environmental Laws, Regulated Substances or
otherwise were operated or maintained by any
such prior owner, operator or occupant except in compliance with Environmental Laws where
such failure to contain, or the use of, Regulated Substances or the
noncompliance with Environmental Laws or Required Environmental Permits, would
result in a Material Adverse Change.

 

(vii) To the knowledge of each Loan Party, no facility or site to which any such
Loan Party, either directly or indirectly by a third party, has sent Regulated
Substances for storage, treatment, disposal or other management is identified in
writing or proposed in writing to be identified on any list of contaminated
properties or other properties which pursuant to Environmental Laws are the
subject of an investigation, cleanup, removal, remediation or other response
action by an Official Body where such investigation, cleanup,
removal, remediation or other response by an Official Body would result in a Material Adverse
Change.

 

(viii) No portion of the Real Property is identified in writing or, to the
knowledge of any Loan Party, proposed to be identified in writing on any list of
contaminated properties or other properties which pursuant to Environmental Laws
are the
subject of an investigation or remediation action by an Official Body where such investigation or
remediation action by an Official Body would result in a Material Adverse
Change, nor to the knowledge of any such Loan Party, is any property adjoining
or in the proximity of the Real Property so identified or proposed to be
identified on any such list where such identification or proposed identification
would result in an investigation or remediation action by an Official Body that
would result in a Material Adverse Change.

 

(ix) No portion of the Real Property constitutes an Environmentally Sensitive
Area where the inclusion of such portion of the Real Property
constituting an Environmentally Sensitive Area would result in a Material Adverse Change.

(x) No lien or other encumbrance authorized by Environmental
Laws exists against the Real Property and none of the Loan Parties has any reason to believe that
such a lien or encumbrance may be imposed where such lien or encumbrance would
result in a Material Adverse Change.

 

2.1.12 Solvency. Each Loan Party is Solvent. After giving effect to the
transactions contemplated by the Loan Documents on the Closing Date, including
all
Indebtedness incurred thereby, the Liens granted each such Loan Party in connection therewith
and the payment of all fees related thereto, each such Loan Party will be Solvent, determined as
of the Closing Date.

 

2.1.13 Employment Matters. Each of the Loan Parties is in compliance with
all employment agreements, employment contracts, collective bargaining agreements and other

 

80

agreements  among any such Loan Party and its employees (collectively, "Labor
Contracts") and all applicable federal, state and local labor and employment
Laws including those related to equal employment opportunity and affirmative
action, labor relations, minimum wage, overtime, child labor, medical insurance
continuation, worker adjustment  and relocation notices, immigration controls
and worker and unemployment compensation, where the failure to comply would
constitute a Material Adverse Change. There are no outstanding grievances,
arbitration awards or appeals therefrom arising out of the Labor Contracts or
current or threatened strikes, picketing, hand billing or other work stoppages
or slowdowns at facilities of any of such Loan Parties which in any case would
constitute a Material Adverse Change.

 

2.1.14 Title to Properties. A Lien on all Real Property owned by each Loan Party
has been granted to the Administrative Agent for the benefit of the Lenders
pursuant to a
Mortgage and other appropriate Security Documents, except for (a) Real Property acquired by a
Loan Party in which a Mortgage and other appropriate Security Documents will be executed and
delivered by such Loan Party in favor of the Administrative Agent for the benefit of the Secured
Parties within the time frames provided in Section 8.1.11 [Collateral and Additional Collateral;
Execution and Delivery of Additional Security Documents] or Section 8.2.9
[Subsidiaries,
Partnerships and Joint Ventures], as applicable, and (b) Real Property listed on Schedule l. l(R)
as of the Closing Date upon which a Lien has not yet been granted to the Administrative Agent
for the benefit of Lenders, but for which a Mortgage and other appropriate Security Documents
will be executed and delivered by such Loan Party in favor of the Administrative Agent for the
benefit of the Secured Parties within the time frame provided in Section 8.1.15
[Post Closing Title Insurance and Additional Mortgages]. Each Loan Party,
Hallador Sands, and all Subsidiaries of Hallador Sands has good and sufficient
title to or valid leasehold interest in all
material properties, assets and other rights that are reflected as owned or leased on its most

recent audited balance sheet, free and clear of all Liens except Permitted Liens, and subject to the
terms and conditions of the applicable leases. All leases of property are in
full force and effect, except for those leases of property where such failure
would not result in a Material Adverse Change.

 

2.1.15 Coal Act: Black Lung Act. To the extent applicable, each Loan Party,
Hallador Sands, and each Subsidiary of Hallador Sands and its "related persons"
(as defined in the Coal Act) are in compliance in
all material respects with the Coal Act and none of the Loan Parties, Hallador
Sands or any Subsidiary of Hallador Sands or its related persons has any
liability under the Coal Act except with respect to premiums or other payments
required
thereunder which have been paid when due and except to the extent that the liability thereunder
would not reasonably be expected to result in a Material Adverse Change. The Loan Parties are
in compliance in all material respects with the Black Lung Act, and none of the Loan Parties has
any liability under the Black Lung Act except with respect to premiums,
contributions or other
payments required thereunder which have been paid when due and except to the extent that the
liability thereunder would not reasonably be expected to result in a Material Adverse Change.

 

2.1.16 Bonding Capacity. After giving effect to the transactions contemplated by
the Loan Documents, the Borrower has a sufficient mine bonding capacity to
conduct its operations as projected in accordance with the financial projections
of the Borrower and its Subsidiaries provided to the Administrative Agent.

 

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2.1.17 Permit Blockage. No Loan Party has been barred for a period in excess
of fourteen (14) consecutive days from receiving surface mining or underground mining permits
pursuant to the permit block provisions of the Surface Mining Control and Reclamation Act, 30

U.S.C. §§ 1201 et seq.,  and the regulations promulgated thereto, or
any corresponding state laws or regulations.

 

2.1.18 Anti-Terrorism Laws; EEA Financial Institution. (i) No Covered Entity is
a Sanctioned Person, and (ii) no Covered Entity, either in its own right or
through any third party,
(a) has any of its assets in a Sanctioned Country or in the possession, custody or control of
a Sanctioned Person in violation of any Anti-Terrorism Law, (b) does business in
or with, or derives any of its income from investments in or transactions with,
any Sanctioned Country or Sanctioned Person in violation of any Anti-Terrorism
Law; or (c) engages in any dealings or transactions prohibited by any
Anti-Terrorism Law. No Loan Party is an EEA Financial Institution.

 

2.1.19 Mining Property. The Loan Parties own or have an interest in all Real
Property (whether owned or leased) as necessary for the mining operations and
related operations and activities of the Loan Parties as currently conducted.

 

2.1.20 Certificate of Beneficial Ownership. The Certificate of Beneficial
Ownership executed and delivered to Administrative Agent and Lenders for the Borrower on or
prior to the date of this Agreement, as updated from time to time in accordance
with this Agreement, is accurate, complete and correct as of the date hereof and
as of the date any such update is delivered. The Borrower acknowledges and
agrees that the Certificate of Beneficial Ownership is one of the
Loan Documents.

 

2.2 Updates to Schedules. Should any of the information or disclosures provided
on any of the Schedules attached hereto become outdated or incorrect in any
material respect, the Borrower shall promptly provide the Administrative Agent
in writing with such revisions or updates to such Schedule as may be necessary
or appropriate to update or correct same; provided, however, that (i) Schedules
1.l(R), 6.1.1, and 6.1.2 shall not be deemed to have been amended, modified or
superseded by any such correction or update, nor shall any breach of
warranty or representation resulting from the inaccuracy or incompleteness of any such Schedule
be deemed to have been cured thereby, unless and until the Administrative Agent, in its sole and
absolute discretion, shall have accepted in writing such revisions or updates to
such Schedules and (ii) all remaining Schedules shall not be deemed to have been
amended, modified or
superseded by any such correction or update, nor shall any breach of warranty or representation
resulting from the inaccuracy or incompleteness of any such Schedule be deemed
to have been
cured thereby, unless and until the Required Lenders, in their sole and absolute discretion, shall
have accepted in writing such revisions or updates to such Schedule.

7.

CONDITIONS OF LENDING AND ISSUANCE OF LETTERS OF CREDIT
The obligation of each Lender to make Loans and of the Issuing Lender to issue Letters

of Credit hereunder is subject to the performance by each of the Loan Parties of
its Obligations

to be performed hereunder at or prior to the making of any such Loans or issuance of such
Letters of Credit and to the satisfaction of the following further conditions:

 

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7.1

First Loans and Letters of Credit.

 

7.1.1 Deliveries. On the Closing Date, the Administrative Agent shall have
received each of the following in form and substance reasonably satisfactory to
the Administrative Agent:

 

(i) A certificate of each of the Loan Parties signed by an
Authorized Officer, dated the Closing Date stating that (w) all representations and warranties of
the Loan Parties set forth in this Agreement are true and correct in all material respects, (x) the
Loan Parties are in compliance with each of the covenants and conditions
hereunder, (y) no
Event of Default or Potential Default exists, and (z) no Material Adverse Change has occurred
since the date of the last audited financial statements of the Borrower
delivered to the Administrative Agent;

 

(ii) A certificate dated the Closing Date and signed by the
Secretary or an Assistant Secretary of each of the Loan Parties, certifying
as appropriate as to:

(a) all action taken by each Loan Party in connection with this Agreement and
the other Loan Documents; (b) the names of the Authorized Officers authorized to
sign the Loan Documents and their true signatures; and (c) copies of its
organizational documents as in effect on the
Closing Date certified by the appropriate state official where such documents are filed in a state
office together with certificates from the appropriate state officials as to the continued existence
and good standing of each Loan Party in each state where organized or qualified to do business.

 

(i) This Agreement and each of the other Loan Documents
signed by an Authorized Officer and all appropriate financing statements and appropriate stock
powers and certificates evidencing the pledged Collateral, including a pledge of all of the equity
in Hourglass Sands and High Point.

 

(ii) A written opinion of counsel for the Loan Parties, dated the
Closing Date and as to the matters set forth in Schedule 7.1.1.

 

(iii) Evidence that adequate insurance, including flood insurance, if
applicable, required to be maintained under this Agreement is in full force and
effect, with additional insured, mortgagee and lender loss payable special endorsements attached
thereto in form and substance satisfactory to the Administrative Agent and its
counsel naming the Administrative Agent as additional insured, mortgagee and
lender loss payee, and evidence that the Loan Parties have taken all actions
required under the Flood Laws and/or requested by the Administrative Agent to
assist in ensuring that each Lender is in compliance with the Flood Laws
applicable to the Collateral, including, but not limited to, providing the
Administrative
Agent with the address and/or GPS coordinates of each structure on any real property that will be
subject to a mortgage in favor of the Administrative Agent, for the benefit of the Lenders, and, to
the extent required, obtaining flood insurance for such property, structures and
contents prior to such property, structures and contents becoming Collateral.

(iv) All material consents, approvals and licenses required to effectuate the
transactions contemplated hereby.

 

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(v) All lessor consents allowing for, among other things, a Lien to be obtained
upon any lease of the Borrower of the Real Property, from the lessors of such
lease, as required by the Administrative Agent, in its sole discretion, to have
such consents,
which such consents shall be in form and substance acceptable to the Administrative Agent (the
"Lessor Consents").

 

(vi) To permit the refinancing by the Lenders of the loans outstanding under the
2014 Credit Agreement, (1) the Borrower shall request Loans in an amount
sufficient to refinance the loans under the 2014 Credit Agreement by delivering
to the
Administrative Agent an appropriately completed irrevocable Loan Request not later than 11:00
a.m., on the first Borrowing Date (which shall be the Closing Date) pursuant to which Loans (to
which the Base Rate Option applies) are requested; and (2) contemporaneously
with the execution and effectiveness of this Agreement and utilizing a portion
of the proceeds of the
Loans, the Borrower shall pay in full all amounts outstanding under the 2014 Credit Agreement,
including all unpaid principal, interest, breakage fees and all other fees and charges thereunder in
order to accomplish the amendment and restatement thereof as of the Closing Date. Each Lender
that was a bank under the 2014 Credit Agreement, by execution of this Agreement,
waives all notice of prepayment of loans and all notice of termination of the
commitments under the 2014
Credit Agreement, and consents to such termination and prepayment. In
the event that the

Borrower submits a Loan Request hereunder, then the Borrower agrees to indemnify
the Lenders

for any and all liabilities, losses, or expenses arising therefrom in accordance with the standards
set forth in Section 5.10 [Indemnity], regardless of whether this Agreement has
become effective.

 

(vii)

A Lien search in acceptable scope and with acceptable

results.

 

(viii) Evidence that after giving effect to the transactions contemplated by the
Loan Documents, the Borrower has a sufficient mine bonding capacity (or
other security available for the issuance of permits, including without limitation, letters of credit)
to conduct its operations as contemplated in accordance with the financial
projections of the Borrower and its Subsidiaries provided to the
Administrative Agent.

 

(ix) Evidence that all of Required Mining Permits with respect
to the Loan Parties are in full force and effect in accordance with their terms.

 

(x) Audited financial statements of Borrower for the fiscal year ended December
31, 2017, prepared in accordance with GAAP and consolidating schedules for
the balance sheet, statement of income, retained earnings and cash flow of the Borrower certified
(subject to normal year-end audit adjustments and without footnotes) by the
Chief Executive Officer, President or Chief Financial Officer of the Borrower as
having been prepared in accordance with GAAP, all as more fully described in
Section 8.3.2 [Annual Financial Statements].

 

(xi) The projected pro-forma financial projections (including
balance sheets and statements of operations and cash flows) of the Borrower for each fiscal year

 

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from 2018 through 2021, which shall be satisfactory to the Administrative Agent (including all
assumptions).

 

(xii)

Completion of all necessary FEMA flood zone diligence

requirements.

 

(xiii) Satisfactory completion and receipt of all third-party due
diligence items, including, but not limited to the Energy Ventures Market Study, each in form
and substance satisfactory to the Administrative Agent.

 

(xiv) An Authorized Officer of each Loan Party, acting in their
capacities as such officers, shall have delivered a certificate in form and substance satisfactory to
the Administrative Agent as to the capital adequacy and solvency of each Loan Party after giving
effect to the transactions contemplated hereby.

 

(xv) A review of the amount and nature of all tax, ERISA,
employee retirement benefit, environmental and all other contingent liabilities to which the Loan
Parties may be subject.

 

(xvi) The Administrative Agent and each Lender shall have
received, in form and substance acceptable to Administrative Agent and each Lender an executed
Certificate of Beneficial Ownership and such other documentation and other
information
requested in connection with applicable "know your customer" and anti-money laundering rules
and regulations, including the USA Patriot Act.

 

(xvii) A duly completed Compliance Certificate dated as of the
Closing Date pursuant to which Borrower certifies that it shall be in compliance on a Pro Forma
Basis with the covenants contained in Section 8.2.15 [Minimum Debt Service Coverage Ratio]
and Section 8.2.16 [Maximum Leverage Ratio] upon the closing and funding of the
Loans hereunder.

 

(xviii) Such other documents in connection with such transactions as the
Administrative Agent or its counsel may reasonably request.

 

1.1.2 Payment of Fees. The Borrower shall have paid all fees and expenses
payable on or before the Closing Date or arranged for funding of such fees and expenses out of
the proceeds of the initial Loans.

 

1.2 Each Loan or Letter of Credit. At the time of making any Loans or issuing,
extending or increasing any Letters of Credit and after giving effect to the
proposed extensions
of credit: the representations, warranties and covenants of the Loan Parties shall then be true and
no Event of Default or Potential Default shall have occurred and be continuing;
the making of the Loans or issuance, extension or increase of such Letter of
Credit shall not contravene any Law applicable to any Loan Party, Hallador
Sands, or any Subsidiary of Hallador Sands, or any of the Lenders; and the
Borrower shall have delivered to the Administrative Agent a duly executed and
completed Loan Request or to the Issuing Lender an application for a Letter of
Credit, as the case may be.

 

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8.

COVENANTS

 

The Loan Parties, jointly and severally, covenant and agree that until Payment In Full, the
Loan Parties shall comply at all times with the following covenants:

 

8.1

Affirmative Covenants.

 

8.1.1 Preservation of Existence, Etc. Each Loan Party shall, and shall cause
Hallador Sands and each Subsidiary of Hallador Sands to, maintain its legal
existence as a
corporation, limited partnership or limited liability company and its license or qualification and
good standing in each jurisdiction in which its ownership or lease of property or the nature of its
business makes such license or qualification necessary, except as otherwise expressly permitted
in Section 8.2.6 [Liquidations, Mergers, Consolidations, Acquisitions] or where failure to do so
would not result in a Material Adverse Change.

 

8.1.2 Payment of Liabilities, Including Taxes, Etc. Each Loan Party shall,
and shall cause Hallador Sands and each Subsidiary of
Hallador Sands to, duly pay and discharge all liabilities to which it is subject
or which are asserted against it, promptly as and when the same shall become due
and payable, including all taxes, assessments and governmental charges upon it
or any of its properties, assets, income or profits, prior to the date on which
penalties attach thereto, except to the extent that such liabilities, including
taxes, assessments or charges,
are being contested in good faith and by appropriate and lawful proceedings diligently conducted
and for which such reserve or other appropriate
provisions, if any, as shall be required by GAAP shall have been made.

 

8.1.3 Maintenance of Insurance. Each Loan Party shall, and shall cause
Hallador Sands and each Subsidiary of Hallador Sands to, insure its properties and assets against
loss or damage by fire and such other insurable hazards as such assets are
commonly insured
(including fire, extended coverage, property damage, workers' compensation and public liability)
and against other risks (including errors and omissions) in such amounts as similar properties and
assets are insured by prudent companies in similar circumstances carrying on similar businesses,
and with reputable and financially sound insurers, including self-insurance to
the extent customary, all as reasonably determined by the Administrative Agent.
The Loan Parties shall comply with the covenants and provide the endorsement set
forth on Schedule 8.1.3 relating to property and related insurance policies
covering the Collateral. Each Loan Party shall take all
actions required under the Flood Laws and/or requested by the Administrative Agent to assist in
ensuring that each Lender is in compliance with the Flood Laws applicable to the
Collateral, including, but not limited to, providing the Administrative Agent
with the address and/or GPS coordinates of each structure on any real property
that will be subject to a mortgage in favor of the Administrative Agent, for the
benefit of the Lenders, and, to the extent required, obtaining flood insurance
for such property, structures and contents prior to such property, structures
and contents becoming Collateral, and thereafter maintaining such flood
insurance in full force and effect for so long as required by the Flood Laws.

 

8.1 :4Maintenance of Properties and Leases. Each Loan Party shall, and shall
cause Hallador Sands and each Subsidiary of Hallador Sands to, maintain in good
repair,
working order and condition (ordinary wear and tear excepted) in accordance with the general

 

83

practice of other businesses of similar character and size, all of those
properties useful or
necessary to its business, and from time to time, such Loan Party will make or cause to be made
all appropriate repairs, renewals or replacements thereof.

 

8.1.5 Visitation Rights. Each Loan Party shall, and shall cause Hallador Sands
and each Subsidiary of Hallador Sands to, permit any of the officers or
authorized employees or representatives of the Administrative Agent or any of
the Lenders to visit and inspect any of its properties and to examine and make
excerpts from its books and records and discuss its business affairs, finances
and accounts with its officers, all in such detail and at such
times and as often as any of the Lenders may reasonably request, provided that each Lender shall
provide the Borrower and the Administrative Agent with reasonable notice prior
to any visit or inspection. In the event any Lender desires to conduct such
visit or inspection of any Loan Party, such Lender shall make a reasonable
effort to conduct such visit or inspection
contemporaneously with any audit to be performed
by the Administrative Agent and such visits
or inspections shall be subject to customary safety procedures.

 

8.1.6 Keeping of Records and Books of Account. Each Loan Party shall, and
shall cause Hallador Sands and each Subsidiary of
Hallador Sands to, maintain and keep proper
books of record and account which enable the Loan Parties, Hallador Sands and each Subsidiary
of Hallador Sands to issue financial statements in accordance with GAAP and as
otherwise
required by applicable Laws of any Official Body having jurisdiction over any Loan Party, and
in which full, true and correct entries shall be made in all material respects of all its dealings and
business and financial affairs.

 

8.1.7 Compliance with Laws; Use of Proceeds. Each Loan Party shall, and
shall cause Hallador Sands and each Subsidiary of
Hallador Sands to, comply with all applicable Laws, including all Environmental
Laws, in all material respects; provided that it shall not be deemed to be a
violation of this Section 8.1.7 if any failure to comply with any Law would not
result in fines, penalties, remediation costs, other similar liabilities or
injunctive relief which in
the aggregate would constitute a Material Adverse Change. The Loan Parties will use the Letters
of Credit and the proceeds of the Loans only in accordance with Section 2.8 [Use
of Proceeds] and as permitted by applicable Law. Without limiting the generality
of the foregoing, the Loan Parties shall maintain adequate allowances on its
books in accordance with GAAP for (i) future costs associated with any lung
disease claim alleging pneumoconiosis or silicosis or arising out of exposure or
alleged exposure to coal dust or the coal mining environment, (ii) future costs
associated with retiree and health care benefits, (iii) future costs associated
with reclamation of disturbed acreage, removal of facilities and other closing
costs in connection with its mining
activities and (iv) future costs associated with other potential environmental liabilities.

 

8.1.8 Further Assurances. Each Loan Party shall, from time to time, at its
expense, faithfully preserve and protect the Administrative Agent's Lien on and
Prior Security
Interest in the Collateral and all other real and personal property of the Loan Parties whether now
owned or hereafter acquired as a continuing first priority perfected Lien,
subject only to Permitted Liens, and shall do such other acts and things as the
Administrative Agent in its sole discretion may deem necessary or advisable from
time to time in order to preserve, perfect and protect the Liens granted under
the Loan Documents and to exercise and enforce its rights and remedies
thereunder with respect to the Collateral.

 

84

8.1.9 Anti-Terrorism Laws. (a) No Covered Entity will become a Sanctioned
Person, (b) no Covered Entity, either in its own right or through any third
party, will (A) have
any of its assets in a Sanctioned Country or in the possession, custody or control of a Sanctioned
Person in violation of any Anti-Terrorism Law; (B) do business in or with, or
derive any of its
income from investments in or transactions with, any Sanctioned Country or Sanctioned Person
in violation of any Anti-Terrorism Law; (C) engage in any dealings or transactions prohibited by
any Anti-Terrorism Law or (D) use the Loans to fund any operations in, finance any investments
or activities in, or, make any payments to, a Sanctioned Country or Sanctioned
Person in violation of any Anti-Terrorism Law, (c) the funds used to repay the
Obligations will not be derived from any unlawful activity, (d) each Covered
Entity shall comply with all Anti­ Terrorism Laws, and (e) the Borrower shall
promptly notify the Agent in writing upon the occurrence of a Reportable
Compliance Event.

 

8.1.10 Keepwell. Each Qualified ECP Loan Party jointly and severally (together
with each other Qualified ECP Loan Party) hereby absolutely unconditionally and
irrevocably (a) guarantees the prompt payment and performance of all Swap Obligations owing
by each Non-Qualifying Party (it being understood and agreed that this guarantee
is a guaranty of payment and not of collection), and (b) undertakes to provide
such funds or other support as may be needed from time to time by any
Non-Qualifying Party to honor all of such Non­ Qualifying Party's obligations
under this Agreement or any other Loan Document in respect of Swap Obligations
(provided, however, that each Qualified ECP Loan Party shall only be liable
under this Section 8.1.10 for the maximU111 amount of such liability that can be hereby incurred
without rendering its obligations under this Section 8.1.10, or otherwise under this Agreement or
any other Loan DocU111ent, voidable under applicable law, including applicable law relating to
fraudulent conveyance or fraudulent transfer, and not for any greater amount).
The obligations
of each Qualified ECP Loan Party under this Section 8.1.10 shall remain in full force and effect
until payment in full of the Obligations and termination of this Agreement and the other Loan.
Documents. Each Qualified ECP Loan Party intends that this Section 8.1.10 constitute, and this
Section 8.1.10 shall be deemed to constitute, a guarantee of the obligations of, and a "keepwell,
support, or other agreement" for the benefit of each other Loan Party for all purposes of Section
la(l8(A)(v)(II) of the CEA.

 

8.1.11 Collateral and Additional Collateral; Execution and Delivery of
Additional and Ancillary Security DocU111ents.

 

(i) Pursuant to the Loan Documents, the Loan Parties and Hallador Sands and its
Subsidiaries shall grant, or cause to be granted, to the Administrative
Agent, for the benefit of the Lenders, a first priority security interest in and lien on, subject only
to Permitted Liens (A) all Collateral, including (i) all capital stock and
equity interests in the
Loan Parties (other than Borrower) and Hallador Sands and the capital stock and equity interests
in each Subsidiary of Hallador Sands that is held by such Loan Party or by Hallador Sands or any
of its Subsidiaries; (ii) all capital stock and equity interests owned by the
Loan Parties of each
existing and subsequently acquired or created Subsidiary including, without limitation, all equity
interests in Hallador Sands and each of its Subsidiaries that are held by the
Loan Parties or Hallador Sands and the Subsidiaries of
Hallador Sands that are wholly owned by a Subsidiary of Hallador Sands in which
Hallador Sands directly or indirectly holds 100% of the voting
membership interests (but excluding the Loan Parties' equity interests in the other Excluded

 

85

Subsidiaries), but only up to 65% of the capital stock or equity interests of
any Foreign
Subsidiaries; and (iii) all of the other assets of the Loan Parties including all accounts, inventory,
as-extracted collateral, fixtures, equipment, investment property, instruments,
chattel paper,
general intangibles, coal reserves, methane gas reserves, coal bed methane reserves, oil, gas and
mineral rights, owned and leased Real Property, leasehold interests, patents and
trademarks of each such Loan Parties and (B) all other assets of the Loan
Parties, whether owned on the Closing Date or subsequently acquired;

(ii) Without limiting the generality of the foregoing, each
applicable Loan Party which owns or leases any real property shall promptly, but in any event
within six months of acquiring or leasing such real property, (a) execute and deliver any and all

(1) Mortgages or Mortgage Amendments substantially in the form of Exhibit
l.l(M)(I) or Exhibit l.1(M)(2). as applicable, and (2) other Security Documents
and Ancillary Security Documents reasonably requested by the Agent to grant a
first priority Lien (subject only to Permitted Liens), (b) with respect to any
Real Property on which any Loan Party obtains title
insurance, provide the Administrative Agent with notice that it is receiving such title insurance,
and, at the Administrative Agent's request, have such title insurer provide the
Lenders with a lender's title insurance policy in an equivalent amount on such
Real Property, and (c) with respect to any leased Real Property, any Lessor
Consents that the Administrative Agent reasonably requests, in such Loan Party's
interest in such real property (other than Excluded Collateral), in favor of the
Administrative Agent, for the ratable benefit of the Lenders, as security for
the Obligations. In furtherance of the foregoing, the Loan Parties shall
diligently cooperate with and assist, at their own expense, the Administrative
Agent in procuring any and all Mortgages, Security Documents, Ancillary Security
Documents and Lessor Consents. Each Loan Party hereby appoints any officer or
agent of the Administrative Agent as its true and
lawful attorney, for it and in its name, place and stead, to make, execute, deliver, and cause to be
recorded or filed any or all such Mortgages, deeds of trust, assignments,
pledges, security interests, financing statements and additional documents and
agreements relating thereto, granting unto said attorney full power to do any
and all things said attorney may consider reasonably necessary or appropriate to
be done with respect to the Mortgages as fully and
effectively as such Loan Party might or could do, and hereby ratifying and confirming all its said
attorney shall lawfully do or cause to be done by virtue hereof. This power of
attorney is coupled with an interest and shall be irrevocable for the terms of
this Agreement and all transactions hereunder. All reasonable out-of-pocket
costs and expenses incurred by the Administrative Agent in connection with the
exercise of the rights under this Section 8.1.11(ii)
shall be paid by the Loan Parties on demand of the Administrative Agent. The Loan Parties, the
Lenders and the Administrative Agent agree that without any further action on the part of any of
them, upon execution and/or delivery, the Mortgages, other Security Documents,
the Ancillary
Security Documents and Lessor Consents shall become Loan Documents and the assets that are
subject.to the Mortgages and the other Security Documents shall become
collateral for the Obligations.

 

8.1.5 Maintenance of Coal Supply Agreements and Material Contracts. Each
Loan Party shall maintain and materially comply with the terms and conditions of all coal supply
agreements and material agreement or contract, the nonperformance of which would reasonably
be expected to result in a Material Adverse Change.

 

86

8.1.6 Maintenance of Licenses, Etc. Each Loan Party shall maintain in full force
and effect all licenses, franchises, permits and other authorizations necessary
for the ownership and operation of its properties and business if the failure so
to maintain the same would constitute a Material Adverse Change.

8.1.7 Maintenance of Permits. Each Loan Party shall maintain all Required
Mining Permits in full force and effect in accordance with their terms.

8.1.8 Post Closing Title Insurance and Additional Mortgages. The Loan
Parties shall, within thirty (30) days after the Closing Date (or such later date as may be agreed
to by Administrative Agent in its sole discretion) provide title insurance
and/or title insurance
endorsements with respect to all Real Property for which a title insurance
policy has previously been issued in favor of the Administrative Agent and in
form and substance reasonably
satisfactory to the Administrative Agent. The Loan Parties shall, within sixty (60) days after the
Closing Date (or such later date as may be agreed to by Administrative Agent in
its sole
discretion) provide Administrative Agent with the documentation (and take all necessary action
to cooperate with the Administrative Agent in furtherance thereof) as required under clause (ii)
of Section 8.1.11 [Collateral and Additional Collateral; Execution and Delivery
of Additional Security Documents] for any Real Property which is listed on the
Schedule 1.l  (R) which is attached to this Agreement as of the Closing Date,
but for which a Lien on such Real Property
has not yet been granted to the Administrative Agent for the benefit of the Lenders pursuant
to a Mortgage and other appropriate Security Documents as of the Closing Date.

8.1.9 Certificate of Beneficial Ownership and Other Additional Information.
The Loan Parties shall provide to Administrative Agent and the Lenders: (i) upon the reasonable
request of Administrative Agent, confirmation of the accuracy of the information set forth in the
most recent Certificate of Beneficial Ownership provided to the Administrative
Agent and Lenders; (ii) a new Certificate of Beneficial Ownership, in form and
substance reasonably
acceptable to Administrative Agent and each Lenders, when the individual(s) to be identified as
a Beneficial Owner have changed; and (iii) such other information and
documentation as may reasonably be requested by Administrative Agent or any
Lender from time to time for purposes
of compliance by Administrative Agent or such Lender with applicable laws (including without
limitation the USA Patriot Act and other "know your customer'' and anti-money laundering rules
and regulations), and any policy or procedure implemented by Administrative
Agent or such Lender to comply therewith.

 

8.2

Negative Covenants.

 

8.2.1 Indebtedness. Each of the Loan Parties shall not at any time create,
incur, assume or suffer to exist any Indebtedness, except:

 

(i)

Indebtedness under the Loan Documents;

(ii) Existing Indebted'  ness as set forth on Schedule 8.2.1 (including any
extensions or renewals thereof; provided there is no increase in the amount
thereof or other significant change in the terms thereof unless otherwise specified on Schedule
8.2.1;

 

87

(iii) Capitalized and operating leases, subject to the limitations of Section
8.2.14 [Capital Expenditures and Leases];

 

(iv) Other than as set forth on Schedule 8.2.1, Indebtedness
secured by Purchase Money Security Interests not exceeding $5,000,000 outstanding (in the
aggregate) at any time;

 

(v) Indebtedness of a Loan Party to another Loan Party which is subordinated
pursuant to the Intercompany Subordination Agreement;

 

(vi) Any (i) Lender Provided Interest Rate Hedge, (ii) other
Interest Rate Hedge approved by the Administrative Agent or (iii) Indebtedness under any Other
Lender Provided Financial Services Product;

 

(vii)

Guaranties permitted under Section 8.2.3 [Guaranties];

 

(viii) Indebtedness representing deferred compensation to employees incurred in
the ordinary course of business;

 

(ix) Indebtedness to current or former officers, directors, employees, their
respective estates, spouses, or former spouses to finance the purchase or
redemption of equity interests in the Borrower in aggregate amount not to exceed $500,000
outstanding in the aggregate at any time;

 

(x) Indebtedness in respect of netting services, automated
clearinghouse arrangements, overdraft protections, and similar arrangements, in each case in
connection with deposit accounts incurred in the ordinary course;

 

(xi) Indebtedness consisting of the financing of insurance premiums arising in
the ordinary course of business;

 

(xii) Indebtedness incurred in respect of warehouse receipts or
similar instruments issued or created in the ordinary course of business;

 

(xiii)

[intentionally omitted]

 

(xiv) Indebtedness incurred and/or assumed in connection with a Permitted
Acquisition in an amount not to exceed $5,000,000 in the aggregate for all such
Permitted Acquisitions;

 

(xv) Obligations in respect of performance, bid, appeal, and surety bonds and
performance and completion guaranties and similar obligations (including
without limitation, letters of credit posted in lieu of such bonds and obligations) provided by the
Loan Parties; and

 

(xvi) Other unsecured Indebtedness or subordinated debt of the
Loan Parties in an aggregate amount outstanding not to exceed $5,000,000.

 

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8.2.2 Liens. Each of the Loan Parties shall not at any time create, incur,
assume or suffer to exist any Lien on any of its property or assets, tangible or intangible, now
owned or hereafter acquired, or agree or become liable to do so, except Permitted Liens.

 

8.2.3 Guaranties. Each of the Loan Parties shall not, at any time, directly or
indirectly, become or be liable in respect of any Guaranty, or assume, guarantee, become surety
for, endorse or otherwise agree, become or remain directly or contingently
liable upon or with respect to any obligation or liability of any other Person,
except for (a) Guaranties of Indebtedness of the Loan Parties permitted
hereunder, and (b) Guaranties of obligations or liabilities of
Hallador Sands or any Subsidiary of
Hallador Sands, but only if such Guaranties are not guaranties of anything which
is otherwise prohibited under Section 8.2.17 [Restrictions on Hallador Sands and
its Subsidiaries].

 

8.2.4 Loans and Investments. Each of the Loan Parties shall not at any time
make or suffer to remain outstanding any loan or advance to, or purchase, acquire or own any
stock, bonds, notes or securities of, or any partnership interest (whether
general or limited) or
limited liability company interest in, or any other investment or interest in, or make any capital
contribution to, any other Person, or agree, become or remain liable to do any of the foregoing,
except:

 

(i)

trade credit extended on usual and customary terms in the

ordinary course of business;

 

(ii) advances to employees to meet expenses incurred by such employees in the
ordinary course of business;

 

(iii)

Permitted Investments;

 

(iv)

loans, advances and investments in other Loan Parties;

 

(v) investments consisting of extensions of credit in the nature of accounts
receivable or notes receivable arising from the grant of trade credit in the
ordinary course of business, and investments received in satisfaction or partial
satisfaction thereof from financially troubled account debtors and other credits
to suppliers in the ordinary course of business;

 

(vi) investments and loans not to exceed $5,000,000 at any time outstanding,
provided that the Borrower shall, at least five (5) Business Days prior to such
investment or loan, deliver a compliance certificate, in form and substance
reasonably satisfactory to the Administrative Agent, certifying that, prior to
and immediately after making such investment or loan: (a) it shall be in
compliance on a Pro Forma Basis with the covenant contained in Section 8.2.16
[Maximum Leverage Ratio], except that for the sole purpose of measuring such Pro
Forma Basis compliance, the maximum ratio set forth in Section 8.2.16 [Maximum
Leverage Ratio] shall be deemed to be reduced by 0.25, (b) the amount of
Availability shall not be less than $30,000,000 and (c) there shall exist no Event of Default;

 

(vii)

advances of payroll payments to employees in the ordinary

course of business;

 

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(viii) investments or loans in Hallador Sands or any Subsidiary of Hallador
Sands not to exceed $30,000,000 in the aggregate at any time outstanding,
provided
that the Borrower shall, at least five (5) Business Days prior to such investment or loan, deliver a
compliance certificate, in form and substance reasonably satisfactory to the
Administrative
Agent, certifying that, prior to and immediately after making such investment or loan: (a) it shall
be in compliance on a Pro Forma Basis with the covenant
contained in Section 8.2.16 [Maximum Leverage Ratio], except that for the sole
purpose of measuring such Pro Forma Basis compliance, the maximum ratio set
forth in Section 8.2.16 [Maximum Leverage Ratio] shall be
deemed to be reduced by 0.25, (b) the amount of Availability shall not be less than $30,000,000
and (c) there shall exist no Event of Default; and

(ix) investments in Sunrise Indemnity, Inc., a Delaware
corporation, in an amount equal to the Loan Parties' and their Subsidiaries' required insurance
premiums and assessments.

 

8.2.5 Dividends and Related Distributions. Each of the Loan Parties shall not
make or pay, or agree to become or remain liable to make or pay, any dividend or
other
distribution of any nature (whether in cash, property, securities or otherwise) on account of or in
respect of its shares of capital stock, partnership interests or limited
liability company interests
on account of the purchase, redemption, retirement or acquisition of its shares of capital stock (or
warrants, options or rights therefor), partnership interests or limited
liability company interests, except (i) subject to Section 8.2.17 [Restrictions
on Hallador Sands and its Subsidiaries], dividends or other distributions
payable to another Loan Party, (ii) dividends or other
distributions not to exceed $0.16 per share multiplied by (A) the outstanding shares of Borrower
as of the Closing Date (other than equity issued to employees, officers, or
directors of any Loan Party that is issued in connection with such person's
compensation), plus (B) any shares issued
after the Closing Date in connection with any Equity Issuances, at any given time per fiscal year,
provided that the Borrower shall, at least five (5) Business Days prior to such
dividend or
distribution, deliver a compliance certificate, in form and substance reasonably satisfactory to the
Administrative Agent certifying that, prior to and immediately after making such
dividend or distribution: (a) it shall be in compliance on a Pro Fornax Basis
with the covenant contained in Section 8.2.16 [Maximum Leverage Ratio], except
that for the sole purpose of measuring such
Pro Forma Basis compliance, the maximum ratio set forth in Section 8.2.16 [Maximum Leverage
Ratio] shall be deemed to be reduced by 0.25, (b) the amount of Availability
shall not be less than $30,000,000 and (c) there shall exist no Event of
Default; and (iii) dividends or other distributions equal to an amount less than
or equal to the Net Hallador Sands Distribution
Amount received by the Loan Parties for the trailing twelve month period, provided that prior to
making such dividends or distributions, the Borrower shall deliver a compliance
certificate, in form and substance reasonable satisfactory to the Administrative
Agent, certifying: (a) that the Leverage Ratio for the fiscal quarter most
recently ended and the Leverage Ratio (on a Pro Forma Basis) after giving effect
thereto, are both less than or equal to 2.0 to 1.0, (b) that the
amount of Availability prior to and after giving effect thereto is
greater than or equal to

$30,000,000, and (c) that the Fixed Charge Coverage Ratio (on a Pro Forma Basis) after giving
effect thereto is greater than or equal to 1.0 to 1.0.

 

8.2.6 Liquidations, Mergers, Consolidations, Acquisitions. Each of the Loan
Parties shall not dissolve, liquidate or wind-up its affairs, or become a party to any merger or

 

90

consolidation, or acquire by purchase, lease or otherwise all or substantially all of the assets or
capital stock of any other Person; provided that:

 

(I)any such Loan Party other than the Borrower may consolidate or merge
into another Loan Party which is wholly-owned by one or more of the other Loan Parties,

 

(2) any Loan Party may acquire, whether by purchase or by merger, (A) all of
the ownership interests of another Person or (B) substantially all of assets of another Person or of
a business or division of another Person (each, including the Transaction, a
"Permitted Acquisition"), provided that each of the following requirements is
met for each Permitted Acquisition:

 

(i) if the Loan Parties are acquiring the ownership interests in such Person,
such Person shall execute a Guarantor Joinder and join this Agreement as a
Guarantor pursuant to Section 8.2.9 [Subsidiaries, Partnerships and Joint Ventures] on or before
the date of such Permitted Acquisition;

 

(ii) the Loan Parties, such Person and its owners, as applicable,
shall grant Liens in the assets of or acquired from and stock or other ownership interests in such
Person and otherwise comply with Section 8.2.9 [Subsidiaries, Partnerships and Joint Ventures]
on or before the date of such Permitted Acquisition;

 

(iii) the board of directors or other equivalent governing body of such Person
shall have approved such Permitted Acquisition;

 

(iv) the business acquired, or the business conducted by the Person whose
ownership interests are being acquired shall comply with Section 8.2.10
[Continuation of or Change in Business];

 

(v) no Potential Default or Event of Default shall exist
immediately prior to and immediately after giving effect to such Permitted Acquisition;

(vi) the Borrower shall demonstrate that it will be in· compliance on a Pro
Forma Basis with the covenant contained in Section 8.2.16 [Maximum
Leverage Ratio] for the four quarter period immediately after giving effect to such Permitted
Acquisition by delivering at least five (5) Business Days prior to such Permitted Acquisition a
compliance certificate, in form and substance reasonably satisfactory to the
Administrative
Agent that evidences such compliance, except that for the sole purpose of measuring such Pro
Forma Basis compliance, the maximum ratio set forth in Section 8.2.16 [Maximum
Leverage Ratio] shall be deemed to be reduced by 0.25;

 

(vii) the Consideration paid by the Loan Parties for such
Permitted Acquisition and all other Permitted Acquisitions made during the period after the
Closing Date and the date of such Permitted Acquisition shall not exceed $50,000,000;

 

(viii) the Borrower shall demonstrate that prior to and
immediately after giving effect to such Permitted Acquisition that the amount of Availability
shall be greater than or equal to $30,000,000; and

 

91

(ix) the Loan Parties shall deliver to the Administrative Agent at least five
(5) Business Days before such Permitted Acquisition copies of any agreements
entered into or proposed to be entered into by such Loan Parties in connection
with such
Permitted Acquisition and shall deliver to the Administrative Agent such other information about
such Person or its assets as the Administrative Agent may reasonably require.

 

8.2.7 Dispositions of Assets or Subsidiaries. Each of the Loan Parties shall not
sell, convey, assign, lease, abandon or otherwise transfer or dispose of,
voluntarily or
involuntarily, any of its properties or assets, tangible or intangible (including sale, assignment,
discount or other disposition of accounts, contract rights, chattel paper,
equipment or general
intangibles with or without recourse or of capital stock, shares of beneficial interest, partnership
interests or limited liability company interests of a Subsidiary of such Loan Party) which are, or
would become, Collateral under any of the Loan Documents, except:

 

(i)

transactions involving the sale of inventory in the ordinary

course of business;

 

(ii) any sale, transfer or lease of assets in the ordinary course of business
which are obsolete or no longer necessary or required in the conduct of such
Loan Party's or such Subsidiary's business, including the sale, transfer or
exchange of any owned or
leased Real Property, or the election by the Borrower to terminate or to allow to expire the leases
of any Real Property, that the Borrower
has determined is not necessary or feasible for use in its mining operations;

 

(iii) any sale, transfer or lease of assets in the ordinary course of business
which are replaced by substitute assets acquired or leased; provided such
substitute
assets are subject to the Lenders' Prior Security Interest (subject to Permitted
Liens);

 

(iv)

[reserved];

 

(v) a disposition of assets acquired in a Permitted Acquisition,
within 270 days of such Permitted Acquisition, that are not necessary or required in the conduct
of such Loan Party's business;

 

(vi) any sale, transfer or lease of assets, including Borrower's
interests in any Subsidiary other than Hallador Sands or any Subsidiary of Hallador Sands, the
aggregate amount of which does not exceed $10,000,000, other than those specifically excepted
pursuant to clauses (i) through (v) above;

 

(vii) subject to the mandatory prepayment requirements of Section 5.7.4, the
sale of Borrower's equity interests in Hallador Sands or any Subsidiary of
Hallador Sands, provided that (A) the Borrower (x) retains at least 51% of the equity of
Hallador
Sands and/or such Subsidiary of Hallador Sands, as applicable, or (y) sells I00% of its equity in
Hallador Sands and/or any Subsidiary of Hallador Sands, as applicable, (B) the
Borrower
receives fair market value for the sale of such equity, and (C) 75% or more of the consideration
for the sale of such interests in Hallador Sands and/or any Subsidiary of Hallador Sands shall be
in cash and/or cash equivalents; and

 

92

(viii) any sale, transfer or lease of assets from one Loan Party to another Loan
Party so long as the Loan Parties provide the Administrative Agent with ten (10)
days written notice prior to such sale, transfer or lease and, in the event that
such assets are or would become Collateral under any of the Loan Documents, the
Loan Parties shall cooperate fully in ensuring that a Lien in such assets shall
be continued or granted, as applicable, in favor of the Administrative Agent for
the benefit of the Lenders and such Loan Party shall take such
other steps as the Administrative Agent deems reasonable and/or necessary to faithfully preserve
and protect the Administrative Agent's Lien on and Prior Security Interest in,
such Collateral unless such Collateral may otherwise be released pursuant to
clauses (i) through (vii) of this Section 8.2.7.

 

8.2.8 Affiliate Transactions. Each of the Loan Parties shall not, and shall not
permit Hallador Sands or any Subsidiary of Hallador Sands to, enter into or
carry out any
transaction with any Affiliate of any Loan Party (including purchasing property or services from
or selling property or services to, any Affiliate of any Loan Party) unless such transaction is not
otherwise prohibited by this Agreement, is entered into in the ordinary course of business upon
fair and reasonable arm's-length terms and conditions which are fully disclosed
to the Administrative Agent and is in accordance with all applicable Law.

 

8.2.9 Subsidiaries, Partnerships and Joint Ventures. Each of the Loan Parties
shall not, and shall not permit any of its Subsidiaries to own or create
directly or indirectly any
Subsidiaries other than (i) any Subsidiary which has joined this Agreement as Guarantor on the
Closing Date; (ii) any Subsidiary formed or acquired (as permitted hereunder) after the Closing
Date which joins this Agreement as a Guarantor by delivering to the Administrative Agent (A) a
signed Guarantor Joinder; (B) documents in the forms described in Section 7.1 [First Loans and
Letters of Credit] modified as appropriate; and (C) documents necessary to grant
and perfect ·
 Prior Security Interests (subject to Permitted Liens) to the Administrative Agent for the benefit
of the Lenders in the equity interests of, and Collateral held by, such
Subsidiary; and (iii) any Excluded Subsidiary and any Subsidiary formed or
acquired by any Excluded Subsidiary,
provided, however, that any such Subsidiary of any Excluded Subsidiary shall be subject to the
same Terms and provisions of this Agreement which are applicable to such Excluded Subsidiary.
None of the Loan Parties shall become or agree to become a party to
a Joint Venture.

 

8.2.10 Continuation of or Change in Business. Each of the Loan Parties shall not
and shall not permit Hallador Sands or any Subsidiary of
Hallador Sands to, engage in any
business other than the business that such Loan Party or Subsidiary is currently engaged in and
reasonable extensions thereof, and such Loan Party or Subsidiary shall not permit any material
change in such business.

 

8.2.11 Fiscal Year. The Loan Parties shall not, and shall not permit Hallador
Sands or any Subsidiary of Hallador Sands to, change its fiscal year from the
twelve-month period beginning January 1 and ending December 31, except with the
written consent of the Administrative Agent, such consent not to be unreasonably
withheld.

 

8.2.12 Issuance of Stock. Each of the Loan Parties (other than Borrower) shall
not, and shall not permit Hallador Sands or any Subsidiary of Hallador Sands to,
issue any
additional shares of its capital stock or any options, warrants or other rights in respect thereof

 

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8.2.13 Changes in Organizational Documents. Each of the Loan Parties shall not,
and shall not permit Hallador Sands or any Subsidiary of Hallador Sands to,
amend in any
respect its certificate of incorporation (including any provisions or resolutions relating to capital
stock), by-laws, certificate of
limited partnership, partnership agreement, certificate of formation,
limited liability company agreement or other organizational documents without providing at least
ten (10) calendar days' prior written notice to the Administrative Agent and the
Lenders and, in the event such change would be adverse to the Lenders as
determined by the Administrative
Agent in its reasonable discretion, obtaining the prior written consent of the Required Lenders.

 

8.2.14 Capital Expenditures and Leases. Each of the Loan Parties shall not
make any payments on account of the purchase or lease of any assets which if purchased would
constitute fixed assets or which if leased would constitute a capitalized lease to exceed

$35,000,000 per fiscal year; provided, however, if such payments made by the
Loan Parties in
any fiscal year (including the 2018 fiscal year) are less than the amounts permitted for such fiscal
year, then the lesser of$5,000,000 or such unpaid amounts may be added by the
Loan Parties to
the amounts permitted to be used for payments in future years (including
a $5,000,000 carryover from the 2017 fiscal year to the 2018 fiscal year test),
it being understood that any carryover amount applicable to a particular
succeeding fiscal year shall be expended in such fiscal year
first before the $35,000,000 permitted to be expended in such fiscal year is expended.

 

8.2.15 Minimum Debt Service Coverage Ratio. The Loan Parties shall not at
any time permit the Debt Service Coverage Ratio, calculated as of the end of each fiscal quarter
for the four fiscal quarters then ended (except as otherwise provided in the
definition of Debt Service Coverage Ratio), to be less than 1.25 to 1.00.

 

8.2.16 Maximum Leverage Ratio. The Loan Parties shall not at any time
permit the Leverage Ratio, calculated as of the end of each fiscal quarter for the four fiscal
quarters then ended, to exceed the applicable amounts set forth below:

 

Fiscal Periods Ending

Ratio

September 30, 2019

3.25 to 1.00

December 31, 2019 through September 30, 2020

3.00 to 1.00

December 31, 2020 through September 30, 2021

2.75 to 1.00

December 31, 2021 and each fiscal quarter

thereafter

2.50 to 1.00

 

 

8.2.17 Restrictions on Hallador Sands and its Subsidiaries. The Loan Parties
shall not at any time permit Hallador Sands or any Subsidiary of Hallador Sands
to (i) create, incur, assume or suffer to exist Indebtedness for Borrowed Money,
(ii) create, incur, assume or suffer to exist any Lien on any of its properties
or assets, tangible or intangible, now owned or hereafter
acquired, or agree or become liable to do so, except Permitted Liens (but not excepting,
however, Liens included in clauses (ix) and (viii) of the definition of Permitted
Liens in

Section 1.1, which shall not be permitted to be incurred by Hallador Sands or any Subsidiary of
Hallador Sands), (iii) make investments, loans, or dispositions or acquisitions of assets except in
the ordinary course of business, (iv) merge or consolidate
with any Person, (v) make any

 

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distributions (other than ratable distributions on equity), or (vi) form any
Subsidiary unless
Hallador Sands and such Subsidiary pledges the equity interests that such Person holds in such
newly formed or acquired Subsidiary as required by Section 8.1.ll(i) of this Agreement.

 

8.3
Reporting Requirements. The Loan Parties will furnish or cause to be furnished
to the Administrative Agent and each of the Lenders.

 

8.3.1 Quarterly Financial Statements. As soon as available and in  any event not
later than the earlier to occur of (x) the 45th day after the close of each of
the first three fiscal quarters of each fiscal year of the Borrower, and (y)
five days after the date by which the  Borrower is required to file its
quarterly report on form 10-Q with the Securities and Exchange Commission (the
"SEC") for the first  three fiscal quarters  of each fiscal year, financial
statements of the Borrower, consisting of a
consolidated and consolidating balance sheet as of the end of such fiscal
quarter and related consolidated statements of income, retained earnings and
cash flows for the fiscal quarter then ended and the fiscal year through that
date, all in reasonable detail and certified (subject to normal year-end audit
adjustments and without footnotes) by the Chief Executive Officer, President or
Chief Financial Officer of the Borrower as having been prepared in accordance
with  GAAP, consistently applied, and including comments  on any positive or
negative variations from the Borrower's annual budget.

 

8.3.2 Annual Financial Statements. As soon as available and in any event not
later than the earlier to occur of (x) the 90th day after the close of each
fiscal year and (y) fifteen
days after the date by which the Borrower is required to file its annual report on form 10-K with
the SEC, unqualified audited financial statements of the Borrower consisting of
a consolidated and consolidating balance sheet as of the end of such fiscal
year, and related consolidated statements of income, retained earnings and cash
flows for the fiscal year then ended, certified (subject to normal year-end
audit adjustments and without footnotes) by independent certified public
accountants satisfactory to the Administrative Agent as having been prepared in
accordance with GAAP all in reasonable detail and setting forth in comparative
form the financial
statements as of the end of and for the preceding fiscal year. The certificate or report of
accountants shall be free of qualifications (other than any consistency
qualification that may result from a change in the method used to prepare the
financial statements as to which such
accountants concur) and shall not indicate the occurrence or existence of any event, condition or
contingency which would materially impair the prospect of payment or performance
of any covenant, agreement or duty of any Loan Party under any of the Loan
Documents. The Loan
Parties shall deliver with such financial statements and certification by their accountants a letter
of such accountants to the Administrative Agent and the Lenders substantially to the effect that,
based upon their ordinary and customary examination of the affairs of the Loan
Parties, performed in connection with the preparation of such consolidated
financial statements, and in accordance with GAAP, they are not aware of the
existence of any condition or event which
constitutes an Event of Default or Potential Default or, if they are aware of such condition or

event, stating the nature thereof.

 

8.3.3 Certificates of the Borrower. Concurrently with the quarterly and
annual financial statements of Borrower, as applicable furnished to the Administrative Agent and
to the Lenders pursuant to Sections 8.3.1 [Quarterly Financial Statements] and 8.3.2 [Annual

 

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Financial Statements], a certificate (each a "Compliance Certificate") of Borrower signed by
the President or Chief
Financial Officer of Borrower, each in the form of Exhibit 8.3.3.

 

8.3.4

Notices.

 

8.3.4.1 Default. Promptly after any officer of any Loan Party
has learned of the occurrence of an Event of Default or Potential Default, a certificate signed by
an Authorized Officer setting forth the details of such Event of Default or Potential Default and
the action which such Loan Party proposes to take with respect thereto.

 

8.3.4.2 Litigation. Promptly after the commencement thereof,
notice of all actions, suits, proceedings or investigations before or by any Official Body or any
other Person against any Loan Party or Subsidiary of any Loan Party which relate
to the Collateral, involve a claim or series of claims in excess of $2,500,000
or which if adversely determined would constitute a Material Adverse Change.

 

8.3.4.3 Organizational Documents. Within the time limits set forth in Section
8.2.13 [Changes in Organizational Documents], any amendment to the
organizational documents of any Loan Party.

 

8.3.4.4 Erroneous Financial Information.  Immediately in the event that the
Borrower or its accountants conclude or advise that any previously issued
financial statement, audit report or interim review should
no  longer  be  relied  upon or that disclosure should be made or action should
be taken  to  prevent  future  reliance, notice in  writing setting forth the
details thereof and the action which the Borrower proposes to take with
respect thereto.

 

8.3.4.5 ERISA Event. Immediately upon the occurrence of any BRISA Event, notice
in writing setting forth the details thereof and the action which the Borrower
proposes to take with respect thereto.

 

 

 

 

 

to the Borrower:

8.3.4.6

 

8.3.4.7

 

Intentionally Deleted.

 

Other Reports. Promptly upon their becoming available

 

 

(i) Annual Budget. The annual budget and any forecasts or
projections of the Borrower, to be supplied not later than the commencement of the current fiscal
year to which any of the foregoing may be applicable,

 

(ii) Management Letters. Any reports including management letters submitted to
the Borrower by independent accountants in connection with any annual, interim
or special audit, and

 

(iii) Other Information. Such other reports and information as
any of the Lenders may from time to time reasonably request.

 

96

9.

DEFAULT

 

9.1
Events of Default. An Event of Default shall mean the occurrence or existence of
any one or more of the following events or conditions (whatever the reason therefor and whether
voluntary, involuntary or effected by operation of Law):

 

9.1.1 Payments Under Loan Documents. The Borrower shall fail to pay: (i) any
principal of any Loan (including scheduled installments, mandatory prepayments
or the payment due at maturity), Reimbursement Obligation or Letter of Credit
Obligation on the date on which such payment becomes due in accordance with the
terms hereof or thereof, or (ii) any interest on any Loan, Reimbursement
Obligation or Letter of Credit Obligation or any other amount owing hereunder or
under the other Loan Documents within three (3) Business Days of
the date on which such interest or other amount becomes due in accordance with the terms hereof
or thereof;

 

9.1.2 Breach of Warranty. Any representation or warranty made at any time
by any of the Loan Parties herein or by any of the Loan Parties in any other Loan Document, or
in any certificate, other instrument or statement furnished pursuant to the
provisions hereof or thereof, shall prove to have been false or misleading
in any material respect as of the time it was made or furnished;

 

9.1.3 Anti-Terrorism Laws. Any representation or warranty contained in
Section 6.1.22 [Anti-Terrorism Laws] is or becomes false or misleading at any time;

 

9.1.4 Breach of Negative Covenants or Visitation Rights or Anti-Terrorism
Laws. Any of the Loan Parties shall default in the observance or performance of any covenant
contained in Section 8.1.5 [Visitation Rights], Section 8.1.9 [Anti-Terrorism Laws] or Section

8.2 [Negative Covenants];

 

9.1.5 Breach of Other Covenants. Any of the Loan Parties shall default in the
observance or performance of any other covenant, condition or provision hereof or of any other
Loan Document and such default shall continue unremedied for a period of thirty (30) days;

 

9.1.6 Defaults in Other Agreements or Indebtedness. A default or event of
default shall occur at any time under the terms of any other agreement involving
borrowed money or the extension of credit or any other Indebtedness under which
any Loan Party or Subsidiary
of any Loan Party may be obligated as a borrower or guarantor in excess of

$10,000,000
in the aggregate, and such breach, default or event of default consists of the failure
to pay (beyond any period of grace permitted with respect thereto, whether waived or not) any
Indebtedness when due (whether at stated maturity, by acceleration or otherwise)
or if such breach or default permits or causes the acceleration of any
Indebtedness (whether or not such
right shall have been waived) or the termination of any commitment to lend;

 

9.1.7 Final Judgments or Orders. Any final judgments or orders for the
payment of money
in excess of $10,000,000 in the aggregate shall be entered against any Loan
Party by a court having jurisdiction in the premises, which judgment is not discharged, vacated,
bonded or stayed pending appeal within a period of thirty (30) days from the date of entry;

 

97

9.1.8 Loan Document Unenforceable. Any of the Loan Documents shall cease to be
legal, valid and binding agreements enforceable against the party executing the same
or such party's successors and assigns (as permitted under the Loan Documents)
in accordance
with the respective terms thereof or shall in any way be terminated (except in accordance
with its terms) or become or be declared ineffective or inoperative or shall in
any way be challenged or contested or cease to give or provide the respective
Liens, security interests, rights, titles, interests, remedies, powers or
privileges intended to be created thereby;

 

9.1.9 Uninsured Losses; Proceedings Against Assets. There shall occur any
material
uninsured damage to or loss, theft or destruction of any of the Collateral in excess of

$3,500,000 or the Collateral or any other of the Loan Parties' or any of their Subsidiaries'
assets
are attached, seized, levied upon or subjected to a writ or distress warrant; or such come within
the possession of any receiver, trustee, custodian or assignee for the benefit of creditors and the
same is not cured within thirty (30) days thereafter;

 

9.1.10 Events Relating to Pension Plans and Benefit Arrangements. (i) An ERISA
Event occurs with respect to a Pension Plan which has resulted or could
reasonably be
expected to result in liability of Borrower or any member of the ERISA Group under Title N of
ERISA to the Pension Plan or the PBGC in an aggregate amount in excess of $2,500,000, or (ii)
Borrower or any member of the CERISA Group fails to pay when due, after the expiration of any
applicable grace period, any installment payment with respect to its withdrawal
liability under Section 4201 of ERISA under a Multiemployer Plan in an aggregate
amount in excess of

$2,500,000;

 

9.1.11

Change of Control. A Change of Control shall occur.

 

9.1.12 Relief Proceedings. (i) A Relief Proceeding shall have been instituted
against any Loan Party or Subsidiary of a Loan Party and such Relief Proceeding
shall remain undismissed or unstayed and in effect for a period of sixty (60)
consecutive days or such court shall enter a decree or order granting any of the
relief sought in such Relief Proceeding, (ii) any
Loan Party or Subsidiary of a Loan Party institutes, or takes any action in furtherance of, a Relief
Proceeding, or (iii) any Loan Party or any Subsidiary of a Loan Party ceases to
be Solvent or admits in writing its inability to pay its debts as they mature.

9.2

Consequences of Event of Default.

 

9.2.1 Events of Default Other Than Bankruptcv, Insolvency or
Reorganization Proceedings. If an Event of Default specified under Sections 9.1.1 through 9.1.11 shall occur and be continuing, the Lenders and the Administrative Agent shall be under no
further obligation to make Loans and the Issuing Lender shall be under no
obligation to issue Letters of Credit and the Administrative Agent may, and upon
the request of the Required Lenders, shall (i) by written notice to the
Borrower, declare the unpaid principal amount of the Notes then outstanding and
all interest accrued thereon, any unpaid fees and all other Indebtedness of the
Borrower to the Lenders hereunder and thereunder to be forthwith due and
payable, and the same shall thereupon become and be immediately due and payable
to the
Administrative Agent for the benefit of each Lender without presentment, demand, protest or any
other notice of any kind, all of which are hereby expressly waived, and (ii) require the Borrower

 

98

to, and the Borrower shall thereupon, deposit in a non-interest-bearing account
with the Administrative Agent, as cash collateral for its Obligations under the
Loan Documents, an
amount equal to the maximum amount currently or at any time thereafter available to be drawn
on all outstanding Letters of Credit, and the Borrower hereby pledges to the
Administrative Agent and the Lenders, and grants to the Administrative Agent and
the Lenders a security
interest in, all such cash as security for such Obligations; and

 

9.2.2 Bankruptcy, Insolvency or Reorganization Proceedings. If an Event of
Default specified under Section 9.1.12 [Relief Proceedings] shall occur and be
continuing, the Lenders shall be under no further obligations to make Loans
hereunder and the Issuing Lender shall be under no obligation to issue Letters
of Credit and the unpaid principal amount of the Loans then outstanding and all
interest accrued thereon, any unpaid fees and all other
Indebtedness of the Borrower to the Lenders hereunder and thereunder shall be immediately due
and payable, without presentment, demand, protest or notice of any kind, all of which are hereby
expressly waived; and

 

9.2.3 Set-off. If an Event of Default shall have occurred and be continuing,
each Lender, the Issuing Lender, and each of their respective Affiliates and any
participant of such Lender or Affiliate
which has agreed in writing to be bound by the provisions of Section 5.3
[Sharing of Payments] is hereby authorized at any time and from time to time, to
the fullest
extent permitted by applicable Law, to set off and apply any and all deposits (general or special,
time or demand, provisional or final, in whatever currency) at any time held and
other obligations (in whatever currency)
at any time owing by such Lender, the Issuing Lender or any
such Affiliate or participant to or for the credit or the account of any Loan Party against any and
all of the Obligations of such Loan Party now or hereafter existing under this
Agreement or any
other Loan Document to such Lender, the Issuing Lender, Affiliate or participant, irrespective of
whether or not such Lender, Issuing Lender, Affiliate or participant shall have made any demand
under this Agreement or any other Loan Document and although such Obligations of
the Borrower or such Loan Party may be contingent or unmatured or are owed to a
branch or office
of such Lender or the Issuing Lender different from the branch or office holding such deposit
or obligated on such Indebtedness. The rights of each Lender, the Issuing Lender
and their respective Affiliates and participants under this Section 9.2.3 are in
addition to other rights and remedies (including other rights of setoff) that
such Lender, the Issuing Lender or their respective Affiliates and participants
may have. Each Lender and the Issuing Lender agrees to
notify the Borrower and the Administrative Agent promptly after any such setoff and

application; provided that the failure to give such notice shall not affect the validity of such
setoff and application; and

 

9.2.4 Enforcement of Rights and Remedies. Notwithstanding anything to the
contrary contained herein or in any other Loan Document, the authority to
enforce rights and
remedies hereunder and under the other Loan Documents against the Loan Parties or any of them
shall be vested exclusively in, and all actions and proceedings at law in
connection with such enforcement shall be instituted and maintained exclusively
by, the Administrative Agent in accordance with this Section 9.2 for the benefit
of all the Lenders and the Issuing Lender;
provided that the foregoing shall not prohibit (a) the Administrative Agent from exercising on its
own behalf the rights and remedies that inure to its benefit (solely in its
capacity as
Administrative Agent) hereunder and under the other Loan Documents, (b) the Issuing Lender or

 

99

the Swing Loan Lender
from exercising the rights and remedies that inure to its benefit (solely in its
capacity as the Issuing Lender or Swing Loan Lender, as the case may be)
hereunder and
under the other Loan Documents, (c) any Lender from exercising setoff rights in accordance with
Section 9.2.3 (subject to the terms of Section 5.3 [Sharing of Payments by
Lenders]), or (d) any
Lender from filing proofs of claim or appearing and filing pleadings on its own behalf during the
pendency of a proceeding relative to any Loan Party under any Insolvency
Proceeding; and
provided, further, that if at any time there is no Person acting as Administrative Agent hereunder
and under the other Loan Documents, then (i) the Required Lenders shall have the
rights
otherwise ascribed to the Administrative Agent pursuant to this Section 9.2.4, and (ii) in addition
to the matters set forth in clauses (b), (c) and (d) of the preceding proviso
and subject to

Section 5.3 [Sharing of Payments by Lenders]),
any Lender may, with the consent of the
Required Lenders, enforce any rights and remedies available to it and as authorized by the
Required Lenders; and

 

9.2.5 Application of Proceeds. From and after the date on which the
Administrative Agent has taken any action pursuant to this Section 9.2 and until Payment In Full,
any and all proceeds received by the Administrative Agent from any sale or other disposition of
the Collateral, or any part thereof, or the exercise of any other remedy by the
Administrative Agent, shall be applied as follows:

 

(i) First, to payment of that portion of the Obligations constituting fees,
indemnities, expenses and other amounts, including attorney fees, payable to the
Administrative Agent in its capacity as such, the Issuing Lender in its capacity
as such and the Swing Loan Lender in its capacity as such, ratably among the
Administrative Agent, the
Issuing Lender and Swing Loan Lender in proportion to the respective amounts described in this
clause (i) payable to them;

 

(ii) Second, to payment of that portion of the Obligations
constituting fees, indemnities and other amounts (other than principal and interest) payable to the
Lenders under the Loan Documents, including attorney fees, ratably among the
Lenders in proportion to the respective
amounts described in this clause (ii) payable to them;

 

(iii) Third, to payment of that portion of the Obligations
constituting accrued and unpaid interest on the Loans and Reimbursement Obligations, ratably
among the Lenders in proportion to the respective amounts described in this clause (iii) payable
to them;

 

(iv) Fourth, to payment of that portion of the Obligations constituting unpaid
principal of the Loans, Reimbursement Obligations and amounts to cash
collateralize any undrawn amounts under outstanding Letters of Credit, and payment obligations
then owing under Lender Provided Interest Rate Hedges and Other Lender Provided
Financial
Service Products, ratably among the Lenders, the Issuing Lender, and the Lenders or Affiliates
of Lenders which provide Lender Provided Interest Rate Hedges and Other Lender
Provided Financial Service Products, in proportion to the respective amounts
described in this clause (iv) held by them; and

 

100

(v)

Last, the balance, if any, to the Loan Parties or as required

by Law.    

 

Notwithstanding anything to the contrary in this Section 9.2.5, no Swap Obligations of any Non­
Qualifying Party shall be paid with amounts received from such Non-Qualifying Party under its
Guaranty Agreement (including sums received as a result of the exercise of
remedies with respect to such Guaranty Agreement) or from the proceeds of such
Non-Qualifying Party's Collateral if such Swap Obligations would constitute
Excluded Hedge Liabilities; provided,
however, that to the extent possible, appropriate adjustments shall be made by the Administrative
Agent with respect to the allocation of payments and/or the proceeds of
Collateral from other Loan Parties that are Eligible Contract Participants with
respect to such Swap Obligations to
preserve the ratable payment of the Obligations among the Lenders as contemplated by Section 9.2.5(iv) after taking into account payments made by, or proceeds received from, any
Non-Qualifying Party in respect of the Obligations.

 

10.

THE ADMINISTRATIVE AGENT

 

10.1 Appointment and Authority. Each of the Lenders and the Issuing Lender
hereby irrevocably appoints PNC Bank to act on its behalf as the Administrative
Agent hereunder and
under the other Loan Documents and authorizes the Administrative Agent to take such actions on
its behalf and to exercise such powers as are delegated to the Administrative Agent by the terms
hereof or thereof, together with such actions and powers as are reasonably incidental thereto. The
provisions of this Section 10 are solely for the benefit of the Administrative
Agent, the
Lenders and the Issuing Lender, and neither the Borrower nor any other Loan Party shall have
rights as a third party beneficiary of any of such provisions.

 

10.2
Rights as a Lender. The Person serving as the Administrative Agent hereunder
shall have the same rights and powers in its capacity as a Lender as any other Lender and may
exercise the same as though it were not the Administrative Agent and the term
"Lender" or
"Lenders" shall, unless otherwise expressly indicated or unless the context otherwise requires,
include the Person serving as the Administrative Agent hereunder in its
individual capacity. Such Person and its Affiliates may accept deposits from,
lend money to, act as the financial
advisor or in any other advisory capacity for and generally engage in any kind of business with
any Loan Party or other Affiliate thereof as if such Person were not the Administrative Agent
hereunder and without any duty to account therefor to the Lenders.

 

10.3
Exculpatory Provisions. The Administrative Agent shall not have any duties or
obligations except those expressly set forth herein and in the other Loan Documents. Without
limiting the generality of the foregoing, the Administrative Agent:

 

(a) shall not be subject to any fiduciary or other implied duties, regardless of
whether a Potential Default or Event of Default has occurred and is continuing;

 

(b) shall not have any duty to take any discretionary action or exercise any
discretionary powers, except discretionary rights and powers expressly
contemplated hereby or by the other Loan Documents that the Administrative Agent is required

 

101

to exercise as directed in writing by the Required Lenders (or such other number or percentage of
the Lenders as shall be expressly provided for herein or in the other Loan Documents); provided
that the Administrative Agent shall not be required to take any action that, in
its opinion or the
opinion of its counsel, may expose the Administrative Agent to liability or that is contrary to any
Loan Document or applicable Law; and

 

(c) shall not, except as expressly set forth herein and in the other Loan
Documents, have any duty to disclose, and shall not be liable for the failure to
disclose, any information relating to the Borrower or any of its Affiliates that is communicated to
or obtained by the Person serving as the Administrative Agent or any of its
Affiliates in any capacity.

 

The Administrative Agent shall not be liable for any action
taken or not taken by it (i) with the consent or at the request of the Required
Lenders (or such other number or percentage of the Lenders as shall be
necessary, or as the Administrative Agent shall believe in good faith shall be
necessary, under the circumstances as provided in Sections 11.1
[Modifications, Amendments or Waivers] and 9.2 [Consequences of Event of Default]) or (ii) in
the absence of its own gross negligence or willful misconduct. The
Administrative Agent shall be deemed not to have knowledge of any Potential
Default or Event of Default unless and until
notice describing such Potential Default or Event of Default is given to the Administrative Agent
by the Borrower, a Lender or the Issuing Lender.

 

The Administrative Agent shall not be responsible for or have any duty to
ascertain or inquire into (i) any statement, warranty or representation made in
or in connection with this Agreement or any other Loan Document, (ii) the
contents of any certificate, report or other document delivered hereunder or
thereunder or in connection herewith or therewith, (iii)
the performance or observance of any of the covenants, agreements
or other terms or conditions
set forth herein or therein or the occurrence of any Potential Default or Event of Default, (iv) the
validity, enforceability, effectiveness or genuineness of this Agreement, any
other Loan Document or any other agreement, instrument or document or (v) the
satisfaction of any condition set forth in Section 7 [Conditions of Lending and
Issuance of Letters of Credit] or
elsewhere herein, other than to confirm receipt of items expressly required to be delivered to the
Administrative Agent.

 

10.4 Reliance by Administrative Agent. The Administrative Agent shall be
entitled to rely upon, and shall not incur any liability for relying upon, any
notice, request, certificate, consent, statement, instrument, document or other
writing (including any electronic message,
Internet or intranet website posting or other distribution) believed
by it to be genuine and to have been signed, sent or otherwise authenticated by
the proper Person. The Administrative Agent also may rely upon any statement
made to it orally or by telephone and believed by it to have been made by the
proper Person and shall not incur any liability for relying thereon. In
determining compliance with any condition hereunder to the making of a Loan, or
the issuance of a Letter of Credit, that by its terms must be fulfilled to the
satisfaction of a Lender or the
Issuing Lender, the Administrative Agent may presume that such condition is satisfactory to such
Lender or the Issuing Lender unless the Administrative Agent shall have received notice to the

contrary from such Lender or the Issuing Lender prior to the making of such Loan
or the
issuance of such Letter of Credit. The Administrative Agent may consult with legal counsel

 

102

(who may be counsel for the Borrower), independent accountants and other experts selected by
it,
and shall not be liable for any action taken or not taken by it in accordance with the advice of
any such counsel, accountants or experts.

 

10.5 Delegation of Duties. The Administrative Agent may perform any and all of
its duties and exercise its rights and powers hereunder or under any other Loan
Document by or
through any one or more sub agents appointed by the Administrative Agent. The Administrative
Agent and any such sub agent may perform any and all of its duties and exercise
its rights and
powers by or through their respective Related Parties. The exculpatory provisions of this Section
10 shall apply to any such sub agent and to the Related Parties of the
Administrative Agent and any such sub agent, and shall apply to their respective
activities in connection with the syndication of the credit facilities provided
for herein as well as activities as Administrative Agent.

 

I0.6Resignation of Administrative Agent. The Administrative Agent may at any time
give notice of its resignation to the Lenders, the Issuing Lender and the
Borrower. Upon receipt of any such notice of resignation, the Required Lenders
shall have the right, with approval from the Borrower (so long as no Event of
Default has occurred and is continuing), to appoint a successor, such approval
not to be unreasonably withheld or delayed. If no such successor shall have been
so appointed by the Required Lenders and shall have accepted such appointment
within thirty (30) days after the retiring Administrative Agent gives notice of its resignation, then
the retiring Administrative Agent may on behalf of the Lenders and the Issuing Lender, appoint a
successor Administrative Agent meeting the qualifications set forth above;
provided that if the Administrative Agent shall notify the Borrower and the
Lenders that no qualifying Person has accepted such appointment, then such
resignation shall nonetheless become effective in accordance with such notice
and (i) the retiring Administrative Agent shall be discharged from
its duties and obligations hereunder and under the other Loan Documents (except that in the case
of any collateral security held by the Administrative Agent on behalf of the
Lenders or the Issuing Lender under any of the Loan Documents, the retiring
Administrative Agent shall continue to hold such collateral security until such
time as a successor Administrative Agent is
appointed) and (ii) all payments, communications and determinations provided to be made by, to
or through the Administrative Agent shall instead be made by or to each Lender
and the Issuing Lender directly, until such time as the Required Lenders appoint
a successor Administrative Agent as provided for above in this Section 10.6.
Upon the acceptance of a successor's appointment as Administrative Agent
hereunder, such successor shall succeed to and become vested with all of the
rights, powers, privileges and duties of the retiring (or retired)
Administrative Agent, and the retiring Administrative Agent shall be discharged
from all of its duties and obligations hereunder or under the other Loan
Documents (if not already discharged therefrom as provided above in this Section
10.6). The fees payable by the Borrower to a successor Administrative Agent
shall be the same as those payable to its predecessor unless otherwise agreed
between the Borrower and such successor. After the retiring Administrative
Agent's resignation hereunder and under the other Loan Documents, the provisions
of this
Section 10 and Section I 1.3 [Expenses; Indemnity; Damage Waiver] shall continue in effect for
the benefit of such retiring Administrative Agent, its sub agents and their
respective Related Parties in respect of any actions taken or omitted to be
taken by any of them while the retiring Administrative Agent was acting as
Administrative Agent.

 

103

If PNC Bank resigns as Administrative Agent under this Section 10.6, PNC Bank
shall also resign as an Issuing Lender. Upon the appoin1ment of a successor
Administrative Agent hereunder, such successor shall (i) succeed to all of the
rights, powers, privileges and duties of PNC Bank as the retiring Issuing Lender
and Administrative Agent and PNC Bank shall be
discharged from all of its respective duties and obligations as Issuing Lender and Administrative
Agent under the Loan Documents,
and (ii) issue letters of credit in substitution for the Letters of Credit
issued by PNC Bank, if any, outstanding at the time of such succession or make
other
arrangement satisfactory to PNC Bank to effectively assume the obligations of PNC Bank with
respect to such Letters of Credit.

 

10.7Non-Reliance on Administrative Agent and Other Lenders. Each Lender and the
Issuing Lender acknowledges that it has, independently and without reliance upon
the Administrative Agent or any other Lender or any of their Related Parties and
based on such documents and information as it has deemed appropriate, made its
own credit analysis and decision to enter into this Agreement. Each Lender and
the Issuing Lender also acknowledges that it will, independently and without
reliance upon the Administrative Agent or any other Lender or any of their
Related Parties and based on such documents and information as it shall
from time to time deem appropriate, continue to make its own decisions in taking or not taking
action under or based upon this Agreement, any other Loan Document or any related agreement
or any document furnished hereunder or thereunder.

 

I0.8No Other Duties, etc. Anything herein to the contrary notwithstanding, none
of
the other Lenders listed on the cover page hereof shall have any powers, duties or responsibilities
under this Agreement or any of the other Loan Documents, except in its capacity,
as applicable,
as the Administrative Agent, a Lender or the Issuing Lender hereunder.

 

10.9Administrative Agent's Fee. The Borrower shall pay to the Administrative Agent
a nonrefundable fee (the "Administrative Agent's Fee") under the terms of a
letter (the
"Administrative Agent's Letter") between the Borrower and Administrative Agent, as amended
from time to time.

 

10.10Authorization to Release Collateral and Guarantors. The Lenders and Issuing
Lenders authorize the Administrative Agent to release (i) any Collateral
consisting of assets or equity interests sold or otherwise disposed of in a sale
or other disposition or transfer permitted
under this Agreement, and (ii) any Guarantor from its obligations under the Guaranty Agreement
if the ownership
interests of such Guarantor in the Borrower are sold or otherwise disposed of or
transferred to persons other than Loan Parties or Subsidiaries of the Loan Parties in a transaction
permitted under this Agreement.

 

I0.11No Reliance on Administrative Agent's Customer Identification Program. Each
Lender acknowledges and agrees that neither such Lender, nor any of its Affiliates, participants
or assignees, may rely on the Administrative Agent to carry out such Lender's,
Affiliate's, participant's or assignee's customer identification program, or
other obligations required or imposed under or pursuant to the USA Patriot Act
or the regulations thereunder, including the regulations contained in 31 CFR
103.121 (as hereafter amended or replaced, the "CIP Regulations"), or any other
Anti-Terrorism Law, including any programs involving any of the
following items relating to or in connection with any of the Loan Parties, their Affiliates or their

 

104

agents, the Loan Documents or the transactions hereunder or contemplated hereby:
(i) any
identity verification procedures, (ii) any recordkeeping, (iii) comparisons with government lists,

(i)
customer notices or (v) other procedures required under the CIP Regulations or such other
Laws.

 

11.

MISCELLANEOUS

 

11.1 Modifications, Amendments or Waivers. With the written consent of the
Required Lenders, the Administrative Agent, acting on behalf of all the Lenders,
and the Borrower, on behalf of the Loan Parties, may from time to time enter
into written agreements amending or changing any provision of this Agreement or
any other Loan Document or the
rights of the Lenders or the Loan Parties hereunder or thereunder, or may grant written waivers
or consents hereunder or thereunder. Any such agreement, waiver or consent made
with such
written consent shall be effective to bind all the Lenders and the Loan Parties; provided, that no
such agreement, waiver or consent may be made which will:

 

11.1.1 Increase of Commitment. Increase the amount of the Revolving Credit
Commitment, Term Loan Commitment or Swing Loan Commitment of any Lender
hereunder without the consent of such Lender;

 

11.1.2 Extension of Payment; Reduction of Principal Interest or Fees;
Modification of Terms of Payment. Whether or not any Loans are outstanding,
extend the Expiration Date, Maturity Date, or the time for payment of principal
or interest of any Loan (excluding the due date of any mandatory prepayment of a
Loan), the Commitment Fee or any other fee payable to any Lender,
or reduce the principal amount of or the rate of interest borne by any Loan or
reduce the Commitment Fee or any other fee payable to any Lender, the Commitment
Fee or any other fee payable to any Lender, without the consent of each Lender
directly affected thereby;

 

11.1.3 Release of Collateral or Guarantor. Except for sales or other
dispositions of assets permitted by this Agreement, release all or a majority of the Collateral or
any Guarantor from its Obligations under the Guaranty Agreement without the
consent of all Lenders (other than Defaulting Lenders); or

 

11.1.4 Miscellaneous. Amend Sections 5.2 [Pro Rata Treatment
of Lenders], 10.3 [Exculpatory Provisions, Etc.] or 5.3 [Sharing of Payments by Lenders] or this Section 11.1,
alter any provision regarding the pro rata treatment of the Lenders or requiring
all Lenders to authorize the taking of any action or reduce any percentage
specified in the definition of Required Lenders, in each case without the
consent of all of the Lenders (other than Defaulting Lenders);

 

provided that no agreement, waiver or consent which would modify the interests,
rights or
obligations of the Administrative Agent, the Issuing Lender or PNC Bank in its capacity as the
Swing Loan lender may be made without the written consent of the Administrative
Agent, the
Issuing Lender or PNC Bank, as applicable, and provided, further that, if in connection with any
proposed waiver, amendment or modification referred to in Sections 11.1.1
through 11.1.4
above, the consent of the Required Lenders is obtained but the consent of one or more of such

 

105

other Lenders whose consent is required is not obtained (each a "Non-Consenting Lender"),
then the Borrower shall have the right to replace any such Non-Consenting Lender with one or
more replacement Lenders pursuant to Section 5.6.2 [Replacement of a Lender].

Notwithstanding anything to the contrary herein, no Defaulting Lender shall have
any right to approve or disapprove any amendment, waiver or consent hereunder
(and any amendment,
waiver or consent which by its terms requires the consent of all Lenders or each affected Lender
maybe effected with the consent of the applicable Lenders other than Defaulting
Lenders), except that (x) the Commitment of any Defaulting Lender may not be
increased or extended without the consent of such Lender, and (y) any waiver,
amendment or modification requiring
the consent of all Lenders or each affected Lender that by its terms affects any Defaulting Lender
disproportionately adversely relative to other affected Lenders shall require
the consent of such Defaulting Lender.

 

11.2 No Implied Waivers: Cumulative Remedies. No course of dealing and no delay
or failure of the Administrative Agent or any Lender in exercising any right, power, remedy or
privilege under this Agreement or any other Loan Document shall affect any other
or future exercise thereof or operate as a waiver thereof, nor shall any single
or partial exercise thereof preclude any further exercise thereof or of any
other right, power, remedy or privilege. The
rights and remedies of the Administrative Agent and the Lenders under this Agreement
and any other Loan Documents are cumulative and not exclusive of any rights or
remedies which they would otherwise have.

11.3

Expenses: Indemnity: Damage Waiver.

 

11.3.1 Costs and Expenses. The Borrower shall pay (i) all reasonable out of
pocket expenses incurred by the Administrative Agent and its Affiliates
(including the reasonable fees, charges and disbursements of counsel for the
Administrative Agent), and shall pay all fees and time charges and disbursements
for attorneys who may be employees of the Administrative Agent, in connection
with the syndication of the credit facilities that have occurred on or prior to
the Closing Date as provided for herein, the preparation, negotiation,
execution, delivery and administration of this Agreement and the other Loan Documents or any
amendments, modifications or waivers of the provisions hereof or thereof
(whether or not the transactions contemplated hereby or thereby shall be
consummated), (ii) all reasonable out-of pocket expenses incurred by the Issuing
Lender in connection with the issuance, amendment, renewal or extension of any
Letter of Credit or any demand for payment thereunder, (iii) all reasonable
out-of pocket expenses incurred by the Administrative Agent, any Lender or the
Issuing Lender (including the fees, charges and disbursements of any counsel for
the
Administrative Agent, any Lender or the Issuing Lender), and shall pay all fees and time charges
for attorneys who may be employees of the Administrative Agent, any Lender or
the Issuing Lender, in connection with the enforcement
or protection of its rights (A) in connection with this Agreement and the other
Loan Documents, including its rights under this Section, or (B) in connection
with the Loans made or Letters of Credit issued hereunder, including all such
reasonable out-of pocket expenses incurred during any workout, restructuring or negotiations in
respect of such Loans or Letters of Credit, and (iv) all reasonable out-of-pocket
expenses of the Administrative Agent's regular employees and agents engaged
periodically to perform audits of the Loan Parties' books, records and
business properties.

 

106

11.3.2 Indemnification by the Borrower. The Borrower shall indemnify the
Administrative Agent (and any sub-agent thereof), each Lender and the Issuing Lender, and each

·

Related Party of any of the foregoing Persons (each such Person being called an "Indemnitee")
against, and hold each Indemnitee harmless from, any and all losses, claims, damages, liabilities
and related expenses (including the fees, charges and disbursements of any
counsel for any Indemnitee), and shall indemnify and hold harmless each
Indemnitee from all fees and time
charges and disbursements for attorneys who may be employees of any Indemnitee, incurred by
any Indemnitee or asserted against any Indemnitee by any third party or by the Borrower or any
other Loan Party arising out of, in connection with, or as a result of (i) the execution or delivery
of this Agreement, any other Loan Document or any agreement or instrument
contemplated hereby or thereby, the performance or nonperformance by the parties
hereto of their respective obligations hereunder or thereunder or the
consummation of the transactions contemplated hereby or thereby, (ii) any Loan
or Letter of Credit or the use or proposed use of the proceeds therefrom
(including any refusal by the Issuing Lender to honor a demand for payment under
a Letter of Credit if the documents presented in connection with such demand do
not strictly comply with the terms of such Letter of Credit), (iii) breach of
representations, warranties or covenants of the Borrower under the Loan
Documents, or (iv) any actual or prospective claim,
litigation, investigation or proceeding relating to any of the foregoing, including any such items
or losses relating to or arising under Environmental Laws or pertaining to environmental matters,
whether based on contract, tort or any other theory, whether brought by a third
party or by the Borrower or any other Loan Party, and regardless of whether any
Indemnitee is a party thereto;
provided that such indemnity shall not, as to any Indemnitee, be available to the extent that such
losses, claims, damages, liabilities or related expenses (x) are determined by a
court of competent jurisdiction by final and nonappealable judgment to have
resulted from the gross negligence or willful misconduct of such Indemnitee or
(y) result from a claim brought by the Borrower or any other Loan Party against
an Indemnitee for breach in bad faith of such Indemnitee's obligations hereunder
or under any other Loan Document, if the Borrower or such Loan Party has
obtained a final and nonappealable judgment in its favor on such claim as
determined by a court of competent jurisdiction. This Section 11.3.2
[Indemnification by the Borrower] shall not apply with respect to Taxes other
than any Taxes that represent losses, claims, damages, etc. arising from any
non-Tax claim.

 

11.3.3 Reimbursement by Lenders. To the extent that the Borrower for any
reason fails to indefeasibly pay any amount required under Sections 11.3.1 [Costs and Expenses]
or 11.3.2 [Indemnification by the Borrower] to be paid by it to the Administrative Agent (or any
sub-agent thereof), the Issuing Lender or any Related Party of any of the foregoing, each Lender
severally agrees to pay to the Administrative Agent (or any such sub-agent), the Issuing Lender
or such Related Party, as the case may be, such Lender's Ratable Share
(determined as of the time that the applicable unreimbursed expense or indemnity
payment is sought) of such unpaid
amount, provided that the unreimbursed expense or indemnified loss, claim, damage, liability or
related expense, as the case may be, was incurred by or asserted against the
Administrative Agent (or any such sub-agent) or the Issuing Lender in its
capacity as such, or against any Related Party of any of the foregoing acting
for the Administrative Agent (or any such sub­ agent) or Issuing Lender in
connection with such capacity.

 

11.3.4 Waiver of Consequential Damages, Etc. To the fullest extent permitted
by applicable Law, the Borrower shall not assert, and hereby waives, any claim against any

 

107

Indemnitee, on any theory of
liability, for special, indirect, consequential or punitive damages (as opposed
to direct or actual damages) arising out of, in connection with, or as a result
of, this
Agreement, any other Loan Document or any agreement or instrument contemplated hereby, the
transactions contemplated hereby or thereby, any Loan or Letter of Credit or the
use of the proceeds thereof. No Indemnitee referred to in Section 11.3.2
[Indemnification by Borrower] shall be liable for any damages
arising from the use by unintended recipients of any information or other
materials distributed by it through telecommunications, electronic or other
information transmission systems in connection with this Agreement or the other
Loan Documents or the transactions contemplated hereby or thereby.

 

11.3.5 Payments. All amounts due under this Section 11.3.5 shall be payable
not later than ten (10) days after demand therefor.

 

11.4 Holidays. Whenever payment of a Loan to be made or taken hereunder shall be
due on a day which is not a Business Day such payment shall be due on the next Business Day
(except as provided in Section 4.3 [Interest Periods]) and such extension of
time shall be
included in computing interest and fees, except that the Loans shall be due on the Business Day
preceding the Expiration Date or Maturity Date if the Expiration Date or Maturity Date is not a
Business Day. Whenever any payment or action to be made or taken hereunder
(other than payment of the Loans) shall be stated to be due on a day which is
not a Business Day, such payment or action shall be made or taken on the next
following Business Day, and such extension
of time shall not be included in computing interest or fees, if any, in connection with
such payment or action.

 

11.5

Notices; Effectiveness; Electronic Communication.

 

11.5.1 Notices Generally. Except in the case of notices and other
communications expressly permitted to be given by telephone (and except as provided in Section

11.5.2
[Electronic Communications]), all notices and other communications provided for herein
shall be in writing and shall be delivered by hand or overnight courier service,
mailed by certified or registered mail or sent by telecopier (i) if to a Lender,
to it at its address set forth in its administrative questionnaire, or (ii) if
to any other Person, to it at its address set forth on Schedule 1.1(B).

 

Notices sent by hand or overnight courier service, or mailed by certified or registered mail, shall
be deemed to have been given when received; notices sent by telecopier shall be deemed to have
been given when sent (except that, if not given during normal business hours for
the recipient,
shall be deemed to have been given at the opening of business on the next Business Day for the
recipient). Notices delivered through electronic communications to the extent
provided in
Section 11.5.2 [Electronic Communications], shall be effective as provided in such Section.

 

11.5.2 Electronic Communications. Notices and other communications to the
Lenders and the Issuing Lender hereunder may be delivered or furnished by
electronic communication (including e mail and Internet or intranet websites)
pursuant to procedures approved by the Administrative Agent; provided that the
foregoing shall not apply to notices to
any Lender or the Issuing Lender if such Lender or the Issuing Lender, as applicable, has notified
the Administrative Agent that it is incapable of
receiving notices under such Article by electronic

 

108

communication. The Administrative Agent or the Borrower may, in its discretion,
agree to
accept notices and other communications to it hereunder by electronic communications pursuant
to procedures approved by it; provided that approval of such procedures may be
limited to
particular notices or communications. Unless the Administrative Agent otherwise prescribes, (i)
notices and other communications sent to an e-mail address shall be deemed
received upon the sender's receipt of an acknowledgement from the intended
recipient (such as by the "return receipt requested" function, as available,
return e-mail or other written acknowledgement);
provided that if such notice or other communication is not sent during the normal business hours
of the recipient, such notice or communication shall be deemed to have been sent at the opening
of business on the next Business Day for the recipient, and (ii) notices or communications posted
to au Internet or intranet website shall be deemed received upon the deemed
receipt by the
intended recipient at its e-mail address as described in the foregoing clause (i) of notification that
such notice or communication is available and identifying the website
address therefor.

 

11.5.3 Change of Address, Etc. Any party hereto may change its address, e
mail address or telecopier number for notices and other communications hereunder by notice to
the other parties hereto.

 

11.6 Severability. The provisions of this Agreement are intended to be
severable. If
any provision of this Agreement shall be held invalid or unenforceable in whole or in part in any
jurisdiction, such provision shall, as to such jurisdiction, be ineffective to
the extent of such invalidity or unenforceability without in any manner
affecting the validity or enforceability thereof in any other jurisdiction
or the remaining provisions hereof if any jurisdiction.

 

11.7 Duration; Survival. All representations and warranties of the Loan Parties
contained
herein or made in connection herewith shall survive the execution and delivery of this
Agreement, the completion of the transactions hereunder and Payment In Full. All
covenants and agreements of the Borrower contained herein relating to the
payment of principal, interest,
premiums, additional compensation or expenses and indemnification, including those set forth in
the Notes, Section 5 [Payments] and Section 11.3 [Expenses; Indemnity; Damage Waiver], shall
survive Payment In Full. All other covenants and agreements of the Loan Parties
shall continue
in full force and effect from and after the date hereof and until Payment In Full.

 

11.8

Successors and Assigns.

 

11.8.1 Successors and Assigns Generally. The provisions of this Agreement shall
be binding upon, and inure to the benefit of, the parties hereto and their
respective successors and assigns permitted hereby, except that neither the
Borrower nor any other Loan
Party may assign or otherwise transfer any of its rights or obligations hereunder without the prior
written consent of the Administrative Agent and each Lender and no Lender may
assign or otherwise transfer any of its rights or obligations hereunder except:
(i) to an assignee in accordance with the provisions of Section 11.8.2
[Assignments by Lenders], (ii) by way of
participation in accordance with the provisions of Section 11.8.4 [Participations], or (iii) by way
of pledge or assignment of a security interest subject to the restrictions of Section 11.8.5 [Certain
Pledges; Successors and Assigns Generally] (and any other attempted assignment
or transfer by any party hereto shall be null and void). Nothing in this
Agreement, expressed or implied, shall
be construed to confer upon any Person (other than the parties hereto, their respective successors

 

109

and assigns permitted hereby, Participants to the extent provided in Section
11.8.4
[Participations] and, to the extent expressly contemplated hereby, the Related Parties of each of
the Administrative Agent and the Lenders) any legal or equitable right, remedy or claim under or
by reason of this Agreement.

 

11.8.2 Assignments by Lenders. Any Lender may at any time assign to one or
more assignees all or a portion of its rights and obligations under this Agreement (including all
or a portion of its Commitment and the Loans at the time owing to it); provided
that any such assignment shall be subject to the following conditions:

 

(i)

Minimum Amounts.

 

(A) in the case of an assignment of the entire
remaining amount of the assigning Lender's Commitment and the Loans at the time
owing to it or in the case of an assignment to a Lender, an Affiliate of a
Lender or an Approved Fund, no minimum amount need be assigned; and

 

(B) In any case not described in clause (i)(A) of this Section 11.8.2, the
aggregate amount of the Commitment (which for this
purpose includes Loans outstanding thereunder) or, if the applicable Commitment
is not then in effect, the principal outstanding balance of the Loans of the
assigning Lender subject to each such assignment (determined as of the date the
Assignment and Assumption Agreement with respect to such assignment is delivered
to the Administrative Agent or, if "Trade Date" is specified in the Assignment
and Assumption Agreement, as of the Trade Date) shall not be less
than $5,000,000 unless each of the Administrative Agent and, so long as no Event
of Default has occurred and is continuing, the Borrower otherwise consents (each
such consent not to be unreasonably withheld or delayed).

 

(ii) Proportionate Amounts. Each partial assignment shall be
made as an assignment of a proportionate part of all the assigning Lender's rights and obligations
under this Agreement with respect to the Loan or the Commitment assigned.

 

(iii) Required Consents. No consent shall be required for any
assignment except for the consent of the Administrative Agent (which shall not be unreasonably
withheld or delayed) and:

 

(A) the consent of the Borrower (such consent
not to be unreasonably withheld or delayed) shall be required unless (x) an Event
of Default has occurred and is continuing at the time of such assignment or (y)
such assignment is to a Lender, an Affiliate of a Lender or an Approved Fund;
provided that the Borrower shall be deemed to have consented to any such
assignment unless it shall object thereto by written notice to the
Administrative
Agent within five (5) Business Days after having received notice thereof; and

 

(B) the consent of the Issuing Lender (such
consent not to be unreasonably withheld or delayed) shall be required for any

 

110

assignment that increases the obligation of the assignee to participate in
exposure under one or more Letters of Credit (whether or not then outstanding).

 

(iv) Assignment and Assumption Agreement. The parties to each assignment shall
execute and deliver to the Administrative Agent an Assignment and Assumption
Agreement, together with a processing and recordation fee of $3,500, and the
assignee, if it is not a Lender, shall deliver to the Administrative Agent an
administrative questionnaire provided by the Administrative Agent.

 

(v) No Assignment to Borrower. No such assignment shall be made to the Borrower
or any of the Borrower's Affiliates or Subsidiaries.

 

(vi) No Assignment to Natural Persons. No such assignment shall be made to a
natural person.

 

Subject to acceptance and recording thereof by the Administrative Agent pursuant
to Section 11.8.3 [Register], from and after the effective date specified in
each Assignment and Assumption Agreement, the assignee thereunder shall be a
party to this Agreement and, to the extent of the interest assigned by such
Assignment and Assumption Agreement, have the rights
and obligations of a Lender under this Agreement, and the assigning Lender thereunder shall, to
the extent of the interest assigned by such Assignment and Assumption Agreement,
be released from its obligations under this Agreement (and, in the case of an
Assignment and Assumption Agreement covering all of the assigning Lender's
rights and obligations under this Agreement, such Lender shall cease to be a
party hereto) but shall continue to be entitled to the benefits of
Sections 4.5 [LIBOR Rate Unascertainable; Illegality; Increased Costs; Deposits Not Available],

5.8 [Increased Costs], and 11.3 [Expenses, Indemnity; Damage Waiver] with respect to facts and
circumstances occurring prior to the effective date of such assignment. Any
assignment or
transfer by a Lender of rights or obligations under this Agreement that does not comply with this
Section 11.8.2 shall be treated for purposes of this Agreement as a sale by such
Lender of a
participation in such rights and obligations in accordance with Section 11.8.4 [Participations].

 

11.8.3 Register. The Administrative Agent, acting solely for this purpose as an
agent of the Borrower, shall maintain a record of the names and addresses of the
Lenders, and the Commitments
of, and principal amounts of the Loans owing to, each Lender pursuant to the
terms hereof from time to time. Such register shall be conclusive, and the
Borrower, the Administrative Agent and the Lenders may treat each Person whose
name is in such register pursuant to the terms hereof as a Lender hereunder for
all purposes of this Agreement,
notwithstanding notice to the contrary. Such register shall be available for inspection by the

Borrower and any Lender, at any reasonable time and from time to time upon
reasonable prior notice.

 

11.8.4 Participations. Any Lender may at any time, without the consent of, or
notice to,  the  Borrower or the  Administrative Agent, sell participations to
any Person (other than a natural person or the Borrower or any of the Borrower's
Affiliates or Subsidiaries) (each, a "Participant") in all or a portion of such
Lender's rights and/or obligations under this Agreement (including all or a
portion of its Commitment and/or the  Loans  owing to  it); provided  that (i)
such Lender's obligations under this Agreement shall remain unchanged, (ii)
such Lender shall

 

111

remain solely responsible to the other parties hereto for the performance of
such obligations and

(iii)
the Borrower, the Administrative Agent, the Lenders and the Issuing Lender shall continue
to deal solely and directly with such Lender in connection with such Lender's
rights and obligations under this Agreement.

 

Any agreement or instrument pursuant to which a Lender sells such a
participation shall provide that such Lender shall retain the sole right to enforce this Agreement
and to approve any amendment, modification or waiver of any provision of this
Agreement; provided that such agreement or instrument may provide that such
Lender will not, without the
consent of the Participant, agree (other than as is already provided for herein) to any amendment,
modification or waiver with respect to Sections 11.1.1 [Increase of Commitment],
11.1.2 [Extension of Payment, Etc.], or 11.1.3 [Release of Collateral or
Guarantor]) that affects such Participant. The Borrower agrees that each
Participant shall be entitled to the benefits of
Sections 4.5 [Libor Rate Unascertainable, Etc.], 5.8 [Increased Costs], 5.10 [Indemnity] and 5.9
[Taxes] (subject to the requirements and limitations therein, including the
requirements under Section 5.9.7 [Status of Lenders] (it being understood that
the documentation required under Section 5.9.7 [Status of Lenders] shall be
delivered to the participating Lender)) to the same
extent as if it were a Lender and had acquired its interest by assignment
pursuant to Section 11.8.2 [Assignments by Lenders];
provided that such Participant (A) agrees to be subject to the provisions of
Section 5.6.2 [Replacement of a Lender] and Section 5.6.3 [Designation of a
Different Lending Office] as if    it were an assignee under Section 11.8.2
[Assignments by Lenders]; and (B) shall not be entitled to receive any greater
payment under Sections 5.8 [Increased Costs] or 5.9 [Taxes], with respect to any
participation, than its participating Lender would have been entitled to
receive, except to the extent such entitlement to receive a greater payment
results from a Change in Law that occurs after the Participant acquired the
applicable participation. Each Lender that sells a participation agrees, at the
Borrower's request and
expense, to use reasonable efforts to cooperate with the Borrower to effectuate the provisions of
Section 5.6.2 [Replacement of a Lender] and Section 5.6.3 [Designation of
Different Lending Office] with respect to any Participant. To the extent
permitted by law, each Participant also shall be entitled to the benefits of
Section 9.2.3 [Set-off] as though it were a Lender; provided that such
Participant agrees to be subject to Section 5.3 [Sharing of Payments by Lenders]
as though it were a Lender. Each Lender that sells a participation shall, acting
solely for this
purpose as an agent of the Borrower, maintain a register on which it enters the name and address
of each Participant and the principal amounts (and stated interest) of each Participant's interest in
the Loans or other obligations under the Loan Documents (the "Participant
Register");
 provided that no Lender shall have any obligation to disclose all or
any portion of the Participant Register (including the identity of any
Participant or any information relating to a Participant's interest in any
commitments, loans, letters of credit or its other obligations under any Loan
Document) to any Person except to the extent that such disclosure is necessary
to establish that such commitment, loan, letter of credit or other obligation is
in registered form under Section 5f.103-l(c) of the United States Treasury
Regulations. The entries in the Participant Register
shall be conclusive absent manifest error, and such Lender shall treat each Person whose name is
recorded in the Participant Register as the owner of such participation for all
purposes of this Agreement notwithstanding any notice to the contrary. For the
avoidance of doubt, the Administrative Agent (in its capacity as Administrative
Agent) shall have no responsibility for maintaining a Participant Register.

 

112

11.8.5Certain Pledges; Successors and Assigns Generally. Any Lender may at any
time pledge or assign a security interest in all or any portion of its rights
under this Agreement to secure obligations of such Lender, including any pledge
or assignment to secure
obligations to a Federal Reserve Bank; provided that no such pledge or assignment
shall release
such Lender from any of its obligations hereunder or substitute any such pledgee or assignee for
such Lender as a party hereto.

 

3.9

Confidentiality.

 

3.9.1 General. Each of the Administrative Agent, the Lenders and the Issuing
Lender agrees to maintain the confidentiality of the Information, except that Information may be
disclosed (i) to its Affiliates and to its and its Affiliates' respective
partners, directors, officers, employees, agents, advisors and other
representatives (it being understood that the Persons to whom such disclosure is
made will be informed of the confidential nature of such Information and
instructed to keep such Information confidential), (ii) to the extent requested
by any regulatory authority purporting to have jurisdiction over it (including
any self-regulatory authority, such as the National Association of Insurance
Commissioners), (iii) to the extent required by applicable Laws or regulations
or by any subpoena or similar legal process, (iv) to any other party hereto, (v)
in connection with the exercise of any remedies hereunder or under any other
Loan Document or any action or proceeding relating to this Agreement or any
other Loan Document or the enforcement of rights hereunder or thereunder, (vi)
subject to an
agreement containing provisions substantially the same as those of this Section 11.9.1, to (A) any
assignee of or Participant in, or any prospective assignee of or Participant in,
any of its rights or obligations under this Agreement or (B) any actual or
prospective counterparty (or its advisors) to any swap or derivative transaction
relating to the Borrower and its obligations, (vii) with the consent of the
Borrower or (viii) to the extent such Information (Y) becomes publicly available
other than as a result of a breach of this Section 11.9.I or (Z) becomes
available to the Administrative Agent, any Lender, the Issuing Lender or any of
their respective Affiliates on a non-confidential basis from a source other than
the Borrower or the other Loan Parties. Any Person required to maintain the
confidentiality of Information as provided in this Section 11.9.1
shall be considered to have complied
with its obligation to do so if such Person has exercised the same degree of
care to maintain the confidentiality of such information as such Person would
accord to its own confidential information.

 

3.9.2 Sharing Information With Affiliates of the Lenders. Each Loan Party
acknowledges that from time to time financial advisory, investment banking and other services
may be offered or provided to the Borrower or one or more of its Affiliates (in connection with
this Agreement or otherwise) by any Lender or by one or more Subsidiaries or Affiliates of such
Lender and each of the Loan Parties hereby authorizes each Lender to share any
information
delivered to such Lender by such Loan Party and its Subsidiaries pursuant to this Agreement to
any such Subsidiary or Affiliate subject to the provisions of Section 11.9.1 [General].

 

11.10Counterparts: Integration; Effectiveness.

 

11.10.1Counterparts; Integration; Effectiveness. This Agreement may be
executed in counterparts (and by different parties hereto in different counterparts), each of which
shall constitute an original, but all of which
when taken together shall constitute a single

 

113

contract. This Agreement and the other Loan Documents, and any separate letter
agreements
with respect to fees payable to the Administrative Agent, constitute the entire contract among the
parties relating to the subject matter hereof and supersede any and all previous
agreements and understandings, oral or written, relating to the subject matter
hereof including any prior confidentiality agreements and commitments. Except as
provided in Section 7 [Conditions Of
Lending And Issuance Of Letters Of Credit], this Agreement shall become effective when it shall
have been executed by the Administrative Agent and when the Administrative Agent
shall have received counterparts hereof that, when taken together, bear the
signatures of each of the other parties hereto. Delivery of an executed
counterpart of a signature page of this Agreement by telecopy or e mail shall be
effective as delivery of a manually executed counterpart of this Agreement.

 

3.11 CHOICE OF LAW; SUBMISSION TO JURISDICTION; WAIYER OF VENUE; SERVICE OF
PROCESS; WAIVER OF JURY TRIAL.

 

11.11.1Governing Law. This Agreement shall be deemed to be a contract under the
Laws of the Commonwealth of Pennsylvania without regard to its conflict of laws
principles. Each standby Letter of Credit issued under this Agreement shall be subject either to
the rules of the Uniform Customs and Practice for Documentary Credits, as most
recently published by the International Chamber of Commerce (the "ICC") at the
time of issuance ("UCP") or the rules of the International Standby Practices
(ICC Publication Number 590)
("ISP98"), as determined by the Issuing Lender, and each trade Letter of Credit shall be subject
to UCP, and in each case to the extent not inconsistent therewith, the Laws of
the
Commonwealth of Pennsylvania without regard to is conflict of laws principles.

 

3.11.2 SUBMISSION TO JURISDICTION. THE BORROWER AND EACH OTHER LOAN PARTY
IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE
NONEXCLUSIVE JURISDICTION OF THE COURTS OF THE COMMONWEALTH OF PENNSYLVANIA
SITTING IN ALLEGHENY COUNTY AND OF THE UNITED STATES DISTRICT COURT OF THE
WESTERN DISTRICT OF PENNSYLVANIA, AND ANY APPELLATE COURT FROM ANY THEREOF, IN
ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY
OTHER LOAN DOCUMENT, OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH
OF THE PARTIES HERETO
IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH
ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH PENNSYLVANIA STATE
COURT OR, TO THE FULLEST EXTENT PERMITTED
BY APPLICABLE LAW, IN SUCH FEDERAL COURT. EACH OF THE PARTIES HERETO
AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE
CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR
IN ANY OTHER MANNER PROVIDED BYLAW. NOTHING IN
THIS AGREEMENT OR IN ANY OTHER LOAN DOCUMENT SHALL AFFECT ANY RIGHT THAT THE
ADMINISTRATIVE AGENT, ANY LENDER OR THE ISSUING LENDER MAY OTHERWISE HAVE TO
BRING ANY ACTION OR PROCEEDING
RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AGAINST THE
BORROWER OR ANY OTHER LOAN PARTY OR ITS PROPERTIES IN THE COURTS OF
ANY JURISDICTION.

 

114

3.11.3 WAIVER OF VENUE. THE BORROWER AND EACH OTHER
LOAN PARTY IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO
THE LAYING OF VENUE OF ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO
THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT IN ANY COURT REFERRED TO IN THIS
SECTION 11.11.  EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, THE DEFENSE OF AN INCONVENIENT FORUM
TO THE MAINTENANCE OF SUCH
ACTION OR PROCEEDING IN ANY SUCH COURT AND AGREES NOT ASSERT ANY SUCH DEFENSE.

 

3.11.4 SERVICE OF PROCESS. EACH  PARTY HERETO IRREVOCABLY
CONSENTS TO SERVICE OF PROCESS IN THE MANNER PROVIDED FOR NOTICES IN SECTION
11.5.1 [NOTICES GENERALLY]. NOTHING IN THIS AGREEMENT WILL AFFECT THE RIGHT OF
ANY PARTY HERETO TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY
APPLICABLE LAW.

 

3.11.5 WAIVER OFJ URYT RIAL. EACH PARTY  HERETO  HEREBY IRREVOCABLY WAIVES, TO
THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL
BY JURY IN ANY LEGAL
PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT
OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER
THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, ADMINISTRATIVE
AGENT OR ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE,
THAT SUCH OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE
THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO
HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS BY,
AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS
SECTION 11.8.5.

 

3.12 USA Patriot Act Notice. Each Lender that is subject to the USA Patriot Act
and the Administrative Agent (for itself and not on behalf of any Lender) hereby
notifies Loan Parties that pursuant to the requirements of the USA Patriot Act,
it is required to obtain, verify
and record information that identifies the Loan Parties, which information includes the name and
address of Loan Parties and other information that will allow such Lender or
Administrative Agent,
as applicable, to identify the Loan Parties in accordance with the USA Patriot Act.

3.13

Certain ERISA Matters.

 

3.13.1 Lender ERISA Representations. Each Lender (x) represents and warrants, as
of the later date of the date of this Agreement or the date such Person became a
Lender party hereto, to, and (y) covenants, from the date which is the later of
the date of this
Agreement or the date such Person became a Lender party hereto to the date such Person ceases
being a Lender party hereto, for the benefit of, the Administrative Agent and its Affiliates, and

 

ll5

not, for the avoidance of doubt, to or for the benefit of the Borrower or
any other Loan Party, that at least one of the following is and will be true:

 

(i) such Lender is not using "plan assets" (within the meaning of29 CFR §
2510.3-101, as modified by Section 3(42) of ERISA) of one or more Benefit Plans
in connection with such Lender's Loans, the Letters of Credit or the
Commitments hereunder,

 

(ii) the transaction exemption set forth in one or more PTEs, such as PTE 84-
14 (a class exemption for certain transactions determined by independent qualified professional
asset managers), PTE 95-60 (a class exemption for certain transactions involving
insurance company general accounts), PTE 90-1 (a class exemption for certain
transactions involving insurance company pooled separate accounts), PTE 91-38 (a
class exemption for certain transactions involving bank collective investment
funds) or PTE 96-23 (a class exemption for certain transactions determined by
in-house asset managers), is applicable with respect to such Lender's entrance
into, participation in, administration of and performance of the Loans, the
Letters of Credit, the Commitments and this Agreement,

 

(iii) (A) such Lender is an investment fund managed by a "Qualified Professional
Asset Manager" (within the meaning of Part VI of PTE 84-14), (B) such Qualified
Professional Asset Manager made the investment decision on behalf of such Lender to enter into,
participate in, administer
and perform the Loans, the Letters of Credit, the Commitments and this
Agreement, (C) the entrance into, participation in, administration of and
performance of the Loans, the Letters of Credit, the Commitments and this
Agreement satisfies the requirements of sub-sections (b) through (g) of Part I
of PTE 84-14 and (D) to the best knowledge of such Lender, the requirements of
subsection (a) of Part I of PTE 84-14 are satisfied with respect to
such Lender's entrance into, participation in, administration of and performance of the Loans, the
Letters of Credit, the Commitments and this Agreement, or

 

(iv) such other representation, warranty and covenant as may be agreed in
writing between the Administrative Agent and such Lender.

 

(iv) Additional Lender ERISA Representations. In addition, unless sub­ clause
(i) in the immediately preceding Section 11.13.1 is true with respect to a
Lender or such
Lender has not provided another representation, warranty and covenant as provided in sub-clause in
the immediately preceding Section 11.13.1, such Lender further (x) represents
and
warrants, as of the later of the date of this Agreement or the date such Person became a Lender
party hereto, to, and (y) covenants,
from the date which is the later of the date of this Agreement or the date such
Person became a Lender party hereto to the date such Person ceases being a
Lender party hereto, for the benefit of, the Administrative Agent and its
Affiliates, and not, for
the avoidance of doubt, to or for the benefit of the Borrower or any other Loan Party, that:

 

(i) none of the Administrative Agent or any of its Affiliates is a fiduciary
with respect to the assets of such Lender (including in connection with the
reservation or
exercise of any rights by the Administrative Agent under this Agreement, any Loan Document or
any documents related to hereto or thereto),

 

116

(ii) the Person making the investment decision on behalf of such Lender with
respect to the entrance into, participation
in, administration of and performance of the Loans, the Letters of Credit, the
Commitments and this Agreement is independent (within the meaning of
29 CFR § 2510.3-21)
and is a bank, an insurance carrier, an investment adviser, a broker-dealer or
other person that holds, or has under management or control, total assets of at
least $50 million, in each case as described in
29 CFR § 2510.3-2l(c)(l)(i)(A)-(E),

 

(iii) the Person making the investment decision on behalf of such Lender with
respect to the entrance into, participation
in, administration of and performance of the Loans, the
Letters of Credit, the Commitments and this Agreement is capable of evaluating investment risks
independently, both in general and with regard to particular transactions and
investment strategies (including in respect of the Obligations),

 

(iv) the Person making the investment decision on behalf of such Lender with
respect to the entrance into, participation in, administration of and performance of the Loans, the
Letters of Credit, the Commitments and this Agreement is a fiduciary under ERISA or the Code,
or both, with respect to the Loans, the Letters of Credit, the Commitments and
this Agreement
and is responsible for exercising independent judgment in evaluating the transactions hereunder,
and

 

(v) no fee or other compensation is being paid directly to the Administrative
Agent or any of its Affiliates for investment advice (as opposed to other services) in connection
with the Loans, the Letters of Credit, the Commitments or this Agreement.

 

(c)The Administrative Agent hereby informs the Lenders that each such Person is
not undertaking to provide impartial investment advice, or to give advice in a fiduciary capacity,
in connection with the transactions contemplated hereby, and that such Person
has a financial interest in the transactions contemplated hereby in that such
Person or an Affiliate thereof (i) may receive interest or other payments with
respect to the Loans, the Letters of Credit, the
Commitments and this Agreement, (ii) may recognize a gain if it extended the Loans, the Letters
of Credit or the Commitments for an amount less than the amount being paid for
an interest in
the Loans, the Letters of Credit or the Commitments by such Lender or (iii) may receive fees or
other payments in connection with the transactions contemplated hereby, the Loan Documents or
otherwise, including structuring fees, commitment fees, arrangement fees,
facility fees, upfront fees, underwriting fees, ticking fees, agency fees,
administrative agent or collateral agent fees, utilization fees, minimum usage
fees, letter of credit fees, fronting fees, deal-away or alternate
transaction fees, amendment fees, processing fees, term out premiums, banker's acceptance fees,
breakage or other early termination fees or fees similar to the foregoing.

 

4.14 Acknowledgement and Consent to Bail-In of EEA Financial Institutions.
Notwithstanding anything to the contrary in any Loan Document or in any other
agreement,
arrangement or understanding among any such parties, each party hereto acknowledges that any
liability of any EEA Financial Institution arising under any Loan Document, to the extent such
liability is unsecured, may be subject to the write-down and conversion powers
of an EEA
Resolution Authority and agrees and consents to, and acknowledges and agrees to be bound by (a) the application of any Write-Down and Conversion Powers by an EEA Resolution Authority
to any such liabilities arising hereunder which may be payable to it by any party hereto that is an

 

117

EEA Financial Institution; and (b) the effects of any Bail-in Action on any such
liability,
including, if applicable, (i) a reduction in full or in part or cancellation of any such liability; (ii) a
conversion of all, or a portion of, such liability into shares or other
instruments of ownership in
such EEA Financial Institution, its parent undertaking, or a bridge institution that may be issued
to it or otherwise conferred on it, and that such shares or other instruments of ownership will be
accepted by it in lieu of any rights with respect to any such liability under this Agreement or any
other Loan Document; or (iii) the variation of the terms of such liability in
connection with the
exercise of the write-down and conversion powers of any EEA Resolution Authority.

 

4.15
Amendment and Restatement. This Agreement amends and restates in its entirety
the 2014 Credit Agreement; and the Loan Parties confirm that the 2014 Credit
Agreement, the other Loan Documents and the Collateral for the Obligations
thereunder (as all such capitalized
terms are defined in the 2014 Credit Agreement) have at all times, since the date of the execution
and delivery of such documents, remained in full force and effect and continued
to secure such obligations which are continued as the Obligations hereunder as
amended hereby; and all such Collateral (as defined in the 2014 Credit
Agreement) shall continue to secure the Obligations hereunder. The Loans
hereunder are a continuation of the Loans under (and as such terms are defined
in) the 2014 Credit Agreement. The Loan Parties, the Administrative Agent and
the Lenders acknowledge and agree that the amendment and restatement of the 2014
Credit Agreement by this Agreement is not intended to constitute, nor does it
constitute, a novation, interruption, suspension of continuity, satisfaction,
discharge or termination of the obligations, loans, liabilities, or indebtedness
under the 2014 Credit Agreement and the other Loan
Documents (as such term is defined therein) thereunder or the collateral security therefor and this
Agreement and the other Loan Documents are entitled to all rights and benefits
originally
pertaining to the 2014 Credit Agreement and the other Loan Documents (as such term is defined
therein). For the avoidance of doubt, the Loan Parties, the Administrative Agent and the Lenders
acknowledge and agree that upon execution of this Agreement by the parties
hereto, Hallador
Energy Company shall be the Borrower hereunder and shall no longer be, and is hereby released
as, a Guarantor under this Agreement and any other Loan Document (but shall be
bound as a
Borrower), and Sunrise Coal, LLC shall be a Guarantor hereunder and shall no longer be, and is
hereby released as, the Borrower under this Agreement and any other Loan Documents (but shall
be bound as a Guarantor).

 

118

SCHEDULE 1.l(A) PRICING GRID--

VARIABLE PRICING AND LETTER OF CREDIT FEES BASED ON LEVERAGE RATIO

(PRICING EXPRESSED IN BASIS POINTS)

 

 

Level

 

Leverage Ratio

 

 

Letter of

Credit

Fee

 

 

Revolving

Base  Rate

Spread

 

 

Revolving

LIBOR Rate

Spread

 

 

Term Loan

Base Rate

Spread

 

 

Term Loan

LIBOR Rate

Spread

 

 

Commitment

Fee

 

 

VI

Greater than or  equal

to 3.0 to 1.0

400

300

400

300

400

50

V

Greater than or  equal

to 2.5 to 1.0 but less

than 3.0 to 1.0

350

250

350

250

350

50

IV

Greater than or      equal

to 2.0 to 1.0 but less

than 2.5 to 1.0

300

200

300

200

300

50

Ill

Greater than or  equal

to 1.5 to 1.0 but less

than 2.0 to 1.0

275

175

275

175

275

37.5

II

Greater than or  equal

to 1.0 to 1.0 but less

than 1.5to 1.0

250

150

250

150

250

37.5

I

Less than 1.0 to 1.0

225

125

225

125

225

37.5

 

For purposes of determining the Applicable Margin, Commitment Fee, and the Applicable Letter
of Credit Fee Rate:

 

(a)
As of the Second Amendment Closing Date, pricing shall be fixed at the level and
rates that correspond to the applicable leverage ratio set forth in the
Compliance Certificate for the fiscal period ending June 30, 2019, until the
date on which a Compliance Certificate for the
fiscal period ending September 30, 2019 is due to be delivered in accordance with Section 8.3.3.
If a Compliance Certificate is not delivered when due in accordance with Section 8.3.3, then the
rates in Level VI shall apply as of the first Business Day after the date on which such

 

 

Compliance Certificate was required to have been delivered and shall remain in effect until the
date on which such Compliance Certificate is delivered.

 

(b) If, as a result of any restatement of or other adjustment
to the financial statements of the Borrower or for any other reason, the
Borrower or the Lenders determine that (i) the
Leverage Ratio as calculated by the Borrower as of any applicable date was inaccurate and (ii) a
proper calculation of the Leverage Ratio would have resulted in higher pricing for such period,
the Borrower shall immediately and retroactively be obligated to pay to the
Administrative Agent for the account of the applicable Lenders, promptly on
demand by the Administrative
Agent (or, after the occurrence of an actual or deemed entry of an order for relief with respect to
the Borrower under the Bankruptcy Code of the United States, automatically and without further
action by the Administrative Agent, any Lender or the Issuing Lender), an amount
equal to the excess of the amount of interest and fees that should have been
paid for such period over the amount of interest and fees actually paid for such
period. This paragraph shall not limit the
rights of the Administrative Agent, any Lender or the Issuing Lender, as the case may be, under
Sections 2.9 [Letter of Credit Subfacility] or 4.4 [Interest After Default] or 9
[Default]. The Borrower's obligations under this paragraph shall survive the
Termination of the Commitments and the repayment of all other Obligations
hereunder.

2