Exhibit 10.1

 

A&R Lender Support Agreement
EXECUTION VERSION

AMENDED AND RESTATED TRANSACTION SUPPORT AGREEMENT

This AMENDED AND RESTATED TRANSACTION SUPPORT AGREEMENT (as amended from time to
time, this “Agreement”) is made and entered into as of July 22, 2016 by and
among (i) Foresight Energy LLC, a Delaware limited liability company
(“Borrower”), certain subsidiaries of Borrower, and Foresight Energy LP, a
Delaware limited partnership (collectively, the “Partnership”) and (ii) each of
the banks and financial institutions from time to time party hereto (each a
“Consenting Lender”, collectively, the “Consenting Lenders” (except that
“Consenting Lenders” shall not include any claim held by a Consenting Lender in
a fiduciary capacity or held by any other distinct business unit of such Lender
other than the business unit expressly identified on the signature pages hereto
unless such business unit is or becomes a party to this Agreement))
(iii) Foresight Reserves LP (“Reserves”), Mr. Christopher Cline (“Cline”), Cline
Resources and Development Company (“Cline R&D”), Mr. Michael J. Beyer (“Beyer”),
Munsen LLC (“Munsen”), Filbert Holdings LLC (“Filbert”), Candice Cline 2004
Irrevocable Trust (“Candice Cline Trust”), Alex T. Cline 2004 Irrevocable Trust
(“Alex Cline Trust”), Christopher L. Cline 2004 Irrevocable Trust (“Christopher
Cline Trust”), and Kameron N. Cline 2004 Irrevocable Trust (“Kameron Cline
Trust”) and Forest Glen Investments LLC (“Forest Glen,” together with Reserves,
Cline, Cline R&D, Beyer, Munsen, Filbert, Candice Cline Trust, Alex Cline Trust,
Christopher Cline Trust and Kameron Cline Trust, the “Cline Group”); and (iv)
Murray Energy Corp. (“Murray”).  The Partnership, the Consenting Lenders, Murray
and the Cline Group shall each be referred to as a “Party” and collectively as
the “Parties.”

Except as otherwise set forth herein, each capitalized term used but not
otherwise defined herein shall have the meaning ascribed to such term in the
term sheet titled “Foresight Energy LLC Third Amended and Restated Credit
Agreement Summary of Principal Terms and Conditions”, attached hereto as Exhibit
A, which term sheet shall be deemed to be amended and restated as of the date
hereof and all exhibits, schedules and annexes thereto are expressly
incorporated by reference herein and made a part of this Agreement as if fully
set forth herein (as may be amended, supplemented or modified from time to time
in accordance with the terms hereof, the “A&R Amendment Term Sheet”).  

RECITALS

WHEREAS, the Borrower entered into that certain Second Amended and Restated
Credit Agreement dated as of August 12, 2010 and amended and restated as of
August 23, 2013, with Citibank, N.A. (the “Administrative Agent”), the lenders
party thereto (the “Lenders”) and the guarantors party thereto (as amended, the
“Credit Agreement”, and loans and commitments under such Credit Agreement, the
“Debt”, and claims related to such Debt, collectively, the “Debt Claims”, it
being understood that Secured Cash Management Agreements (as that term is
defined in the Credit Agreement) shall not constitute Debt Claims for purposes
of this Agreement);

WHEREAS, the Borrower and Foresight Energy Finance Corporation (collectively,
the “Issuers”) are party to that certain Indenture, dated as of August 23, 2013,
with Wilmington Savings Fund Society, FSB (the “Trustee”), the holders
thereunder (the “Noteholders”) and the

 

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guarantors party thereto (as amended, the “Notes Indenture”, and such notes
issued under such Notes Indenture, the “Notes” and claims related to such Notes,
collectively, the “Note Claims”);

WHEREAS, the Partnership entered into that certain Transaction Support
Agreement, dated as of April 18, 2016 (such date being the “TSA Effective Date”)
(as amended by that certain First Amendment to Transaction Support Agreement,
dated as of May 6, 2016, and that certain Second Amendment to Transaction
Support Agreement, dated as of July 15, 2016, the “Original Support Agreement”)
with certain Consenting Lenders, under which the Consenting Lenders agreed to
support the Transaction on the terms set forth in the Original Support
Agreement;

WHEREAS, the Partnership entered into that certain Transaction Support
Agreement, dated as of May 17, 2016 (as amended from time to time, the
“Noteholder Support Agreement” and, together with the Original Support
Agreement, the “Support Agreements”), with certain Consenting Noteholders and
Foresight Energy GP LLC (“FEGP”), under which the Consenting Noteholders agreed
to support the Transaction on the terms set forth in the Noteholder Support
Agreement;

WHEREAS, the Partnership, FEGP and the Consenting Noteholders entered into that
certain First Amendment to Transaction Support Agreement, dated as of July 15,
2016, pursuant to which they agreed to certain modifications to the terms of the
Transaction and further agreed to amend and restate the term sheet attached to
the Noteholder Support Agreement in accordance with the terms thereof;

WHEREAS, Murray and the Cline Group each executed a joinder, dated as of
July 17, 2016, pursuant to which each agreed to become party to the Noteholder
Support Agreement;

WHEREAS, since execution of the Support Agreements, the Partnership, the
Consenting Noteholders, the Consenting Lenders, Murray, the Cline Group and
certain other parties in interest (collectively, the “Transaction Parties”) have
continued to engage in arm’s-length, good faith discussions regarding a
restructuring of the Partnership’s indebtedness and other obligations, including
the Partnership’s indebtedness and obligations under the Notes Indenture and the
Credit Agreement; and

WHEREAS, each Party desires to amend and restate the Credit Agreement (the
“Amendment”) on the terms set forth in the A&R Amendment Term Sheet and enter
into the various agreements and transactions in furtherance of a global
restructuring of the Partnership’s indebtedness (the “Transaction”),
substantially on the terms set forth in the term sheet, attached hereto as
Exhibit B, which term sheet and all exhibits, schedules and annexes thereto are
expressly incorporated by reference herein and made a part of this Agreement as
if fully set forth herein (as amended, supplemented or modified from time to
time in accordance with this Agreement, the “A&R Transaction Term Sheet” and,
together with the A&R Amendment Term Sheet, the “A&R Term Sheets”).

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NOW, THEREFORE, in consideration of the covenants and agreements contained
herein, and for other valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, each Party, intending to be legally bound hereby,
agrees as follows:

AGREEMENT

1.Commitment of the Partnership.  

Subject to the Partnership’s fiduciary duties under applicable law and governing
documents, as of the TSA Effective Date (as defined below), and for so long as
the Termination Date (as defined below) has not occurred, the Partnership agrees
to:

 

a.

support the Transaction, including the Amendment, as contemplated under this
Agreement and the A&R Term Sheets;

 

b.

implement and consummate the Transaction, including the Amendment, in a timely
manner and take any and all commercially reasonable and appropriate actions in
furtherance of the Transaction and the Amendment as contemplated under this
Agreement and the A&R Term Sheets;

 

c.

negotiate in good faith with the Consenting Lenders, Murray and the Cline Group
the Amendment and other definitive documents that are contemplated in the A&R
Amendment Term Sheet and/or that are necessary or desirable for the consummation
of the Amendment (collectively, the “Definitive Documents”), which shall contain
provisions that are consistent with this Agreement, the A&R Term Sheets, and
such other provisions as are agreed to by the Required Lenders (as that term is
defined in the Credit Agreement), the Partnership, Murray and the Cline Group
(it being understood and agreed that any terms therefore contained in the A&R
Amendment Term Sheet shall be deemed to be so acceptable);

 

d.

negotiate in good faith with (i) the Consenting Lenders, Murray, the Cline Group
and other Transaction Parties regarding the terms and conditions of, and the
other definitive documents for, the Transaction, including in connection with
the Note Claims arising under the Indenture and the claims arising under the
Receivables Financing Agreement dated as of January 13, 2015 (as amended, the
“A/R Securitization”), by and among Foresight Receivables LLC, PNC Bank,
National Association, and the lenders and guarantors party thereto, as
applicable, and further including the FEGP LLC Agreement Amendment, the FEGP
Governance Documents Modifications, the FELP LP Agreement Amendment, the
PSA-Related Amendments, the Equity Adjustment Agreement, the Colt Assignment,
the Side Letters, the Release Agreements and other documents affecting the
rights of Murray and members of the Cline Group (each, as defined in the A&R
Transaction Term Sheet and, collectively, the “Sponsor Documents”), each on
terms consistent with the A&R Transaction Term Sheet and (ii) any third party
creditors and contract counterparties (in each case unaffiliated with the
Partnership) as may be necessary or appropriate under the circumstances in
furtherance of the Transaction and in the exercise of the Partnership’s
fiduciary

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duties to maximize value for the Partnership; provided that such definitive
documents shall contain provisions that are consistent with the A&R Term Sheets
and shall otherwise be reasonably satisfactory to the Required Lenders (as that
term is defined in the Credit Agreement), Murray or the members of the Cline
Group who are parties to such documents, as applicable, to the extent such
documents directly impact such Party;  

 

e.

obtain any and all required regulatory and third-party approvals for the
Transaction, including the Amendment;

 

f.

not directly or indirectly (i) seek, solicit, support, encourage, propose,
assist, consent to, or participate in any discussions regarding the negotiation
or formulation of any proposal, offer, dissolution, winding up, liquidation,
reorganization, merger, consolidation, business combination, joint venture,
partnership, sale of assets, or restructuring of the Partnership other than the
Transaction (including the Amendment) (each, an “Alternative Proposal”),
(ii) publicly announce its intention not to pursue the Transaction and/or the
Amendment or (iii) take any other action that is inconsistent with, or that
would reasonably be expected to prevent, interfere with or delay the proposal,
solicitation, confirmation, or consummation of the Transaction and/or the
Amendment;

 

g.

take no actions inconsistent with this Agreement or the A&R Term Sheets;

 

h.

at the request of any Consenting Lender, promptly deliver to such Lender a list
of all Consenting Lenders and appropriate contact information for such
Consenting Lenders; and

 

i.

provide the Consenting Lenders, Murray, the Cline Group or any of their
professional advisors with reasonable access to management upon reasonable
notice and keep the Consenting Lenders, Murray and the Cline Group reasonably
apprised of any material adverse developments regarding the Partnership’s
business operations.

2.Commitment of Consenting Lenders.  

As of the TSA Effective Date, and for so long as the Termination Date has not
occurred, each Consenting Lender (severally and not jointly) agrees to:

 

a.

support the Transaction, including the Amendment, as contemplated under this
Agreement and the A&R Term Sheets;

 

b.

implement and consummate the Transaction, including the Amendment, in a timely
manner and take any and all commercially reasonable and appropriate actions in
furtherance of the Transaction and the Amendment as contemplated under this
Agreement and the A&R Term Sheets; provided, however, that such actions shall be
limited to review and negotiation of the applicable Definitive Documents and
execution of the same;

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c.

execute, enter into and take any other steps necessary to consummate (including
seeking the Administrative Agent’s acknowledgement of), and not take any action
or commence any proceeding to oppose or seek any modification of, the Amendment
or the Definitive Documents, and not exercise or seek to exercise any rights
(including rights of acceleration or payment) or remedies or assert or bring any
claims under or with respect to the Debt or the Credit Agreement against the
Partnership that is inconsistent with this Agreement or the A&R Term Sheets; 

 

d.

negotiate in good faith with (i) the Partnership and, as necessary, the other
Transaction Parties the Amendment and the Definitive Documents (each of which
shall be consistent in all material respects with this Agreement or the
Amendment Term Sheet, as applicable, or otherwise in form and substance
reasonably acceptable to the Partnership and the Required Lenders (as that term
is defined in the Credit Agreement) (it being understood and agreed that any
terms therefor contained in the A&R Term Sheets shall be deemed to be
acceptable) and (ii) if required by any such Consenting Lender, any third
parties and/or contract counterparties (in each case unaffiliated with the
Consenting Lenders) as may be necessary or appropriate under the circumstances
in furtherance of the Transaction; and

 

e.

not directly or indirectly (i) seek, solicit, support, propose, assist,
encourage, tender any of its Debt Claims held in any applicable capacity for,
consent to, or participate in any discussions regarding the negotiation or
formulation of any Alternative Proposal, (ii) publicly announce its intention
not to pursue the Amendment or (iii) take any other action that is inconsistent
with, or that would reasonably be expected to prevent, interfere with or delay
the proposal, solicitation, confirmation, or consummation of the Transaction or
the Amendment; provided, that nothing contained herein shall prevent the
Consenting Lenders from discussing in the ordinary course the Credit Agreement,
related loan documents, or matters related thereto with the Administrative Agent
or other Lenders;

provided that except as expressly provided herein, this Agreement and all
communications and negotiations among the Transaction Parties with respect
hereto or any of the transactions contemplated hereunder are without waiver or
prejudice to such Parties’ rights and remedies and the Parties hereby expressly
reserve all claims, defenses and positions that they may have with respect to
each other; and provided further that, except as otherwise expressly set forth
in this Agreement, the foregoing provisions will not limit the rights of any
Party to appear and participate as a party in interest in any matter to be
adjudicated in any case under the Bankruptcy Code (or otherwise) concerning the
Partnership.  For the avoidance of doubt, each Consenting Lender agrees to
support the Transaction, including the Amendment, as set forth herein solely in
its capacity as a Lender under the Credit Agreement and not in any other
capacity, including as a provider of treasury services to the Partnership or a
lender or contract counterparty under any of the Partnership’s other financing
or contractual arrangements, and references to Debt Claims herein shall not be
deemed to include claims arising in such other capacities.

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3.Commitment of Murray and the Cline Group.   

For so long as the Termination Date has not occurred, Murray and each member of
the Cline Group (severally and not jointly) agrees to:

 

a.

support the Transaction as contemplated under this Agreement and the A&R Term
Sheets;

 

b.

implement and consummate the Transaction in a timely manner and take any and all
commercially reasonable and appropriate actions in furtherance of the
Transaction as contemplated under this Agreement and the A&R Transaction Term
Sheet; provided, however, that neither Murray nor any member of the Cline Group
is obligated to consummate any part of the Transaction (including the Exchange
Offer and Tender Offer) unless and until all of the conditions to the
effectiveness thereof set forth in the A&R Transaction Term Sheet and the
Offering Memorandum that are for the benefit of such Party have been waived with
the prior written consent of such Party or satisfied or will be satisfied or
waived contemporaneously with the closing of the Transaction;

 

c.

execute, enter into and take any other steps necessary to consummate the Sponsor
Documents, and not exercise or seek to exercise any rights or remedies or assert
or bring any claims under or with respect to the Sponsor Documents against the
Partnership that is inconsistent with this Agreement or the A&R Term Sheets;

 

d.

negotiate in good faith with (i) the Partnership and, as necessary, the other
Transaction Parties the Definitive Documents to which such Party is a party and
the Sponsor Documents to which such Party is a party (each of which shall be
consistent in all material respects with this Agreement or the A&R Transaction
Term Sheet, as applicable, or otherwise in form and substance reasonably
acceptable to the Partnership, Murray and the Cline Group (it being understood
and agreed that any terms therefor contained in the A&R Term Sheets shall be
deemed to be acceptable) and (ii) if required, any third parties and/or contract
counterparties as may be necessary or appropriate under the circumstances in
furtherance of the Transaction; and

 

e.

not directly or indirectly (i) seek, solicit, support, propose, assist,
encourage, consent to, or participate in any discussions regarding the
negotiation or formulation of any Alternative Proposal, (ii) publicly announce
its intention not to pursue the Transaction or (iii) take any other action that
is inconsistent with, or that would reasonably be expected to prevent, interfere
with or delay the proposal, solicitation, confirmation, or consummation of the
Transaction;

provided that anything in this Section 3 or elsewhere in this Agreement to the
contrary notwithstanding, Beyer shall not be required to contribute any cash
consideration or other instruments of value to the Transaction except as may be
required pursuant to the Reserves Exchange (as defined in the A/R Transaction
Term Sheet). 

 

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4.Representations and Warranties. 

 

a.

Representations and Warranties of Consenting Lenders.  Each Consenting Lender
identified on the signature pages hereto as a holder of Debt, represents and
warrants on a several (but not joint) basis to the Partnership, Murray and the
Cline Group, that the following are true, correct, and complete as of the TSA
Effective Date (or such later date on which a Consenting Lender becomes a party
to this Agreement by executing and delivering a Joinder Agreement (as defined
below)):

 

i.

Organization; Authority.  Such Consenting Lender, if an entity, is duly
organized, validly existing and in good standing under the laws of its
jurisdiction of formation or incorporation.  Such Consenting Lender has all
requisite power and authority to execute and deliver this Agreement and to carry
out the transactions contemplated by, and perform its obligations under, this
Agreement.

 

ii.

Binding Obligation. This Agreement constitutes the legally valid and binding
obligation of such Consenting Lender, enforceable against it in accordance with
its terms.

 

iii.

No Other Representations; No Reliance.  Except for (a) the representations and
warranties made by the Partnership in this Agreement, (b) the representations
and warranties made in the Credit Agreement as of the date thereof (as such
representations and warranties are modified or supplemented by that certain
compliance certificate dated March 23, 2016), and (c) the good faith statements
and representations made by the Partnership in materials posted to the Lenders
in connection with negotiation of the Transaction and the Amendment, no party
has made to such Consenting Lender any express or implied representation or
warranty with respect to the Partnership or its subsidiaries or their respective
businesses, operations, assets, liabilities, conditions (financial or otherwise)
or prospects, and such Consenting Lender hereby disclaims any such other
representations or warranties.  Subject to the foregoing exceptions, such
Consenting Lender is not relying upon any warranty or representation by, or
information from, the Partnership of any sort, oral or written, except the
warranties and representations expressly set forth in this Agreement.  In
particular, and without limiting the generality of the foregoing, such
Consenting Lender acknowledges that no representation and warranty is made
hereunder with respect to any financial projection.

 

iv.

Ownership; Control.  Such Consenting Lender (A) either (i) is the sole
beneficial owner of the principal amount of Debt and, as applicable, other
interests in the Partnership set forth on its signature page hereto, or (ii) has
sole investment or voting discretion with respect to the principal amount of
such Debt and, if applicable, other interests in the Partnership set forth on
its signature page and has the power and authority to bind the beneficial
owner(s) of such Debt and, if applicable, other interests in the

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Partnership to the terms of this Agreement as such terms relate to the Debt and,
if applicable, such other interests and (B) has full power and authority to act
on behalf of, vote, and consent to matters concerning such Debt and, if
applicable, other interests in the Partnership as set forth on its signature
page and to dispose of, exchange, assign, and transfer such Debt and, if
applicable, such other interests in the Partnership, including the power and
authority to execute and deliver this Agreement and to perform its obligations
hereunder.  

 

b.

Representations and Warranties of the Partnership.  The Partnership represents
and warrants to each Consenting Lender, Murray and the Cline Group that the
following are true, correct, and complete as of the TSA Effective Date:

 

i.

Indebtedness. As of July 22, 2016, the aggregate outstanding indebtedness (x)
under the Credit Agreement is $656.8 million, comprised of $352.5 million of
borrowings under the revolving credit facility, $297.8 million of principal
amount of term loans, and $6.5 million in letters of credit, (y) under the Notes
Indenture is $600 million, and (z) under the A/R Securitization is $13.4
million, and such amounts (together with accrued interest and fees thereon) are
outstanding and justly and truly owing by the Borrower without defense, offset
or counterclaim.

 

ii.

Financial Condition.  The financial condition of the Partnership has not
materially and adversely changed from that set forth in the Form 10-Q for the
quarter ending on March 31, 2016.

 

iii.

Organization; Authority.  The Partnership is duly organized, validly existing
and in good standing under the laws of its jurisdiction of incorporation.  The
Partnership has all requisite power and authority to, and all necessary action
on such entity’s part has been taken to authorize it to, execute and deliver
this Agreement and to carry out the transactions contemplated by, and perform
its obligations under, this Agreement.

 

iv.

Binding Obligation.  This Agreement is the legally valid and binding obligation
of the Partnership and is enforceable against the Partnership in accordance with
its terms, except as enforcement may be limited by bankruptcy, insolvency,
reorganization, moratorium, or other similar laws relating to or limiting
creditors’ rights generally or by equitable principles relating to
enforceability.

 

v.

Governmental Consents.  Except as expressly provided in this Agreement, the
execution, delivery, and performance by it of this Agreement do not and shall
not require any registration or filing with, consent or approval of, or notice
to, or other action to, with or by, any federal, state, or other governmental
authority or regulatory body other than the Securities Exchange Commission.

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vi.

Review; Fiduciary Duties.  The Partnership acknowledges that it has reviewed
this Agreement and has decided to enter into this Agreement on the terms and
conditions set forth in the exercise of its fiduciary duties. 

 

vii.

Other Agreements.  The management services agreement between the Partnership and
Murray American Coal, Inc. is in full force and effect and no notice of breach
or termination has been received by the Partnership, nor is the Partnership
aware of any reason for any such notice.

 

c.

Representations and Warranties of Murray and the Cline Group.  Murray and each
member of the Cline Group each represents and warrants on a several (but not
joint) basis to the Partnership and each Consenting Lender that the following
are true, correct, and complete as of the A&R Effective Date (as defined
herein):

 

i.

Organization; Authority.  Murray and each member of the Cline Group, if an
entity, is duly organized, validly existing and in good standing under the laws
of its jurisdiction of formation or incorporation.  Each of Murray and each
member of the Cline Group has all requisite power and authority to execute and
deliver this Agreement and to carry out the transactions contemplated by, and
perform its obligations under, this Agreement.

 

ii.

Binding Obligation. This Agreement constitutes the legally valid and binding
obligation of Murray and each member of the Cline Group, enforceable against it
in accordance with its terms.

 

iii.

No Other Representations; No Reliance.  Except for the representations and
warranties made by the Partnership in this Agreement, no party has made to
Murray or the Cline Group any express or implied representation or warranty with
respect to the Partnership or its subsidiaries or their respective businesses,
operations, assets, liabilities, conditions (financial or otherwise) or
prospects, and such Party hereby disclaims any such other representations or
warranties.  Subject to the foregoing exceptions, each of Murray and each member
of the Cline Group is not relying upon any warranty or representation by, or
information from, the Partnership of any sort, oral or written, except the
warranties and representations expressly set forth in this Agreement.  In
particular, and without limiting the generality of the foregoing, each of Murray
and each member of the Cline Group acknowledges that no representation and
warranty is made hereunder with respect to any financial projection.

 

iv.

Ownership; Control.  Each of Murray and each member of the Cline Group (A)
either (i) is the sole beneficial owner of the principal amount of Debt or other
interests in the Partnership set forth on its signature page hereto, or (ii) has
sole investment or voting discretion with respect to the principal amount of
such Debt or other interests in the Partnership set forth on its signature page
and has the power and authority to bind the beneficial owner(s) of such Debt or
other interests in the Partnership to the

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terms of this Agreement as such terms relate to the Debt or such other interests
and (B) has full power and authority to act on behalf of, vote, and consent to
matters concerning such Debt or other interests in the Partnership as set forth
on its signature page and to dispose of, exchange, assign, and transfer such
Debt or such other interests in the Partnership, including the power and
authority to execute and deliver this Agreement and to perform its obligations
hereunder. 

 

v.

Governmental Consents.  Except as expressly provided in this Agreement, the
execution, delivery, and performance by Murray and each member of the Cline
Group of this Agreement do not and shall not require any registration or filing
with, consent or approval of, or notice to, or other action to, with or by, any
federal, state, or other governmental authority or regulatory body other than
the Securities Exchange Commission.

5.Covenants of the Parties.

 

a.

Subject to the terms and conditions hereof, as of the TSA Effective Date and for
so long as the Termination Date has not occurred, and unless compliance is
waived in writing by the Required Consenting Lenders (as defined herein), Murray
and the Cline Group, the Partnership agrees as follows:

 

i.

it shall use its commercially reasonable efforts to (A) complete and satisfy the
conditions necessary to consummate the Transaction, including the Amendment, as
contemplated under this Agreement within the timeframes contemplated under
Section 8 herein;  and (B) take any and all necessary and appropriate actions in
furtherance of the Transaction and the Amendment as contemplated under the A&R
Term Sheets;

 

ii.

it shall cooperate fully with the Consenting Lenders, Murray, the Cline Group
and each of their respective advisors and shall promptly provide updates to such
parties (and promptly respond to any written or oral requests) regarding (A) any
potential bankruptcy proceeding to be commenced by the Partnership (including
but not limited to issues related to valuation of the Partnership or its assets,
asset disposition, bankruptcy-related costs and expenses and creditor
recoveries); (B) any contingency planning or any other material actions to be
taken by or agreements to be entered into by the Partnership; and (C) any
discussions or negotiations regarding any of the foregoing;

 

iii.

subject to the Partnership’s fiduciary duties under applicable law and governing
documents, it shall take no actions inconsistent with this Agreement or the A&R
Term Sheets; and

 

iv.

if the Partnership receives an unsolicited proposal or expression of interest in
undertaking an Alternative Proposal, the Partnership shall, within 24 hours of
the receipt of such proposal or expression of interest, notify the

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Consenting Lenders, Murray and the Cline Group of the receipt thereof, with such
notice to include the material terms thereof, including the identity of the
person, entity or group of persons or entities involved, and the Partnership
shall not enter into any confidentiality agreement with party proposing an
Alternative Proposal unless such party consents in advance to identifying and
providing to the Consenting Lenders (under a reasonably acceptable
confidentiality agreement) the information contemplated herein.  

 

b.

Subject to the terms and conditions hereof, as of the TSA Effective Date and for
so long as the Termination Date has not occurred, and unless compliance is
waived in writing by the Partnership, Murray, each member of the Cline Group,
and each Consenting Lender (severally and not jointly), each agrees as follows:

 

i.

it/he shall use its/his commercially reasonable efforts to (A) support,
complete, and satisfy the conditions necessary to consummate the Transaction and
the Amendment as contemplated under this Agreement and the A&R Term Sheets
within the timeframes contemplated under Section 8; (B) take any and all
necessary and appropriate actions in furtherance of the Transaction and the
Amendment as contemplated under the A&R Term Sheets; and (C) to the extent
required by such Party, obtain, file, submit or register any and all required
regulatory and/or third-party filings, approvals, registrations or notices that
are necessary or advisable to implement and consummate the Transaction and the
Amendment; provided, further, that neither Murray nor any member of the Cline
Group is obligated to consummate any part of the Transaction (including the
Exchange Offer and Tender Offer) unless and until all of the conditions to the
effectiveness thereof set forth in the A&R Transaction Term Sheet and the
Offering Memorandum that are for the benefit of such Party have been waived with
the prior written consent of such Party or satisfied or will be satisfied or
waived contemporaneously with the closing of the Transaction;  

 

ii.

it/he shall take no actions inconsistent with this Agreement or the A&R Term
Sheets; and

 

iii.

it/he shall execute and deliver the Definitive Documents or Sponsor Documents,
as applicable, to which it/he is to be a party, consummate the Transaction
and/or Amendment contemplated thereby and perform its/his respective obligations
thereunder.

6.Transfer of Debt or Other Interests in the Partnership.

As of the TSA Effective Date and until and unless the Termination Date has
occurred, no Consenting Lender shall assign or otherwise transfer (“Transfer”)
any Debt Claims or other rights and obligations under the Credit Agreement
(including all or a portion of its commitments and the loans at the time owing
to it), and any purported Transfer shall be null and void and

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without effect, unless the transferee is a Party to this Agreement or has
executed a Joinder Agreement, the form of which is attached hereto as Exhibit C,
prior to the time any such Transfer is effective and delivered a copy thereof to
the Partnership in accordance with the notice provisions set forth herein.  Any
Transfer that does not comply with the foregoing shall be deemed void ab initio
and each Party hereto shall have the right to enforce the voiding of such
Transfer.  Any Consenting Lender that effectuates a Transfer in compliance with
the terms hereof shall have no liability under this Agreement arising from or
related to the failure of the transferee to comply with the terms of this
Agreement.  This Agreement shall in no way be construed to preclude any
Consenting Lender from acquiring additional Debt or other claims against or
interests in the Partnership; provided that any such additional Debt shall, upon
acquisition, automatically be deemed to be subject to all the terms of this
Agreement.  

Notwithstanding anything to the contrary set forth in this Section 6, (i) the
foregoing provisions shall not preclude any Consenting Lender from settling or
delivering any Debt Claims to settle any confirmed transaction pending as of the
date of such Consenting Lender’s entry into this Agreement (subject to
compliance with applicable securities laws and it being understood that such
Debt Claims so acquired and held shall be subject to the terms of this
Agreement),  (ii) a Qualified Marketmaker that acquires any Debt Claims from a
Consenting Lender with the purpose and intent of acting as a Qualified
Marketmaker for such Debt Claims shall not be required to execute and deliver to
counsel a Joinder Agreement or otherwise agree to be bound by the terms and
conditions set forth in this Agreement if such Qualified Marketmaker transfers
such Debt Claims (by purchase, sale, assignment, participation, or otherwise)
within five (5) business days of its acquisition to a Consenting Lender or
permitted transferee and the Transfer otherwise is a permitted Transfer,
including that such transferee delivers an executed Joinder Agreement to the
Partnership no later than two (2) business days after consummation of the
Transfer; and (iii) to the extent any Party is acting solely in its capacity as
a Qualified Marketmaker, it may Transfer any ownership interests in the Debt
Claims that it acquires from a Lender that is not or has not been a Consenting
Lender to a transferee that is not a Consenting Lender at the time of such
Transfer without the requirement that the transferee be or become a signatory to
this Agreement or execute a Joinder Agreement.    

As used herein, “Qualified Marketmaker” means an entity that (a) holds itself
out to the public or the applicable private markets as standing ready in the
ordinary course of business to purchase from customers and sell to customers
claims against the Partnership (or enter with customers into long and short
positions in claims against the Partnership), in its capacity as a dealer or
market maker in claims against the Partnership and (b) is, in fact, regularly in
the business of making a market in claims against issuers or borrowers
(including debt securities or other debt).

7.Amendment Fee.

On the effective date of the Amendment, Borrower shall pay an amendment fee (the
“Amendment Fee”) to each Consenting Lender that has executed the Original
Support Agreement and the Amendment in an aggregate amount equal to (i) 1.00% of
such Consenting Lender’s Revolving Credit Commitment (as that term is defined in
the Credit Agreement) after giving effect to the reduction of such commitment as
contemplated in the A&R Amendment Term Sheet and, without duplication, (ii)
1.00% of all Revolving Loans, Term Loans, Swing

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Line Loans and L/C Obligations (as each term as defined in the Credit Agreement)
owed to such Consenting Lender after giving effect to the modifications
contemplated in the A&R Amendment Term Sheet; provided that the Consent Fee (as
defined herein) shall be credited against the Amendment Fee.

8.Termination.

This Agreement shall terminate (a) at any time by the mutual written consent of
the Partnership, the Required Consenting Lenders, Murray and the Cline Group,
(b) automatically upon the occurrence of the event set forth in (iv) hereof,
unless waived or otherwise agreed to by the Required Consenting Lenders, Murray
and the Cline Group, (c) automatically upon the occurrence of the event set
forth in (iii) hereof, unless waived or otherwise agreed to by Required
Consenting Lenders constituting Required Lenders (as that term is defined in the
Credit Agreement), Murray and the Cline Group, (d) automatically upon the
occurrence of any of the events set forth in (i), (ii), (v) or (xvii) hereof,
unless cured, waived or otherwise agreed to by each Consenting Lender, (e)
automatically, three (3) business days’ after the occurrence of any of the
events set forth in (vi) – (x) hereof, unless cured, waived or otherwise agreed
to by the Required Consenting Lenders, Murray and the Cline Group, (f) by the
Partnership or the Required Consenting Lenders, as applicable, upon three (3)
business days’ written notice delivered in accordance herewith of the occurrence
of an event set forth in (xi) – (xvi) hereof, unless subsequently cured, waived
or otherwise agreed to by the Partnership or the Required Consenting Lenders, as
applicable, and (g) by either Murray or the Cline Group, as applicable, upon
three (3) business days’ written notice delivered in accordance herewith of the
occurrence of any of the events set forth in (xi) (only to the extent that the
inconsistency in (xi) is in a manner that is adverse to Murray or any member of
the Cline Group specifically, as applicable), (xii), (xv) and (xvi) hereof,
unless cured, waived or otherwise agreed by Murray or the Cline Group, as
applicable (each of the following events, a “Termination Event”):

Automatic Termination - Immediate.

 

i.

the Partnership consents to the appointment of or taking possession by a
receiver, liquidator, assignee, custodian, trustee or sequestrator (or similar
official) of the Partnership or any substantial part of the property of the
Partnership;

 

ii.

the Partnership commences a voluntary case filed under the Bankruptcy Code;

 

iii.

the Partnership fails to consummate the Transaction, including the Amendment, on
or before August 31, 2016;

 

iv.

the Transaction is consummated on the effective date thereof;

 

v.

the commencement of an involuntary case against the Partnership under the
Bankruptcy Code (as defined below);

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Automatic Termination – After Three Business Days.

 

vi.

the Partnership receives written notice from the Administrative Agent of the
occurrence of any Event of Default pursuant to section 8.01(a) of the Credit
Agreement;

 

vii.

the Partnership proposes or supports an Alternative Proposal, publicly announces
its intention to pursue such an Alternative Proposal, or otherwise exercises its
fiduciary duties under applicable law or its governing documents;

 

viii.

[Reserved];

 

ix.

(x) the forbearance agreement dated January 27, 2016 (as amended, extended or
otherwise modified from time to time, the “A/R Securitization Forbearance
Agreement”) with certain lenders (the “Consenting A/R Lenders”) in respect of
the A/R Securitization is terminated or is otherwise no longer in effect or (y)
any other transaction support agreement or similar agreement entered into by the
Partnership and any of the other Transaction Parties (other than the Lenders) in
support of the Transaction terminates or is otherwise no longer in effect;

 

x.

if by no later than August 1, 2016 the Partnership fails to (A) launch the
Exchange Offer (as defined in the A&R Transaction Term Sheet) or (B) obtain
amendments to each of the Noteholder Forbearance Agreement and the A/R
Securitization Forbearance Agreement that extend any stated termination event
set forth therein to a date not earlier than August 31, 2016;

Termination Upon Three Business Days’ Notice.

 

xi.

any of the Sponsor Documents, the Definitive Documents or other documents in
respect of the Transaction are inconsistent with the material terms and
conditions set forth in the A&R Term Sheets or this Agreement in a manner that
is adverse to the Consenting Lenders, Murray or any member of the Cline Group
that is party thereto, as applicable;

 

xii.

any material breach by the Partnership of any of its other obligations under
this Agreement, including any modifications or amendments to the A&R Term Sheets
that are not made in accordance with the terms hereof, or any agreement
governing the Transaction or failure by the Partnership to satisfy the terms and
conditions of the A&R Term Sheets in any material respect;

 

xiii.

the forbearance agreement dated December 18, 2015 (as amended, extended or
otherwise modified from time to time, the “Noteholder Forbearance Agreement”)
with certain Noteholders in respect of the Notes Indenture is terminated or is
otherwise no longer in effect;

 

xiv.

the occurrence of any Event of Default under section 8.01 of the Credit
Agreement after the TSA Effective Date based on events occurring after the

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TSA Effective Date (but excluding section 8.01(a) thereof and any Event of
Default in respect of financial covenants as set forth in section 7.11
thereof); 

 

xv.

any Party delivers written notice of termination following any court of
competent jurisdiction or other competent governmental or regulatory authority
issuing a final, nonappealable order making illegal or otherwise restricting,
preventing, or prohibiting the Transaction in a material way that cannot be
reasonably remedied by the Parties; provided, that in no case shall any Party be
entitled to terminate this Agreement pursuant to this Section 8 (xv) if (A) such
Party’s failure to comply with this Agreement was the primary reason that such
order was entered or such restriction, prevention, or prohibition imposed or (B)
such Party requested or commenced the action that led to such order;

 

xvi.

Murray or any member of the Cline Group (A) proposes or supports an Alternative
Proposal, publicly announces its/his intention to pursue an Alternative
Proposal, or otherwise breaches its obligations under Section 3(d) or (B)
materially breaches any of its/his representations or warranties set forth in
this Agreement or any of its/his covenants or other obligations under this
Agreement (except to the extent any such breach is covered by any of the other
Termination Events set forth in this Section 8); provided, that in no case shall
any Party be entitled to terminate this Agreement pursuant to this Section
8(xvi) if such Party’s failure to comply with this Agreement was the primary
reason for the occurrence of such Termination Event; and

Outside Date.

 

xvii.

the Partnership fails to consummate the Transaction, including the Amendment, on
or before November 4, 2016.

The date on which the Agreement terminates shall be referred to as the
“Termination Date” and the provisions of this Agreement and the A&R Term Sheets
shall terminate on the Termination Date, except as otherwise provided in this
Agreement, unless, prior to the Termination Date, the Termination Event is
waived, amended or modified in writing on the terms set forth in this Section
8.  The first paragraph of this Section 8 and clause (xvii) of this Section 8
shall not be amended without the consent of each Consenting Lender.  

For the purposes of this Section 8, any right of the Cline Group or its members
to terminate this Agreement pursuant to any provision of this Section 8 is
exercisable only by Reserves.  

Upon the Termination Date, (i) this Agreement shall forthwith become void and of
no further force or effect, (ii) each Party shall (except as otherwise expressly
provided in this Agreement) be immediately be released from its commitments,
obligations, undertakings, and agreements under or related to this Agreement,
(iii) there shall be no liability or obligation on the part of any Party under
this Agreement, and (iv) each Party shall have all the rights and remedies that
it would have had and shall be entitled to take all actions that it would have
been entitled to

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take had it not entered this Agreement; provided that in no event shall any such
termination relieve a Party from (A) liability for its breach or non-performance
of its obligations hereunder prior to the date of such termination and (B)
obligations under this Agreement which by their terms expressly survive
termination of the Agreement.

Notwithstanding the foregoing paragraph, immediately upon the occurrence of a
Termination Event pursuant to Section 8(x) above, each Consenting Lender that
has executed the Original Support Agreement and executes this Agreement shall
have earned, and the Partnership shall pay, a fee in an aggregate amount equal
to (i) 0.25% of such Consenting Lender’s Revolving Credit Commitment (as that
term is defined in the Credit Agreement) after giving effect to the proposed
reduction of such commitment as contemplated in the A&R Amendment Term Sheet
and, without duplication, (ii) 0.25% of all Revolving Loans, Term Loans, Swing
Line Loans and L/C Obligations (as each term as defined in the Credit Agreement)
owed to such Consenting Lender after giving effect to the proposed modifications
contemplated in the A&R Amendment Term Sheet.  For the avoidance of doubt, any
fees paid to a Consenting Lender pursuant to this paragraph shall not be
credited against such Consenting Lender’s Amendment Fee.

9.Specific Performance.

It is understood and agreed by the Parties that money damages would be an
insufficient remedy for any breach of this Agreement by any Party and each
non-breaching Party shall be entitled to seek specific performance and
injunctive or other equitable relief, including attorneys’ fees and costs, as a
remedy of any such breach without the necessity of proving the inadequacy of
money damages as a remedy, in addition to any other remedy to which such
non-breaching Party may be entitled at law or in equity; provided, however, that
each Party agrees to waive any requirement for the securing or posting of a bond
in connection with such remedy; and provided, further, that other than with
respect to the remedy of specific performance, the liability of each Consenting
Lender hereunder is subject to section 10.04 of the Credit Agreement.

10.Relationship Among Parties.

Notwithstanding anything herein to the contrary, the duties and obligations of
the Parties under this Agreement shall be several and not joint.  It is
understood and agreed that any Consenting Lender may trade in the Debt Claims or
other debt or equity securities of the Partnership without the consent of the
Partnership, subject to applicable securities laws and Section 6 hereof.  No
Party hereto shall have any responsibility with respect to the Transfer of any
of the Debt by any other entity by virtue of this Agreement.  No prior history,
pattern or practice of sharing confidences among or between the Parties shall in
any way affect or negate this understanding and agreement.  The Consenting
Lenders hereby represent and warrant that they have no agreement, arrangement or
understanding with respect to acting together for the purpose of acquiring,
holding, voting or disposing of any equity securities of the Partnership and do
not constitute a “group” within the meaning of Rule 13d-5 under the Securities
Exchange Act of 1934, as amended.  No action taken by a Consenting Lender
pursuant to this Agreement shall be deemed to constitute or to create a
presumption by any of the Parties that the Consenting Lenders are in any way
acting in concert or as such a “group”.  For the avoidance of doubt, the
execution of this Agreement by any Consenting Lender shall not create, or be
deemed to create,

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any fiduciary or other duties (actual or implied) to any other Consenting Lender
other than as expressly set forth in this Agreement.

11.Entire Agreement; Prior Negotiations.

This Agreement, including the A&R Term Sheets, constitutes the entire agreement
of the Parties and supersedes all prior agreements (oral or written),
negotiations, and documents reflecting such prior negotiations between and among
the Parties (and their respective advisors), with respect to the subject matter
hereof, except for any confidentiality agreements heretofore executed between or
among any of the Parties, which shall continue in full force and effect.  

12.Conflicts.

In the event of any conflict among the terms and provisions of (i) either of the
A&R Term Sheets and (ii) this Agreement, the terms and provisions of the
applicable Term Sheet shall control.  In the event of any conflict among the
terms and provisions of (i) the A&R Amendment Term Sheet and (ii) the A&R
Transaction Term Sheet, the terms and provisions of the A&R Amendment Term Sheet
shall control.  Notwithstanding the foregoing, nothing contained in this Section
12 shall affect, in any way, the requirements set forth herein for the amendment
of this Agreement.

13.Survival.

Notwithstanding the termination of this Agreement pursuant to Section 8 hereof,
the acknowledgements, agreements and obligations of the Parties in this Section
13 and Sections 10 and 23 hereof (and any defined terms used in any such
Sections), and the proviso in the last paragraph of Section 8, shall survive
such termination and shall continue in full force and effect in accordance with
the terms hereof.

14.Amendments and Waivers.

 

a.

Except as otherwise provided herein, this Agreement (but not the A&R Term
Sheets) may not be modified, amended, supplemented or waived without the prior
written consent of the Partnership, the Required Consenting Lenders, Murray and
the Cline Group.  As used in this Agreement, “Required Consenting Lenders” means
the Consenting Lenders holding more than 50% in aggregate outstanding principal
amount of the Debt Claims that are held by all Consenting Lenders (excluding any
Consenting Lenders who may be affiliates of the Partnership) as of the date of
determination.  No course of dealing between or among the Parties shall be
deemed effective to modify, amend, or discharge any part of this Agreement or
any rights or obligations of any such Party or such holder under or by reason of
this Agreement.  In determining whether any consent or approval has been given
or obtained by the Required Consenting Lenders, the Debt held by any Consenting
Lenders that is, at the time of determination, in material breach of its
covenants, obligations or representations under this Agreement shall be excluded
from such determination.

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b.

No amendment, modification or supplement to (i) the A&R Amendment Term Sheet or
(ii) this Section 14(b) shall be effective without the prior written consent of
Consenting Lenders constituting “Required Lenders”, “Required Revolving Lenders”
and “each Lender”, as applicable, as each of those terms is defined in the
Credit Agreement and as proscribed by section 10.01 of the Credit Agreement. 

 

c.

No material amendment, modification or supplement to the A&R Transaction Term
Sheet that is adverse to the Lenders shall be effective without the prior
written consent of Consenting Lenders constituting “Required Lenders” as that
term is defined in the Credit Agreement and as proscribed by section 10.01 of
the Credit Agreement.

 

d.

No material amendment, modification or supplement to the A&R Term Sheets that is
adverse to Murray or the Cline Group shall be effective without the prior
written consent of such Party.

 

e.

For the purposes of this Section 14, any right of the Cline Group or its members
to waive or amend any provision of this Agreement pursuant to any provision of
this Section 14 is exercisable only by Reserves.

15.Independent Analysis.

Each Consenting Lender, Murray and each member of the Cline Group hereby
confirms that it has made its own decision to execute this Agreement based upon
its own independent assessment of documents and information available to it, as
it deemed appropriate.

16.Cooperation; Further Assurances.

The Parties shall cooperate with each other in good faith and shall coordinate
their activities with each other (to the extent practicable and subject to the
terms hereof) in respect of (a) all matters concerning the drafting and
execution of the Definitive Documents and the implementation of the Transaction
and the Amendment, and (b) the pursuit and support of the Transaction and the
Amendment.  The Parties agree to execute and deliver such other instruments and
perform such acts, in addition to the matters herein specified, as may be
reasonably appropriate or necessary, from time to time, to effectuate the
agreements and understandings of the Parties, whether the same occurs before or
after the date of this Agreement.

17.GOVERNING LAW.  THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK (INCLUDING NEW YORK GENERAL
OBLIGATIONS LAW SECTION 5-1401), WITHOUT REGARD TO ANY CONFLICTS OF LAW
PROVISIONS WHICH WOULD REQUIRE THE APPLICATION OF THE LAW OF ANY OTHER
JURISDICTION.

18.WAIVER OF JURY TRIAL.  EACH PARTY HERETO IRREVOCABLY WAIVES ANY AND ALL RIGHT
TO TRIAL BY JURY IN ANY LEGAL

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PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY. 

19.Consent to Jurisdiction.

Each of the Parties hereby irrevocably and unconditionally submits to the
non-exclusive jurisdiction of (a) the Delaware Court of Chancery (and any state
appellate court therefrom within the State of Delaware), the United States
District Court for the District of Delaware and any appellate court from any
thereof or, if either such court declines to accept jurisdiction over a
particular matter, any other state or federal court in Delaware generally, or
(b) the United States District Court for the Southern District of New York and
any appellate court from any thereof or, if either such court declines to accept
jurisdiction over a particular matter, any other state or federal court in New
York generally, in any action or proceeding arising out of or relating to this
Agreement or the Credit Agreement, or for recognition or enforcement of any
judgment arising therefrom, and further irrevocably and unconditionally agrees
that all claims arising out of or relating to this Agreement or the Credit
Agreement brought by them shall be brought, and shall be heard and determined,
exclusively in the aforementioned Delaware or New York courts.  Each Party
irrevocably waives any objection as to venue or inconvenient forum.  Each Party
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 by law.  

20.A&R Effective Date; Conditions to Effectiveness.

This Agreement shall become effective and binding upon each of the Parties at
12:01 a.m. prevailing Eastern Time on the date on which all of the following
conditions are satisfied (the “A&R Effective Date”):

 

a.

the Consenting Lenders, Murray and the Cline Group shall have received duly
executed signature pages for this Agreement signed by the Partnership;

 

b.

the Partnership shall have received duly executed signature pages for this
Agreement from (i) Consenting Lenders constituting “Required Lenders” and
“Required Revolving Lenders”, as each of those terms is defined in the Credit
Agreement, (ii) Murray, and (iii) each member of the Cline Group;

 

c.

payment of a consent fee to each Consenting Lender that executes this Agreement
in an aggregate amount equal to (i) 0.25% of such Consenting Lender’s Revolving
Credit Commitment (as that term is defined in the Credit Agreement) after giving
effect to the proposed reduction of such commitment as contemplated in the A&R
Amendment Term Sheet and, without duplication, (ii) 0.25% of all Revolving
Loans, Term Loans, Swing Line Loans and L/C Obligations (as each term as defined
in the Credit Agreement) owed to such Consenting Lender after giving effect to
the proposed modifications contemplated in the A&R Amendment Term Sheet (the
“Consent Fee”);

 

d.

each of the representations and warranties made by the Partnership in Section 4
hereof or elsewhere in this Agreement shall be true and correct as of the A&R
Effective Date; and

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e.

the Noteholder Support Agreement, the Noteholder Forbearance Agreement and the
A/R Securitization Forbearance Agreement shall be in full force and effect.   

Upon the A&R Effective Date, the A&R Term Sheets shall be deemed effective for
the purposes of this Agreement, and thereafter the terms and conditions therein
may only be amended, modified, waived, or otherwise supplemented as set forth in
Section 14.

21.No Solicitation.

Notwithstanding anything to the contrary, this Agreement is not and shall not be
deemed to be an offer for the issuance, purchase, sale, exchange, hypothecation,
or other transfer of securities or a solicitation of an offer to purchase or
otherwise acquire securities for purposes of the Securities Act and the
Securities Exchange Act.  

22.Third-Party Beneficiary.

The terms and provisions of this Agreement are intended solely for the benefit
of the Parties hereto and their respective successors and permitted assigns, and
it is not the intention of the Parties to confer third-party beneficiary rights
upon any other Person.

23.Successors and Assigns; Severability.  

Except as otherwise provided in this Agreement, this Agreement is intended to
bind and inure to the benefit of each of the Parties and each of their
respective successors, assigns, heirs, executors, administrators and
representatives.  If any provision of this Agreement or the application of any
such provision to any person or circumstance shall be held invalid or
unenforceable in whole or in part, such invalidity or unenforceability shall
attach only to such provision or part thereof and the remaining part of such
provision hereof and this Agreement shall continue in full force and effect,
provided, however, that nothing in this Section 23 shall be deemed to amend,
supplement or otherwise modify, or constitute a waiver of, any Termination
Event.

24.Counterparts.

This Agreement may be executed in several counterparts, each of which shall be
deemed to be an original, and all of which together shall be deemed to be one
and the same agreement.  Execution copies of this Agreement may be delivered by
electronic mail (in “.pdf” or “.tif” format), facsimile or otherwise, which
shall be deemed to be an original for the purposes of this Agreement.

25.Headings.

The section headings of this Agreement are for convenience of reference only and
shall not, for any purpose, be deemed a part of this Agreement.

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26.No Waiver of Participation and Preservation of Rights. 

Except as provided in this Agreement, nothing herein is intended to, does, or
shall be deemed in any manner to waive, limit, impair, or restrict the ability
of each of the Lenders to (i) protect and preserve its rights, remedies, and
interests, including, but not limited to, its claims against any other Party and
any liens or security interests it may have in any assets of the Partnership,
(ii) purchase, sell or enter into any transactions in connection with the Debt,
subject to the restrictions provided for herein in respect of such Transfers,
(iii) enforce any right under the Credit Agreement, subject to the terms hereof,
(iv) consult with other Consenting Lenders, the Partnership or any other
Transaction Party, or (v) enforce any right, remedy, condition, consent or
approval requirement under this Agreement or in any of the Definitive
Documents.  Without limiting the foregoing sentence in any way, if this
Agreement is terminated in accordance with its terms for any reason (other than
consummation of the Transaction), the Parties each fully and expressly reserve
any and all of their respective rights, remedies, claims, defenses and
interests, subject to Sections 8 and 9 in the case of any claim for breach of
this Agreement arising prior to termination.

27.Consideration.

The Parties hereby acknowledge that no consideration, other than that
specifically described herein and in the Term Sheet and the Definitive Documents
shall be due or paid to any Party for its agreement to support the Transaction
in accordance with the terms and conditions of this Agreement.

28.Interpretation.

This Agreement is the product of negotiations among the Parties, and the
enforcement or interpretation of this Agreement is to be interpreted in a
neutral manner.  Any presumption with regard to interpretation for or against
any Party by reason of that Party having drafted or caused to be drafted this
Agreement or any portion of this Agreement, shall not be effective in regard to
the interpretation of this Agreement.

29.Several, Not Joint, Claims.

The agreements, representations, warranties and obligations of the Parties to
this Agreement are, in all respects, several and not joint.

30.Notices.

All notices, requests, demands, document deliveries and other communications
hereunder shall be deemed given if in writing and delivered, if sent by email,
facsimile, courier or by registered or certified mail (return receipt requested)
to the following addresses, email addresses and facsimile numbers (or at such
other addresses, email addresses or facsimile numbers as shall be specified by
like notice):

If to the Partnership, to counsel at the following address:

Foresight Energy LP

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211 North Broadway, Suite 2600

Saint Louis, MO  63102

Attn: Rashda Buttar, General Counsel

Email: rashda.buttar@foresight.com

 

with a copy (which shall not constitute notice) to:

 

Paul, Weiss, Rifkind, Wharton & Garrison LLP

1285 Avenue of the Americas

New York, New York 10019

Facsimile:  (212) 492-0158

Attn:  Kelley A. Cornish, Alice Belisle Eaton and Lauren Shumejda

Email: kcornish@paulweiss.com, aeaton@paulweiss.com, lshumejda@paulweiss.com

 

If to any Consenting Lender, to the address set forth on its signature page.

If to Murray, to counsel at the following address:

Murray Energy Corp.

46226 National Road
St. Clairsville, Ohio  43950

Attn: Michael O. McKown

Email: mmckown@coalsource.com

 

with a copy (which shall not constitute notice) to:

 

Kirkland & Ellis LLP

601 Lexington Avenue

New York, NY 10022

Facsimile:  (212) 446-4900

Attn:  Christian Nagler

Email: cnagler@kirkland.com

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If to Beyer, to the following address:

Michael J. Beyer

768 Harbor Isles Court
North Palm Beach, FL  33410
Email:  beyermichaelj@gmail.com

with a copy (not constituting notice) to:

Cohen & Grigsby, P.C.

625 Liberty Avenue

Pittsburgh, PA  15222-3152

Attn:  Paul DeRosa

Fax (412) 209-1993

Email: pderosa@cohenlaw.com

If to any member of the Cline Group (other than Beyer), to the following
address:

Cline Group

c/o Foresight Reserves, LP

3801 PGA Boulevard

Suite 903

Palm Beach Gardens, FL 33410

Attn: Paul Vining

Email: pvining@clineres.com

 

with a copy (which shall not constitute notice) to:

 

Foresight Reserves, LP

3801 PGA Boulevard

Suite 903

Palm Beach Gardens, FL 33410

Attn:  Richard Verheij

Email:  rverheij@clineres.com

 

[Remainder of page intentionally left blank]

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IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed and
delivered by their respective duly authorized officers or other agents, solely
in their respective capacity as officers or other agents of the undersigned and
not in any other capacity, as of the date first set forth above.

FORESIGHT ENERGY LLC

By: /s/ Robert D. Moore
Name: Robert D. Moore
Title:   President and Chief Executive Officer

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

[Signature page to A&R Transaction Support Agreement]

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GUARANTORS:

FORESIGHT ENERGY FINANCE CORPORATION

By: /s/ Robert D. Moore
Name: Robert D. Moore
Title:   President and Chief Executive Officer 

 

FORESIGHT ENERGY SERVICES LLC

By: /s/ Robert D. Moore
Name: Robert D. Moore
Title:   President and Chief Executive Officer

 

FORESIGHT COAL SALES LLC

By: /s/ Robert D. Moore
Name: Robert D. Moore
Title:   President and Chief Executive Officer

FORESIGHT SUPPLY COMPANY LLC

By: /s/ Robert D. Moore
Name: Robert D. Moore
Title:   President and Chief Executive Officer

 

HILLSBORO ENERGY LLC

By: /s/ Robert D. Moore
Name: Robert D. Moore
Title:   President and Chief Executive Officer

 

MACOUPIN ENERGY LLC

By: /s/ Robert D. Moore
Name: Robert D. Moore
Title:   President and Chief Executive Officer

 

 

[signature page to A&R Transaction Support Agreement]

 

 

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OENEUS LLC D/B/A SAVATRAN LLC

By: /s/ Robert D. Moore
Name: Robert D. Moore
Title:   President and Chief Executive Officer 

 

SUGAR CAMP ENERGY, LLC

By: /s/ Robert D. Moore
Name: Robert D. Moore
Title:   President and Chief Executive Officer

 

WILLIAMSON ENERGY, LLC

By: /s/ Robert D. Moore

Name: Robert D. Moore
Title:   President and Chief Executive Officer

 

AMERICAN CENTURY MINERALS LLC

By: /s/ Robert D. Moore
Name: Robert D. Moore
Title:   President and Chief Executive Officer

 

AMERICAN CENTURY TRANSPORT LLC

By: /s/ Robert D. Moore
Name: Robert D. Moore
Title:   President and Chief Executive Officer

 

 

 

FORESIGHT ENERGY LP

By: /s/ Robert D. Moore
Name: Robert D. Moore
Title:   President and Chief Executive Officer

 

[Signature page to A&R Transaction Support Agreement]

 

 

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AGREED BY EACH OF THE
FOLLOWING PARTIES:

 

MURRAY ENERGY CORP.

 

Authorized Signatory:

 

 

By: /s/ Robert D. Moore
Name: Robert D. Moore                                                       
Title: EVP, COO & CFO                                 

 

Aggregate FELP Units held:  

 

 

FORESIGHT RESERVES LP

 

Authorized Signatory:

 

 

By: /s/ Paul Vining
Name:  Paul Vining                                                          
Title:  President

 

Aggregate FELP Units held:  

 

     

 

CHRISTOPHER CLINE

 

 

By: /s/ Christopher Cline
Name: Christopher Cline                                                         
Title:                                                              

 

Aggregate FELP Units held:  

Aggregate Principal Amount of Notes under the Notes Indenture:  

 

 

 

 

 

 

 

[Signature page to A&R Transaction Support Agreement]

 

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CLINE RESOURCES AND DEVELOPMENT COMPANY

 

Authorized Signatory:

 

 

By: /s/ John Dickinson
Name: John Dickinson                                                            
Title: Authorized Person
                                                             

 

Aggregate FELP Units held:  

 

 

MICHAEL J. BEYER

 

 

By: /s/ Michael J. Beyer
Name: Michael J. Beyer
                                                           
Title:                                                              

 

Aggregate FELP Units held:  

Aggregate Principal Amount of Notes under the Notes Indenture:  

 

MUNSEN LLC

 

Authorized Signatory:

 

 

By: /s/ John Dickinson
Name: John Dickinson                                                            
Title: Manager                                                               

                                                              

Aggregate FELP Units held:  

Aggregate Principal Amount of Notes under the Notes Indenture:  

 

 

 

 

 

 

 

 

 

 

 

[Signature page to A&R Transaction Support Agreement]

 

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FILBERT HOLDINGS LLC

 

Authorized Signatory:

 

 

By: /s/ Andrew Rimbach ____
Name:  Andrew Rimbach                                                          
Title: Manager                                                             

                                                              

Aggregate FELP Units held:  

Aggregate Principal Amount of Notes under the Notes Indenture:  

 

 

FOREST GLEN INVESTMENTS LLC

 

Authorized Signatory:

 

 

By: /s/ Brian Glasser
Name: Brian Glasser                                                 
Title: Manager                                                               

                                                              

Aggregate FELP Units held:  

Aggregate Principal Amount of Notes under the Notes Indenture:  

 

ALEX T. CLINE 2004 IRREVOCABLE TRUST

 

Authorized Signatory:

 

 

By: /s/ Donald R. Holcomb
Name: Donald R.
Holcomb                                                          
Title: Trustee                                                          

                                                              

Aggregate FELP Units held:  

Aggregate Principal Amount of Notes under the Notes Indenture:  

 

 

 

 

 

 

 

 

 

[Signature page to A&R Transaction Support Agreement]

 

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CANDICE CLINE 2004 IRREVOCABLE TRUST

 

Authorized Signatory:

 

 

By: /s/ Donald R. Holcomb
Name: Donald R.
Holcomb                                                          
Title: Trustee                                                              

                                                              

Aggregate FELP Units held:  

Aggregate Principal Amount of Notes under the Notes Indenture:  

 

CHRISTOPHER L. CLINE 2004 IRREVOCABLE TRUST

 

Authorized Signatory:

 

 

By: /s/ Donald R. Holcomb
Name: Donald R.
Holcomb                                                          
Title: Trustee                                                              

                                                              

Aggregate FELP Units held:  

Aggregate Principal Amount of Notes under the Notes Indenture:  

 

 

KAMERON N. CLINE 2004 IRREVOCABLE TRUST

 

Authorized Signatory:

 

 

By: /s/ Donald R. Holcomb
Name: Donald R.
Holcomb                                                          
Title: Trustee                                                              

                                                              

Aggregate FELP Units held:  

Aggregate Principal Amount of Notes under the Notes Indenture:  

 

 

 

 

 

 

[Signature page to A&R Transaction Support Agreement]

 

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AGREED BY EACH OF THE
FOLLOWING PARTIES:

 

[_________________]

 

Authorized Signatory:

 

 

By:_________________________________
Name:                                                            
Title:                                                              

 

Aggregate Principal Amount of Debt under the Credit Agreement:
$_______________________

 

Name and Address of Contact for Notices:

 

Name:  

Address:

Facsimile:

Email:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

[Signature page to A&R Transaction Support Agreement]

 

 

 

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EXHIBIT A

 

A&R Amendment Term Sheet

 

 

 

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EXECUTION VERSION

EXHIBIT A TO A&R LENDER SUPPORT AGREEMENT

SCHEDULE 6 OF EXHIBIT A TO A&R NOTES SUPPORT AGREEMENT

 

Foresight Energy LLC
Third Amended and Restated Credit Agreement

Summary of Principal Terms and Conditions

Set forth below is a summary of the principal terms and conditions for the
amendment and restatement of the Second Amended and Restated Credit Agreement
dated as of August 23, 2013 among Foresight Energy LLC, the letter of credit
issuing banks party thereto, the lenders party thereto and Citibank, N.A., as
administrative agent and collateral agent (as amended, restated, supplemented or
otherwise modified prior to the date hereof, the “Existing Credit
Agreement”).  This summary does not purport to summarize all the terms,
conditions, representations and other provisions with respect to the amendment
and restatement of the Existing Credit Agreement, which, to the extent not
specified herein, will be set forth in the Third Amended and Restated Credit
Agreement and include additional corrections and modifications to reflect the
operational and strategic requirements of the Borrower and its subsidiaries, as
may be mutually agreed by the parties, and to include LSTA contractual bail-in
language.  Any capitalized terms used herein and not otherwise defined shall
have the meanings give such terms in the Existing Credit Agreement.

Borrower:

Foresight Energy LLC, a Delaware limited liability company (the “Borrower”).

Agent:

Citibank, N.A., as administrative agent and collateral agent for the Senior
Facilities (in such capacities, the “Agent”).

Senior Facilities:

(A) Senior secured term loans in an aggregate outstanding principal amount of
$297.8 million (the “Term Facility” and the loans thereunder, the “Term Loans”),
subject to any reductions prior to the Effective Date (as defined below) as a
result of prepayments by the Borrower (including any amortization payments).  

 

(B) A senior secured revolving credit facility in an aggregate principal amount
of $475 million (reflecting a decrease of $75 million from the Existing Credit
Agreement on the Effective Date (the “Revolving Facility Reduction”)) (together
with the swingline facility referred to below, the “Revolving Facility” and,
together with the Term Facility, the “Senior Facilities”), under which the
Borrower may borrow loans from time to time (the “Revolving Loans”).  

 

NY 76190361v2

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Transactions:

On the closing date of the Amended and Restated Credit Agreement (the “Effective
Date”): (i) the Amended and Restated Credit Agreement shall become effective,
(ii) the closing of the offer to exchange Senior Notes for Exchangeable Notes
and Second Lien Notes shall occur, (iii) the other transactions

contemplated by the Transaction Support Agreement to occur on such date shall
occur, and (iv) fees and expenses related to the foregoing, including the
Amendment Fee, shall be paid.

Letter of Credit and Swingline Subfacilities:

Same as Existing Credit Agreement.

Incremental Facilities:

No future Incremental Facilities will be permitted under the Credit Agreement.

Purpose:

Same as Existing Credit Agreement, except that the proceeds of Revolving Loans
shall not be permitted to be used to pay accrued and unpaid interest on the
Senior Notes (including as of the Effective Date) that are being exchanged for
Exchangeable Notes or Second Lien Notes (each as defined below).

Refinancing Facilities:

Same as Existing Credit Agreement.

Interest Rates:

The interest rates, Revolving Facility commitment fees and letter of credit fees
will be calculated in the same manner as in the Existing Credit Agreement;
provided that the Applicable Rates as to interest rate margins (and the Letter
of Credit Fee based on the Applicable Rate for Eurocurrency Rate Revolving
Loans) shall be increased by 1.00% per annum as set forth in Annex I.  The
Revolving Facility commitment fee and letter of credit fronting fee levels shall
remain unchanged.

Amendment Fee:

Lenders that execute the Transaction Support Agreement (or their permitted
successors and assigns thereunder) will receive on the Effective Date an
amendment fee in an amount equal to 1.00% of the aggregate principal amount of
their respective Term Loans and Revolving Facility commitments under the Credit
Agreement as of the Effective Date (after giving effect to the Revolving
Facility Reduction) (the “Amendment Fee”); provided that the Borrower shall be
entitled to a credit against such Amendment Fee for the fee of 0.25% of the
aggregate principal amount of their respective Term Loans and Revolving Facility
commitments under the Credit Agreement that shall be paid to the Lenders as a
condition precedent to the Lenders’ execution of the Amended and Restated
Transaction Support Agreement.

Default Rate:

Same as Existing Credit Agreement.

Letters of Credit:

Same as Existing Credit Agreement.  Any Letters of Credit outstanding under the
Existing Credit Agreement as of the Effective Date shall be deemed to be
outstanding under the Credit Agreement.

2

 

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Final Maturity and Amortization:

Same as Existing Credit Agreement (i.e., (i) the Term Facility will mature on
August 23, 2020, and will amortize in equal quarterly installments in an amount
equal to 0.25% of the original aggregate principal amount of the Term Loans on
August 23, 2013, with the balance payable on the maturity date of the Term
Facility; and (ii) the Revolving Facility will mature and the commitments
thereunder will terminate on August 23, 2018), except that (x) the Revolving
Facility will be subject to the mandatory commitment reduction and (y) the Term
Loans will have the benefit of the Excess Cash Flow Sweep, in each case as
described below under “Mandatory Prepayments and Commitment Reductions”.

Guarantees and Collateral:

Same as Existing Credit Agreement.

For the avoidance of doubt, the Collateral will be subject to second priority
Liens securing the Exchangeable Notes and the Second Lien Notes and any
Refinancing Indebtedness in respect thereof, which junior Liens shall be subject
to a customary silent second intercreditor agreement (the “Second Lien
Intercreditor Agreement”), materially consistent with the term sheet attached as
Schedule 1.

3

 

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Mandatory Prepayments and Commitment Reductions:

Same as Existing Credit Agreement, except:

(i) the excess cash flow prepayment provision in the Existing Credit Agreement
shall be replaced by a new provision providing that, in respect of each of (x)
the second half of fiscal year 2016 and (y) fiscal year 2017, 50% of Excess Cash
Flow (to be defined in a manner consistent with the Existing Credit Agreement
with such modifications mutually agreed by the parties) for such period shall be
used to prepay the Term Loans (the “Excess Cash Flow Sweep”); provided that any
voluntary prepayment of Term Loans made during each such period shall be
credited against excess cash flow prepayment obligations for such period on a
dollar-for-dollar basis;

(ii) the Extraordinary Receipts prepayment provisions in the Existing Credit
Agreement shall be modified to (i) include all proceeds of business interruption
insurance to the extent such proceeds constitute compensation for lost earnings
with respect to or otherwise connected to the Deer Run mine (“Hillsboro Business
Interruption Insurance Proceeds”) in the definition of “Extraordinary Receipts”,
(ii) permit Extraordinary Receipts constituting insurance proceeds (other than
Hillsboro Business Interruption Insurance Proceeds) to be used to repay any
purchase money, capital lease or other project-level Indebtedness permitted

under the Credit Agreement (including the Longwall Financing Arrangements) that
is secured by Liens on such insurance proceeds (or assets and property that gave
rise to the insurance proceeds) to the extent required under the documents
governing such Indebtedness as in effect as of the later to occur of (x) the
Effective Date and (y) the time of the event giving rise to such insurance
proceeds, and (iii) provide that the Hillsboro Business Interruption Insurance
Proceeds are not subject to reinvestment rights or the 100% prepayment
requirement, but 50% thereof shall be used to prepay the Term Loans and the
remaining 50% may be retained by the Borrower.

(iii) the aggregate commitments under the Revolving Facility shall be reduced on
a pro rata basis on December 31, 2016 to $450 million, without premium or
penalty; and

(iv) Section 2.05(c)(i)(A) of the Existing Credit Agreement shall be revised to
include a reference to Section 7.05(r).

Voluntary Prepayments and Reductions in Commitments:

Same as Existing Credit Agreement (i.e., all Loans may be prepaid without
prepayment premium, subject to customary breakage provisions).

Representations and Warranties:

Same as Existing Credit Agreement, except that (i) any representations and
warranties that refer to the Amendment Effective Date (the effective date of the
second amendment and restatement) will refer to the Effective Date, (ii) the
representation and warranty that there has not been a Material Adverse Effect
shall be measured from the last day of the most recently ended fiscal quarter
for which financial statements have been delivered prior to the Effective Date
and (iii) for purposes of any representations and warranties that are qualified
by Material Adverse Effect, “Material Adverse Effect” shall exclude the effect
of matters directly arising from or otherwise specifically related to the
Hillsboro complex, including any combustion event at, and subsequent idling of,
the Hillsboro mine and any contracts related thereto.

4

 

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Conditions Precedent to Effective Date:

Customary for transactions of this type, and in addition, will include:

(i) the substantially concurrent consummation of the Transaction (as defined in
the Transaction Support Agreement);

(ii) evidence of the effectiveness of amendments and waivers of the Receivables
Financing Agreement dated January 13, 2015 among Foresight Receivables, LLC, as
borrower, the Borrower,

certain Subsidiaries of the Borrower, the lenders party thereto and PNC Bank,
National Association, as agent, as amended (the “Receivables Financing
Agreement”);

(iii) evidence of the effectiveness of amendments and waivers to certain other
Indebtedness of the Loan Parties;

(iv) execution and delivery of the Second Lien Intercreditor Agreement;

(v) the Borrower shall have paid to the Agent, for the account of the Lenders
entitled thereto, the Amendment Fee; and

(vi) the receipt by each Lender at least three (3) Business Days prior to the
Effective Date, to the extent requested by such Lender at least ten (10)
Business Days prior to the Effective Date, all documentation and other
information required by bank regulatory authorities under applicable “know your
customer” and anti-money laundering rules and regulations including the PATRIOT
Act.

Conditions Precedent to all Subsequent Borrowings:

Same as Existing Credit Agreement.

Affirmative Covenants:

Same as Existing Credit Agreement, except that (i) as an additional requirement,
within 30 days after the end of each of the first two months of each fiscal
quarter, the Borrower shall provide to the Agent for distribution to those
Lenders that are not Public Lenders an unaudited monthly management consolidated
balance sheet and income statement of the Borrower and its Subsidiaries (in a
form consistent with the Borrower’s current practice and, for the avoidance of
doubt, subject to normal quarterly or year-end adjustments and the absence of
footnotes) and (ii) the requirement that audit opinion not be qualified by a
“going concern” or like qualification or exception shall not apply to the
financial statements of the Borrower delivered for the fiscal year ended
December 31, 2015.

5

 

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6

 

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Negative Covenants:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Same as Existing Credit Agreement, except:

(i) the Indebtedness covenant shall be modified to (A) permit the incurrence of
(1) up to $300 million aggregate principal amount of second lien senior
exchangeable Notes maturing no later than September 30, 2017 and with an
interest rate not in excess of 15% per annum, payable in kind (the “Exchangeable
Notes”), plus additional principal amounts resulting from any Refinancing
Indebtedness in respect thereof, provided, that any such Refinancing
Indebtedness (i) shall have a maturity date no earlier than 91 days after the
maturity date of the Second Lien Notes, (ii) shall not require payment of
interest in cash, and (iii) may only be secured by a lien junior in right of
priority to the lien securing the Second Lien Notes, and (2) up to $300 million
aggregate principal amount of second lien senior secured notes due August 2021
with an interest rate per annum not in excess of (i) 9% per annum in cash for
the first two years and 10% per annum in cash thereafter, plus (ii) 1% per annum
payable in kind (the “Second Lien Notes”), plus, in each case, additional
principal amounts resulting from the capitalization of accrued and unpaid
interest on the Senior Notes at the Effective Date, any paid in kind interest
after the Effective Date and any Refinancing Indebtedness in respect thereof,
provided that any lien securing such Refinancing indebtedness shall be junior in
right of priority to the lien securing the Facilities, (B) correct the
cross-reference in clause (l) thereof to refer to Section 7.01(c) of the Credit
Agreement and (C) add the following sentence:  “The accrual of interest or
preferred stock dividends, the accretion or amortization of original issue
discount, the payment of interest on any indebtedness in the form of additional
indebtedness with the same terms, the reclassification of preferred stock as
Indebtedness due to a change in accounting principles and the payment of
dividends on preferred stock or Disqualified Equity Interests in the form of
additional shares of the same class of preferred stock or Disqualified Equity
Interests will not be deemed to be an incurrence of Indebtedness or an issuance
of preferred stock or Disqualified Equity Interests for purposes of this Section
7.02.”;

(ii) the Lien covenant shall be modified to permit junior priority Liens on the
Collateral to secure the obligations under the Exchangeable Notes and the Second
Lien Notes and any Refinancing Indebtedness in respect thereof, which Liens
shall be subject to the Second Lien Intercreditor Agreement;

(iii) the Restricted Payment covenant shall be modified to (A) prohibit any
Restricted Payments by the Borrower during fiscal year 2016, (B) prohibit
Restricted Payments (other than permitted Tax Distributions and TRA
Distributions described in clause (C) below) from January 1, 2017 until the
later to occur of (x) June 30, 2018 and (y) the refinancing of the Revolving
Facility and (C) permit Tax Distributions and TRA Distributions by the Borrower
during fiscal years 2017 and 2018 and thereafter, provided that Tax
Distributions related to cancellation of debt income shall be capped at $15
million per fiscal year; provided, further, that in each case such provisions
shall be subject to customary exceptions to permit payments of expenses of the
MLP and the General Partner, payments under the MSA and other customary
exceptions to be agreed;

(iv) the debt prepayment covenant shall be modified to expressly permit (A) the
prepayment or redemption of the Exchangeable Notes in connection with the
exercise by Murray Energy Holdings Co., a Delaware corporation, and/or its
subsidiaries of the option to purchase 46% of the equity interests of Foresight
Energy GP LLC (the “Murray Option”); provided that such prepayment or redemption
may only be consummated with the proceeds of (i) an equity issuance, (ii) a
capital contribution or (iii) an incurrence of indebtedness that is unsecured or
ranks junior to the Second Lien Notes, does not have any cash interest payments
and matures later than the Second Lien Notes, (B) any redemption in respect of
any Senior Notes not participating in the exchange offer and permit the
satisfaction and discharge of the indenture governing the Senior Notes, (C) the
conversion of the Exchangeable Notes into Equity Interests of Foresight Energy
LP in accordance with their terms and (D) any permitted refinancing of
Indebtedness with Refinancing Indebtedness or the proceeds of Qualified Equity
Interests; and

(v) the transactions with Affiliates covenant will be modified to permit the
transactions to occur concurrently with the effectiveness of the Credit
Agreement on the Effective Date.

Anti-Hoarding:

An anti-hoarding provision prohibiting borrowings of Revolving Loans (but not
the issuance of letters of credit) under the Revolving Facility if unrestricted
cash of the Borrower exceeds $35 million will be added to the Credit Agreement
and apply so long as any Revolving Loans are outstanding.

7

 

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Financial Covenants:

The Consolidated Interest Coverage Ratio financial covenant in Section 7.11(a)
of the Existing Credit Agreement and the Senior Secured Leverage Ratio financial
covenant in Section 7.11(b) of the Existing Credit Agreement will apply to both
the Revolving Facility and the Term Facility.  Section 8.01(b) will also be
modified to reflect such change.  Following the Effective Date, any amendment
of, or waiver or consent with respect to, Section 7.11 will also require the
consent of the Required Lenders.

The applicable ratios will be as follows:

(i) The Consolidated Interest Coverage Ratio covenant levels will remain the
same as in the Existing Credit Agreement.

(ii) The Senior Secured Leverage Ratio will be calculated the

same as in the Existing Credit Agreement and the levels will be reset as
follows:

 

Fiscal Quarter Ending

Maximum Senior
Secured Leverage Ratio

Second Quarter 2016 through
Fourth Quarter 2016

3.50 : 1.00

First Quarter 2017 through
Fourth Quarter 2017

3.50 : 1.00

First Quarter 2018 through
Fourth Quarter 2018

3.50 : 1.00

First Quarter 2019 through
Fourth Quarter 2019

3.25 : 1.00

First Quarter 2020 through
Fourth Quarter 2020

3.00 : 1.00

 

First Quarter 2021 through
Fourth Quarter 2021

2.75 : 1.00

8

 

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For purposes of determining compliance with the financial covenants, any cash
equity contribution (which shall be common equity or otherwise in a form
reasonably acceptable to the Required Lenders) made to the Borrower after the
first day of the applicable quarter and on or prior to the day that is 10
business days after the day on which financial statements are required to be
delivered for such fiscal quarter will be included in the calculation of
Consolidated EBITDA solely for the purposes of determining compliance with the
financial covenants at the end of such fiscal quarter and applicable subsequent
periods which include such fiscal quarter (any such equity contribution so
included in the calculation of Consolidated EBITDA, a “Specified Equity
Contribution”); provided that (a) in each four consecutive fiscal quarter
period, there shall be at least two fiscal quarters in respect of which no
Specified Equity Contribution is made, (b) no more than three Specified Equity
Contributions may be made, (c) the amount of any Specified Equity Contribution
shall be no greater than the amount required to cause the Borrower to be in pro
forma compliance with the financial covenants, and (d) there shall be no pro
forma reduction in indebtedness with the proceeds of any Specified Equity
Contribution for determining compliance with the financial covenants for the
fiscal quarter in respect of which such Specified Equity Contribution is made
(either directly through prepayment or indirectly as a result of the netting of
unrestricted cash).

 

“Consolidated EBITDA” will be modified to add an addback for any actually
incurred costs, fees and expenses in connection with the contemplated
transactions, the change of control litigation, any redemption of the
Exchangeable Notes, exercise of the Murray Option and any related transactions
and any restructuring of the Borrower and its Subsidiaries, including the fees
and expenses of restructuring advisors.

Synergy and Conflicts Committee and CAO:

Affiliate transactions in excess of a materiality threshold to be agreed upon
shall be subject to the review and approval of a Synergy and Conflicts
Committee.  

A chief accounting officer (CAO) that is not affiliated with either Murray
Energy Corp. or Foresight Reserves LP shall be appointed by the independent
members of the Board; provided that Alix Partners or another restructuring
advisor selected by the Board shall be authorized to act as a restructuring
advisor reporting to the CEO, to perform such function as generally required of
an interim CAO and to provide such reporting support and advice to the Board as
is appropriate and necessary.

9

 

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Events of Default:

Same as Existing Credit Agreement, except that in connection with the Change of
Control Event of Default, the definition of “Permitted Holders” shall be revised
as set forth below and expressly permit the exercise of the Murray Option and
the redemption and/or conversion of the Exchangeable Notes and related
transactions.

“Permitted Holder” means, collectively, (a) (i) Chris Cline and his children and
other lineal descendants, Robert E. Murray, Brenda L. Murray, Robert Edward
Murray (son), Jonathan Robert Murray and Ryan Michael Murray (or any of their
estates, or heirs or beneficiaries by will); (ii) the spouses or former spouses,
widows or widowers and estates of any of the Persons referred to in clause (i)
above; (iii) any trust having as its sole beneficiaries one or more of the
persons listed in clauses (i) and (ii) above; and (iv) any Person a majority of
the voting power of the outstanding Equity Interest of which is owned by one or
more of the Persons referred to in clauses (i), (ii) or (iii) above, (b) Murray
Energy Holdings Co., a Delaware corporation, and its Subsidiaries (“Murray
Energy”) and any investor that participates with Murray Energy in the exercise
of the Murray Option, (c) any group (within the meaning of Section 13(d)(3) or
Section 14(d)(2) of the Exchange Act or any successor provision) of which any of
the foregoing are members; provided that, in the case of such group and without
giving effect to the existence of such group or any other group, such Persons
referenced in clauses (a) and (b)

above, collectively, have beneficial ownership of more than 50% of the total
voting power of the voting units or stock of the Borrower or any Parent thereof,
(d) Foresight Reserves L.P. and (e) the General Partner.

On the Effective Date, the Required Lenders will also waive the Defaults and
Events of Default specified in (i) the Notice of Events of Default and
Reservation of Rights delivered by Agent to Borrower dated December 9, 2015,
(ii) the notice of payment default delivered by Borrower to the Agent dated
February 16, 2016, and (iii) that certain Compliance Certificate in respect of
the period ending December 31, 2015 delivered to the Agent on March 23, 2016,
and any other Defaults or Events of Default (other than any payment Default or
Event of Default) continuing immediately prior to the consummation of the
Transactions.

Unrestricted Subsidiaries:

Same as Existing Credit Agreement.

Voting:

Same as Existing Credit Agreement.

Cost and Yield Protection:

Same as Existing Credit Agreement.

Assignments and Participations:

Same as Existing Credit Agreement

Non-Pro Rata Discounted Voluntary Prepayments:

 

Same as Existing Credit Agreement.

 

Expenses and Indemnification:

Same as Existing Credit Agreement.

Governing Law and Forum:

New York.

Counsel to Agent:

Shearman & Sterling LLP

General:

The covenants and event of defaults in the indentures governing the Second Lien
Notes and Exchangeable Notes shall in no event be more restrictive than the
corresponding covenants and events of default set forth in the amended and
restated Credit Agreement.  For the avoidance of doubt, the Second Lien Notes
and Exchangeable Notes shall not have a financial maintenance covenant.

 

10

 

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ANNEX I

Applicable Rate

The first clause of the definition of Applicable Rate in Section 1.01 of the
Credit Agreement (prior to the proviso therein) will be amended and restated as
follows:

“Applicable Rate” means (a) in the case of Term Loans, (i) 5.50% per annum for
Eurocurrency Rate Loans and (ii) 4.50% per annum for Base Rate Loans and (b) in
the case of the Revolving Loans and Swing Line Loans, the applicable percentage
per annum set forth below determined by reference to the Consolidated Net
Leverage Ratio as set forth in the most recent Compliance Certificate received
by the Administrative Agent pursuant to Section 6.02(b):

Applicable Rate for Revolving Loan and Swing Line Loans

Level

Consolidated Net
Leverage Ratio

Eurocurrency Rate Loans and Letters of Credit

Base Rate Loans

Commitment Fee

I

< 2.50 to 1.00

3.50%

2.50%

0.50%

II

≥2.50 : 1.00 but < 3.00 : 1.00

3.75%

2.75%

0.50%

III

≥3.00 : 1.00 but < 4.00 : 1.00

4.00%

3.00%

0.50%

IV

≥4.00 : 1.00 but < 5.00 : 1.00

4.25%

3.25%

0.50%

V

≥5.00 : 1.00

4.50%

3.50%

0.50%

 

 

provided that (a) the Applicable Rate will be determined as of the last day of
the immediately preceding fiscal quarter, (b) the Applicable Rate determined for
any Adjustment Date (including the first Adjustment Date) shall remain in effect
until a subsequent Adjustment Date for which the Consolidated Net Leverage Ratio
falls within a different level, and (c) if the financial statements and related
Compliance Certificate for any fiscal period are not delivered by the date due
pursuant to Sections 6.01 and 6.02, the Applicable Rate shall be set at Level V
until the date of delivery of such financial statements and Compliance
Certificate, after which the Applicable Rate shall be based on the Consolidated
Net Leverage Ratio set forth in such Compliance Certificate.

 

 

 

NY 76190361v2

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Schedule 1

Intercreditor Agreement Term Sheet1

Reference is made to (i) that certain Credit Agreement, dated as of August 12,
2010, amended and restated on December 15, 2011 and August 23, 2013, and amended
by Incremental Amendment No. 1 dated as of May 27, 2015, and as further amended,
amended and restated, modified or supplemented in connection with the
Restructuring (as defined below) and from time to time (the “First Lien Credit
Agreement”), between Foresight Energy LLC (the “Borrower”) and certain other
parties; and (ii) (A) certain second lien senior exchangeable notes (the “Second
Lien Exchangeable Notes”) to be issued by [_______] (the “Issuer”), and (B)
certain second lien senior secured notes (the “Second Lien Secured Notes” and,
together with the Second Lien Exchangeable Notes, the “Second Lien Notes”) to be
issued by the Issuer, all of which Second Lien Notes will be guaranteed by,
among others, the Borrower and secured by a junior lien on the Collateral (as
defined below).  

“Restructuring”  means the transactions related to the restructuring of
outstanding indebtedness of the Borrower and its affiliates arising as a result
of the occurrence of certain events of default thereunder, including, without
limitation, indebtedness outstanding under the First Lien Credit Agreement and
under the Senior Notes (as defined in the First Lien Credit Agreement).  For
purposes of this Amended and Restated Term Sheet, the Facilities (as defined in
the First Lien Credit Agreement) under the First Lien Credit Agreement (and the
facilities provided in any refinancings, substitutions, extensions or
replacements thereof) are herein referred to collectively as the “First Lien
Credit Facility” and the First Lien Credit Facility together with the Second
Lien Notes (and any refinancings, substitutions, extensions or replacements
thereof) are referred to herein individually as a “Debt Facility” and
collectively as the “Debt Facilities”.  Capitalized terms used herein and not
otherwise defined herein shall have the meanings set forth in the First Lien
Credit Agreement as in effect as of the date hereof.

 

1 

The Second Lien Notes (and any Refinancing Indebtedness thereof) shall be
subject to a customary silent second intercreditor agreement, however, all such
terms set forth in this Schedule 1 in respect thereof are subject to ongoing
negotiation between the Consenting Secured Lenders and the Required Consenting
Noteholders; all of such terms shall be acceptable to such parties.

 

 

 

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Parties:

(i)Citibank, N.A., as administrative agent (in such capacity, together with its
successors and permitted assigns in such capacity, the “First Lien
Administrative Agent”) and as collateral agent (in such capacity, together with
its successors and permitted assigns in such capacity, the “First Lien
Collateral Agent”) under the First Lien Credit Agreement.

(ii)[___] as trustee for the Second Lien Exchangeable Notes (in such capacity,
together with its successors and permitted assigns in such capacity, the “Second
Lien Exchangeable Notes Trustee”),  [___] as trustee for the Second Lien Senior
Notes (in such capacity, together with its successors and permitted assigns in
such capacity, the “Second Lien Secured Notes Trustee” and, together with the
Second Lien Exchangeable Notes Trustee, the “Second Lien Trustees”)

and [______] as collateral trustee (in such capacity, together with its
successors and permitted assigns in such capacity, the “Second Lien Collateral
Agent”) for the Second Lien Notes. 

(iii)The Borrower under the First Lien Credit Agreement.

(iv)Each guarantor under the First Lien Credit Agreement (each, individually, a
“First Lien Guarantor”). NTD: For the avoidance of doubt, the Issuer and the
Second Lien Guarantors will also be required to be First Lien Guarantors.

(v)The Issuer under the Second Lien Notes.

(vi)Each guarantor under the Second Lien Notes (each, a “Second Lien
Guarantor”).

(vii)Each other Person required to be a party to the Intercreditor Agreement
from time to time pursuant to the terms of the Intercreditor Agreement, the
First Lien Credit Agreement and the Second Lien Notes, including, without
limitation, each Hedge Bank and Commodity Hedge Counterparty party to a
Permitted Secured Commodity Swap Contract from time to time.

The Borrower, the Issuer, the First Lien Guarantors and the Second Lien
Guarantors are hereinafter referred to collectively as the “Loan Parties”.

Any reference to “Collateral Agent” hereunder shall mean the First Lien
Collateral Agent and/or the Second Lien Collateral Agent, as the context may
require.

Purpose:

To establish the relative rights and privileges of the parties with respect to
the Collateral.

 

First Lien Claimholders:

The agents, issuing banks and lenders under the First Lien Credit Agreement (and
any refinancings, substitutions, extensions or replacements thereof) (the “First
Lien Lender Parties”), the Hedge Banks under any Secured Hedge Agreement, the
Cash Management Banks under any Secured Cash Management Agreement, each
Commodity Hedge Counterparty party to a Permitted Secured Counterparty Swap
Contract from time to time and the First Lien Collateral Agent.

 

 

 

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First Lien Obligations:

All obligations of every nature of each Loan Party from time to time owed to the
First Lien Claimholders under the applicable secured documents, whether for
principal, interest, breakage costs, fees, expenses, premium (if any), payments
of early termination of or ordinary course settlement payments under interest
rate protection agreements and commodity hedge agreements, indemnification
payments, letter of credit reimbursement obligations, and all guarantees of the
foregoing.  

 

Second Lien Claimholders:

The agents, trustees and note holders of the Second Lien Notes (and any
refinancings, substitutions, extensions or replacements thereof) (the “Second
Lien Noteholders”) and the Second Lien Collateral Agent.

The First Lien Claimholders and the Second Lien Claimholders are the “Secured
Parties”.

 

Second Lien Obligations:

All obligations of every nature of each Loan Party from time to time owed to the
Second Lien Claimholders under the applicable secured documents, whether for
principal, interest, breakage costs, fees, expenses, premium (if any),
indemnification payments, and all guarantees of the foregoing.  

 

Collateral:

The First Lien Obligations and the Second Lien Obligations shall be secured by
liens on the same Collateral (other than Excluded Collateral (as defined
below)).  No Loan Party shall grant any liens on any asset or property to secure
obligations under either Debt Facility unless it has granted a lien on such
asset or property to secure the other Debt Facility.  The Collateral will
consist of the following, collectively:

 

(i)the “Collateral” (as such term is defined in the First Lien Credit Agreement)
(the “Credit Facility Collateral”); and

(ii)all other existing and future assets and property, and all proceeds thereof,
of each Loan Party (other than Excluded Assets (as defined in the Security
Agreement referred to in the First Lien Credit Agreement) and real property that
is not Material Owned Real Property or Material Leased Real Property (as defined
in the First Lien Credit Agreement) (the “Additional Collateral”).

Excluded Collateral:

Notwithstanding anything to the contrary herein, certain accounts (e.g., cash
collateral accounts for the benefit of issuing banks) maintained pursuant to the
credit documents for the benefit of the First Lien Lender Parties shall solely
be for the benefit of the applicable First Lien Lender Parties (“Excluded
Collateral”).

 

Additionally, no First Lien Claimholder or Second Lien Claimholder shall be
required to share any amounts received or deemed received by it in respect of
any First Lien Obligation or Second Lien Obligation owed to it from separate
insurance, credit default swap protection or other protection against loss
arranged by such First Lien Claimholder or Second Lien Claimholder (as
applicable) for its own account in respect of any such First Lien Obligation or
Second Lien Obligation (which amounts shall be for the sole benefit of such
First Lien Claimholder or Second Lien Claimholder (as applicable)).

 

 

 

--------------------------------------------------------------------------------

 

Permitted Liens:

The Secured Parties’ rights with respect to the Collateral shall be subject only
to other liens permitted to exist on the Collateral under the First Lien Credit
Agreement.

 

Lien Subordination:

The liens securing the Second Lien Obligations (the “Second Priority Liens”)
shall be expressly junior and subordinated in all respects to the liens securing
the First Lien Obligations (the “First Priority Liens”), irrespective of the
time, order or method of creation, attachment or perfection of such Second
Priority Liens or First Priority Liens or any failure, defect or deficiency or
alleged failure, defect or deficiency in any of the foregoing.

 

 

 

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Limitations on Enforcement:

Until the First Lien Obligations have been paid in full in cash:

 

(i)  The Second Lien Claimholders shall not (nor shall they instruct the Second
Lien Collateral Agent to) exercise or seek to exercise any rights, power or
remedies (including setoff) with respect to, or take any action in respect of,
any of the Collateral and shall not (nor shall they instruct the Second Lien
Collateral Agent to) institute any action or proceeding (whether judicial or
non-judicial) with respect to such rights, powers or remedies.

 

(ii) None of the Second Lien Claimholders will take or receive any Collateral or
any proceeds of Collateral in connection with the exercise of any right or
remedy (including setoff) with respect to any Collateral in contravention of the
aforementioned lien priority.

 

(iii)  The Second Lien Claimholders shall recognize the rights of the First Lien
Claimholders under the Intercreditor Agreement, including, without limitation,
the right of the First Lien Claimholders to vote the claim represented by the
Second Lien Obligations to the extent necessary to enforce the Intercreditor
Agreement.

 

At all times prior to the payment in full in cash of the First Lien Obligations,
the First Lien Claimholders shall control (as described under the caption
“Voting” below) all decisions related to the exercise of remedies in respect of
the Collateral (subject to the terms of the First Lien Credit Agreement and the
collateral documents entered into to secure the First Lien Obligations (the
“First Lien Collateral Documents”) and any amendments and waivers thereunder
(subject to customary provisions requiring consent of the First Lien
Claimholders and the Second Lien Claimholders)).  The First Lien Collateral
Agent shall have the right to initiate a vote of the First Lien Claimholders
with respect to the exercise of remedies.

 

No Secured Party will oppose or otherwise contest any lawful exercise by the
First Lien Collateral Agent of the right to credit bid the secured obligations
at any sale in foreclosure of the liens granted to the First Lien Collateral
Agent, for the benefit of the Secured Parties so long as such bid is approved
separately by the requisite First Lien Claimholders.  

 

The terms of the Intercreditor Agreement shall govern even if part or all of the
First Lien Obligations or Second Lien Obligations or the liens securing payment
and performance thereof are not perfected or are avoided, disallowed, set aside
or otherwise invalidated in any judicial proceeding or otherwise.

 

 

 

--------------------------------------------------------------------------------

 

No Interference:

 

Each Second Lien Claimholder will agree that:

(i) it will not support, take or cause to be taken any action the purpose or
effect of which is, or could be, to make any Second Priority Lien pari passu
with, or to give such Second Lien Claimholder any preference or priority
relative to, any First Priority Lien with respect to the Collateral subject to
such First Priority Lien and Second Priority Lien or any part thereof;

(ii) it will not challenge or question in any proceeding the validity or
enforceability of any First Lien Obligations or First Lien Collateral Documents,
or the validity, attachment, perfection or priority of any First Priority Lien,
or the validity or enforceability of the priorities, rights or duties
established by or other provisions of the Intercreditor Agreement;

(iii) it will not support, take or cause to be taken any action the purpose or
intent of which is, or could be, to interfere, hinder or delay, in any manner,
whether by judicial proceedings or otherwise, any sale, transfer or other
disposition of the Collateral subject to any Second Priority Lien by any First
Lien Claimholder or the First Lien Collateral Agent acting on their behalf;

(iv) it shall have no right to (A) direct any First Lien Claimholder to exercise
any right, remedy or power with respect to the Collateral subject to any Second
Priority Lien or (B) consent to the exercise by any First Lien Claimholder or
the First Lien Collateral Agent acting on their behalf of any right, remedy or
power with respect to the Collateral subject to any Second Priority Lien;

(v) it will not institute any suit or assert in any suit or insolvency or
liquidation proceeding any claim against any First Lien Claimholder seeking
damages from or other relief by way of specific performance, instructions or
otherwise with respect to, and no First Lien Claimholder shall be liable to any
Second Lien Claimholder for, any action taken or omitted to

be taken by such First Lien Claimholder or the First Lien Collateral Agent
acting on their behalf with respect to any Collateral securing such Second Lien
Obligations that is subject to any Second Priority Lien;

(vi) it will not seek, and shall waive any right, to have any Collateral subject
to any Second Priority Lien or any part thereof marshaled upon any foreclosure
or other disposition of such Collateral; and

(vii) it will not attempt, directly or indirectly, whether by judicial
proceedings or otherwise, to challenge the enforceability of any provision of
the Intercreditor Agreement or support, take or cause to be taken any action
that could otherwise reasonably be expected to result in an impairment of the
First Lien Administrative Agent’s, the First Lien Collateral Agent’s or any of
the First Lien Claimholders’ rights or interests under the First Lien Credit
Agreement, the First Lien Collateral Documents, and the Intercreditor Agreement.

 

Voting:

With respect to any remedies proposed to be taken by Secured Parties with
respect to the Collateral and all other matters relating to the Collateral or
the First Lien Collateral Documents, the First Lien Collateral Agent will take
direction from the holders of a majority in amount of all First Lien Obligations
then outstanding under the First Lien Credit Agreement.

 

Except as otherwise provided herein, with respect to the Second Lien Collateral
Agent, the Second Lien Collateral Agent will take direction from the holders of
a majority of all Second Lien Obligations then outstanding.

 

 

 

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Distributions of

Collateral:

Following the occurrence of and during the continuation of an Event of Default
and delivery of a remedies instruction to apply proceeds of the Collateral in
accordance with the cash waterfall provisions below, the proceeds of any
application of amounts received in accordance with account control rights
exercised by either Collateral Agent (irrespective of whether such control
rights have been exercised pursuant to a remedies instruction), liquidation,
foreclosure or similar transaction related to the sale of Collateral (other than
the Excluded Collateral), and proceeds received in a bankruptcy will be applied
in the following order of priority:

(i)First, on a pro rata basis, to pay fees, expenses and indemnities of the
First Lien Collateral Agent, the Second Lien Collateral Agent and any
administrative agent or issuing bank expenses and fees (other than letter of
credit reimbursement obligations) under the First Lien Credit Agreement and
Second Lien Notes;

 

(ii)Second, on a pro rata basis to any First Lien Claimholder which has
theretofore advanced or paid any fees to any agent or bank referred to in
priority first above, other than any amounts

paid under priority first above, an amount equal to the amount thereof so
advanced or paid by such First Lien Claimholder and for which such Secured Party
has not been previously reimbursed; 

 

(iii)Third, on a pro rata basis to the payment of, without duplication, (a) any
interest expense (including fees) then due and payable under the First Lien
Credit Facility, any Secured Hedge Agreement, any Secured Cash Management
Agreement and any Permitted Secured Commodity Swap Contract and (b) to the
extent such expenses are reimbursable in accordance with the terms of the
relevant documents, all out-of-pocket expenses (including reasonable legal fees)
incurred by any First Lien Claimholder in connection with the enforcement and
protection of its rights under such documents to which such First Lien
Claimholder is a party or otherwise by reason of the occurrence of a default
thereunder;

 

(iv)Fourth, on a pro rata basis, to the payment of, without duplication, (a) any
principal and other amounts then due and payable in respect of the First Lien
Credit Facility (including cash collateralization (at 102.5% of the available
amount thereof) of all outstanding letters of credit issued thereunder), any
Secured Hedge Agreement, any Secured Cash Management Agreement and any Permitted
Secured Commodity Swap Contract and (b) any other First Lien Obligations then
outstanding (including termination or settlement payments under interest rate
protection agreements);

 

(v)Fifth, on a pro rata basis to the payment of, without duplication, (a) any
interest expense then due and payable under the Second Lien Notes (and any
refinancings, substitutions, extensions or replacements thereof), and (b) to the
extent such expenses are reimbursable in accordance with the terms of the
relevant documents, all out-of-pocket expenses (including reasonable legal fees)
incurred by any Second Lien Claimholder in connection with the enforcement and
protection of its rights under such documents to which such Second Lien
Claimholder is a party or otherwise by reason of the occurrence of a default
thereunder;

 

(vi)Sixth, on a pro rata basis, to the payment of, without duplication, (a) any
principal and other amounts then due and payable in respect of the Second Lien
Notes (and any refinancings, substitutions, extensions or replacements
thereof)  and (b) any other Second Lien Obligations then outstanding; and

 

(vii)Seventh, any remaining proceeds to the applicable Loan Party or as a court
of competent jurisdiction may direct.

 

In addition to the foregoing, any net (x) casualty and condemnation

proceeds and (y) asset sale proceeds and extraordinary receipts shall be applied
in accordance with the terms of the First Lien Credit Facility.

Turnover Provisions:

Each of the Second Lien Claimholders will agree to hold in trust and promptly
turn over to the First Lien Collateral Agent any payments or other distributions
received in contravention of the Intercreditor Agreement regardless of their
source or form.  For the avoidance of doubt, no mandatory or voluntary
prepayments of Second Lien Obligations will be permitted prior to the discharge
in full in cash of the First Lien Obligations.

 

If, for any reason, a Secured Party does not have a valid and perfected lien
(either directly or through any applicable Collateral Agent) on any portion of
the Collateral, proceeds on such portion received by the other Secured Parties
will be paid over to the extent necessary to reflect the distribution provisions
above as if all Secured Parties held such a lien.

 

If any Second Lien Claimholder obtains knowledge of or is notified by the First
Lien Collateral Agent that a payment or distribution made to a First Lien
Claimholder is rescinded for any reason whatsoever, such Second Lien Claimholder
shall promptly pay or remit to the First Lien Collateral Agent any payment or
distribution received by it in respect of any Collateral subject to any First
Priority Liens securing such First Lien Obligations, and the provisions set
forth in the Intercreditor Agreement shall be reinstated as if such payment or
distribution had not been made, until the payment and satisfaction in full of
the First Lien Obligations.

 

 

 

--------------------------------------------------------------------------------

 

Restrictions on Amendments:

Without the prior written consent of the First Lien Collateral Agent, no
collateral documents entered into to secure the Second Lien Obligations (such
collateral documents, the “Second Lien Collateral Documents”) may be amended,
supplemented or otherwise modified or entered into to the extent such amendment,
supplement or modification, or the terms of any new Second Lien Collateral
Document, would be prohibited by, or would require any Loan Party to act or
refrain from acting in a manner that would violate, any of the terms of the
Intercreditor Agreement.

 

In the event that the First Lien Claimholders or the First Lien Collateral Agent
enters into any amendment, waiver or consent in respect of any of the First Lien
Collateral Documents for the purpose of adding to, or deleting from, or waiving
or consenting to any departures from any provisions of, any First Lien
Collateral Document or changing in any manner the rights of the First Lien
Collateral Agent, the First Lien Claimholders, the Borrower or any other Loan
Party thereunder (including the release of any liens in Collateral to the extent
permitted as described below under “Release of Liens”), then such amendment,
waiver or consent shall apply automatically to any comparable provision of the
comparable Second Lien Collateral Document without the consent of the Second

Lien Collateral Agent or any Second Lien Claimholder and without any action by
the Second Lien Collateral Agent, the Borrower or any other Loan Party.

 

Effective Date Acknowledgments:

On the Effective Date (to be defined as the date of consummation of certain
transactions), each of the Secured Parties will recognize the existence and the
permissibility of the other Secured Parties and their respective debt and/or
lien obligations and rights.  

 

Release of Liens:

The Intercreditor Agreement will provide that in the event the First Lien
Collateral Agent releases its lien on and/or sells all or any portion of
Collateral that is (a) permitted to be sold or transferred pursuant to the First
Lien Credit Agreement, (b) sold in a foreclosure or similar transactions in
accordance with the terms of the First Lien Credit Agreement or (c) Excluded
Collateral, in each case, the Second Priority Lien on such Collateral shall be
automatically released without the consent of any of the Second Lien
Claimholders or the Second Lien Collateral Agent being required, such release
being made free and clear of all liens of the Secured Parties, and each Second
Lien Claimholder shall be deemed to have consented to such release or sale.

 

In addition, the requirement that a Second Priority Lien attach to, or be
perfected with respect to, Collateral shall be waived automatically and without
further action so long as the requirement that a First Priority Lien attach to,
or be perfected with respect to, such property or assets is waived by the First
Lien Collateral Agent.

 

 

 

--------------------------------------------------------------------------------

 

Refinancings:

The First Lien Credit Facility and the Second Lien Notes may be replaced,
refunded or refinanced, in whole or in part, (each, a “Replacement”) without
notice to, or the consent of any Secured Party, all without affecting the Lien
priorities provided for under the Intercreditor Agreement or the other
provisions thereof; provided, however, that the First Lien Administrative Agent
and the Second Lien Trustee shall receive on or prior to the incurrence of the
Replacement:

(i) an officers’ certificate from the Borrower or Issuer, as applicable, stating
that (A) the Replacement is permitted by each applicable collateral document to
be incurred (or, if required, any relevant consent has been obtained) and (B)
customary legending requirements, if any, have been satisfied, and

(ii)  a “Priority Confirmation Joinder” (to be defined in the Intercreditor
Agreement) from the holders or lenders of any indebtedness that replaces the
First Lien Credit Facility or the Second Lien Notes, as the case may be (or an
authorized agent, trustee or other

representative on their behalf).

Upon the consummation of such Replacement and the satisfaction of certain other
requirements, the holders or lenders of the indebtedness incurred pursuant to
such Replacement and any authorized agent, trustee or other representative
thereof will be entitled to the benefits of the Intercreditor Agreement.

Bankruptcy or Insolvency/Liquidation:

In the event of an insolvency or liquidation proceeding of a Loan Party, whether
voluntary or involuntary, if the First Lien Administrative Agent or the First
Lien Collateral Agent shall desire to permit the use of cash collateral or to
permit such Loan Party to obtain debtor-in-possession financing (a “DIP
Financing”), then the Second Lien Claimholders will agree that they will raise
no objection to such use of cash collateral (or any grant of administrative
expense priority under the Bankruptcy Code) or DIP Financing and will not
request adequate protection or any other relief in connection therewith.  The
Second Lien Claimholders will subordinate their respective liens in the
Collateral to the liens securing such DIP Financing to the extent the liens
securing the First Lien Obligations are subordinated or are pari passu with such
DIP Financing.  The Second Lien Claimholders agree that they shall not be
entitled to provide any DIP Financing unless the First Lien Claimholders have
elected not to provide such DIP Financing.

 

Adequate Protection:

No Second Lien Claimholder will file or prosecute in any insolvency or
liquidation proceeding any motion for adequate protection (or any comparable
request for relief) based upon their interest in the Collateral under the Second
Priority Liens, nor will it object to or contest (i) any request by the First
Lien Collateral Agent or First Lien Claimholders for adequate protection or (ii)
any objection by the First Lien Collateral Agent or First Lien Claimholders to
any motion, relief, action or proceeding based on the First Lien Claimholders
claiming a lack of adequate protection, except that the Second Lien Claimholders
may freely seek and obtain any relief upon a motion for adequate protection (or
any comparable relief), without any condition or restriction whatsoever, at any
time after the discharge of the First Lien Obligations.

Automatic Stay Relief

The Second Lien Claimholders will not oppose or otherwise contest any motion for
relief from the automatic stay made by the First Lien Administrative Agent, the
First Lien Collateral Agent or the First Lien Claimholders.

 

 

--------------------------------------------------------------------------------

 

No Objection:

No Second Lien Claimholder will object to or oppose a sale or other

disposition of any Collateral (or any portion thereof) under Section 363 of the
Bankruptcy Code or any other provision of the Bankruptcy Code if the First Lien
Claimholders shall have consented to such sale or disposition of such Collateral
and all First Priority Liens and Second Priority Liens will attach to the
proceeds of the sale.

 

Waiver of Claims:

Each of the Second Lien Claimholders will waive any claim such Second Lien
Claimholders may have against the First Lien Administrative Agent, the First
Lien Collateral Agent or any other First Lien Claimholders (or their
representatives) arising out of any election by the First Lien Administrative
Agent, First Lien Collateral Agent or any First Lien Claimholders, in any
proceeding instituted under the Bankruptcy Code, of the application of Section
1111(b) of the Bankruptcy Code.

 

Plan support:

Without the consent of the First Lien Claimholders, the Second Lien Claimholders
will not propose or support any plan that does not contemplate payment of the
First Lien Obligations in full in cash or is otherwise  inconsistent with the
Intercreditor Agreement.

 

Separate grants:

Each of the First Lien Claimholders and the Second Lien Claimholders will agree
that (a) the grants of liens under the First Lien Collateral Documents and the
Second Lien Collateral Documents are separate and distinct grants and (b) First
Lien Obligations and Second Lien Obligations must be separately classified in
any bankruptcy.

 

Rights As Unsecured Creditors:

The First Lien Claimholders may exercise rights and remedies as unsecured
creditors against any of the Loan Parties.

 

Insurance:

The First Lien Collateral Agent shall have the sole right (subject to the
Borrower’s rights under the First Lien Credit Agreement, and the other documents
relating thereto) to adjust and settle insurance claims with respect to the
Collateral and approve awards granted with respect to the Collateral in any
condemnation or similar proceeding.

 

Purchase Right:

If an Event of Default under and as defined in the First Lien Credit Agreement
has occurred and is continuing and the amount of any claim or claims in respect
of any First Lien Obligations has been determined, the Second Lien Claimholders
will be permitted within an agreed exercise period to purchase the entire amount
of such claim or claims at par plus any accrued interest (and payment of any
outstanding fees and expenses) from such First Lien Claimholders during a call
period to be agreed.

 

Interpretation:

For the avoidance of doubt, any determinations as to whether a First Lien
Obligation has been paid in full in cash hereunder shall be made without taking
into account any limitations on such obligations imposed by the United States
Bankruptcy Code or other applicable insolvency law.

 

 

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Governing Law; Jurisdiction:

The State of New York.

 

 

 

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EXHIBIT B

 

A&R Transaction Term Sheet

 

 

 

 

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EXECUTION VERSION
EXHIBIT A TO A&R NOTES SUPPORT AGREEMENT

EXHIBIT B TO A&R LENDER SUPPORT AGREEMENT

 

AMENDED AND RESTATED TERM SHEET FOR PROPOSED TRANSACTION

 

This amended and restated term sheet (including all exhibits, schedules and
annexes hereto, as amended, supplemented or otherwise modified from time to time
in accordance with the terms of the Amended and Restated Notes Support Agreement
(as defined below), this “Amended and Restated Term Sheet”) sets forth certain
of the principal terms of a proposed global restructuring of the indebtedness
and other obligations of, and certain equity and governance matters relating to,
(a) Foresight Energy GP LLC, a Delaware limited liability company (“FEGP”), and
(b) Foresight Energy LP, a Delaware limited partnership (“FELP”), Foresight
Energy LLC, a Delaware limited liability company (“FELLC”), and their respective
subsidiaries (collectively, the “Partnership”) and certain related agreements
among Reserves (as defined below), Murray (as defined below) and certain of
their respective affiliates.  Such global restructuring, as contemplated by this
Amended and Restated Term Sheet, is referred to herein as the “Transaction”.

 

Capitalized terms used herein without definitions shall have the meanings given
to such terms in the Amended and Restated Transaction Support Agreement, dated
as of July 22, 2016 (the “Restatement Date”), to which this Amended and Restated
Term Sheet is attached as Exhibit A (as amended, supplemented or otherwise
modified from time to time in accordance with the terms thereof, the “Amended
and Restated Notes Support Agreement”).

 

The Transaction contemplates, among other things: (i) an exchange of the Senior
Notes (as defined herein); (ii) amendments and waivers to the Credit Agreement
and the Securitization Facility (each as defined herein); (iii) amendments to
various corporate governance agreements and related contracts; (iv) the granting
of certain releases by and among certain Transaction Parties (as defined below)
and (v) related agreements among Reserves, Murray and certain of their
respective affiliates, in each case, on the terms and subject to the conditions
set forth in this Amended and Restated Term Sheet and the Amended and Restated
Notes Support Agreement.  The date on which the Transaction is consummated is
called the “Effective Date”.

 

This Amended and Restated Term Sheet does not include a description of all of
the terms, conditions and other provisions that are to be contained in the
definitive documentation executed, delivered, filed and/or distributed in
connection with the Transaction, all of which remain subject to discussion and
negotiation among the Transaction Parties.

 

THIS AMENDED AND RESTATED TERM SHEET IS NOT AN OFFER OR THE SOLICITATION OF AN
OFFER WITH RESPECT TO ANY SECURITIES. ANY SUCH OFFER WILL ONLY BE MADE IN
COMPLIANCE WITH ALL APPLICABLE SECURITIES LAWS.

 

THIS AMENDED AND RESTATED TERM SHEET IS BEING PROVIDED AS PART OF A
COMPREHENSIVE COMPROMISE AND SETTLEMENT, EACH ELEMENT OF WHICH IS CONSIDERATION
FOR THE OTHER ELEMENTS AND AN INTEGRAL ASPECT OF THE PROPOSED TRANSACTION.  THIS
AMENDED AND RESTATED TERM SHEET IS CONFIDENTIAL AND SUBJECT TO FEDERAL RULE OF
EVIDENCE 408.  NOTHING IN THIS AMENDED AND RESTATED TERM SHEET SHALL CONSTITUTE
OR BE CONSTRUED AS AN ADMISSION OF ANY fact or liability, a stipulation or a
waiver, AND EACH statement CONTAINED HEREIN IS MADE without prejudice solely for
settlement purposes, with a full reservation as to any rights, remedies or
defenses of the PARTNERSHIP AND ALL OTHER TRANSACTION PARTIES.

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SUMMARY OF CERTAIN ECONOMIC AND OTHER
TERMS AND CONDITIONS FOR TRANSACTION

 

Parties in Interest:

The Transaction is contemplated by and among:

(a)FELP, FELLC, and their respective subsidiaries;

(b)Murray Energy Corp., an Ohio corporation (“Murray”), Christopher Cline, an
individual (“Cline”), and Cline Resources and Development Company, a West
Virginia corporation (“Development” and, together with Murray and Cline, the
“Significant Equityholders”), and certain investors in, and affiliates and
principals of, the Significant Equityholders;

(c)FEGP;

(d)lenders under the Credit Agreement who hold commitments, loans or other
credit extensions under the Credit Agreement in a sufficient amount or
percentage to effectuate the amendments and waivers to the Credit Agreement
contemplated herein (the “Consenting Secured Lenders”);

(e)PNC Bank, National Association, as administrative agent (the “Securitization
Agent”) under the Securitization Facility, and lenders under the Securitization
Facility who hold commitments, loans or other credit extensions under the
Securitization Facility in a sufficient amount or percentage to effectuate the
amendments and waivers to the Securitization Facility contemplated herein;

(f)the Indenture Trustee (as defined below), the holders of the Senior Notes
that are affiliates of the Partnership, and holders of the Senior Notes holding
at least 98% of the aggregate principal amount of outstanding Senior Notes not
held by affiliates of the Partnership; and

(g)the members of FEGP, in their capacities as such, which consist of:
(i) Foresight Reserves LP, a Nevada limited partnership (“Reserves”),
(ii) Murray and (iii) Michael Beyer, an individual (“Beyer,” and such members,
collectively, the “Members”).

The persons and entities described in clauses (a) through (g) shall be referred
to herein, collectively, as the “Transaction Parties”.

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Current Capital Structure:

The capital structure of the Partnership is currently as follows:

(a)Indebtedness (the “Secured Debt”) outstanding under the Second Amended and
Restated Credit Agreement, dated as of August 23, 2013, by and among FELLC, as
borrower, certain guarantors, Citibank N.A., as administrative agent (the
“Administrative Agent”), and the lenders party thereto from time to time (as
amended, supplemented or otherwise modified, the “Credit Agreement”), comprised
of (i) $352.5 million of principal amount of revolving loans, (ii) $297.8
million of principal amount of term loans, and (iii) $6.5 million in undrawn
letters

of credit, in each case, outstanding as of the Restatement Date;  

(b)Indebtedness outstanding under the Receivables Financing Agreement, dated as
of January 13, 2015, by and among Foresight Receivables LLC, as borrower, the
Securitization Agent, and the lenders party thereto from time to time (as
amended, supplemented or otherwise modified, the “Securitization Facility”),
comprised of a $50 million credit facility of which an estimated principal
amount of approximately $13.4 million of borrowings are outstanding as of the
Restatement Date;

(c)Indebtedness and lease obligations (the “Equipment Financings”) outstanding,
collateralized by longwall mine equipment, by and among FELP, FELLC, and the
financing parties thereto, with an aggregate outstanding balance of $140.1
million as of the Restatement Date;

(d)Indebtedness constituting senior unsecured notes (the “Senior Notes”) issued
under that certain Indenture, dated as of August 23, 2013, by and among FELLC
and Foresight Energy Financing Corporation, as issuers (the “Issuers”), certain
guarantors, and Wilmington Savings Fund Society, FSB, as successor indenture
trustee (in such capacity, the “Indenture Trustee”) (as amended, supplemented or
otherwise modified, the “Indenture”), in an outstanding principal amount of $600
million as of the Restatement Date, which amount includes Senior Notes held by
investors in Reserves (collectively, the “Reserves Investor Group” and such
Senior Notes, the “Affiliate Notes”) in an aggregate principal amount of $83.0
million as of the Restatement Date;

(e)Partnership interests in FELP, comprised of (i) common units in FELP (the
“Common Units”) held by public unitholders, current and former FEGP executive
officers and directors, Cline Trust Company, a Delaware limited liability
company (“CTC”), and affiliates of Cline and Reserves and (ii) subordinated
units in FELP (together with the Common Units, the “FELP Units”) held by Murray;
and

(f)Limited liability company interests in FEGP held by Reserves, Murray and
Beyer.

See Schedule 1 hereto for the Partnership’s projected capitalization and equity
structure as of the Effective Date and September 30, 2017, assuming the Note
Redemption (as defined below) occurs on such date and after giving effect
thereto.

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Implementation of Transaction:

The Transaction will be accomplished through the following key steps and
transactions, each as described in detail below:

(a)The purchase, through a cash tender offer (the “Reserves Tender Offer”), by
the Reserves Investor Group of up to $105.4 million principal amount of Senior
Notes held by holders that are not Reserves, the Reserves Investor Group or
affiliates of Reserves or the Reserves Investor Group (including CTC), which
purchase shall settle contemporaneously with the settlement of the Exchange
Offer (as defined below) (such purchased Senior Notes, the “New Affiliate

Notes”), on the terms described in Schedule 2 hereto; 

(b)The exchange, through an exchange offer with holders of Senior Notes that are
not Reserves, the Reserves Investor Group or affiliates of Reserves or the
Reserves Investor Group (collectively, the “Exchange Offer”), of Senior Notes
for (1) Exchangeable PIK Notes (as defined below), (2) Second Lien Notes (as
defined below) and (3) Warrants (as defined below) (such exchange is further
described below in the section entitled “Treatment of Non-Affiliated Senior
Notes in Exchange Offer.”)

(c)The exchange, through an individually negotiated exchange with the Reserves
Investor Group, of Affiliate Notes and New Affiliate Notes for Exchangeable PIK
Notes and Second Lien Notes (such exchange is further described below in the
section entitled “Treatment of and Consideration by Reserves Investor Group and
Reserves” and defined therein as the “Reserves Exchange”);

(d)Amendments and waivers to the Credit Agreement on the terms described in
Schedule 6 hereto (the “Credit Agreement Amendment”);

(e)Amendments and waivers to the Securitization Facility to, among other things,
address any existing defaults, on the terms described in Schedule 7 hereto (the
“Securitization Facility Amendment”);

(f)Execution of a new intercreditor agreement to govern the respective rights of
the Secured Lenders, on the one hand, and the holders of the Second Lien Notes
and the Exchangeable PIK Notes, on the other hand, the current negotiations of
the terms of which are reflected on Schedule 6 hereto (the “Intercreditor
Agreement”);

(g)Amendments to the Second Amended and Restated Limited Liability Company
Agreement of FEGP, dated as of April 16, 2015 (as amended, supplemented or
otherwise modified from time to time in accordance with the terms thereof prior
to giving effect to the FEGP LLC Agreement Amendment (as defined below), the
“Existing FEGP LLC Agreement”), among the Members (such amendments to the
Existing FEGP LLC Agreement, the “FEGP LLC Agreement Amendment”) to, among other
things, grant the holders of Senior Notes that are not Murray, Reserves, the
Reserves Investor Group or affiliates of any of Murray, Reserves or the Reserves
Investor Group the right to appoint an observer to the board of directors of
FEGP (the “Board”) that is mutually acceptable to the Required Consenting
Noteholders and the Partnership, and provide for certain modifications to the
Existing FEGP LLC Agreement upon a Failure to Redeem (as defined below) on the
terms described on Schedule 8 hereto under “FEGP Governance Documents
Modifications”;

(h)Amendments to the First Amended and Restated Agreement of Limited Partnership
of FELP, dated as of June 23, 2014 (as amended, supplemented or otherwise
modified from time to time in accordance with the terms thereof prior to giving
effect to the FELP LP Agreement Amendment (as defined below), the “Existing FELP
LP Agreement”), among the partners of FELP (such amendments to the Existing FELP

LP Agreement, the “FELP LP Agreement Amendment”), on the terms described on
Schedule 8 hereto under “FELP LP Agreement Amendment”; 

(i)Amendments to (i) the Purchase and Sale Agreement, dated as of April 7, 2015,
by and among Reserves, Murray and Beyer (the “PSA”), (ii) the Second Amended and
Restated Management Services Agreement, dated as of April 30, 2015, by and among
FEGP and Murray American Coal, Inc., a subsidiary of Murray (the “MSA”),
(iii) the Call and Put Option Agreement, dated as of April 16, 2015, by and
among Colt LLC and Murray (the “Call/Put Agreement”), and (iv) the Option
Agreement, dated as of April 16, 2015, by and among the Members (the “Option
Agreement”), in each case, on the terms described on Schedule 8 hereto under
“PSA-Related Modifications” (collectively, the “PSA-Related Amendments”);

(j)Execution of an equity adjustment agreement by and among Murray and the
Reserves Investor Group on the terms described on Schedule 8 hereto under
“Equity Adjustment Agreement” (the “Equity Adjustment Agreement”);

(k)Execution of one or more release agreements by and among the Partnership, the
Significant Equityholders, the Reserves Investor Group, and the holders of the
Senior Notes on the terms described below (collectively, the “Release
Agreements”);

(l)Execution of an agreement between Colt LLC and Murray American Coal, Inc.
pursuant to which Colt LLC indefeasibly assigns to Murray American Coal, Inc.
certain minimum royalty payments under certain coal mining leases (the “Colt
Assignment”);

(m)Execution by Reserves and Murray of (1) a letter agreement governing the
rights of Reserves with respect to its Exchangeable PIK Notes upon a Note
Redemption or exercise by Murray (or any of its affiliates) of the Purchase
Right (the “Financing Letter Agreement”) and (2) a letter agreement governing
the release by Robert Murray and Robert Moore of potential fraudulent conveyance
claims against Reserves (and its affiliates) (the “Release Letter Agreement” and
together with the Financing Letter Agreement, the “Letter Agreements”); and

(n)Such other modifications or amendments to other operational, governance or
financing documents, including Equipment Financings, as may be necessary to
address existing defaults and/or events of default and permit the transactions
contemplated herein (each such modification and amendment described in this
clause (n), collectively, the “Other Amendments”).

An illustrative chart showing the aggregate consideration that would be received
by the Eligible Holders (as defined in Schedule 2 hereto) and the holders of
Affiliate Notes and New Affiliate Notes in connection with the Transaction,
assuming: (i) full participation, and (ii) participation of the Eligible Holders
holding 98% of the aggregate principal amount of Senior Notes held by all of the
Eligible Holders, in the Tender Offer and the

Exchange Offer is attached hereto as Schedule 10.

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Conditions Precedent to Effective Date:

The Transaction will be subject to the satisfaction or waiver of the following
conditions:

(a)Holders of Senior Notes that are not Reserves, the Reserves Investor Group or
affiliates of Reserves or the Reserves Investor Group tender into the Reserves
Tender Offer and the Exchange Offer Senior Notes representing at least 98% of
the aggregate principal amount of Senior Notes outstanding held by all such
holders;

(b)Each of the representations and warranties of the Partnership, FEGP, the
Cline Group and Murray in the Amended and Restated Notes Support Agreement shall
be true and correct in all material respects (without regard to any
“materiality” qualifier set forth therein) as of the Effective Date as if made
at and as of the Effective Date (except for representations and warranties made
as of a specified date, which shall be true and correct only as of the specified
date);

(c)Each of the Partnership, FEGP, the Cline Group and Murray shall have complied
in all material respects with all covenants in the Amended and Restated Notes
Support Agreement which are applicable to it;

(d)The Amended and Restated Notes Support Agreement shall not have been
terminated and there shall not be continuing any 3-business day period referred
to in the first paragraph of Section 7 of the Amended and Restated Notes Support
Agreement;

(e)Each of the New Notes, the New Notes Indentures, the Notes Security
Documents, the New Notes Guarantees, the Intercreditor Agreement and each
certificate, agreement or document that the Partnership or any other person or
entity is required to execute, authenticate and/or deliver pursuant to any of
the foregoing documents or agreements (collectively, the “New Notes Documents”),
(i) shall have been executed, authenticated and/or delivered by the Partnership
and each other person or entity required to execute, authenticate and/or deliver
the same, (ii) shall be consistent with this Amended and Restated Term Sheet and
otherwise in form and substance acceptable to the Required Consenting
Noteholders, and (iii) shall be in full force and effect;

(f)All of the New Notes Liens shall have been created and perfected on the
Collateral (as defined in Schedule 3 hereto) in accordance with the terms of the
New Notes Documents and such New Notes Liens shall be valid liens on the
Collateral;

(g)All material governmental, regulatory and third party notifications, filings,
waivers, authorizations and consents necessary or required to be obtained by the
Partnership for the consummation of any part of the Transaction shall have been
made or received, shall be in full force and effect, and shall not be subject to
unfulfilled conditions or contingencies;

(h)The Partnership shall have paid any and all outstanding Trustee Fees (as
defined in the Forbearance Agreement), reasonable Holder

Expenses (as defined in the Forbearance Agreement) and other fees and expenses
of advisors to the Trustee or any of the Consenting Noteholders agreed under any
agreements between the Partnership and the Trustee or the Required Consenting
Noteholders and other engagement letters between FELP and advisors to the
Trustee or any of the Consenting Noteholders (if any); 

(i)The offer, issuance and delivery of the New Notes, the New Notes Guarantees
and the Warrants shall be exempt from the registration and prospectus delivery
requirements of the Securities Act, and no proceeding shall be pending or
threatened by any governmental authority or other person that alleges that the
offer, issuance and delivery of the New Notes, the New Notes Guarantees and/or
the Warrants is not exempt from the registration and prospectus delivery
requirements of the Securities Act;

(j)Each of the Credit Agreement Amendment and the Securitization Facility
Amendment, and each certificate, agreement or document required to be executed
and/or delivered pursuant to any of the foregoing documents or agreements, (i)
shall have been executed and/or delivered by each person or entity required to
execute and/or deliver the same, (ii) shall be consistent with this Amended and
Restated Term Sheet and, to the extent any provisions thereof are not addressed
by this Amended and Restated Term Sheet and directly impact the Consenting
Noteholders, such provisions shall be reasonably satisfactory to the Required
Consenting Noteholders, and (iii) shall be in full force and effect;

(k)Each of the PSA-Related Amendments, the FELP LP Agreement Amendment, the FEGP
LLC Agreement Amendment, the Equity Adjustment Agreement, the Colt Assignment,
the Letter Agreements and the Release Agreements, and each certificate,
agreement or document required to be executed and/or delivered pursuant to any
of the foregoing documents or agreements, (i) shall have been executed and/or
delivered by each person or entity required to execute and/or deliver the same,
(ii) shall be consistent with this Amended and Restated Term Sheet and otherwise
in form and substance reasonably acceptable to the Required Consenting
Noteholders, and (iii) shall be in full force and effect;

(l)Any Other Amendments that are executed and/or delivered shall not be
inconsistent with this Amended and Restated Term Sheet and, to the extent any
provisions thereof are not addressed by this Amended and Restated Term Sheet and
directly impact the Consenting Noteholders, such provisions shall be reasonably
satisfactory to the Required Consenting Noteholders;

(m)The Offering Memorandum and each document, agreement, instrument or form
(including any letter of transmittal) to be executed and/or delivered in
connection therewith shall be consistent with this Amended and Restated Term
Sheet and otherwise in form and substance acceptable to the Required Consenting
Noteholders;

(n)FELP and the warrant agent party thereto shall have executed and delivered
the Warrant Agreement, the terms of which shall be

consistent with this Amended and Restated Term Sheet and otherwise in form and
substance acceptable to the Required Consenting Noteholders, the Warrant
Agreement shall be in full force and effect, and FELP shall have issued the
Warrants to the holders of Senior Notes pursuant thereto; 

(o)FELP shall have executed and delivered a registration rights agreement for
the benefit of holders of Exchangeable PIK Notes (other than any holder that is
party to a registration rights agreement in effect on the Effective Date)
providing for registration rights in respect of resale of the Common Units that
may be acquired by such holders upon the conversion of the Exchangeable PIK
Notes and any other Common Units held by such holders (to the extent that any
such holder owns 10% or more of the outstanding FELP Units or cannot resell such
Common Units pursuant to Rule 144 promulgated under the Securities Act without
being subject to the volume limitations or manner of sale restrictions imposed
thereunder) in form and substance acceptable to the Required Consenting
Noteholders;

(p)No temporary restraining order, preliminary or permanent injunction, judgment
or other order preventing the consummation of any material part of the
Transaction shall have been entered, issued, rendered or made, nor shall any
proceeding seeking any of the foregoing be commenced, pending or threatened; nor
shall there be any law, rule or regulation promulgated, enacted, entered,
enforced or deemed applicable to the Partnership which makes the consummation of
any material part of the Transaction illegal, void or rescinded;

(q)The Reserves Tender Offer shall have closed (or shall close concurrently with
the closing of the Exchange Offer) and the Reserves Investor Group shall have
paid all amounts in cash owed to the holders of Senior Notes that tendered
Senior Notes into the Reserves Tender Offer;

(r)The Reserves Exchange shall have closed (or shall close concurrently with the
closing of the Exchange Offer) on the terms set forth in this Amended and
Restated Term Sheet; and

(s)On the Effective Date, an officer of FEGP shall have executed and delivered
to the Consenting Noteholders a closing certificate in form and substance to be
agreed among the Partnership and the Required Consenting Noteholders and the
representations and warranties of the Partnership set forth therein shall be
true and correct on and as of the Effective Date.

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Treatment of Non-Affiliated
Senior Notes in Exchange Offer:

In connection with the Transaction, and subject to the treatment of the
Affiliate Notes and New Affiliate Notes described below, the Senior Notes held
by persons other than Reserves, the Reserves Investor Group or affiliates of
Reserves or the Reserves Investor Group will be exchanged for the following
consideration:

(a) second lien senior secured notes due 2021 (the “Second Lien Notes”) issued
in the Exchange Offer on the terms described in Schedule 3 hereto in an
aggregate principal amount of between $285.8 million and

$291.6 million (the ultimate amount of Second Lien Notes being issued in the
Exchange Offer to depend on the aggregate principal amount of Senior Notes
tendered into the Reserves Tender Offer between the range of $103.3 million and
$105.4 million); 

(b) an additional principal amount of Second Lien Notes equal to the accrued and
unpaid interest on the Senior Notes held by such holders (including any Senior
Notes tendered by such holders into the Reserves Tender Offer) up to (but
excluding) the Effective Date;

(c) exchangeable PIK notes issued in the Exchange Offer on the terms described
in Schedule 4 hereto (the “Exchangeable PIK Notes”) in an aggregate principal
amount of between $117.6 million and $120 million (the ultimate amount of
Exchangeable PIK Notes being issued in the Exchange Offer to depend on the
aggregate principal amount of Senior Notes tendered into the Reserves Tender
Offer between the range of $103.3 million and $105.4 million); and

(d) warrants to be issued on the Effective Date to acquire an amount of newly
issued Common Units equal to 4.5% of the FELP Units outstanding on the
Redemption/Purchase Date (as defined below) (after giving effect to the full
exercise of the warrants and after giving effect to (i) the issuance of all FELP
Units that are issued in connection with a Murray Investment (as defined below)
or any Partnership Redemption (as defined below) (including the Reserves
Issuance (as defined below)), or that are issuable upon the full conversion,
exchange or exercise of any option, warrant, indebtedness or security issued or
incurred in connection with a Murray Investment or a Partnership Redemption
(assuming the maximum amount of FELP Units are issued in connection with any
such conversion, exchange or exercise) and (ii) in the case where the
Exchangeable PIK Notes are purchased by the Murray Group in connection with the
exercise by the Murray Group of the Purchase Right (as defined below), all FELP
Units that would be issued upon exchange of all of the Exchangeable PIK Notes on
the Redemption/Purchase Date in accordance with the terms of the Exchangeable
PIK Notes Indenture, as in effect immediately prior to the Redemption/Purchase
Date (but after giving effect to any adjustment of the exchange price to the
VWAP Price (as defined below), as described below), but excluding the effect of
(iii) any Public Rights Offering (as defined below) in connection with the
Murray Investment or any Partnership Redemption on the terms and subject to the
conditions described on Schedule 5 hereto (the “Warrants”), including the
condition that the Warrants will be exercisable only if all (but not less than
all) of the Exchangeable PIK Notes have been (x) redeemed, repurchased,
refinanced, defeased or otherwise retired by the Partnership or (y) purchased
by, or on behalf of, Murray and/or other investors pursuant to the Purchase
Right, in each case pursuant to the terms of the Exchangeable PIK Notes
Indenture, on or prior to September 30, 2017 (any such redemption, repurchase,
refinancing, defeasance, retirement or purchase described in clauses (x) and (y)
being referred to as the “Note Redemption”).

At least 10 business days prior to the Effective Date (for purposes of enabling
the redemption and discharge of Senior Notes described below), holders of at

least a majority of the outstanding aggregate principal amount of Senior Notes
will consent to amend Section 8.05 of the Indenture to remove the condition
requiring the absence of a continuing default or event of default for the
satisfaction and discharge of the Indenture or such other amendments requested
by the Partnership, and that are reasonably acceptable to the Required
Consenting Noteholders, to facilitate the redemption, satisfaction and discharge
of Senior Notes referred to below.

On or prior to the Effective Date, the Issuers will send a notice of redemption
in respect of any Senior Notes not tendered in the Exchange Offer or otherwise
exchanged for Exchangeable PIK Notes directly with FELLC, and on the Effective
Date, the Indenture will be discharged.

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Treatment of and Consideration by Reserves Investor Group and Reserves:

In connection with and upon effectiveness of the Transaction, the Reserves
Investor Group and Reserves, as applicable, shall:

(a)Purchase pursuant to the Reserves Tender Offer up to $105.4 million principal
amount of Senior Notes that are held by persons or entities that are not
Reserves, the Reserves Investor Group or affiliates of Reserves or the Reserves
Investor Group (but in any event not to exceed 20.38% of the principal amount of
Senior Notes held by any such holder) on the terms described in Schedule 2
hereto, which purchase shall close contemporaneously with the closing of the
Exchange Offer;

(b)Exchange an aggregate principal amount of between $176.4 million and $180
million of Affiliate Notes and New Affiliate Notes (the ultimate amount of
Affiliate Notes and New Affiliate Notes being exchanged to depend on the
aggregate principal amount of Senior Notes tendered into the Reserves Tender
Offer between the range of $103.3 million and $105.4 million) for an equal
principal amount of Exchangeable PIK Notes through an exchange with FELLC that
will close contemporaneously with the Exchange Offer;

(c)Exchange an aggregate principal amount of between $9.9 million and $8.4
million of Affiliate Notes and New Affiliate Notes (the ultimate amount of
Affiliate Notes and New Affiliate Notes being exchanged to depend on the
aggregate principal amount of Senior Notes tendered into the Reserves Tender
Offer between the range of $103.3 million and $105.4 million) for an equal
principal amount of Second Lien Notes;

(d)an additional principal amount of Second Lien Notes in respect of accrued and
unpaid interest on $83 million principal amount of Affiliate Notes (such
exchanges referred to in the preceding clause (b), (c) and this clause (d) being
collectively referred to as the “Reserves Exchange”);

(e)Execute and deliver the FEGP LLC Agreement Amendment, the PSA-Related
Amendments, the Equity Adjustment Agreement, the Colt Assignment, the Letter
Agreements and the FELP LP Agreement Amendment, and each other document or
agreement set forth on Schedule 8 hereto, including the agreement pursuant to
the amendment to the MSA constituting part of the PSA-Related Amendments to pay

Murray a sum of $12.5 million in the event the MSA terminates on exchange of the
Exchangeable PIK Notes upon a Failure to Redeem; 

(f)Execute one or more Release Agreements containing the terms described in
“Effective Date Releases” below; and

(g)Fund when due any above-market compensation (as determined among Murray and
the Reserves Investor Group) due to certain designated FELP employees prior to
the earlier of (i) the Redemption/Purchase Date and (ii) September 30, 2017.

Treatment of and Consideration by Murray:

In connection with and upon effectiveness of the Transaction, Murray shall:

(a)Execute and deliver the FEGP LLC Agreement Amendment, the PSA-Related
Amendments, the Equity Adjustment Agreement, the Colt Assignment, the Letter
Agreements and the FELP LP Agreement Amendment, and each other document or
agreement set forth on Schedule 8 hereto; and

(b)Execute one or more Release Agreements containing the terms described in
“Effective Date Releases” below.

Exchange Offer Mechanics:

The Transaction shall be principally implemented through the Exchange Offer
which will be conducted pursuant to the exemption under Section 4(a)(2) of the
Securities Act.  At least twenty business days prior to the anticipated
Effective Date, the Partnership shall commence the Exchange Offer regarding the
Senior Notes on the terms described herein.  

The Reserves Investor Group will not participate in the Exchange Offer but will
instead exchange all Affiliate Notes and New Affiliate Notes pursuant to the
Reserves Exchange (as described in clauses (b), (c) and (d) of “Treatment of and
Consideration by Reserves Investor Group and Reserves”).

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Corporate Governance and Related Matters:

On the Effective Date, each of the Members shall execute and deliver the FEGP
LLC Agreement Amendment, and the Board shall adopt resolutions and take other
actions, to provide for each of the following, it being understood that each of
the following shall be in place from the Effective Date through September 30,
2017, unless otherwise extended by the Members:

(a)A chief accounting officer of FEGP that is not affiliated with any
Significant Equityholder shall be nominated by the members of the Board that
constitute Independent Directors (as defined in the Existing FEGP LLC Agreement)
and appointed by the Board; provided that Alix Partners or another restructuring
advisor selected by the Board shall be authorized to act as a restructuring
advisor reporting to the Board, to perform such functions as are generally
required of an interim chief accounting officer and to provide such reporting
support and advice to the Board as is appropriate and necessary;

(b)A Board observer mutually agreed upon by the Required Consenting Noteholders
and the Partnership shall be appointed, and, subject to such observer’s
agreement to be bound by reasonable confidentiality obligations and subject
further to agreed exceptions for privilege and

conflicts of interest, shall be entitled to (i) attend all Board meetings, all
meetings of the Synergy and Conflicts Committee (as defined below), and all
meetings of any other committee of the Board (each, a “Governing Body”), and
(ii) receive copies of all materials (including written consents) given to
members of any Governing Body at the same time such materials are provided to
such members; 

(c)A “Synergy and Conflicts Committee” shall be created by the Board and
comprised of the three members of the Board that constitute Independent
Directors, with the duties set forth on Schedule 9 hereto; and

(d)Mr. Anthony Webb shall not be removed prior to September 30, 2017 from his
current position without cause; provided that Reserves agrees to fund the
portion of Mr. Webb’s compensation that is above-market to support the continued
employment of Mr. Webb or similarly qualified individuals.

1212

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1313

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1414

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Redemption of Exchangeable PIK Notes:

At any time prior to September 30, 2017, the Issuers may redeem, repurchase,
refinance, defease or otherwise retire (any of the foregoing, a “redemption”)
all (but not less than all) of the Exchangeable PIK Notes for cash at par plus
accrued interest to the date of redemption. On September 30, 2017, the Issuers
shall redeem, repurchase, refinance, defease or otherwise retire all (but not
less than all) of the Exchangeable PIK Notes for cash at a price equal to 100%
of the principal amount of the Exchangeable PIK Notes plus accrued interest to
September 30, 2017 (whether effected on or before September 30, 2017, any
redemption, repurchase, refinancing, defeasance or retirement pursuant to either
the first or second sentence of this paragraph being referred to herein as a
“Partnership Redemption”). If no Note Redemption shall have occurred at or prior
to 11:59 p.m. on September 30, 2017, then the Exchangeable PIK Notes shall be
exchanged for Common Units in accordance with the terms of the Exchangeable PIK
Notes Indenture.  For the avoidance of doubt, notwithstanding any reference in
this Amended and Restated Term Sheet to FELP or the Partnership redeeming the
Exchangeable PIK Notes, the relevant definitive documents shall provide that the
Issuers are the legal entities redeeming the Exchangeable PIK Notes.

Additionally, Murray, an affiliate of Murray or a group of persons which
includes Murray or any of its affiliates (collectively, the “Murray Group”)
shall have the right to purchase all (but not less than all) of the Exchangeable
PIK Notes on or before September 30, 2017 in cash at par plus accrued interest
to the date of purchase (the “Purchase Right”); provided, that, immediately
prior to the consummation of any such purchase (and conditioned upon such
purchase being consummated), the exchange price for the Exchangeable PIK Notes
shall automatically adjust to the greater of (A) the exchange price then in
effect and (B) 92.5% of the VWAP Price (as defined below).  Immediately upon the
consummation of a purchase of the Exchangeable PIK Notes pursuant to the
Purchase Right, the Exchangeable PIK Notes shall automatically be exchanged for
Common Units in accordance with the terms of the Exchangeable PIK Notes
Indenture (taking into account any adjustment to the exchange price applicable
to the Exchangeable PIK Notes as hereinabove described).  The “VWAP Price” means
the daily volume-weighted average price of a Common Unit for the thirty (30)
consecutive trading days immediately prior to the Redemption/Purchase Date (such
30-consecutive trading day period being referred to as the “VWAP Period”).  The
“Redemption/Purchase Date” means the date on which either the Partnership
redeems all (but not less than all) of the Exchangeable PIK Notes pursuant to a
Partnership Redemption or the date that the Murray Group purchases all (but not
less than all) of the Exchangeable PIK Notes pursuant to the Purchase Right.  

The Reserves Investor Group shall not (and shall not cause, or collaborate with
any other person or entity to) transact in any of the FELP Units during the VWAP
Period; provided, that notice of the commencement of the VWAP Period must be
promptly delivered to the Reserves Investor Group prior to the commencement
thereof.  

In the event that the Murray Group exercises the Purchase Right or any other
Note Redemption occurs and in connection therewith Reserves does not exercise
the right to convert or exchange pursuant to the Financing Letter Agreement,
Reserves shall be issued Common Units (which would otherwise have been issued to
the Murray Group in connection with the exchange of the Exchangeable PIK Notes
purchased in the Purchase Right) by FELP to

increase Reserves’ aggregate ownership of Common Units to 25% of all Common
Units (assuming full conversion of all of the Warrants, including a cashless
exercise of the Warrants assuming a market price of one Common Unit equal to the
exchange price used in connection with the Purchase Right (it being understood,
however, that the Reserves Issuance shall not dilute the Warrants)) then
outstanding, subject to a cap on the number of Common Units issued to Reserves
equal to $25,000,000 divided by 92.5% of the VWAP Price. The issuance of Common
Units to Reserves by FELP described in the immediately preceding sentence shall
be referred to herein as the “Reserves Issuance.”  For the avoidance of doubt,
the number of Common Units issued by FELP to the Murray Group in connection with
the exercise by the Murray Group of the Purchase Right shall be decreased by the
number of Common Units issued to Reserves in connection with the Reserves
Issuance.  Murray, Cline and Reserves agree not to trade or take any derivative
position during the VWAP Period (or cause anyone else to do the same). The
calculation of Reserves’ 25% ownership shall be based upon the Reserves Investor
Group’s ownership as of the date hereof of 46.3 million Common Units.

For the avoidance of doubt, a Partnership Redemption and the Purchase Right can
be effected in combination as two transactions that close simultaneously, so
long as at the conclusion of the combined transactions all (but not less than
all) of the Exchangeable PIK Notes are redeemed, repurchased, refinanced,
defeased or otherwise retired.

Any debt or equity issuance by the Partnership the proceeds of which are to be
used to facilitate or effect a redemption of the Exchangeable PIK Notes pursuant
to a Partnership Redemption on or prior to September 30, 2017 shall require the
consent of Murray.

The Issuers shall cause notice of any Partnership Redemption to be given to
Reserves (a) 30 days prior to the consummation of a Partnership Redemption,
which notice shall contain all of the proposed terms and (b) no less than 15
business days prior to the consummation of such Partnership Redemption stating
its proposed terms and attaching draft documents related thereto. Within 10
business days of receipt of the notice in clause (a) of the preceding sentence,
Reserves shall notify the Issuers that it intends to (i) continue to hold all of
the Exchangeable PIK Notes held by Reserves and receive payment upon redemption
in connection with such Partnership Redemption, (ii) exchange its pro rata share
of the Exchangeable PIK Notes (not to exceed $180 million (plus accrued and
unpaid interest)) for an equal aggregate principal amount of the debt or having
a value (based on the economic terms of the Murray Investment), in the case of
other securities, on the same terms being issued or borrowed in connection with
such Partnership Redemption or (iii) any combination of (i) and (ii)
above.  Regardless of whether Reserves elects to participate in any of the
refinancing transactions described above, (A) FELP shall deliver written notice
to each of Reserves and Murray promptly, but in any event no later than three
(3) business days prior to the closing of such transactions, of any expected
change to the terms thereof and the documents reflecting such changes and (B)
upon receipt of such notice of a change in terms and such documents, Reserves
shall have the right to change any election it had previously made regarding
such transaction within two (2) business days of receipt of such notice.

If after exchange, Reserves would not be the holder of at least 60% of the total
amount of any such new debt or other securities it shall have the option to

provide cash that would result in Reserves holding up to 60% of an aggregate
principal amount of such new debt or other securities.  

If Murray, the Issuers or a combination of the two directly purchases or
redeems, as the case may be, all of the Exchangeable PIK Notes directly from the
holders thereof, Reserves may elect not to have the Exchangeable PIK Notes it
then holds (in an aggregate principal amount not to exceed $180 million plus PIK
interest), purchased or redeemed, as the case may be, and, if Murray, the
Issuers or a combination of the two do not purchase or redeem such Exchangeable
PIK Notes from Reserves in connection with the purchase or redemption of
Exchangeable PIK Notes from the other holders, then the Exchangeable PIK Notes
held by Reserves shall automatically be exchanged for Common Units in accordance
with the terms of the Exchangeable PIK Notes Indenture (at an exchange price
equal to the higher of (x) the exchange price then in effect and (y) 92.5% of
the VWAP Price).  If Reserves’ Exchangeable PIK Notes are exchanged as described
in this paragraph, for all purposes hereunder, the Note Redemption shall
nevertheless be deemed to have occurred so long as all of the other Exchangeable
PIK Notes are purchased or redeemed in full as provided herein.

Subject to approval by the Synergy and Conflicts Committee, Murray shall be
entitled to make an investment in FELP (any such investment, the “Murray
Investment”) at any time prior to September 30, 2017.  To the extent the Murray
Investment is in the form of debt or preferred equity, it must: (a) be unsecured
or secured on a junior lien basis to the Second Lien Notes pursuant to an
intercreditor agreement that is reasonably acceptable to Murray, FELP and the
holders of a majority in principal amount of the Second Lien Notes, (b) have a
maturity date at least 91 days later than the earlier of (i) the maturity date
of the Second Lien Notes and (ii) the date on which the Second Lien Notes have
been paid in full in cash and are no longer outstanding; (c) have no obligor
thereto other than the Issuers and the Guarantors, (d) not include cash payments
while the Second Lien Notes are outstanding, and (e) other restrictions set
forth in the Description of Notes (defined below).

Additional terms regarding the Note Redemption are set forth on Schedule 4
hereto.

1515

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Changes Upon Failure to Redeem:

If a Note Redemption shall not have occurred on or prior to September 30, 2017
(a “Failure to Redeem”), then the following events shall immediately occur
pursuant to the FEGP LLC Agreement Amendment and the PSA-Related Amendments, as
applicable, without any further action on the part of, or notice to, any person
or entity:

(a)The changes to the Existing FEGP LLC Agreement described in Schedule 8 hereto
shall go into effect;

(b)The Option Agreement shall automatically terminate;

(c)The MSA shall automatically terminate, upon which Reserves shall pay Murray a
sum of $12.5 million, which shall not be subject to any set-off;

(d)The existing chief executive officer of FEGP shall be removed and the Board
shall appoint a new chief executive officer of FEGP; and

(e)Murray and its affiliates shall provide transition services to FELP for a
period not to exceed 3 months pursuant to a customary transition services
agreement to be negotiated among the parties on the same terms as the MSA,
without any set-off with respect to employees or otherwise.

See Schedule 1 hereto for the Partnership’s projected equity ownership as of
September 30, 2017, pro forma for the exchange of the Exchangeable PIK Notes.

Projected Transaction Timeline:

August 1, 2016 = Projected Launch Date of Exchange Offer and the Reserves Tender
Offer

August 31, 2016 = Projected Effective Date of Transaction

 

2 

For the avoidance of doubt, for purposes of the releases described in this
Amended and Restated Term Sheet, the term “Reserves Investor Group” may include
additional investors in Reserves who do not hold any Senior Notes as of the
Restatement Date, but may contribute cash as part of the consideration provided
by the Reserves Investor Group in connection with the Transaction.

1616

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Effective Date Releases:

On the Effective Date, the following releases shall be granted:

(a)Mutual releases (the “Noteholder Release”) by and among each non-affiliate
and non-insider holder of Senior Notes, on the one hand, and each of Murray, the
Reserves Investor Group,2 and the Partnership, on the other hand, including each
of their respective directors, officers, funds, affiliates, members, employees,
partners, managers, agents, representatives, principals, consultants and
professional advisors specified in the applicable release (each in their
capacity as such, the “Representatives”) of any and all claims, obligations
(contractual or otherwise), suits, judgments, damages, rights, liabilities, or
causes of action, whether known or unknown, foreseen or unforeseen, relating to
any actions, transactions, events, or omissions before the Effective Date in any
way relating to the Partnership, the obligations under the

Indenture, the PSA or the Transaction, that such released party has or may in
the future acquire in their own right or on behalf of another party (including,
for the avoidance of doubt, the Partnership) against another released party;
provided that in the case of the holders of the Affiliate Notes, the New
Affiliate Notes or any other Senior Note held by an affiliate or insider of the
Partnership, the Noteholder Release shall only be exchanged by and among (i) the
holders of the Affiliate Notes, the New Affiliate Notes or any other Senior Note
held by an affiliate or insider of the Partnership, on the one hand, and (ii)
each non-affiliate and non-insider holder of Senior Notes, on the other hand;
and provided, further, that the Noteholder Release shall not include a release
by and among Murray, the Reserves Investor Group, the Partnership, and their
respective Representatives; 

(b)Mutual releases by and among the Partnership, the Reserves Investor Group,
and each of their respective Representatives of any and all claims, obligations
(contractual or otherwise), suits, judgments, damages, rights, liabilities, or
causes of action, whether known or unknown, foreseen or unforeseen, relating to
any actions, transactions, events, or omissions before the Effective Date in any
way relating to the Partnership, the Transaction, or any agreement to which the
Partnership and any member of the Reserves Investor Group, or any subsidiaries
thereof are party as of the Effective Date, that such released party has or may
in the future acquire in their own right or on behalf of another party against
another released party;

(c)Mutual releases by and among the Partnership, Murray, and each of their
respective Representatives of any and all claims, obligations (contractual or
otherwise), suits, judgments, damages, rights, liabilities, or causes of action,
whether known or unknown, foreseen or unforeseen, relating to any actions,
transactions, events, or omissions before the Effective Date in any way relating
to the Partnership, the Transaction, the MSA, or any other agreement to which
the Partnership and Murray, or any subsidiaries thereof are party as of the
Effective Date, that such released party has or in the future may acquire in
their own right or on behalf of another party against another released party;
and

(d)Mutual releases by and among the Reserves Investor Group, Murray and each of
their respective Representatives of any and all claims, obligations (contractual
or otherwise), suits, judgment, damages, rights, liabilities, or causes of
action, whether known or unknown, foreseen or unforeseen, relating to any
actions, transactions, events, or omissions before the Effective Date that such
released party has or in the future may acquire in their own right or on behalf
of another party against another released party, other than as specifically set
forth below in the Release Exclusions.

1717

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Redemption Date Releases:

Immediately after Murray exercises its Option, including the satisfaction of the
conditions set forth in the Option Agreement, an additional release shall be
granted by and among the Reserves Investor Group, Murray and each of their
respective Representatives of any and all claims, obligations (contractual or
otherwise), suits, judgments, damages, rights, liabilities, or causes of action,

whether known or unknown, foreseen or unforeseen, relating to any actions,
transactions, events, or omissions before the Redemption Date that such released
party has or in the future may acquire in their own right or on behalf of
another party (including, for the avoidance of doubt, the Partnership) against
another released party. The closing of the transactions contemplated by the
Option Agreement is a condition to the granting of such releases.

Release Exclusion:

The releases contemplated under clause (d) of the heading “Effective Date
Releases” shall not include releases for any fraudulent transfer claims (other
than fraudulent transfer claims against the Partnership or FEGP) relating to the
April 2015 transaction between Murray and Reserves and shall not constitute or
be deemed a ratification or estoppel barring Murray or its creditors from
pursuing fraudulent transfer claims against Reserves or any affiliate thereof
(but excluding the Partnership and FEGP).

Other Contracts:

Prior to the Effective Date, the Partnership shall use commercially reasonable
efforts to obtain satisfactory waivers or consents (which waivers or consents
shall be negotiated in consultation with the Transaction Parties and shall be on
terms reasonable satisfactory to the Transaction Parties) from counterparties to
material contracts with respect to any existing event of default or any change
of control that may be triggered by the transactions contemplated herein.

Trade Payables and Third Party Agreements:

To remain outstanding and satisfied in the ordinary course of business; provided
that on or before July 31, 2016, the Partnership shall consummate the
acquisition of the Contractor VIEs (as that term is defined in the Form 10-Q for
the period ending March 31, 2016) for not more than $100,000 and shall terminate
the agreements currently in place with such entities.  

Governing Law:

New York.

 

1818

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Schedule 1

 

Pre- and Post-Effective Date and Redemption Date Projected Capitalization

 

 

[See attached]

 

 

 

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Schedule 2

 

Description of Reserves Tender Offer3

The following description summarizes the material terms of the proposed Reserves
Tender Offer.

 

 

·

Reserves Investor Group offers to purchase up to $105.4 million principal amount
of Senior Notes from holders of Senior Notes that are not Reserves, the Reserves
Investor Group or affiliates of Reserves or the Reserves Investor Group (such
holders, “Eligible Holders”) on the terms described herein in a cash tender
offer at a price equal to 100% of the principal amount thereof.  The Reserves
Investor Group shall not be entitled to receive any portion of the accrued and
unpaid interest on the Senior Notes acquired by the Reserves Investor Group in
the Reserves Tender Offer.  Such accrued and unpaid interest shall be paid to
the Eligible Holders who tendered such Senior Notes in the Reserves Tender
Offer, such payment to be made in the form of Second Lien Notes.

 

·

The Reserves Tender Offer will be structured such that the Reserves Investor
Group offers to purchase up to the Applicable Percentage (as defined below) of
each Eligible Holder’s Senior Notes, based on the amount being certified to
Reserves Investor Group as being owned by such Eligible Holder.  The “Applicable
Percentage” means a fraction, expressed as a percentage, the numerator of which
is 106 and the denominator of which is 520.  For the avoidance of doubt, in the
event Eligible Holders in the aggregate tender less than the full amount of
Senior Notes that may be tendered pursuant to the Reserves Tender Offer, the
maximum principal amount of Senior Notes that the Reserves Investor Group will
purchase from Eligible Holders in the Reserves Tender Offer will be equal to the
product of (x) $105.4 million and (y) a fraction, the numerator of which is the
principal amount of Senior Notes tendered by Eligible Holders in the aggregate
and the denominator of which is $517 million.  

 

·

Each Eligible Holder may only tender all or none of its Senior Notes it is
entitled to tender into the Reserves Tender Offer.

 

·

Reserves Tender Offer will be open for at least 20 business days.

 

·

The withdrawal deadline will be the 10th business day prior to the expiration of
the Reserves Tender Offer.

 

·

Eligible Holders will only be eligible to participate in the Reserves Tender
Offer if they simultaneously elect to tender their remaining Senior Notes into
the Exchange Offer.  Eligible Holders will be required to certify as to
compliance with this requirement.

 

·

Holders of Senior Notes that are Reserves, members of the Reserves Investor
Group or affiliates of Reserves or the Reserves Investor Group will not be
eligible to participate in the Reserves Tender Offer and will not constitute
Eligible Holders.

 

3 

Capitalized terms used in this Schedule 2 without definitions shall have the
meanings given to such terms in the Amended and Restated Term Sheet to which
this Schedule 2 is attached.

 

 

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·

Closing of the Reserves Tender Offer will be conditioned upon:

 

o

Substantially concurrent closing of the Exchange Offer without any amendment or
waiver adverse to the interests of the Reserves Investor Group (unless consented
to by the Reserves Investor Group in its sole discretion).

 

o

Eligible Holders representing at least 98% of the aggregate principal amount of
Senior Notes outstanding held by all such holders tender into the Reserves
Tender Offer and the Exchange Offer Senior Notes.

 

o

Other customary tender offer conditions.

 

·

Settlement of the purchase will be promptly after expiration of the Reserves
Tender Offer and the Exchange Offer and substantially concurrent with (but
immediately prior to) the consummation of the Exchange Offer.

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Schedule 3

 

Second Lien Senior Secured Notes due 2021

Summary of Indicative Terms and Conditions4

 

THIS AMENDED AND RESTATED TERM SHEET REPRESENTS AN OUTLINE OF TERMS OF CERTAIN
INDEBTEDNESS TO BE ISSUED TO THE HOLDERS OF SENIOR NOTES IN THE EXCHANGE OFFER.

Issuers

FELLC and the Co-Issuer.

Guarantors

Parent Guarantor and each of the Issuers’ wholly-owned domestic subsidiaries
that is a guarantor under the Credit Agreement or any credit facility that
refinances or replaces the Credit Agreement (the “Second Lien Notes Subsidiary
Guarantors” and such guarantees, together with the guarantees of the
Exchangeable PIK Notes provided by the Exchangeable PIK Notes Subsidiary
Guarantors, the “Subsidiary Guarantees” and the Second Lien Notes Subsidiary
Guarantors, together with the Parent Guarantor, the “Second Lien Notes
Guarantors”).

Interest

Interest on the Second Lien Notes will accrue from the Effective Date at (a) a
rate of 9% per annum until the second anniversary of the Effective Date and 10%
per annum thereafter payable in cash on each interest payment date (“Cash Pay
Interest”) and (b) a rate of 1% per annum payable in kind (“Paid-In-Kind
Interest”) by increasing the aggregate principal amount of the Second Lien Notes
by an amount equal to such accrued and unpaid interest or through the issuance
of additional Second Lien Notes in an aggregate principal amount equal to such
accrued and unpaid interest (rounded down to the nearest $1.00) for the
applicable interest period, in either case, at which point such Paid-In-Kind
Interest shall constitute outstanding principal in respect of the Second Lien
Notes and shall accrue interest at the rate applicable to the Cash Pay Interest
and the Paid-In-Kind Interest.  Interest on the Second Lien Notes will be
payable on February 15 and August 15 of each year, commencing on February 15,
2017.

 

4 

Definitions used in this Schedule 3 are specific to this Schedule 3 and Schedule
4, and capitalized terms used in this Schedule 3 without definitions shall have
the meanings given to such terms in the offering memorandum substantially agreed
to among the parties.

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Default Interest

Upon the occurrence and during the continuance of an event of default under the
Second Lien Notes Indenture, interest on the Second Lien Notes, and interest on
all overdue principal, interest and premium, shall accrue at the rate applicable
to Cash Pay Interest and Paid-In-Kind Interest, provided that the rate
applicable to Cash Pay Interest shall be increased by 2.0% per annum, payable in
cash on demand.

Maturity

August 15, 2021.

Collateral

The Second Lien Notes will be secured by a second priority security interest in
all of the assets of the Issuers and the Second Lien Notes Subsidiary Guarantors
that secure the indebtedness outstanding under the Credit Agreement on the
Effective Date, all assets of the Issuers and the Second Lien Notes Subsidiary
Guarantors acquired after the Effective Date that are of the type of assets that
secured the indebtedness outstanding under the Credit Agreement on the Effective
Date and any other assets that secure the indebtedness outstanding under the
Credit Agreement (including refinancings or replacements thereof) from time to
time, subject to certain limited exceptions.  Neither the indebtedness under the
Credit Agreement nor the Second Lien Notes will be secured by any assets of the
Parent Guarantor.  

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Ranking

The indebtedness evidenced by the Second Lien Notes and related guarantees will
be the Issuers’ and the Second Lien Notes Subsidiary Guarantors’ second-lien
senior secured indebtedness and will:

·  rank pari passu in right of payment to all of the Issuers’ and the Second
Lien Notes Guarantors’ existing and future senior indebtedness;

·  rank senior in right of payment to all of the Issuers’ and Second Lien Notes
Guarantors’ existing and future subordinated indebtedness;

·  be effectively senior with respect to the Issuers’ and the Second Lien Notes
Subsidiary Guarantors’ existing and future unsecured indebtedness to extent of
the value of the Collateral;

·  rank equal in priority as to the Collateral with respect to any obligations
secured by a second priority lien on the

Collateral, including the Exchangeable PIK Notes;

·  be effectively junior in priority as to the Collateral with respect to the
Issuers’ and Second Lien Notes Subsidiary Guarantors’ existing and future first
priority secured debt obligations, including obligations under the Credit
Agreement;

·  be effectively junior to all of the Issuers’ and Second Lien Notes
Guarantors’ existing and future debt secured by assets that do not also secure
the indebtedness under the Credit Agreement and the Second Lien Notes, including
the assets securing the Longwall Financing Agreements and capital lease
obligations and the Securitization Facility, in each case to the extent of the
value of the collateral securing such obligations; and

·  be effectively subordinated to all existing and future indebtedness,
preferred stock and other liabilities of our non-guarantor subsidiaries.

 

Intercreditor Arrangements

The liens securing the Second Lien Notes will be subject to the Intercreditor
Agreement that will provide for the priority of such liens relative to the liens
on the same Collateral that secure other obligations of the Issuers and the
Second Lien Notes Subsidiary Guarantors.  In addition, such Intercreditor
Agreement will generally impose significant limitations on the ability of
holders of the Second Lien Notes or the collateral agent that represents such
holders to take enforcement actions with respect to such liens until all
obligations under the Credit Agreement and other first priority lien obligations
are discharged.

Optional Redemption

The Issuers may redeem the Second Lien Notes at their option, in whole or in
part, at any time prior to August 31, 2018 at a redemption price equal to 100%
of the principal amount of the Second Lien Notes redeemed, plus accrued and
unpaid interest to the redemption date plus a customary T+50 make-whole premium.

--------------------------------------------------------------------------------

 

At any time on or after August 31, 2018, the Issuers may redeem the Second Lien
Notes, in whole or in part, at the following redemption prices (expressed as a
percentage of principal amount), plus accrued and unpaid interest, if any, to
the redemption date (subject to the right of holders of record

on the relevant record date to receive interest due on the relevant interest
payment date), if redeemed during the twelve-month period commencing on August
31 of the years set forth below:

2018105.500%
2019102.750%
2020 and thereafter100.000%

 

If the Second Lien Notes are accelerated or obligations thereunder otherwise
become due and payable prior to their maturity date, in each case, as a result
of any Event of Default (as defined under “Description of Second Lien Notes”)
(including, but not limited to, upon the occurrence of a bankruptcy or
insolvency event (including the acceleration of claims by operation of law)),
the premium applicable with respect to an optional redemption of the Second Lien
Notes as of such date, in addition to any principal and accrued and unpaid
interest, will be deemed due and payable as of such date as if the Second Lien
Notes were optionally redeemed as of such date and such premium thereafter shall
constitute part of the obligations due and payable in respect of the Second Lien
Notes.

 

In addition, from time to time before August 31, 2018, the Issuers may redeem in
the aggregate up to 35% of the original aggregate principal amount of the Second
Lien Notes at a redemption price equal to 110.00% of the principal amount of
Second Lien Notes redeemed plus accrued and unpaid interest to the redemption
date, with the net cash proceeds raised from one or more equity offerings.

Change of Control

Upon the occurrence of a Change of Control (as defined under “Description of
Second Lien Notes”), the holders will have the right to require the Issuers to
repurchase some or all of their Second Lien Notes at 101% of their principal
amount, plus accrued and unpaid interest to (but excluding) the repurchase date.

--------------------------------------------------------------------------------

Certain U.S. Federal Income Tax Considerations

The Second Lien Notes will be treated as issued with original issue discount
(“OID”) for U.S. federal income tax purposes. Therefore, a holder subject to
U.S. federal income taxation, whether on the cash or accrual method of tax
accounting, will generally be required to include the OID in gross income (as
ordinary income) as such amounts accrue (on a constant yield to maturity basis),
in advance of the receipt of the cash payment attributable thereto.  

 

--------------------------------------------------------------------------------

Certain Covenants

The indenture governing the Second Lien Notes (the “Second Lien Notes
Indenture”) will contain covenants limiting the ability of the Issuers and the
ability of the Issuers’ restricted subsidiaries to:

·  incur additional indebtedness and issue preferred equity;

·  pay dividends or distributions on or purchase our stock or our restricted
subsidiaries’ stock;

·  repay, redeem, make payments on, or retire any subordinated indebtedness or
any indebtedness that refinances the Exchangeable PIK Notes or subsequent
refinancings thereof;

·  make certain investments;

·  incur or create liens on any asset or property;

·  create guarantees of indebtedness by restricted subsidiaries;

·  restrict the ability of restricted subsidiaries to make dividends,
distributions or other payments, loans or transfers of assets to the Issuers or
any restricted subsidiaries;

·  sell certain assets or merge with or into other companies; and

·  enter into transactions with affiliates.

These covenants are subject to a number of important limitations and exceptions.

 

The Second Lien Notes Indenture will have a customary 101% change of control
offer that will have related definitions that are no more restrictive than the
Credit Agreement as amended and restated as described in the Amended and
Restated Term Sheet (it being understood that Murray’s exercise of the Option
will not constitute a “change of control” and the permitted holders definition
will include the Murray Group, and such other changes as mutually agreed between
the Consenting Noteholders party to the Amended and Restated Notes Support
Agreement and the Issuers).

Transfer Restrictions

The Issuers have not registered and will not register the Second Lien Notes
under the Securities Act or any state or other securities laws.  The Second Lien
Notes will be subject to restrictions on transfer as a result of the operation
of such securities laws and may only be offered or sold pursuant to an effective
registration statement or in transactions exempt from the registration
requirements of the Securities Act.  The Issuers do not intend to list the
Second Lien Notes on any securities exchange.

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Schedule 4

 

$300,000,000 aggregate principal amount of Exchangeable PIK Notes

Summary of Indicative Terms and Conditions15

THIS AMENDED AND RESTATED TERM SHEET REPRESENTS AN OUTLINE OF TERMS OF CERTAIN
INDEBTEDNESS TO BE ISSUED TO THE HOLDERS OF SENIOR NOTES IN THE EXCHANGE OFFER.

Issuers

FELLC and the Co-Issuer.

Guarantors

FELP (the “Parent Guarantor”) and each of the Issuers’ wholly-owned domestic
subsidiaries that is a guarantor under the Credit Agreement or any credit
facility that refinances or replaces the Credit Agreement (the “Exchangeable PIK
Notes Subsidiary Guarantors” and together with the Parent Guarantor, the
“Exchangeable PIK Notes Guarantors”).

Notes Offered

Up to $120.0 million aggregate principal amount of Exchangeable PIK Notes are
offered hereby. In addition, up to $180.0 million aggregate principal amount of
Exchangeable PIK Notes will be issued to the Reserves Investor Group in the
Reserves Exchange.

Interest

Interest on the Exchangeable PIK Notes will accrue from the Effective Date at a
rate of 15.0% per annum and shall be payable in kind (“Paid-In-Kind”) by
increasing the aggregate principal amount of Exchangeable PIK Notes by an amount
equal to such accrued and unpaid interest or through the issuance of additional
Exchangeable PIK Notes in an aggregate principal amount equal to such accrued
and unpaid interest (rounded down to the nearest $1.00) for the applicable
interest period, in each case, at which point such interest shall constitute
outstanding principal in respect of the Exchangeable PIK Notes and shall accrue
interest; provided, however, that accrued and unpaid interest shall be paid in
cash in connection with any Note Redemption.  Interest on the Exchangeable PIK
Notes will be payable semi-annually.

 

5 

Definitions used in this Schedule 4 are specific to this Schedule 4 and Schedule
3, and capitalized terms used in this Schedule 4 without definitions shall have
the meanings given to such terms in the offering memorandum substantially agreed
to among the parties.

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Default Interest

Upon the occurrence and during the continuance of an event of default under the
Exchangeable PIK Notes Indenture, interest on the notes, and interest on all
overdue principal,

interest and premium, shall accrue at a rate of 17% per annum, which interest
shall be Paid-In-Kind.

Maturity Date

September 30, 2017.

Exchange

If the Exchangeable PIK Notes are not redeemed by the Issuers or purchased by or
on behalf of Murray Energy at or prior to 11:59 p.m. on the Exchangeable PIK
Note Maturity Date, then all outstanding Exchangeable PIK Notes (including all
principal, interest and other amounts outstanding thereunder) will be exchanged
for 393,152,352 Common Units, representing 75% of the FELP Units outstanding on
the Effective Date (after giving effect to the full exchange of the Exchangeable
PIK Notes into Common Units) and such number of Common Units shall be subject to
adjustment on account of certain anti-dilution protections.  

The Exchangeable PIK Notes will be exchanged for Common Units at an initial
exchange rate of 1.12007 Common Units per $1.00 of amounts outstanding
(including principal and interest) under the Exchangeable PIK Notes (which
represents an exchange price of $0.8928 per Common Unit), subject to adjustment
as described in this Offering Memorandum.  

 

The initial exchange rate will be adjusted from time to time to account for
certain corporate actions of the MLP, including the issuance of Common Units as
a distribution on the Common Units, a unit split or unit combination, the
issuance of certain rights, options or warrants to subscribe for or purchase
Common Units, the distribution of other securities of the MLP to holders of
Common Units, payments in certain tender offers or exchange offers for Common
Units or the issuance of Common Units or securities convertible into or
exchangeable for Common Units at a discount or below the then existing exchange
price.  

 

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Collateral

The Exchangeable PIK Notes will be secured by a second priority security
interest in all of the assets of the Issuers and the Exchangeable PIK Notes
Subsidiary Guarantors that secure the indebtedness outstanding under the Credit
Agreement on the Effective Date, all assets of the Issuers and

the Exchangeable PIK Notes Subsidiary Guarantors acquired after the Effective
Date that are of the type of assets that secure the indebtedness outstanding
under the Credit Agreement on the Effective Date and any other assets that
secure the indebtedness outstanding under the Credit Agreement (including
refinancings or replacements thereof) from time to time, subject to certain
limited exceptions.  Neither the indebtedness under the Credit Agreement nor the
Exchangeable PIK Notes will be secured by any assets of the Parent Guarantor.  

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Ranking

The indebtedness evidenced by the Exchangeable PIK Notes and related guarantees
will be the Issuers’ and the Exchangeable PIK Notes Subsidiary Guarantors’
second-lien senior secured indebtedness and will:

·  rank pari passu in right of payment to all of the Issuers’ and the
Exchangeable PIK Notes Guarantors’ existing and future senior indebtedness;

·  rank senior in right of payment to all of the Issuers’ and the Exchangeable
PIK Notes Guarantors’ existing and future subordinated indebtedness;

·  be effectively senior with respect to the Issuers’ and the Exchangeable PIK
Notes Subsidiary Guarantors’ existing and future unsecured indebtedness to
extent of the value of the Collateral;

·  rank equal in priority as to the Collateral with respect to any obligations
secured by a second priority lien on the Collateral, including the Second Lien
Notes;

·  be effectively junior in priority as to the Collateral with respect to the
Issuers’ and the Exchangeable PIK Notes Subsidiary Guarantors’ existing and
future first priority secured debt obligations, including obligations under the
Credit Agreement;

·  be effectively junior to all of the Issuers’ and the Exchangeable PIK Notes
Guarantors’ existing and future debt secured by assets that do not also secure
the indebtedness under the Credit Agreement and the Exchangeable PIK Notes,
including the assets securing the Longwall Financing Agreements and capital
lease obligations and the Securitization Facility, in each case to the extent of
the value of the collateral securing such

obligations; and

·  be effectively subordinated to all existing and future indebtedness,
preferred stock and other liabilities of our non-guarantor subsidiaries.

 

Intercreditor Arrangements

The liens securing the Exchangeable PIK Notes will be subject to the
Intercreditor Agreement that will provide for the priority of such liens
relative to the liens on the same Collateral that secure other obligations of
the Issuers and the Exchangeable PIK Notes Subsidiary Guarantors.  In addition,
such Intercreditor Agreement will generally impose significant limitations on
the ability of holders of the Exchangeable PIK Notes or the collateral agent
that represents such holders to take enforcement actions with respect to such
liens until all obligations under the Credit Agreement and other first priority
lien obligations are discharged.

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Note Redemption

On the Exchangeable PIK Note Maturity Date, the Issuers shall redeem,
repurchase, refinance, defease or otherwise retire all (but not less than all)
of the Exchangeable PIK Notes in cash at a price equal to 100% of the principal
amount of the Exchangeable PIK Notes plus accrued interest to the Exchangeable
PIK Note Maturity Date.

Pursuant to the Exchangeable PIK Note Retirement, the Issuers may redeem,
repurchase, refinance, defease or otherwise retire all (but not less than all)
of the Exchangeable PIK Notes at any time prior to the Exchangeable PIK Note
Maturity Date for cash at a price equal to 100% of the principal amount of the
Exchangeable PIK Notes plus accrued interest to (but excluding) the date of the
Exchangeable PIK Note Retirement.

In addition to the Exchangeable PIK Note Retirement, Murray Energy, an affiliate
of Murray Energy or a group of Persons which includes Murray Energy or any of
its affiliates (collectively, the “Murray Group”), shall have the right to
purchase all (but not less than all) of the Exchangeable PIK Notes at or prior
to 11:59 p.m. on the day immediately preceding the Exchangeable PIK Note
Maturity Date for cash at a price equal to 100% of the principal amount of the
Exchangeable PIK Notes plus accrued interest to (but excluding) the date of
purchase (the “Purchase Right”).  

Immediately prior to the consummation of any such purchase pursuant to the
Purchase Right (and conditioned upon such purchase being consummated), the
exchange price for the Exchangeable PIK Notes shall automatically adjust to the
greater of (A) the exchange price then in effect and (B) 92.5% of the daily
volume-weighted average price of a Common Unit for the thirty (30) consecutive
trading days immediately prior to the Note Redemption Date (the “VWAP Price”) on
the business day immediately prior to the Note Redemption Date, which change
shall be reflected in the Exchange Rate.  

The Issuers may exercise the Exchangeable PIK Note Retirement in conjunction
with Murray Energy exercising its Purchase Right so long as the two transactions
close simultaneously and at the conclusion of the combined transactions all (but
not less than all) of the Exchangeable PIK Notes are redeemed, repurchased,
refinanced, defeased or otherwise retired for cash at a price equal to 100% of
the principal amount of the Exchangeable PIK Notes plus accrued interest to the
Note Redemption Date.

The “Note Redemption Date” means the date on which either the Issuers redeem all
(but not less than all) of the Exchangeable PIK Notes pursuant to an
Exchangeable PIK Note Retirement, the date that the Murray Group purchases all
(but not less than all) of the Exchangeable PIK Notes pursuant to the Purchase
Right or the date on which there occurs a combination of the foregoing which
results in a redemption or purchase of all (but not less than all) of the
Exchangeable PIK Notes for cash at a price equal to 100% of the principal amount
of the Exchangeable PIK Notes plus accrued interest to the Note Redemption Date.

Following the Note Redemption Date, all Exchangeable PIK Notes redeemed by the
Issuers shall be cancelled and the Exchangeable PIK Notes purchased by the
Murray Group shall immediately and automatically be exchanged for Common Units
in accordance with the terms of the indenture governing the Exchangeable PIK
Notes (the “Exchangeable PIK Notes Indenture”) (taking into account any
adjustment to the exchange price applicable to the Exchangeable PIK Notes as
described above).

To the extent the Note Redemption is funded with the proceeds of an issuance and
sale of Common Units (or any options, warrants or other equity securities that
are

convertible into, or exercisable or exchangeable for, Common Units) by FELP,
FELP will make a rights offering to any then-existing non-affiliate holders of
the FELP Units permitting such holders to buy up to a number of Common Units (or
any option, warrants or other equity securities that are convertible into, or
exchangeable for, Common Units) so that any such holder retains up to its
then-existing ownership percentage of FELP at 92.5% of the VWAP Price as the
redemption price.

In connection with the exercise of the Purchase Right by the Murray Group,
Reserves may choose to not have its Exchangeable PIK Notes (issued to it in the
Reserves Exchange and any Exchangeable PIK Notes representing interest that has
been Paid-In-Kind) redeemed or purchased.  In such a case, the Exchangeable PIK
Notes held by Reserves shall automatically exchange into Common Units upon the
consummation of the Note Redemption in accordance with the terms of the
Exchangeable PIK Notes Indenture (which will be at an exchange price equal to
92.5% of the VWAP Price if such amount is higher than the exchange price in
existence on the business day immediately prior to the Note Redemption
Date).  Notwithstanding, a Note Redemption will still have been deemed to have
taken place so long as at the conclusion of the exercise of the Purchase Right
all of the Exchangeable PIK Notes are redeemed or purchased from all other
holders for cash at a price equal to 100% of the principal amount of the
Exchangeable PIK Notes plus accrued interest to the Note Redemption Date.

If a Note Redemption has not occurred at or prior to 11:59 p.m. on the
Exchangeable PIK Note Maturity Date, then all outstanding Exchangeable PIK Notes
(including all principal, interest, and other amounts outstanding thereunder)
shall be exchanged for Common Units. In addition, the Conditional Corporate
Governance Amendments/Actions shall be consummated or become effective.  

Change of Control

Upon the occurrence of a Change of Control, the holders of the Exchangeable PIK
Notes will have the right to require the Issuers to repurchase some or all of
their Exchangeable PIK Notes at 101% of their principal amount, plus accrued
interest to (but excluding) the repurchase date.

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Certain U.S. Federal Income

Tax Considerations

The Exchangeable PIK Notes will be treated as issued with original issue
discount (“OID”) for U.S. federal income tax purposes. Therefore, a holder
subject to U.S. federal income taxation, whether on the cash or accrual method
of tax accounting, will generally be required to include the OID in gross income
(as ordinary income) as such amounts accrue (on a constant yield to maturity
basis), in advance of the receipt of the cash payment attributable thereto.

Certain Covenants

The Exchangeable PIK Notes Indenture will contain covenants limiting the ability
of the Issuers and the ability of the Issuers’ restricted subsidiaries to:

·  incur additional indebtedness and issue preferred equity;

·  pay dividends or distributions on or purchase our stock or our restricted
subsidiaries’ stock;

·  repay, redeem, make payments on, or retire any subordinated indebtedness;

·  make certain investments;

·  incur or create liens on any asset or property;

·  create guarantees of indebtedness by restricted subsidiaries;

·  restrict the ability of restricted subsidiaries to make dividends,
distributions or other payments, loans or transfers of assets to the Issuers or
any restricted subsidiaries;

·  sell certain assets or merge with or into other companies; and

·  enter into transactions with affiliates.

These covenants are subject to a number of important limitations and
exceptions.  

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Transfer Restrictions

The Issuers have not registered and will not register the Exchangeable PIK Notes
under the Securities Act or any state or other securities laws.  The
Exchangeable PIK Notes will be subject to restrictions on transfer as a result
of the operation of such securities laws and may only be offered or sold
pursuant to an effective registration statement or in

transactions exempt from the registration requirements of the Securities
Act.  The Issuers do not intend to list the Exchangeable PIK Notes on any
securities exchange.

Registration Rights

Upon completion of the Transactions, a registration rights agreement will be
delivered and executed by FELP for the benefit of holders of the Exchangeable
PIK Notes providing for registration rights in respect of resale of the Common
Units that may be acquired by such holders upon the exchange of the Exchangeable
PIK Notes and any other Common Units held by such holders (to the extent that
any such holder owns 10% or more of the outstanding FELP Units or cannot resell
such Common Units pursuant to Rule 144 promulgated under the Securities Act
without being subject to the volume limitations or manner of sale restrictions
imposed thereunder).

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Schedule 5

 

Description of Material Terms of Warrants

The form of Warrant Certificate is attached to this Schedule 5.

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EXECUTION VERSION

THE WARRANT(S) EVIDENCED BY THIS CERTIFICATE HAve not BEEN, AND THE securities
WHICH MAY BE PURCHASED PURSUANT TO THE EXERCISE OF WARRANT(S) EVIDENCED BY THIS
CERTIFICATE (THE “WARRANT Securities,” AND TOGETHER WITH THIS WARRANT, THE
“SECURITIES”) HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (the “Securities Act”), OR ANY STATE SECURITIES LAWS, AND NONE OF the
SECURITIES OR ANY INTEREST THEREIN MAY BE OFFERED, SOLD, TRANSFERRED, PLEDGED,
HYPOTHECATED OR OTHERWISE DISPOSED OF UNLESS THE SAME ARE REGISTERED AND
QUALIFIED IN ACCORDANCE WITH the securities ACT AND ANY APPLICABLE STATE
SECURITIES LAWS OR SUCH OFFER, SALE, TRANSFER, PLEDGE, HYPOTHECATION OR OTHER
DISPOSITION IS EXEMPT FROM REGISTRATION UNDER the securities ACT AND any
applicable state securities LAWS. THIS WARRANT CERTIFICATE MUST BE SURRENDERED
TO THE Partnership OR ITS TRANSFER AGENT AS A CONDITION PRECEDENT TO THE SALE,
PLEDGE OR OTHER TRANSFER OF WARRANT(S) EVIDENCED BY THIS CERTIFICATE OR ANY
INTEREST IN ANY OF THE WARRANT securities.

WARRANT NO.

 

WARRANT

TO PURCHASE COMMON UNITS

OF

FORESIGHT ENERGY LP

This warrant certificate (this “Warrant Certificate”) certifies that [warrant
holder], a [_____ entity], or its registered assigns (the “Holder”), is the
owner of a number of warrants (“Warrants”) equal to the Total Number of
Warrants, each of which entitles the Holder to purchase from FORESIGHT ENERGY
LP, a Delaware limited partnership (the “Partnership”), one duly authorized,
validly issued and fully paid and nonassessable (except as such nonassessability
may be affected by Sections 17-607 and 17-804 of the Delaware Limited
Partnership Act (the “Delaware LP Act”)) Common Unit (subject to adjustment in
Section 2), at any time or from time to time during the Exercise Period (as
defined below), at an exercise price of $0.8928 per Common Unit (subject to
adjustment in Section 2, the “Exercise Price”), all on the terms and subject to
the conditions hereinafter set forth.

The number of Common Units issuable upon exercise of each such Warrant (the
“Number Issuable”), which is initially one (1) Common Unit, is subject to
adjustment from time to time pursuant to the provisions of Section 2 of this
Warrant Certificate.

Capitalized terms used herein but not otherwise defined shall have the meanings
given them in Section 11 hereof.

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Section 1.Exercise of Warrant.  Subject to the last paragraph of this Section 1,
the Warrants evidenced hereby may be exercised, in whole or in part, by the
Holder at any time or from time to time during the period commencing on the
Redemption/Purchase Date and ending at 5:00 p.m., New York City time, on the
date immediately preceding the tenth anniversary of the Redemption/Purchase Date
(the “Exercise Period”), upon delivery to the Partnership at the registered
office of the Partnership set forth in Section 12, of: (a) this Warrant
Certificate or any affidavit of loss (accompanied by any indemnity, medallion
guarantee or other undertaking or assurance reasonably requested from the Holder
by the Partnership, its Transfer Agent or its warrant agent, as the case may be)
if the Holder does not have possession of this Warrant Certificate at the time
of exercise, (b) a written notice stating that the Holder elects to exercise all
or a specified number of Warrants evidenced hereby in accordance with the
provisions of this Section 1 and specifying the name or names in which the
Holder wishes the certificate or certificates for Common Units to be issued (if
certificated) and (c) payment of the Exercise Price for the Common Units
issuable upon exercise of such Warrants.  Such Exercise Price shall be payable
(i) by wire transfer or a certified or official bank check payable to the order
of the Partnership or (ii) by electing (and without the payment of the Exercise
Price in cash) that the Partnership deduct from the number of Common Units
otherwise to be delivered to the Holder upon exercise of the Warrants a number
of Common Units equal to the quotient obtained by dividing (x) the aggregate
Exercise Price to be paid by (y) the Market Price of one Common Unit on the
Business Day which immediately precedes the day of exercise of the Warrants.  An
exercise of a Warrant in accordance with clause (ii) of the immediately
preceding sentence is herein referred to as a “Cashless Exercise” and the Holder
shall specify in the written notice provided pursuant to this Section 1 that it
is electing to make a Cashless Exercise.  The documentation and consideration,
if any, delivered in accordance with subsections (a), (b) and (c) of this
paragraph are collectively referred to herein as the “Warrant Exercise
Documentation.” For the avoidance of doubt, if the Note Redemption does not
occur on or prior to September 30, 2017, the Warrants shall not become
exercisable, shall have no value (except as contemplated pursuant to Section
2(b)) and shall be surrendered to the Partnership promptly thereafter.  No
consideration shall be required to be paid by the Partnership or its Affiliates
in exchange for such surrender.

As promptly as practicable, and in any event within five Business Days after
receipt of the Warrant Exercise Documentation, the Partnership shall: (a) (i) to
the extent that the Partnership’s transfer agent (the “Transfer Agent”) is
participating in The Depositary Trust Company (“DTC”) Fast Automated Securities
Transfer Program, upon the request of the Holder of the Warrants, credit such
aggregate number of Common Units to which such Holder is entitled pursuant to
such exercise to such Holder’s or its designee’s balance account with DTC
through its Deposit Withdrawal Agent Commission system, or (ii) if the Transfer
Agent is not participating in the DTC Fast Automated Securities Transfer
Program, deliver or cause to be delivered, the certificates, if certificated, or
if not certificated then in book-entry form at the Transfer Agent, representing
the number of validly issued and fully paid and nonassessable (except as such
nonassessability may be affected by Sections 17-607 and 17-804 of the Delaware
LP Act) Common Units properly specified in the Warrant Exercise Documentation,
(b) if applicable, deliver or caused to be delivered cash in lieu of any
fraction of a Common Unit, as hereinafter provided, and (c) if less than the
full number of Warrants evidenced hereby are being exercised, deliver or caused
to be delivered, a new warrant certificate or certificates, of like tenor, for
the number of Warrants evidenced by this Warrant Certificate, less the number of

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Warrants then being exercised.  Such exercise shall be deemed to have been made
at the close of business on the date of delivery of all of the Warrant Exercise
Documentation so that, to the extent permitted by applicable law, the Person
entitled to receive Common Units upon such exercise shall be treated for all
purposes as having become the record holder of such Common Units at such
time.  Any exercise of the Warrants evidenced hereby may be conditioned upon the
occurrence of an event or transaction that is specified in a written notice of
exercise provided by or on behalf of the Holder pursuant to this Section 1,
provided that such conditional exercise is only permitted with respect to events
for which notice was required to be provided to the Holder by or on behalf of
the Partnership pursuant to Section 3 hereof.  Such conditional exercise shall
be deemed revoked if such event or transaction does not occur on the date, or
within the dates, specified in the applicable notice provided by or on behalf of
the Partnership pursuant to Section 3 hereof (if such a notice was provided).

The Partnership shall pay all expenses in connection with, and all taxes and
other governmental charges (other than income taxes of the Holder) that may be
imposed in respect of, the issue or delivery of any Common Units issuable upon
the exercise of the Warrants evidenced hereby.  The Partnership shall not be
required, however, to pay any tax or other charge imposed in connection with any
transfer involved in the issue of any Common Units in any name other than that
of the Holder.

In connection with the exercise of any Warrants evidenced hereby, no fractions
of Common Units shall be issued, but in lieu thereof the Partnership shall pay a
cash adjustment in respect of such fractional interest in an amount equal to
such fractional interest multiplied by the Market Price of a Common Unit on the
Business Day which immediately precedes the day of exercise.  If more than one
such Warrant shall be exercised by the Holder thereof at the same time, the
number of full Common Units issuable on such exercise shall be computed on the
basis of the total number of Warrants so exercised.  

Section 2.Adjustments.

(a)Adjustment of Number Issuable and/or Exercise Price.  The Number Issuable
and/or the Exercise Price shall be subject to adjustment from time to time as
follows:

(i)In case the Partnership shall at any time or from time to time after the
Issue Date:

(A)pay a dividend or make a distribution on the outstanding Common Units in
Common Units;

(B)effect a forward split or subdivision of the outstanding Common Units into a
larger number of Common Units; or

(C)effect a reverse split or combination of the outstanding Common Units into a
smaller number of Common Units;

then, and in each such case of any of the events described in clauses (A)
through (C) above, (I) the Number Issuable in effect immediately

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prior to such event shall be adjusted (and any other appropriate actions shall
be taken by the Partnership to effect such adjustment) so that the number of
Common Units issuable upon exercise of a Warrant immediately after the
occurrence of any such event shall equal the number of Common Units that a
record holder of the same number of Common Units for which a Warrant is
exercisable immediately prior to the occurrence of such event would own or be
entitled to receive after the happening of such event, and (II) the Exercise
Price shall be adjusted to be equal to the product of (x) the Exercise Price
immediately prior to the occurrence of such event and (y) a fraction (1) the
numerator of which is the number of Common Units issuable upon exercise of such
Warrant immediately prior to the adjustment in Section 2(a)(i)(I) above and (2)
the denominator of which is the number of Common Units issuable upon exercise of
such Warrant immediately after the adjustment in Section 2(a)(i)(I) above.  An
adjustment made pursuant to this Section 2(a)(i) shall become effective
retroactively (x) in the case of any such dividend or distribution, to a date
immediately following the close of business on the record date for the
determination of holders of Common Units entitled to receive such dividend or
distribution, or (y) in the case of any such split, subdivision or combination,
to the close of business on the date upon which such corporate action becomes
effective.  Notwithstanding the foregoing, no adjustment to the Number Issuable
shall be made pursuant to this Section 2(a)(i) for any event described in this
Section 2(a)(i) that occurs prior to the Redemption/Purchase Date; provided,
however, that, the Exercise Price shall adjust for any event described in this
Section 2(a)(i) that occurs prior to the Redemption/Purchase Date and the Number
Issuable shall adjust for any event described in this Section 2(a)(i) that
occurs prior to the Redemption/Purchase Date solely for purposes of determining
the adjustment to the Exercise Price for such event and any other such event
that occurs prior to the Redemption/Purchase Date.

(ii)In case the Partnership shall at any time or from time to time after the
Issue Date distribute to any holder of Common Units (including any such
distribution made in connection with a consolidation or merger in which the
Partnership is the resulting or surviving entity and the Common Units are not
changed or exchanged) cash, evidences of indebtedness of the Partnership or
another issuer, securities of the Partnership or another issuer or other assets
or property (excluding: (i) dividends or other distributions of Common Units for
which adjustment is made under Section 2(a)(i); (ii) cash distributions made to
the holders of Common Units to enable such holders to pay taxes incurred by such
holders as a result of allocations to such holders of items of income and gain
arising from the operations of the Partnership and its subsidiaries) and (iii)
for the avoidance of doubt, any rights offering made to the holders of
Partnership Units in connection with the Note Redemption) or rights, options,
securities or warrants to subscribe for or purchase securities of the
Partnership or another issuer (excluding: (i) those in respect of which
adjustments in the Number Issuable is made pursuant to Section 2(a)(i) or
Section 2(a)(iv); and (ii) for the avoidance of doubt, any rights offering made
to the holders of Partnership Units in connection with the Note Redemption)
(each, a “Distribution”), then, and in each such case,

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(I) the Exercise Price shall be decreased to the Exercise Price determined by
multiplying (x) the Exercise Price in effect immediately prior to the
Distribution by (y) a fraction, (1) the numerator of which is an amount equal to
(A) the Market Price of a Common Unit on the second Business Day preceding the
first date on which the Common Units trade regular way without the right to
receive such Distribution minus (B) the Fair Market Value of the Distribution
(determined as of the date of such Distribution) applicable to one Common Unit
and (2) the denominator of which is the Market Price of a Common Unit on the
second Business Day preceding the first date on which the Common Units trade
regular way without the right to receive such Distribution; and (II) the Number
Issuable in effect immediately prior to such Distribution shall be increased
(and any other appropriate actions shall be taken by the Partnership to effect
such increase) so that the number of Common Units issuable upon exercise of a
Warrant immediately after such Distribution shall equal the number of Common
Units obtained by dividing (x) the number of Common Units issuable upon exercise
of a Warrant immediately prior such Distribution by (y) the fraction described
in Section 2(a)(ii)(I)(y) above.  Such adjustment shall be made whenever any
such Distribution is made and shall become effective retroactively to a date
immediately following the close of business on the record date for the
determination of unitholders entitled to receive such Distribution.  

(iii)In case the Partnership shall at any time or from time to time after the
Issue Date make any payment or distribution in respect of any tender offer or
exchange offer for Common Units where the Fair Market Value of the consideration
per Common Unit when paid by the Partnership exceeds the Market Price of a
Common Unit acquired in such tender offer or exchange offer as of the Business
Day immediately preceding the first public announcement of the tender offer or
exchange offer (the aggregate excess amount for all Common Units acquired in
such tender offer or exchange offer, the “Excess Tender Amount”) (excluding a
tender offer or exchange offer to effect the Note Redemption), then, and in each
such case, (I) the Exercise Price to be in effect after the tender offer or
exchange offer expires shall be decreased to the Exercise Price determined by
multiplying (x) the Exercise Price in effect immediately prior to the close of
business on the expiration date of the tender offer or exchange offer (the
“Offer Expiration Date”) by (y) a fraction, (1) the numerator of which is (A)
the Market Price of a Common Unit on the Business Day immediately preceding the
first public announcement of the tender offer or exchange offer, minus (B) the
Excess Tender Amount divided by the number of Common Units outstanding
immediately after the expiration of the tender or exchange offer (after giving
effect to the purchase or exchange of Common Units), and (2) the denominator of
which is the Market Price of a Common Unit on the Business Day immediately
preceding the first public announcement of the tender offer or exchange offer;
and (II) the Number Issuable shall be increased (and any other appropriate
actions shall be taken by the Partnership to effect such increase) so that the
number of Common Units issuable upon exercise of a Warrant immediately after the
occurrence of such exchange offer or tender offer shall equal the number of
Common Units obtained by dividing (x) the number of Common Units issuable

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upon exercise of a Warrant immediately prior to the close of business on the
Offer Expiration Date by (y) a fraction, the numerator of which shall be the
Exercise Price in effect immediately after such adjustment and the denominator
of which shall be the Exercise Price in effect immediately before such
adjustment.  Such adjustment shall be made whenever any such exchange offer or
tender offer is consummated.

(iv)In case the Partnership shall at any time or from time to time after the
Issue Date distribute to all holders of Common Units any rights, options or
warrants entitling them to purchase, for a period of not more than sixty (60)
days after the first date on which the Common Units trade regular way without
the right to receive such distribution (such date, the “Ex-Dividend Date”),
Common Units for less than the Market Price of Common Units on the Business Day
immediately preceding the first public announcement of such distribution, then,
and in each such case, (I) the Exercise Price shall be decreased to the Exercise
Price determined by multiplying (x) the Exercise Price in effect immediately
prior to the close of business on the Ex-Dividend Date, by (y) a fraction, (1)
the numerator of which is (A) the number of Common Units outstanding immediately
prior to the open of business on the Ex-Dividend Date plus (B) the number of
Common Units equal to the quotient obtained by dividing the aggregate exercise
price payable to exercise all such rights, options or warrants by the Market
Price of a Common Unit on the Business Day immediately preceding the first
public announcement of such distribution, and (2) the denominator of which is
(A) the number of Common Units outstanding immediately prior to the open of
business on the Ex-Dividend Date plus (B) the number of Common Units issuable
pursuant to such rights, options or warrants, and (II) the Number Issuable shall
be increased (and any other appropriate actions shall be taken by the
Partnership to effect such increase) so that the number of Common Units issuable
upon exercise of a Warrant immediately after the occurrence of such distribution
shall equal the number of Common Units obtained by dividing (x) the number of
Common Units issuable upon exercise of a Warrant immediately prior to the close
of business on the Ex-Dividend Date by (y) a fraction, the numerator of which
shall be the Exercise Price in effect immediately after such adjustment and the
denominator of which shall be the Exercise Price in effect immediately before
such adjustment.  Such adjustment shall be made whenever any such distribution
is consummated.

(v)Notwithstanding anything herein to the contrary, no adjustment under this
Section 2(a) need be made to the Number Issuable unless such adjustment would
require an increase or decrease of at least 1% of the Number Issuable then in
effect.  Any lesser adjustment shall be carried forward and shall be made at the
time of and together with the next subsequent adjustment, which, together with
any adjustment or adjustments so carried forward, shall amount to an increase or
decrease of at least 1% of such Number Issuable.  Any adjustment to the Number
Issuable carried forward and not theretofore made shall be made immediately
prior to the exercise of any Warrants

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pursuant hereto or any adjustment or redemption of any Warrants pursuant to
Section 2(b).

(vi)The Partnership shall deliver to the Holder promptly following the
occurrence of any event or the consummation of any transaction which would
result in an increase or decrease in the Number Issuable and/or Exercise Price
pursuant to this Section 2(a) a notice thereof, together with a certificate,
signed by the chief executive officer, the chief financial officer, the
treasurer or an assistant treasurer or the secretary or an assistant secretary
of the General Partner, setting forth in reasonable detail the event or
transaction requiring the adjustment and the method by which such adjustment was
calculated and specifying the increased or decreased Number Issuable and
Exercise Price then in effect following such adjustment.

(vii)Notwithstanding anything to the contrary contained in this Section 2(a),
the Partnership shall be entitled to make such upward adjustments in the Number
Issuable, in addition to those otherwise required by this Section 2(a), as the
board of directors of the General Partner in its discretion shall determine to
be advisable in order that any equity dividend, split, subdivision or
combination of equity interests, distribution of rights or warrants to purchase
equity interests or securities or distribution of securities convertible into or
exchangeable for Common Units hereafter made by the Partnership to its
equityholders shall not be taxable; provided, however, that any such adjustment
shall treat all holders of Warrants with similar protections on an equal basis.

(viii)Notwithstanding anything to the contrary contained in this Section 2(a),
(x) any adjustment to the Exercise Price or Number Issuable shall be void ab
initio (and shall be of no force or effect) to the extent that such adjustment
would result in a violation of law by the Partnership as a direct result of such
adjustment, and (y) no adjustment to the Exercise Price pursuant to Section
2(a)(ii) or Section 2(a)(iii) shall be made to the extent such adjustment
results in an Exercise Price being zero or a negative number (it being
understood that any such adjustment to the Exercise Price pursuant to Section
2(a)(ii) or Section 2(a)(iii) that would otherwise result in the Exercise Price
being zero or a negative number shall reduce the Exercise Price to $0.01).

(b)Reorganization, Reclassification, Consolidation, Merger or Sale of
Assets.  In case of any purchase, acquisition, capital reorganization or
reclassification in which all of the outstanding Common Units are sold for cash
and/or exchanged for other securities or assets (other than as a result of a
split, subdivision or combination to which Section 2(a)(i) applies), or in case
of any consolidation or merger of the Partnership with or into another Person
(other than a consolidation or merger in which the Partnership is the resulting
or surviving Person and which does not result in any reclassification or change
of outstanding Common Units), or in case of any sale or other disposition to
another Person of all or substantially all of the assets of the Partnership,
other than a sale/leaseback, mortgage or other similar financing transaction
(any of the foregoing, a “Transaction”), the Partnership shall not effect any
such Transaction, unless, at the

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Partnership’s option, either (A) the Partnership, or such successor Person or
transferee of the Partnership, as the case may be, shall make appropriate
provision by amendment of the Warrant Agreement or by the successor Person or
transferee executing a replacement warrant agreement so that the Holder of each
Warrant then outstanding shall have the right at any time after the consummation
of such Transaction, upon exercise or conversion of such Warrant (in lieu of the
number of Common Units theretofore deliverable) to receive, at the Exercise
Price, the kind and amount of securities, cash and other property receivable
upon such Transaction as would be received by a holder of the number of Common
Units issuable upon exercise or conversion of the Warrant immediately prior to
such Transaction assuming such holder of Common Units did not exercise its
rights of election, if any, as to the kind or amount of securities, cash and
other property receivable upon such Transaction (provided that, if the kind or
amount of securities, cash and other property receivable upon such Transaction
is not the same for each Common Unit in respect of which such rights of election
shall not have been exercised (“nonelecting unit”), then for the purposes of
this Section 2(b) the kind and amount of securities, cash and other property
receivable upon such Transaction for each nonelecting unit shall be deemed to be
the kind and amount so receivable per unit by a plurality of the nonelecting
units), or (B) simultaneously with the consummation of such Transaction, the
Partnership shall redeem the Warrants and pay to the Holder, upon surrender of
each such Warrant to the Partnership, in the same form of consideration as is
received by holders of Common Units in such Transaction, an amount equal to the
positive difference between (y) the Fair Market Value of the consideration that
would be received upon such consummation by a holder of the number of Common
Units deliverable (immediately prior to such consummation) upon exercise of such
Warrants and (z) the aggregate Exercise Price therefor; provided, however, that
in the event that the Transaction is an Affiliate Transaction and the
consideration that would be received upon the consummation of such Affiliate
Transaction by a holder of the number of Common Units issuable upon exercise or
conversion of a Warrant immediately prior to such Affiliate Transaction
(determined utilizing the assumptions set forth in subclause (A) of this Section
2(b)) is less than or equal to the Exercise Price, the Partnership shall not be
permitted to redeem the Warrants pursuant to subclause (B) of this Section 2(b),
but shall instead be entitled to elect to redeem the Warrants by paying the
Holder the Black-Scholes Value of the Warrants in cash simultaneously with the
consummation of such Affiliate Transaction.  The provisions of this Section 2(b)
similarly shall apply to successive Transactions.  Any such amendment or
agreement executed by the Partnership or the successor or transferee shall
provide for adjustments which shall be as nearly equivalent as may be
practicable to the adjustments provided for in this Section 2.  Nothing in this
Section 2(b) shall have any effect on the exercise of any Warrants made prior
to, or in connection with, any Transaction.

In the event that a redemption of Warrants pursuant to this Section 2(b) is
consummated prior to the Redemption/Purchase Date, the Total Number of Warrants
evidenced by this Warrant Certificate shall be determined (including determining
the Total Unit Number and the Total Warrant Number for such purpose) as of
immediately prior to the consummation of such Transaction.  In furtherance of
the foregoing, for purposes of making such determination, the Total Unit Number
shall be calculated as of the date of such Transaction prior to giving effect to
such Transaction.

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Section 3.Notice of Certain Events.  In case at any time or from time to time
the Partnership shall declare any dividend or any other distribution to the
holders of its Common Units, or shall authorize the granting to the holders of
its Common Units of rights, options or warrants to subscribe for or purchase any
additional equity interests of any class or any other right, or shall authorize
the issuance or sale of any other equity interests or rights which would result
in an adjustment to the Number Issuable, or shall commence an exchange offer or
tender offer for Common Units, or there shall be any Transaction, then, in any
one or more of such cases, the Partnership shall mail (or e-mail) to the Holder
at the Holder’s address as it appears on the transfer books of the Partnership,
as promptly as practicable (but in any event no later than the date that is ten
(10) Business Days prior to the earliest to occur of the record date, the
effective date or the commencement date of any of the foregoing), a notice
stating (a) the date on which a record is to be taken for the purpose of such
dividend or grant of distribution, rights, options or warrants or, if a record
is not to be taken, the date as of which the holders of the Common Units of
record to be entitled to such dividend, distribution, rights, options or
warrants are to be determined, (b) the date of issuance of such equity interests
or rights, (c) the date of the commencement of any such exchange offer or tender
offer and the Offer Expiration Date, or (d) the date on which such Transaction
is expected to become effective. Until such time that the Partnership publicly
discloses the information that is the subject of any notice provided pursuant to
this Section 3, the Holder shall keep (and shall cause its agents and Affiliates
to keep) such notice and its contents confidential and shall not publicly
disclose (and shall cause its agents and Affiliates not to publicly disclose)
such notice or its contents to any person (provided that the Holder may disclose
such notice and its contents to its agents, Affiliates and advisors for the
purpose of seeking financial, legal or other advice reasonably related to such
notice and its contents, and the Holder and its agents, Affiliates and advisors
may disclose such notice and its contents as may be required by law, regulation
or court order).  In case of any event described in Section 2(b), such notice
also shall specify the date as of which it is expected that the holders of the
Common Units of record shall be entitled to exchange their Common Units for
equity interests or other securities or property or cash deliverable upon such
reorganization, reclassification, consolidation, merger, sale or conveyance.

Section 4.Authorized Units.  The Partnership covenants and agrees that all
Common Units which may be issued upon the exercise of the Warrants evidenced
hereby will be duly authorized, validly issued and fully paid and nonassessable
(except as such nonassessability may be affected by Sections 17-607 and 17-804
of the Delaware LP Act) upon issuance and will be free and clear of all liens
and will not be subject to any pre-emptive or similar rights.

Section 5.Registered Holder.  The person in whose name this Warrant Certificate
is registered shall be deemed the owner hereof and of the Warrants evidenced
hereby for all purposes.  The Holder of this Warrant Certificate, in its
capacity as such, shall not be entitled to any rights whatsoever as a holder of
Common Units, except as herein provided or as provided in the Partnership
Agreement.

Section 6.Certain Transfer and Exercise Provisions.  

(a)Transfer Provisions.  Any transfer of the rights represented by this Warrant
Certificate shall be effected by the surrender of this Warrant Certificate,
along with the form of assignment attached hereto as Exhibit A, properly
completed and

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executed by the Holder hereof, at the registered office of the Partnership as
set forth in Section 12, subject to the restrictions below.  Thereupon, the
Partnership shall issue in the name or names specified by the Holder hereof and,
in the event of a partial transfer, in the name of the Holder hereof, a new
warrant certificate or certificates evidencing the right to purchase such number
of Common Units as shall be equal to the then applicable Number Issuable.

(b)Legends.  If applicable, the Common Units shall be imprinted with a legend in
substantially the following form:

THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR ANY STATE SECURITIES LAWS AND MAY NOT BE OFFERED, SOLD, TRANSFERRED,
PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF UNLESS THE SAME ARE REGISTERED
AND QUALIFIED IN ACCORDANCE WITH SAID ACT AND ANY OTHER APPLICABLE STATE
SECURITIES LAWS OR SUCH OFFER, SALE, TRANSFER OR OTHER DISPOSITION IS EXEMPT
FROM REGISTRATION UNDER SUCH ACT AND ANY OTHER APPLICABLE STATE SECURITIES LAWS.

 

(c)Transfer Restrictions.  Before any proposed sale, pledge, or transfer of any
of the Warrants evidenced by this Warrant Certificate or any Common Units
issuable upon exercise of any of the Warrants evidenced by this Warrant
Certificate, unless there is in effect a registration statement under the
Securities Act, covering the proposed transaction, the Holder shall give notice
to the Partnership of the Holder’s intention to effect such sale, pledge, or
other transfer.  Each such notice shall describe the manner and circumstances of
the proposed sale, pledge, or transfer in sufficient detail and the Holder must
deliver evidence reasonably satisfactory to counsel to the Partnership to the
effect that the proposed sale, pledge, or transfer of the restricted securities
(as defined in Rule 144(a)(3) of the Securities Act) may be effected without
registration under the Securities Act (a certificate in the form of Exhibit B
hereto being deemed to be satisfactory) and, if requested by the Partnership, an
opinion of counsel reasonably satisfactory to the Partnership and its counsel
that such disposition is exempt from the registration and prospectus delivery
requirements of the Securities Act (an opinion in the form of Exhibit C hereto
being deemed to be satisfactory), whereupon the Holder shall be entitled to
sell, pledge, or transfer the securities in accordance with the terms of the
notice given by the Holder to the Partnership; provided, however, that the
Partnership shall pay or reimburse the Holder for any costs or expenses
reasonably incurred by the Holder in obtaining any such opinion (up to a maximum
amount $1,000 per opinion).  The Partnership will not require such evidence in
any transaction in which Holder distributes the Warrant or Common Units to an
affiliate of such Holder for no consideration.  Each certificate evidencing the
restricted securities transferred as above provided shall bear, except if such
transfer is made pursuant to Rule 144 under the Securities Act, the appropriate
restrictive legend set forth above to the extent applicable.

Section 7.Denominations.  The Partnership covenants that it will, at its
expense, promptly upon surrender of this Warrant Certificate at the registered
office of the Partnership as set forth in Section 12, execute and deliver to the
Holder a new warrant certificate

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or certificates in denominations specified by the Holder for an aggregate number
of Warrants equal to the number of Warrants evidenced by this Warrant
Certificate.

Section 8.Replacement of Warrants.  Upon receipt of evidence satisfactory to the
Partnership of the loss, theft, destruction or mutilation of this Warrant
Certificate and, in the case of loss, theft or destruction, upon delivery of an
indemnity reasonably satisfactory to the Partnership and the Transfer Agent, or,
in the case of mutilation, upon surrender and cancellation thereof, the
Partnership will issue a new warrant certificate of like tenor for a number of
Warrants equal to the number of Warrants evidenced by this Warrant Certificate.

Section 9.Governing Law.  THIS WARRANT CERTIFICATE SHALL BE CONSTRUED AND
ENFORCED IN ACCORDANCE WITH, AND THE RIGHTS OF THE PARTIES SHALL BE GOVERNED BY,
THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE
PERFORMED ENTIRELY WITHIN SUCH STATE.

Section 10.Rights Inure to Registered Holder.  The Warrants evidenced by this
Warrant Certificate will inure to the benefit of and be binding upon the Holder
and the Partnership and their respective successors and permitted
assigns.  Nothing in this Warrant Certificate shall be construed to give to any
Person other than the Partnership and the Holder any legal or equitable right,
remedy or claim under this Warrant Certificate, and this Warrant Certificate
shall be for the sole and exclusive benefit of the Partnership and such
Holder.  Nothing in this Warrant Certificate shall be construed to give the
Holder any rights as a holder of Common Units until such time, if any, as the
Warrants evidenced by this Warrant Certificate are exercised in accordance with
the provisions hereof, except as herein provided and as provided in the
Partnership Agreement.

Section 11.Definitions.  For the purposes of this Warrant Certificate, the
following terms shall have the meanings indicated below:

“Affiliate” means, with respect to any specified Person, any other Person
directly or indirectly Controlling, Controlled by or under direct or indirect
common Control with such specified Person.

“Affiliate Transaction” means (a) any Transaction where, prior to the
consummation of the Transaction, Persons that are Affiliates of the Partnership
immediately prior to the Transaction either own or have an arrangement or
understanding with any party to the Transaction or any such party’s Affiliates
that provides such Affiliates of the Partnership with the right or opportunity
to own, after the consummation of the Transaction (other than an arrangement or
understanding that is made available to all holders of Common Units), directly
or indirectly, 20% or more of the total voting power of the securities of, or
20% or more of the total economic interests in, the succeeding, acquiring,
resulting or transferee Person, or (b) any Transaction where Persons that are
Affiliates of the Partnership immediately prior to the consummation of such
Transaction own, directly or indirectly, a majority of the total voting power of
the securities of, or a majority of the total economic interests in, the
succeeding, acquiring, resulting or transferee Person after giving effect to
such Transaction.  For purposes of

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this definition, an Affiliate of the Partnership shall include any trust or
other entity that is formed or established for the benefit of any family members
of an Affiliate of the Partnership.

“Applicable Percentage” means [__]%.6

“Black-Scholes Value” means, as of the date the Partnership elects to redeem the
Warrants in connection with an Affiliate Transaction pursuant to the last
proviso of Section 2(b),  the value of the Warrants, as reasonably determined by
the board of directors of the General Partner in good faith, calculated using
the Black-Scholes method for valuing options with the following inputs: (a)
volatility shall be 50%, (b) the risk free rate shall be the then current
effective U.S. Federal government interest rate for a bond or note with a
remaining time to maturity equal to the amount of time remaining in the Exercise
Period as of such date, (c) the exercise price shall be the Exercise Price, (d)
the term of the Warrants shall be the amount of time remaining in the Exercise
Period as of such date and (e) the underlying security price for purposes of the
Black-Scholes calculation shall be the greater of (i) the daily volume-weighted
average price of a Common Unit for the thirty (30) consecutive trading days
immediately prior to the Affiliate Transaction and (ii) the value of the
consideration received in respect of each outstanding Common Unit pursuant to
the Affiliate Transaction.

“Business Day” means any day other than a Saturday, Sunday or other day on which
the NYSE is authorized or required by law or executive order to close.

“Cashless Exercise” has the meaning given it in Section 1.

“Common Units” means the limited partnership interests in the Partnership
defined as “Common Units” under and pursuant to the Partnership Agreement.

“Control” means the possession, direct or indirect, of the power to direct or
cause the direction of the management and the policies of a Person, whether
through the ownership of voting securities, by contract or otherwise.

“Distribution” has the meaning given it in Section 2(a)(ii).

“DTC” has the meaning given it in Section 1.

“Exchange Act” has the meaning given it in Section 6(d)(ii).

“Exchangeable PIK Note” means any exchangeable PIK note issued by Foresight
Energy LLC, a Delaware limited liability company, and Foresight Energy Finance
Corporation, a Delaware corporation, pursuant to the Exchangeable PIK Note
Indenture.

“Exchangeable PIK Note Indenture” means that certain Indenture, dated as of [●],
2016, by and among Foresight Energy LLC, a Delaware limited liability company,
Foresight

 

6 

Note to Draft:  The “Applicable Percentage” will be equal to a percentage,
expressed as a fraction, (i) the numerator of which is the aggregate principal
amount of Second Lien Notes that are owned or held by the Holder on the Issue
Date and (ii) the denominator of which is the aggregate principal amount of
Second Lien Notes that are outstanding on the Issue Date (excluding any Second
Lien Notes owned or held by Reserves, the Reserves Investor Group or any
affiliates of Reserves or the Reserves Investor Group).

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Energy Finance Corporation, a Delaware corporation, and the trustee named
therein, as amended, supplemented or otherwise modified from time to time.

“Exercise Price” has the meaning given it in the first paragraph hereof.

“Exercise Period” has the meaning given it in Section 1.

“Fair Market Value” means (a) in the case of cash, the amount of such cash, (b)
in the case of a security, the Market Price of such security, and (c) in the
case of any assets or property (other than cash or securities), the amount which
a willing buyer, under no compulsion to buy, would pay a willing seller, under
no compulsion to sell, for such assets or property in an arm’s-length
transaction but in all events without application of any minority, illiquidity,
transfer or voting restriction, or similar discounts or reductions, as
reasonably determined in good by the board of directors of the General Partner.

“General Partner” means Foresight Energy GP LLC, the general partner of the
Partnership.

“Holder” has the meaning given it in the first paragraph hereof.

“Issue Date” means [●], 2016.

“Market Price” of each Common Unit or any other securities means, on any date
specified herein: (a) if the Common Units or such securities are then listed or
admitted to trading on any national securities exchange, the average of the high
and low trading prices of the Common Units or such other securities on such date
as reported by such national securities exchange; (b) if the Common Units or
such other securities are not then listed or admitted to trading on any national
securities exchange but are designated as a national market system security, the
average of the high and low sale prices of the Common Units or such other
securities on such date; (c) if there shall have been no trading on such date or
if the Common Units or such other securities are not so designated, the average
of the last quoted bid and asked prices per Common Unit or per such other
security in the over-the-counter market on the relevant date as reported by Pink
OTC Markets Inc. or a similar quotation reporting organization; or (d) if none
of (a), (b) or (c) is applicable, the Fair Market Value of each Common Unit or
such other security reasonably determined in good faith by the board of
directors of the General Partner.

“Note Redemption” means either a Note Retirement or a Murray Purchase (each as
defined in the Exchangeable PIK Notes Indenture), or a combination of the two
resulting in the purchase or other retirement of all (but not less than all) of
the Exchangeable PIK Notes (subject to the right of Foresight Reserves LP, a
Nevada limited partnership (“Reserves”), to elect to have Exchangeable PIK Notes
it holds, in lieu of being redeemed or purchased, be, simultaneously with the
closing of such Note Retirement or Murray Purchase, exchanged for Common Units
or exchanged for certain refinancing debt or securities pursuant to the terms of
the Letter Agreement (as defined in the Exchangeable PIK Notes Indenture)), on
or prior to September 30, 2017.

“Number Issuable” has the meaning given it in the second paragraph hereof.

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“NYSE” means the New York Stock Exchange, Inc.

“Offer Expiration Date” has the meaning given it in Section 2(a)(iii).

“Partnership” has the meaning given it in the first paragraph hereof.

“Partnership Agreement” means the First Amended and Restated Agreement of
Limited Partnership of the Partnership, dated as of June 23, 2014, by and among
the partners of the Partnership, as amended, supplemented or otherwise modified
from time to time.

“Partnership Units” means, collectively, the Common Units and the Subordinated
Units.

“Person” means any individual, corporation, limited liability company,
partnership, trust, incorporated or unincorporated association, joint venture,
joint stock company, government (or an agency or political subdivision thereof)
or other entity of any kind.

“Redemption/Purchase Date” means the date on which the Note Redemption has been
consummated.

“Subordinated Units” means the limited partnership interests in the Partnership
defined as “Subordinated Units” under and pursuant to the Partnership Agreement.

“Total Number of Warrants” means the product of (a) the Applicable Percentage
and (b) the Total Warrant Number.

“Total Unit Number” means, as of the Redemption/Purchase Date, the sum (without
duplication) of: (a) the total number of issued and outstanding Partnership
Units as of such date after giving effect to the consummation of the Note
Redemption, (b) all Partnership Units that are issued or issuable in connection
with the Note Redemption (including any (x) Partnership Units issued or issuable
in connection with any financing transaction consummated by, or any investment
made in, the Partnership or any of its subsidiaries in connection with the Note
Redemption, but excluding any Partnership Units issued in a rights offering in
connection therewith, and (y) Partnership Units issued or issuable to Reserves
(or any of its nominees, assignees or designees) pursuant to any contract or
other arrangement to provide Reserves (or any of its nominees, assignees or
designees) with a minimum amount or percentage of the Common Units that are
outstanding after giving effect to the consummation of the Note Redemption), (c)
all Partnership Units that are issuable upon the full conversion, exchange or
exercise of any option, warrant, indebtedness or security issued, issuable,
incurred or that may be incurred in connection with the Note Redemption
(including any option, warrant, indebtedness or security issued, issuable,
incurred or that may be incurred in connection with any financing transaction
consummated by, or any investment made in, the Partnership or any of its
subsidiaries in connection with the Note Redemption), assuming the maximum
amount of Partnership Units are issued in connection with any such conversion,
exchange or exercise, and (d) in the event that the Note Redemption is
consummated by, either in whole or in part, the acquisition of Exchangeable PIK
Notes by Murray Energy Corp., an Ohio Corporation (“Murray”), an Affiliate of
Murray or a group of Persons which includes Murray or any of its Affiliates, the
total number of Common Units that are issued or issuable upon exchange of all

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Exchangeable PIK Notes that exchange for Common Units in connection with the
Note Redemption (including any Exchangeable PIK Notes held by Reserves that
Reserves elects to have exchanged for Common Units in connection with the Note
Redemption) (such exchange to be determined based on the terms of the
Exchangeable PIK Notes Indenture as in effect immediately prior to the
Redemption/Purchase Date (but after giving effect to any adjustment to the
exchange price of the Exchangeable PIK Notes made upon the occurrence of a Note
Redemption, as described therein)).  Promptly following the Redemption/Purchase
Date (but in no event later than three (3) Business Days following the
Redemption/Purchase Date), the Partnership shall notify the Holder of the Total
Unit Number and the Total Warrant Number (such notification to include
reasonably detailed calculations of such numbers).

“Total Warrant Number” means the number of Warrants equal to the quotient
obtained by dividing (a) the product of (i) the Total Unit Number and (ii) .045,
by (b) .955.

“Transaction” has the meaning given it in Section 2(b).

“Transfer” means any voluntary or involuntary attempt to sell, assign, transfer,
grant a participation in, pledge or otherwise dispose of any Warrants, or the
consummation of any such transaction, or taking a pledge of, any of the
Warrants; provided, however, that a transaction that is a pledge shall not be
deemed to be a Transfer, but a foreclosure pursuant thereto shall be deemed to
be a Transfer.  The term “Transferred” shall have a correlative meaning.

“Transfer Agent” has the meaning given it in Section 1.

“Warrant Agreement” shall mean that certain Warrant Agreement, dated as of [●],
2016, between the Partnership and [American Stock Transfer & Trust Company,
LLC.]

“Warrants” have the meaning given it in the first paragraph hereof.

“Warrant Certificate” has the meaning given it in the first paragraph hereof.

“Warrant Exercise Documentation” has the meaning given it in Section 1.

Section 12.Notices.  All notices, demands and other communications provided for
or permitted hereunder shall be made in writing and shall be by electronic mail
(“e-mail”), registered or certified first-class mail, return receipt requested,
courier services or personal delivery, (a) if to the Holder, at the Holder’s
last known address (including e-mail address) appearing on the transfer books of
the Partnership or the Partnership’s warrant agent; and (b) if to the
Partnership, at its registered office located at 211 North Broadway, Suite 2600,
Saint Louis, MO  63102, Attention:  General Counsel; or such other address as
shall have been furnished to the party giving or making such notice, demand or
other communication.  All such notices and communications shall be deemed to
have been duly given: when delivered by hand, if personally delivered; when sent
by e-mail, if delivered by e-mail transmission; one Business Day following the
date delivered to a courier with overnight delivery requested, if delivered by a
recognized commercial overnight courier service guaranteeing next Business Day
delivery; and three Business Days after being deposited in the mail, postage
prepaid, if mailed.

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Section 13. Listing on Exchange.  If at any time the Common Units shall be
listed on any national securities exchange or automated quotation system, the
Partnership shall use its commercially reasonable efforts to cause to be listed,
and keep listed (so long as the Common Units shall be so listed on such exchange
or automated quotation system) any Common Units issuable upon exercise of the
Warrants.  

 

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IN WITNESS WHEREOF, the Partnership has caused this Warrant Certificate to be
duly executed as of the Issue Date.

FORESIGHT ENERGY LP

By: Foresight Energy GP, LLC, its general partner

 

 

By:

Name:

Title:

 

[Warrant Certificate Signature Page]

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Exhibit A

[Form of Assignment Form]

[To be executed upon assignment of Warrants]

The undersigned hereby assigns and transfers this Warrant Certificate to
_________________ whose Social Security Number or Tax ID Number is
_________________ and whose record address is
__________________________________, and irrevocably appoints _________________
as agent to transfer this security on the books of the Partnership.  Such agent
may substitute another to act for such agent.

Signature:

 

 

 

 

 

 

 

Signature Guarantee:

 

 

 

 

 

Date:

 

 

 

 

 

 

 

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Exhibit B7

 

Form of Back-Up Certificate

 

 

[Name and Address of Recipient]

Attn:  [__________]

 

Ladies and Gentlemen:

 

The undersigned proposes to sell [________] warrants (“Warrants”) to purchase
common units of Foresight Energy LP, a Delaware limited partnership (the
“Partnership”), pursuant to Rule 144 under the Securities Act of 1933, as
amended (“Rule 144”).  In connection with the sale of the Warrants, the
undersigned represents and warrants to you as follows:

1.

The Warrants are “restricted securities,” as that term is used in Rule 144(a)(3)
and the undersigned acquired and fully paid for the Warrants on [__________].

2.

The undersigned is not now, and has not been during the preceding three months,
an officer, director, or more than 10% unitholder of the Partnership or in any
other way an “affiliate” of the Partnership (as that term is defined in Rule
144(a)(1)).

3.

The undersigned has been the beneficial owner of the Warrants for a period of at
least [six (6) months]8 [one (1) year]9 as computed in accordance with Rule
144(d).  The undersigned as described on Schedule 1 the transactions that permit
“tacking” of the undersigned’s holding period to a date earlier than the date
referred to in paragraph 1 above.

4.

[To the best of the undersigned’s knowledge, the Partnership has complied with
the reporting requirements of Rule 144(c)(1).]10

5.

To the best of the undersigned’s knowledge, the Partnership [is not and has
never been a “shell company”]11 [has satisfied the requirements of Rule
144(i)(2), applicable to former “shell companies”]12 (as that term is defined in
Rule 144(i)(1)(i)-(ii)).

 

7 

Note to Draft:  This certificate is intended to be used by a seller of Warrants
that is not an “affiliate” (as defined under Rule 144(a)(1)) of the
Partnership.  If the seller is an affiliate of the Partnership, appropriate
changes will need to be made to this certificate.

8 

Note to Draft:  Bracketed text to be used if the Partnership is, and has been
for a period of at least 90 days immediately before the sale of the Warrants,
subject to the reporting requirements of Section 13 or Section 15(d) of the
Exchange Act of 1934, as amended.

9 

Note to Draft:  Bracketed text to be used if the Partnership is not, or has not
been for a period of at least 90 days immediately before the sale of the
Warrants, subject to the reporting requirements of Section 13 or Section 15(d)
of the Exchange Act of 1934, as amended.

10 

Note to Draft:  Bracketed text to be used if the Partnership is, and has been
for a period of at least 90 days immediately before the sale of the Warrants,
subject to the reporting requirements of Section 13 or Section 15(d) of the
Exchange Act of 1934, as amended.

11 

Note to Draft:  Bracketed text to be used if the Partnership has never been a
shell company.

12 

Note to Draft:  Bracketed text to be used if the Partnership has previously been
a shell company and has satisfied the requirements of Rule 144(i)(2).

 

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6.

This transaction is not part of a plan or scheme to evade the registration
requirements of the Securities Act of 1933, as amended. 

7.

The undersigned has read Rule 144 and is familiar with it.

8.

The undersigned is not aware of any material, non-public information about the
Partnership.

9.

The undersigned understands that you are relying upon the representations
contained in this letter.

 

Very truly yours,

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

 

 

 

 

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Exhibit C

 

Form of Legal Opinion

 

 

 

[Name and Address of Recipient]

Attn:  [__________]

 

Ladies and Gentlemen:

 

 

 

 

 

We are counsel to [___________] (“Seller”), and have recently received a
communication relating to the proposed transfer of an aggregate of [________]
warrants (the “Warrants”) to purchase common units of Foresight Energy LP, a
Delaware limited partnership (the “Partnership”).  We understand that all such
Warrants are restricted securities within the meaning of Rule 144 under the
Securities Act of 1933, as amended (the “Securities Act”).

In connection with the opinion hereinafter expressed, we have relied upon the
representations of Seller contained in its certification to us as of the date
hereof.  In addition, we have assumed, without any independent investigation,
the truth, accuracy and completeness of the Partnership’s filings with the
United States Securities and Exchange Commission filed pursuant to the
Securities Exchange Act of 1934, as amended, and the rules and regulations
promulgated thereunder.

Based on the foregoing, and subject to the further assumptions and
qualifications set forth below, we are of the opinion that the transfer of the
Warrants from Seller to the transferee is exempt from the registration
requirements of the Securities Act.

Attorneys involved in the preparation of this opinion are admitted to practice
law in the State of New York and we do not purport to be experts on, or to
express any opinion herein concerning, any law other than the laws of the State
of New York and the federal laws of the United States of America.

We are furnishing this letter to you solely for your benefit in connection with
the transfer of the Warrants.  This letter is not to be relied on by or
furnished to any other person or used, circulated, quoted or otherwise referred
to for any other purpose.  We do not undertake by delivery of this opinion or
otherwise to advise you of any change in any matter set forth herein, whether
based on a change in law or a change in any fact arising subsequent to the date
hereof that might affect the opinion expressed herein.

 

Very truly yours,

 

 

 

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Schedule 6

 

Description of Amendments to the Credit Agreement

The following description summarizes the material terms of the proposed
amendments to the Credit Agreement.  This description is also attached as
Exhibit A to the Amended and Restated Lender Support Agreement (as defined in
the Amended and Restated Notes Support Agreement).  

 

 

 

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EXECUTION VERSION

EXHIBIT A TO A&R LENDER SUPPORT AGREEMENT

SCHEDULE 6 OF EXHIBIT A TO A&R NOTES SUPPORT AGREEMENT

 

Foresight Energy LLC
Third Amended and Restated Credit Agreement

Summary of Principal Terms and Conditions

Set forth below is a summary of the principal terms and conditions for the
amendment and restatement of the Second Amended and Restated Credit Agreement
dated as of August 23, 2013 among Foresight Energy LLC, the letter of credit
issuing banks party thereto, the lenders party thereto and Citibank, N.A., as
administrative agent and collateral agent (as amended, restated, supplemented or
otherwise modified prior to the date hereof, the “Existing Credit
Agreement”).  This summary does not purport to summarize all the terms,
conditions, representations and other provisions with respect to the amendment
and restatement of the Existing Credit Agreement, which, to the extent not
specified herein, will be set forth in the Third Amended and Restated Credit
Agreement and include additional corrections and modifications to reflect the
operational and strategic requirements of the Borrower and its subsidiaries, as
may be mutually agreed by the parties, and to include LSTA contractual bail-in
language.  Any capitalized terms used herein and not otherwise defined shall
have the meanings give such terms in the Existing Credit Agreement.

Borrower:

Foresight Energy LLC, a Delaware limited liability company (the “Borrower”).

Agent:

Citibank, N.A., as administrative agent and collateral agent for the Senior
Facilities (in such capacities, the “Agent”).

Senior Facilities:

(A) Senior secured term loans in an aggregate outstanding principal amount of
$297.8 million (the “Term Facility” and the loans thereunder, the “Term Loans”),
subject to any reductions prior to the Effective Date (as defined below) as a
result of prepayments by the Borrower (including any amortization payments).  

 

(B) A senior secured revolving credit facility in an aggregate principal amount
of $475 million (reflecting a decrease of $75 million from the Existing Credit
Agreement on the Effective Date (the “Revolving Facility Reduction”)) (together
with the swingline facility referred to below, the “Revolving Facility” and,
together with the Term Facility, the “Senior Facilities”), under which the
Borrower may borrow loans from time to time (the “Revolving Loans”).  

1

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Transactions:

On the closing date of the Amended and Restated Credit Agreement (the “Effective
Date”): (i) the Amended and Restated Credit Agreement shall become effective,
(ii) the closing of the offer to exchange Senior Notes for Exchangeable Notes
and Second Lien Notes shall occur, (iii) the other transactions

contemplated by the Transaction Support Agreement to occur on such date shall
occur, and (iv) fees and expenses related to the foregoing, including the
Amendment Fee, shall be paid.

Letter of Credit and Swingline Subfacilities:

Same as Existing Credit Agreement.

Incremental Facilities:

No future Incremental Facilities will be permitted under the Credit Agreement.

Purpose:

Same as Existing Credit Agreement, except that the proceeds of Revolving Loans
shall not be permitted to be used to pay accrued and unpaid interest on the
Senior Notes (including as of the Effective Date) that are being exchanged for
Exchangeable Notes or Second Lien Notes (each as defined below).

Refinancing Facilities:

Same as Existing Credit Agreement.

Interest Rates:

The interest rates, Revolving Facility commitment fees and letter of credit fees
will be calculated in the same manner as in the Existing Credit Agreement;
provided that the Applicable Rates as to interest rate margins (and the Letter
of Credit Fee based on the Applicable Rate for Eurocurrency Rate Revolving
Loans) shall be increased by 1.00% per annum as set forth in Annex I.  The
Revolving Facility commitment fee and letter of credit fronting fee levels shall
remain unchanged.

Amendment Fee:

Lenders that execute the Transaction Support Agreement (or their permitted
successors and assigns thereunder) will receive on the Effective Date an
amendment fee in an amount equal to 1.00% of the aggregate principal amount of
their respective Term Loans and Revolving Facility commitments under the Credit
Agreement as of the Effective Date (after giving effect to the Revolving
Facility Reduction) (the “Amendment Fee”); provided that the Borrower shall be
entitled to a credit against such Amendment Fee for the fee of 0.25% of the
aggregate principal amount of their respective Term Loans and Revolving Facility
commitments under the Credit Agreement that shall be paid to the Lenders as a
condition precedent to the Lenders’ execution of the Amended and Restated
Transaction Support Agreement.

Default Rate:

Same as Existing Credit Agreement.

Letters of Credit:

Same as Existing Credit Agreement.  Any Letters of Credit outstanding under the
Existing Credit Agreement as of the Effective Date shall be deemed to be
outstanding under the Credit Agreement.

2

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Final Maturity and Amortization:

Same as Existing Credit Agreement (i.e., (i) the Term Facility will mature on
August 23, 2020, and will amortize in equal quarterly installments in an amount
equal to 0.25% of the original aggregate principal amount of the Term Loans on
August 23, 2013, with the balance payable on the maturity date of the Term
Facility; and (ii) the Revolving Facility will mature and the commitments
thereunder will terminate on August 23, 2018), except that (x) the Revolving
Facility will be subject to the mandatory commitment reduction and (y) the Term
Loans will have the benefit of the Excess Cash Flow Sweep, in each case as
described below under “Mandatory Prepayments and Commitment Reductions”.

Guarantees and Collateral:

Same as Existing Credit Agreement.

For the avoidance of doubt, the Collateral will be subject to second priority
Liens securing the Exchangeable Notes and the Second Lien Notes and any
Refinancing Indebtedness in respect thereof, which junior Liens shall be subject
to a customary silent second intercreditor agreement (the “Second Lien
Intercreditor Agreement”), materially consistent with the term sheet attached as
Schedule 1.

3

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Mandatory Prepayments and Commitment Reductions:

Same as Existing Credit Agreement, except:

(i) the excess cash flow prepayment provision in the Existing Credit Agreement
shall be replaced by a new provision providing that, in respect of each of (x)
the second half of fiscal year 2016 and (y) fiscal year 2017, 50% of Excess Cash
Flow (to be defined in a manner consistent with the Existing Credit Agreement
with such modifications mutually agreed by the parties) for such period shall be
used to prepay the Term Loans (the “Excess Cash Flow Sweep”); provided that any
voluntary prepayment of Term Loans made during each such period shall be
credited against excess cash flow prepayment obligations for such period on a
dollar-for-dollar basis;

(ii) the Extraordinary Receipts prepayment provisions in the Existing Credit
Agreement shall be modified to (i) include all proceeds of business interruption
insurance to the extent such proceeds constitute compensation for lost earnings
with respect to or otherwise connected to the Deer Run mine (“Hillsboro Business
Interruption Insurance Proceeds”) in the definition of “Extraordinary Receipts”,
(ii) permit Extraordinary Receipts constituting insurance proceeds (other than
Hillsboro Business Interruption Insurance Proceeds) to be used to repay any
purchase money, capital lease or other project-level Indebtedness permitted

under the Credit Agreement (including the Longwall Financing Arrangements) that
is secured by Liens on such insurance proceeds (or assets and property that gave
rise to the insurance proceeds) to the extent required under the documents
governing such Indebtedness as in effect as of the later to occur of (x) the
Effective Date and (y) the time of the event giving rise to such insurance
proceeds, and (iii) provide that the Hillsboro Business Interruption Insurance
Proceeds are not subject to reinvestment rights or the 100% prepayment
requirement, but 50% thereof shall be used to prepay the Term Loans and the
remaining 50% may be retained by the Borrower.

(iii) the aggregate commitments under the Revolving Facility shall be reduced on
a pro rata basis on December 31, 2016 to $450 million, without premium or
penalty; and

(iv) Section 2.05(c)(i)(A) of the Existing Credit Agreement shall be revised to
include a reference to Section 7.05(r).

Voluntary Prepayments and Reductions in Commitments:

Same as Existing Credit Agreement (i.e., all Loans may be prepaid without
prepayment premium, subject to customary breakage provisions).

Representations and Warranties:

Same as Existing Credit Agreement, except that (i) any representations and
warranties that refer to the Amendment Effective Date (the effective date of the
second amendment and restatement) will refer to the Effective Date, (ii) the
representation and warranty that there has not been a Material Adverse Effect
shall be measured from the last day of the most recently ended fiscal quarter
for which financial statements have been delivered prior to the Effective Date
and (iii) for purposes of any representations and warranties that are qualified
by Material Adverse Effect, “Material Adverse Effect” shall exclude the effect
of matters directly arising from or otherwise specifically related to the
Hillsboro complex, including any combustion event at, and subsequent idling of,
the Hillsboro mine and any contracts related thereto.

4

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Conditions Precedent to Effective Date:

Customary for transactions of this type, and in addition, will include:

(i) the substantially concurrent consummation of the Transaction (as defined in
the Transaction Support Agreement);

(ii) evidence of the effectiveness of amendments and waivers of the Receivables
Financing Agreement dated January 13, 2015 among Foresight Receivables, LLC, as
borrower, the Borrower,

certain Subsidiaries of the Borrower, the lenders party thereto and PNC Bank,
National Association, as agent, as amended (the “Receivables Financing
Agreement”);

(iii) evidence of the effectiveness of amendments and waivers to certain other
Indebtedness of the Loan Parties;

(iv) execution and delivery of the Second Lien Intercreditor Agreement;

(v) the Borrower shall have paid to the Agent, for the account of the Lenders
entitled thereto, the Amendment Fee; and

(vi) the receipt by each Lender at least three (3) Business Days prior to the
Effective Date, to the extent requested by such Lender at least ten (10)
Business Days prior to the Effective Date, all documentation and other
information required by bank regulatory authorities under applicable “know your
customer” and anti-money laundering rules and regulations including the PATRIOT
Act.

Conditions Precedent to all Subsequent Borrowings:

Same as Existing Credit Agreement.

Affirmative Covenants:

Same as Existing Credit Agreement, except that (i) as an additional requirement,
within 30 days after the end of each of the first two months of each fiscal
quarter, the Borrower shall provide to the Agent for distribution to those
Lenders that are not Public Lenders an unaudited monthly management consolidated
balance sheet and income statement of the Borrower and its Subsidiaries (in a
form consistent with the Borrower’s current practice and, for the avoidance of
doubt, subject to normal quarterly or year-end adjustments and the absence of
footnotes) and (ii) the requirement that audit opinion not be qualified by a
“going concern” or like qualification or exception shall not apply to the
financial statements of the Borrower delivered for the fiscal year ended
December 31, 2015.

5

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6

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Negative Covenants:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Same as Existing Credit Agreement, except:

(i) the Indebtedness covenant shall be modified to (A) permit the incurrence of
(1) up to $300 million aggregate principal amount of second lien senior
exchangeable Notes maturing no later than September 30, 2017 and with an
interest rate not in excess of 15% per annum, payable in kind (the “Exchangeable
Notes”), plus additional principal amounts resulting from any Refinancing
Indebtedness in respect thereof, provided, that any such Refinancing
Indebtedness (i) shall have a maturity date no earlier than 91 days after the
maturity date of the Second Lien Notes, (ii) shall not require payment of
interest in cash, and (iii) may only be secured by a lien junior in right of
priority to the lien securing the Second Lien Notes, and (2) up to $300 million
aggregate principal amount of second lien senior secured notes due August 2021
with an interest rate per annum not in excess of (i) 9% per annum in cash for
the first two years and 10% per annum in cash thereafter, plus (ii) 1% per annum
payable in kind (the “Second Lien Notes”), plus, in each case, additional
principal amounts resulting from the capitalization of accrued and unpaid
interest on the Senior Notes at the Effective Date, any paid in kind interest
after the Effective Date and any Refinancing Indebtedness in respect thereof,
provided that any lien securing such Refinancing indebtedness shall be junior in
right of priority to the lien securing the Facilities, (B) correct the
cross-reference in clause (l) thereof to refer to Section 7.01(c) of the Credit
Agreement and (C) add the following sentence:  “The accrual of interest or
preferred stock dividends, the accretion or amortization of original issue
discount, the payment of interest on any indebtedness in the form of additional
indebtedness with the same terms, the reclassification of preferred stock as
Indebtedness due to a change in accounting principles and the payment of
dividends on preferred stock or Disqualified Equity Interests in the form of
additional shares of the same class of preferred stock or Disqualified Equity
Interests will not be deemed to be an incurrence of Indebtedness or an issuance
of preferred stock or Disqualified Equity Interests for purposes of this Section
7.02.”;

(ii) the Lien covenant shall be modified to permit junior priority Liens on the
Collateral to secure the obligations under the Exchangeable Notes and the Second
Lien Notes and any Refinancing Indebtedness in respect thereof, which Liens
shall be subject to the Second Lien Intercreditor Agreement;

(iii) the Restricted Payment covenant shall be modified to (A) prohibit any
Restricted Payments by the Borrower during fiscal year 2016, (B) prohibit
Restricted Payments (other than permitted Tax Distributions and TRA
Distributions described in clause (C) below) from January 1, 2017 until the
later to occur of (x) June 30, 2018 and (y) the refinancing of the Revolving
Facility and (C) permit Tax Distributions and TRA Distributions by the Borrower
during fiscal years 2017 and 2018 and thereafter, provided that Tax
Distributions related to cancellation of debt income shall be capped at $15
million per fiscal year; provided, further, that in each case such provisions
shall be subject to customary exceptions to permit payments of expenses of the
MLP and the General Partner, payments under the MSA and other customary
exceptions to be agreed;

(iv) the debt prepayment covenant shall be modified to expressly permit (A) the
prepayment or redemption of the Exchangeable Notes in connection with the
exercise by Murray Energy Holdings Co., a Delaware corporation, and/or its
subsidiaries of the option to purchase 46% of the equity interests of Foresight
Energy GP LLC (the “Murray Option”); provided that such prepayment or redemption
may only be consummated with the proceeds of (i) an equity issuance, (ii) a
capital contribution or (iii) an incurrence of indebtedness that is unsecured or
ranks junior to the Second Lien Notes, does not have any cash interest payments
and matures later than the Second Lien Notes, (B) any redemption in respect of
any Senior Notes not participating in the exchange offer and permit the
satisfaction and discharge of the indenture governing the Senior Notes, (C) the
conversion of the Exchangeable Notes into Equity Interests of Foresight Energy
LP in accordance with their terms and (D) any permitted refinancing of
Indebtedness with Refinancing Indebtedness or the proceeds of Qualified Equity
Interests; and

(v) the transactions with Affiliates covenant will be modified to permit the
transactions to occur concurrently with the effectiveness of the Credit
Agreement on the Effective Date.

Anti-Hoarding:

An anti-hoarding provision prohibiting borrowings of Revolving Loans (but not
the issuance of letters of credit) under the Revolving Facility if unrestricted
cash of the Borrower exceeds $35 million will be added to the Credit Agreement
and apply so long as any Revolving Loans are outstanding.

7

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Financial Covenants:

The Consolidated Interest Coverage Ratio financial covenant in Section 7.11(a)
of the Existing Credit Agreement and the Senior Secured Leverage Ratio financial
covenant in Section 7.11(b) of the Existing Credit Agreement will apply to both
the Revolving Facility and the Term Facility.  Section 8.01(b) will also be
modified to reflect such change.  Following the Effective Date, any amendment
of, or waiver or consent with respect to, Section 7.11 will also require the
consent of the Required Lenders.

The applicable ratios will be as follows:

(i) The Consolidated Interest Coverage Ratio covenant levels will remain the
same as in the Existing Credit Agreement.

(ii) The Senior Secured Leverage Ratio will be calculated the

same as in the Existing Credit Agreement and the levels will be reset as
follows:

 

Fiscal Quarter Ending

Maximum Senior
Secured Leverage Ratio

Second Quarter 2016 through
Fourth Quarter 2016

3.50 : 1.00

First Quarter 2017 through
Fourth Quarter 2017

3.50 : 1.00

First Quarter 2018 through
Fourth Quarter 2018

3.50 : 1.00

First Quarter 2019 through
Fourth Quarter 2019

3.25 : 1.00

First Quarter 2020 through
Fourth Quarter 2020

3.00 : 1.00

 

First Quarter 2021 through
Fourth Quarter 2021

2.75 : 1.00

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For purposes of determining compliance with the financial covenants, any cash
equity contribution (which shall be common equity or otherwise in a form
reasonably acceptable to the Required Lenders) made to the Borrower after the
first day of the applicable quarter and on or prior to the day that is 10
business days after the day on which financial statements are required to be
delivered for such fiscal quarter will be included in the calculation of
Consolidated EBITDA solely for the purposes of determining compliance with the
financial covenants at the end of such fiscal quarter and applicable subsequent
periods which include such fiscal quarter (any such equity contribution so
included in the calculation of Consolidated EBITDA, a “Specified Equity
Contribution”); provided that (a) in each four consecutive fiscal quarter
period, there shall be at least two fiscal quarters in respect of which no
Specified Equity Contribution is made, (b) no more than three Specified Equity
Contributions may be made, (c) the amount of any Specified Equity Contribution
shall be no greater than the amount required to cause the Borrower to be in pro
forma compliance with the financial covenants, and (d) there shall be no pro
forma reduction in indebtedness with the proceeds of any Specified Equity
Contribution for determining compliance with the financial covenants for the
fiscal quarter in respect of which such Specified Equity Contribution is made
(either directly through prepayment or indirectly as a result of the netting of
unrestricted cash).

 

“Consolidated EBITDA” will be modified to add an addback for any actually
incurred costs, fees and expenses in connection with the contemplated
transactions, the change of control litigation, any redemption of the
Exchangeable Notes, exercise of the Murray Option and any related transactions
and any restructuring of the Borrower and its Subsidiaries, including the fees
and expenses of restructuring advisors.

Synergy and Conflicts Committee and CAO:

Affiliate transactions in excess of a materiality threshold to be agreed upon
shall be subject to the review and approval of a Synergy and Conflicts
Committee.  

A chief accounting officer (CAO) that is not affiliated with either Murray
Energy Corp. or Foresight Reserves LP shall be appointed by the independent
members of the Board; provided that Alix Partners or another restructuring
advisor selected by the Board shall be authorized to act as a restructuring
advisor reporting to the CEO, to perform such function as generally required of
an interim CAO and to provide such reporting support and advice to the Board as
is appropriate and necessary.

9

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Events of Default:

Same as Existing Credit Agreement, except that in connection with the Change of
Control Event of Default, the definition of “Permitted Holders” shall be revised
as set forth below and expressly permit the exercise of the Murray Option and
the redemption and/or conversion of the Exchangeable Notes and related
transactions.

“Permitted Holder” means, collectively, (a) (i) Chris Cline and his children and
other lineal descendants, Robert E. Murray, Brenda L. Murray, Robert Edward
Murray (son), Jonathan Robert Murray and Ryan Michael Murray (or any of their
estates, or heirs or beneficiaries by will); (ii) the spouses or former spouses,
widows or widowers and estates of any of the Persons referred to in clause (i)
above; (iii) any trust having as its sole beneficiaries one or more of the
persons listed in clauses (i) and (ii) above; and (iv) any Person a majority of
the voting power of the outstanding Equity Interest of which is owned by one or
more of the Persons referred to in clauses (i), (ii) or (iii) above, (b) Murray
Energy Holdings Co., a Delaware corporation, and its Subsidiaries (“Murray
Energy”) and any investor that participates with Murray Energy in the exercise
of the Murray Option, (c) any group (within the meaning of Section 13(d)(3) or
Section 14(d)(2) of the Exchange Act or any successor provision) of which any of
the foregoing are members; provided that, in the case of such group and without
giving effect to the existence of such group or any other group, such Persons
referenced in clauses (a) and (b)

above, collectively, have beneficial ownership of more than 50% of the total
voting power of the voting units or stock of the Borrower or any Parent thereof,
(d) Foresight Reserves L.P. and (e) the General Partner.

On the Effective Date, the Required Lenders will also waive the Defaults and
Events of Default specified in (i) the Notice of Events of Default and
Reservation of Rights delivered by Agent to Borrower dated December 9, 2015,
(ii) the notice of payment default delivered by Borrower to the Agent dated
February 16, 2016, and (iii) that certain Compliance Certificate in respect of
the period ending December 31, 2015 delivered to the Agent on March 23, 2016,
and any other Defaults or Events of Default (other than any payment Default or
Event of Default) continuing immediately prior to the consummation of the
Transactions.

Unrestricted Subsidiaries:

Same as Existing Credit Agreement.

Voting:

Same as Existing Credit Agreement.

Cost and Yield Protection:

Same as Existing Credit Agreement.

Assignments and Participations:

Same as Existing Credit Agreement

Non-Pro Rata Discounted Voluntary Prepayments:

 

Same as Existing Credit Agreement.

 

Expenses and Indemnification:

Same as Existing Credit Agreement.

Governing Law and Forum:

New York.

Counsel to Agent:

Shearman & Sterling LLP

General:

The covenants and event of defaults in the indentures governing the Second Lien
Notes and Exchangeable Notes shall in no event be more restrictive than the
corresponding covenants and events of default set forth in the amended and
restated Credit Agreement.  For the avoidance of doubt, the Second Lien Notes
and Exchangeable Notes shall not have a financial maintenance covenant.

 

10

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ANNEX I

Applicable Rate

The first clause of the definition of Applicable Rate in Section 1.01 of the
Credit Agreement (prior to the proviso therein) will be amended and restated as
follows:

“Applicable Rate” means (a) in the case of Term Loans, (i) 5.50% per annum for
Eurocurrency Rate Loans and (ii) 4.50% per annum for Base Rate Loans and (b) in
the case of the Revolving Loans and Swing Line Loans, the applicable percentage
per annum set forth below determined by reference to the Consolidated Net
Leverage Ratio as set forth in the most recent Compliance Certificate received
by the Administrative Agent pursuant to Section 6.02(b):

Applicable Rate for Revolving Loan and Swing Line Loans

Level

Consolidated Net
Leverage Ratio

Eurocurrency Rate Loans and Letters of Credit

Base Rate Loans

Commitment Fee

I

< 2.50 to 1.00

3.50%

2.50%

0.50%

II

≥2.50 : 1.00 but < 3.00 : 1.00

3.75%

2.75%

0.50%

III

≥3.00 : 1.00 but < 4.00 : 1.00

4.00%

3.00%

0.50%

IV

≥4.00 : 1.00 but < 5.00 : 1.00

4.25%

3.25%

0.50%

V

≥5.00 : 1.00

4.50%

3.50%

0.50%

 

 

provided that (a) the Applicable Rate will be determined as of the last day of
the immediately preceding fiscal quarter, (b) the Applicable Rate determined for
any Adjustment Date (including the first Adjustment Date) shall remain in effect
until a subsequent Adjustment Date for which the Consolidated Net Leverage Ratio
falls within a different level, and (c) if the financial statements and related
Compliance Certificate for any fiscal period are not delivered by the date due
pursuant to Sections 6.01 and 6.02, the Applicable Rate shall be set at Level V
until the date of delivery of such financial statements and Compliance
Certificate, after which the Applicable Rate shall be based on the Consolidated
Net Leverage Ratio set forth in such Compliance Certificate.

 

 

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Schedule 1

Intercreditor Agreement Term Sheet13

Reference is made to (i) that certain Credit Agreement, dated as of August 12,
2010, amended and restated on December 15, 2011 and August 23, 2013, and amended
by Incremental Amendment No. 1 dated as of May 27, 2015, and as further amended,
amended and restated, modified or supplemented in connection with the
Restructuring (as defined below) and from time to time (the “First Lien Credit
Agreement”), between Foresight Energy LLC (the “Borrower”) and certain other
parties; and (ii) (A) certain second lien senior exchangeable notes (the “Second
Lien Exchangeable Notes”) to be issued by [_______] (the “Issuer”), and (B)
certain second lien senior secured notes (the “Second Lien Secured Notes” and,
together with the Second Lien Exchangeable Notes, the “Second Lien Notes”) to be
issued by the Issuer, all of which Second Lien Notes will be guaranteed by,
among others, the Borrower and secured by a junior lien on the Collateral (as
defined below).  

“Restructuring”  means the transactions related to the restructuring of
outstanding indebtedness of the Borrower and its affiliates arising as a result
of the occurrence of certain events of default thereunder, including, without
limitation, indebtedness outstanding under the First Lien Credit Agreement and
under the Senior Notes (as defined in the First Lien Credit Agreement).  For
purposes of this Amended and Restated Term Sheet, the Facilities (as defined in
the First Lien Credit Agreement) under the First Lien Credit Agreement (and the
facilities provided in any refinancings, substitutions, extensions or
replacements thereof) are herein referred to collectively as the “First Lien
Credit Facility” and the First Lien Credit Facility together with the Second
Lien Notes (and any refinancings, substitutions, extensions or replacements
thereof) are referred to herein individually as a “Debt Facility” and
collectively as the “Debt Facilities”.  Capitalized terms used herein and not
otherwise defined herein shall have the meanings set forth in the First Lien
Credit Agreement as in effect as of the date hereof.

 

13 

The Second Lien Notes (and any Refinancing Indebtedness thereof) shall be
subject to a customary silent second intercreditor agreement, however, all such
terms set forth in this Schedule 1 in respect thereof are subject to ongoing
negotiation between the Consenting Secured Lenders and the Required Consenting
Noteholders; all of such terms shall be acceptable to such parties.

 

 

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Parties:

(viii)Citibank, N.A., as administrative agent (in such capacity, together with
its successors and permitted assigns in such capacity, the “First Lien
Administrative Agent”) and as collateral agent (in such capacity, together with
its successors and permitted assigns in such capacity, the “First Lien
Collateral Agent”) under the First Lien Credit Agreement.

(ix)[___] as trustee for the Second Lien Exchangeable Notes (in such capacity,
together with its successors and permitted assigns in such capacity, the “Second
Lien Exchangeable Notes Trustee”),  [___] as trustee for the Second Lien Senior
Notes (in such capacity, together with its successors and permitted assigns in
such capacity, the “Second Lien Secured Notes Trustee” and, together with the
Second Lien Exchangeable Notes Trustee, the “Second Lien Trustees”) and [______]
as collateral trustee (in such capacity, together

with its successors and permitted assigns in such capacity, the “Second Lien
Collateral Agent”) for the Second Lien Notes. 

(x)The Borrower under the First Lien Credit Agreement.

(xi)Each guarantor under the First Lien Credit Agreement (each, individually, a
“First Lien Guarantor”). NTD: For the avoidance of doubt, the Issuer and the
Second Lien Guarantors will also be required to be First Lien Guarantors.

(xii)The Issuer under the Second Lien Notes.

(xiii)Each guarantor under the Second Lien Notes (each, a “Second Lien
Guarantor”).

(xiv)Each other Person required to be a party to the Intercreditor Agreement
from time to time pursuant to the terms of the Intercreditor Agreement, the
First Lien Credit Agreement and the Second Lien Notes, including, without
limitation, each Hedge Bank and Commodity Hedge Counterparty party to a
Permitted Secured Commodity Swap Contract from time to time.

The Borrower, the Issuer, the First Lien Guarantors and the Second Lien
Guarantors are hereinafter referred to collectively as the “Loan Parties”.

Any reference to “Collateral Agent” hereunder shall mean the First Lien
Collateral Agent and/or the Second Lien Collateral Agent, as the context may
require.

Purpose:

To establish the relative rights and privileges of the parties with respect to
the Collateral.

 

First Lien Claimholders:

The agents, issuing banks and lenders under the First Lien Credit Agreement (and
any refinancings, substitutions, extensions or replacements thereof) (the “First
Lien Lender Parties”), the Hedge Banks under any Secured Hedge Agreement, the
Cash Management Banks under any Secured Cash Management Agreement, each
Commodity Hedge Counterparty party to a Permitted Secured Counterparty Swap
Contract from time to time and the First Lien Collateral Agent.

 

First Lien Obligations:

All obligations of every nature of each Loan Party from time to time owed to the
First Lien Claimholders under the applicable secured documents, whether for
principal, interest, breakage costs, fees, expenses, premium (if any), payments
of early termination of or ordinary course settlement payments under interest
rate protection agreements and commodity hedge agreements, indemnification
payments, letter of credit reimbursement obligations, and all guarantees of the
foregoing.  

 

2

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Second Lien Claimholders:

The agents, trustees and note holders of the Second Lien Notes (and any
refinancings, substitutions, extensions or replacements thereof) (the “Second
Lien Noteholders”) and the Second Lien Collateral Agent.

The First Lien Claimholders and the Second Lien Claimholders are the “Secured
Parties”.

 

Second Lien Obligations:

All obligations of every nature of each Loan Party from time to time owed to the
Second Lien Claimholders under the applicable secured documents, whether for
principal, interest, breakage costs, fees, expenses, premium (if any),
indemnification payments, and all guarantees of the foregoing.  

 

Collateral:

The First Lien Obligations and the Second Lien Obligations shall be secured by
liens on the same Collateral (other than Excluded Collateral (as defined
below)).  No Loan Party shall grant any liens on any asset or property to secure
obligations under either Debt Facility unless it has granted a lien on such
asset or property to secure the other Debt Facility.  The Collateral will
consist of the following, collectively:

 

(iii)the “Collateral” (as such term is defined in the First Lien Credit
Agreement) (the “Credit Facility Collateral”); and

(iv)all other existing and future assets and property, and all proceeds thereof,
of each Loan Party (other than Excluded Assets (as defined in the Security
Agreement referred to in the First Lien Credit Agreement) and real property that
is not Material Owned Real Property or Material Leased Real Property (as defined
in the First Lien Credit Agreement) (the “Additional Collateral”).

Excluded Collateral:

Notwithstanding anything to the contrary herein, certain accounts (e.g., cash
collateral accounts for the benefit of issuing banks) maintained pursuant to the
credit documents for the benefit of the First Lien Lender Parties shall solely
be for the benefit of the applicable First Lien Lender Parties (“Excluded
Collateral”).

 

Additionally, no First Lien Claimholder or Second Lien Claimholder shall be
required to share any amounts received or deemed received by it in respect of
any First Lien Obligation or Second Lien Obligation owed to it from separate
insurance, credit default swap protection or other protection against loss
arranged by such First Lien Claimholder or Second Lien Claimholder (as
applicable) for its own account in respect of any such First Lien Obligation or
Second Lien Obligation (which amounts shall be for the sole benefit of such
First Lien Claimholder or Second Lien Claimholder (as applicable)).

 

3

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Permitted Liens:

The Secured Parties’ rights with respect to the Collateral shall be subject only
to other liens permitted to exist on the Collateral under

the First Lien Credit Agreement.

 

Lien Subordination:

The liens securing the Second Lien Obligations (the “Second Priority Liens”)
shall be expressly junior and subordinated in all respects to the liens securing
the First Lien Obligations (the “First Priority Liens”), irrespective of the
time, order or method of creation, attachment or perfection of such Second
Priority Liens or First Priority Liens or any failure, defect or deficiency or
alleged failure, defect or deficiency in any of the foregoing.

 

4

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Limitations on Enforcement:

Until the First Lien Obligations have been paid in full in cash:

 

(i)  The Second Lien Claimholders shall not (nor shall they instruct the Second
Lien Collateral Agent to) exercise or seek to exercise any rights, power or
remedies (including setoff) with respect to, or take any action in respect of,
any of the Collateral and shall not (nor shall they instruct the Second Lien
Collateral Agent to) institute any action or proceeding (whether judicial or
non-judicial) with respect to such rights, powers or remedies.

 

(ii) None of the Second Lien Claimholders will take or receive any Collateral or
any proceeds of Collateral in connection with the exercise of any right or
remedy (including setoff) with respect to any Collateral in contravention of the
aforementioned lien priority.

 

(iii)  The Second Lien Claimholders shall recognize the rights of the First Lien
Claimholders under the Intercreditor Agreement, including, without limitation,
the right of the First Lien Claimholders to vote the claim represented by the
Second Lien Obligations to the extent necessary to enforce the Intercreditor
Agreement.

 

At all times prior to the payment in full in cash of the First Lien Obligations,
the First Lien Claimholders shall control (as described under the caption
“Voting” below) all decisions related to the exercise of remedies in respect of
the Collateral (subject to the terms of the First Lien Credit Agreement and the
collateral documents entered into to secure the First Lien Obligations (the
“First Lien Collateral Documents”) and any amendments and waivers thereunder
(subject to customary provisions requiring consent of the First Lien
Claimholders and the Second Lien Claimholders)).  The First Lien Collateral
Agent shall have the right to initiate a vote of the First Lien Claimholders
with respect to the exercise of remedies.

 

No Secured Party will oppose or otherwise contest any lawful exercise by the
First Lien Collateral Agent of the right to credit bid the secured obligations
at any sale in foreclosure of the liens granted to the First Lien Collateral
Agent, for the benefit of the Secured Parties so long as such bid is approved
separately by the requisite First Lien Claimholders.  

 

The terms of the Intercreditor Agreement shall govern even if part or

all of the First Lien Obligations or Second Lien Obligations or the liens
securing payment and performance thereof are not perfected or are avoided,
disallowed, set aside or otherwise invalidated in any judicial proceeding or
otherwise.

 

5

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No Interference:

 

Each Second Lien Claimholder will agree that:

(i) it will not support, take or cause to be taken any action the purpose or
effect of which is, or could be, to make any Second Priority Lien pari passu
with, or to give such Second Lien Claimholder any preference or priority
relative to, any First Priority Lien with respect to the Collateral subject to
such First Priority Lien and Second Priority Lien or any part thereof;

(ii) it will not challenge or question in any proceeding the validity or
enforceability of any First Lien Obligations or First Lien Collateral Documents,
or the validity, attachment, perfection or priority of any First Priority Lien,
or the validity or enforceability of the priorities, rights or duties
established by or other provisions of the Intercreditor Agreement;

(iii) it will not support, take or cause to be taken any action the purpose or
intent of which is, or could be, to interfere, hinder or delay, in any manner,
whether by judicial proceedings or otherwise, any sale, transfer or other
disposition of the Collateral subject to any Second Priority Lien by any First
Lien Claimholder or the First Lien Collateral Agent acting on their behalf;

(iv) it shall have no right to (A) direct any First Lien Claimholder to exercise
any right, remedy or power with respect to the Collateral subject to any Second
Priority Lien or (B) consent to the exercise by any First Lien Claimholder or
the First Lien Collateral Agent acting on their behalf of any right, remedy or
power with respect to the Collateral subject to any Second Priority Lien;

(v) it will not institute any suit or assert in any suit or insolvency or
liquidation proceeding any claim against any First Lien Claimholder seeking
damages from or other relief by way of specific performance, instructions or
otherwise with respect to, and no First Lien Claimholder shall be liable to any
Second Lien Claimholder for, any action taken or omitted to be taken by such
First Lien Claimholder or the First Lien Collateral Agent acting on their behalf
with respect to any Collateral securing such Second Lien

Obligations that is subject to any Second Priority Lien;

(vi) it will not seek, and shall waive any right, to have any Collateral subject
to any Second Priority Lien or any part thereof marshaled upon any foreclosure
or other disposition of such Collateral; and

(vii) it will not attempt, directly or indirectly, whether by judicial
proceedings or otherwise, to challenge the enforceability of any provision of
the Intercreditor Agreement or support, take or cause to be taken any action
that could otherwise reasonably be expected to result in an impairment of the
First Lien Administrative Agent’s, the First Lien Collateral Agent’s or any of
the First Lien Claimholders’ rights or interests under the First Lien Credit
Agreement, the First Lien Collateral Documents, and the Intercreditor Agreement.

 

Voting:

With respect to any remedies proposed to be taken by Secured Parties with
respect to the Collateral and all other matters relating to the Collateral or
the First Lien Collateral Documents, the First Lien Collateral Agent will take
direction from the holders of a majority in amount of all First Lien Obligations
then outstanding under the First Lien Credit Agreement.

 

Except as otherwise provided herein, with respect to the Second Lien Collateral
Agent, the Second Lien Collateral Agent will take direction from the holders of
a majority of all Second Lien Obligations then outstanding.

 

6

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Distributions of

Collateral:

Following the occurrence of and during the continuation of an Event of Default
and delivery of a remedies instruction to apply proceeds of the Collateral in
accordance with the cash waterfall provisions below, the proceeds of any
application of amounts received in accordance with account control rights
exercised by either Collateral Agent (irrespective of whether such control
rights have been exercised pursuant to a remedies instruction), liquidation,
foreclosure or similar transaction related to the sale of Collateral (other than
the Excluded Collateral), and proceeds received in a bankruptcy will be applied
in the following order of priority:

(i)First, on a pro rata basis, to pay fees, expenses and indemnities of the
First Lien Collateral Agent, the Second Lien Collateral Agent and any
administrative agent or issuing bank expenses and fees (other than letter of
credit reimbursement obligations) under the First Lien Credit Agreement and
Second Lien Notes;

 

(ii)Second, on a pro rata basis to any First Lien Claimholder which has
theretofore advanced or paid any fees to any agent or bank referred to in
priority first above, other than any amounts paid under priority first above, an
amount equal to the amount thereof so advanced or paid by such First Lien
Claimholder and for which such Secured Party has not been previously

reimbursed;

 

(iii)Third, on a pro rata basis to the payment of, without duplication, (a) any
interest expense (including fees) then due and payable under the First Lien
Credit Facility, any Secured Hedge Agreement, any Secured Cash Management
Agreement and any Permitted Secured Commodity Swap Contract and (b) to the
extent such expenses are reimbursable in accordance with the terms of the
relevant documents, all out-of-pocket expenses (including reasonable legal fees)
incurred by any First Lien Claimholder in connection with the enforcement and
protection of its rights under such documents to which such First Lien
Claimholder is a party or otherwise by reason of the occurrence of a default
thereunder;

 

(iv)Fourth, on a pro rata basis, to the payment of, without duplication, (a) any
principal and other amounts then due and payable in respect of the First Lien
Credit Facility (including cash collateralization (at 102.5% of the available
amount thereof) of all outstanding letters of credit issued thereunder), any
Secured Hedge Agreement, any Secured Cash Management Agreement and any Permitted
Secured Commodity Swap Contract and (b) any other First Lien Obligations then
outstanding (including termination or settlement payments under interest rate
protection agreements);

 

(v)Fifth, on a pro rata basis to the payment of, without duplication, (a) any
interest expense then due and payable under the Second Lien Notes (and any
refinancings, substitutions, extensions or replacements thereof), and (b) to the
extent such expenses are reimbursable in accordance with the terms of the
relevant documents, all out-of-pocket expenses (including reasonable legal fees)
incurred by any Second Lien Claimholder in connection with the enforcement and
protection of its rights under such documents to which such Second Lien
Claimholder is a party or otherwise by reason of the occurrence of a default
thereunder;

 

(vi)Sixth, on a pro rata basis, to the payment of, without duplication, (a) any
principal and other amounts then due and payable in respect of the Second Lien
Notes (and any refinancings, substitutions, extensions or replacements
thereof)  and (b) any other Second Lien Obligations then outstanding; and

 

(vii)Seventh, any remaining proceeds to the applicable Loan Party or as a court
of competent jurisdiction may direct.

 

In addition to the foregoing, any net (x) casualty and condemnation proceeds and
(y) asset sale proceeds and extraordinary receipts shall be applied in
accordance with the terms of the First Lien Credit Facility.

7

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Turnover Provisions:

Each of the Second Lien Claimholders will agree to hold in trust and promptly
turn over to the First Lien Collateral Agent any payments or other distributions
received in contravention of the Intercreditor Agreement regardless of their
source or form.  For the avoidance of doubt, no mandatory or voluntary
prepayments of Second Lien Obligations will be permitted prior to the discharge
in full in cash of the First Lien Obligations.

 

If, for any reason, a Secured Party does not have a valid and perfected lien
(either directly or through any applicable Collateral Agent) on any portion of
the Collateral, proceeds on such portion received by the other Secured Parties
will be paid over to the extent necessary to reflect the distribution provisions
above as if all Secured Parties held such a lien.

 

If any Second Lien Claimholder obtains knowledge of or is notified by the First
Lien Collateral Agent that a payment or distribution made to a First Lien
Claimholder is rescinded for any reason whatsoever, such Second Lien Claimholder
shall promptly pay or remit to the First Lien Collateral Agent any payment or
distribution received by it in respect of any Collateral subject to any First
Priority Liens securing such First Lien Obligations, and the provisions set
forth in the Intercreditor Agreement shall be reinstated as if such payment or
distribution had not been made, until the payment and satisfaction in full of
the First Lien Obligations.

 

Restrictions on Amendments:

Without the prior written consent of the First Lien Collateral Agent, no
collateral documents entered into to secure the Second Lien Obligations (such
collateral documents, the “Second Lien Collateral Documents”) may be amended,
supplemented or otherwise modified or entered into to the extent such amendment,
supplement or modification, or the terms of any new Second Lien Collateral
Document, would be prohibited by, or would require any Loan Party to act or
refrain from acting in a manner that would violate, any of the terms of the
Intercreditor Agreement.

 

In the event that the First Lien Claimholders or the First Lien Collateral Agent
enters into any amendment, waiver or consent in respect of any of the First Lien
Collateral Documents for the purpose of adding to, or deleting from, or waiving
or consenting to any departures from any provisions of, any First Lien
Collateral Document or changing in any manner the rights of the First Lien
Collateral Agent, the First Lien Claimholders, the Borrower or any other Loan
Party thereunder (including the release of any liens in Collateral to the extent
permitted as described below under “Release of Liens”), then such amendment,
waiver or consent shall apply automatically to any comparable provision of the
comparable Second Lien Collateral Document without the consent of the Second
Lien Collateral Agent or any Second Lien Claimholder and without any action by
the Second Lien Collateral Agent, the Borrower or any other Loan Party.

 

8

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Effective Date Acknowledgments:

On the Effective Date (to be defined as the date of consummation of certain
transactions), each of the Secured Parties will recognize the existence and the
permissibility of the other Secured Parties and their respective debt and/or
lien obligations and rights.  

 

Release of Liens:

The Intercreditor Agreement will provide that in the event the First Lien
Collateral Agent releases its lien on and/or sells all or any portion of
Collateral that is (a) permitted to be sold or transferred pursuant to the First
Lien Credit Agreement, (b) sold in a foreclosure or similar transactions in
accordance with the terms of the First Lien Credit Agreement or (c) Excluded
Collateral, in each case, the Second Priority Lien on such Collateral shall be
automatically released without the consent of any of the Second Lien
Claimholders or the Second Lien Collateral Agent being required, such release
being made free and clear of all liens of the Secured Parties, and each Second
Lien Claimholder shall be deemed to have consented to such release or sale.

 

In addition, the requirement that a Second Priority Lien attach to, or be
perfected with respect to, Collateral shall be waived automatically and without
further action so long as the requirement that a First Priority Lien attach to,
or be perfected with respect to, such property or assets is waived by the First
Lien Collateral Agent.

 

9

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Refinancings:

The First Lien Credit Facility and the Second Lien Notes may be replaced,
refunded or refinanced, in whole or in part, (each, a “Replacement”) without
notice to, or the consent of any Secured Party, all without affecting the Lien
priorities provided for under the Intercreditor Agreement or the other
provisions thereof; provided, however, that the First Lien Administrative Agent
and the Second Lien Trustee shall receive on or prior to the incurrence of the
Replacement:

(i) an officers’ certificate from the Borrower or Issuer, as applicable, stating
that (A) the Replacement is permitted by each applicable collateral document to
be incurred (or, if required, any relevant consent has been obtained) and (B)
customary legending requirements, if any, have been satisfied, and

(ii)  a “Priority Confirmation Joinder” (to be defined in the Intercreditor
Agreement) from the holders or lenders of any indebtedness that replaces the
First Lien Credit Facility or the Second Lien Notes, as the case may be (or an
authorized agent, trustee or other representative on their behalf).

Upon the consummation of such Replacement and the satisfaction of certain other
requirements, the holders or lenders of the indebtedness incurred

pursuant to such Replacement and any authorized agent, trustee or other
representative thereof will be entitled to the benefits of the Intercreditor
Agreement.

Bankruptcy or Insolvency/Liquidation:

In the event of an insolvency or liquidation proceeding of a Loan Party, whether
voluntary or involuntary, if the First Lien Administrative Agent or the First
Lien Collateral Agent shall desire to permit the use of cash collateral or to
permit such Loan Party to obtain debtor-in-possession financing (a “DIP
Financing”), then the Second Lien Claimholders will agree that they will raise
no objection to such use of cash collateral (or any grant of administrative
expense priority under the Bankruptcy Code) or DIP Financing and will not
request adequate protection or any other relief in connection therewith.  The
Second Lien Claimholders will subordinate their respective liens in the
Collateral to the liens securing such DIP Financing to the extent the liens
securing the First Lien Obligations are subordinated or are pari passu with such
DIP Financing.  The Second Lien Claimholders agree that they shall not be
entitled to provide any DIP Financing unless the First Lien Claimholders have
elected not to provide such DIP Financing.

 

Adequate Protection:

No Second Lien Claimholder will file or prosecute in any insolvency or
liquidation proceeding any motion for adequate protection (or any comparable
request for relief) based upon their interest in the Collateral under the Second
Priority Liens, nor will it object to or contest (i) any request by the First
Lien Collateral Agent or First Lien Claimholders for adequate protection or (ii)
any objection by the First Lien Collateral Agent or First Lien Claimholders to
any motion, relief, action or proceeding based on the First Lien Claimholders
claiming a lack of adequate protection, except that the Second Lien Claimholders
may freely seek and obtain any relief upon a motion for adequate protection (or
any comparable relief), without any condition or restriction whatsoever, at any
time after the discharge of the First Lien Obligations.

Automatic Stay Relief

The Second Lien Claimholders will not oppose or otherwise contest any motion for
relief from the automatic stay made by the First Lien Administrative Agent, the
First Lien Collateral Agent or the First Lien Claimholders.

10

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No Objection:

No Second Lien Claimholder will object to or oppose a sale or other disposition
of any Collateral (or any portion thereof) under Section 363 of the Bankruptcy
Code or any other provision of the Bankruptcy Code if the First Lien
Claimholders shall have consented to such sale or disposition of such Collateral
and all First Priority Liens and Second Priority Liens will attach to the
proceeds of the sale.

 

Waiver of Claims:

Each of the Second Lien Claimholders will waive any claim such Second Lien
Claimholders may have against the First Lien Administrative Agent, the First
Lien Collateral Agent or any other First Lien Claimholders (or their
representatives) arising out of any election by the First Lien Administrative
Agent, First Lien Collateral Agent or any First Lien Claimholders, in any
proceeding instituted under the Bankruptcy Code, of the application of Section
1111(b) of the Bankruptcy Code.

 

Plan support:

Without the consent of the First Lien Claimholders, the Second Lien Claimholders
will not propose or support any plan that does not contemplate payment of the
First Lien Obligations in full in cash or is otherwise  inconsistent with the
Intercreditor Agreement.

 

Separate grants:

Each of the First Lien Claimholders and the Second Lien Claimholders will agree
that (a) the grants of liens under the First Lien Collateral Documents and the
Second Lien Collateral Documents are separate and distinct grants and (b) First
Lien Obligations and Second Lien Obligations must be separately classified in
any bankruptcy.

 

Rights As Unsecured Creditors:

The First Lien Claimholders may exercise rights and remedies as unsecured
creditors against any of the Loan Parties.

 

Insurance:

The First Lien Collateral Agent shall have the sole right (subject to the
Borrower’s rights under the First Lien Credit Agreement, and the other documents
relating thereto) to adjust and settle insurance claims with respect to the
Collateral and approve awards granted with respect to the Collateral in any
condemnation or similar proceeding.

 

Purchase Right:

If an Event of Default under and as defined in the First Lien Credit Agreement
has occurred and is continuing and the amount of any claim or claims in respect
of any First Lien Obligations has been determined, the Second Lien Claimholders
will be permitted within an agreed exercise period to purchase the entire amount
of such claim or claims at par plus any accrued interest (and payment of any
outstanding fees and expenses) from such First Lien Claimholders during a call
period to be agreed.

 

Interpretation:

For the avoidance of doubt, any determinations as to whether a First Lien
Obligation has been paid in full in cash hereunder shall be made without taking
into account any limitations on such obligations imposed by the United States
Bankruptcy Code or other applicable insolvency law.

 

 

Governing Law; Jurisdiction:

The State of New York.

 

 

11

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Schedule 7

 

Description of Amendments to the Securitization Facility

 

 

The following description summarizes the material terms of the proposed
amendments to the Securitization Facility.  

 

                        

Maturity

1/12/2018 (no change from existing maturity date)

 

Facility Limit

$50 million held entirely by PNC

 

Pricing

 

 

 

All-in Drawn: 1-month LIBOR + 250 bps (30 day moving average of 30 day LIBOR to
avoid breakage costs on weekly settlement)

 

All-in LC Fee: 265 bps

 

Amendment Fee: 100 bps

 

Administrative Agent Fee: $125,000

 

Settlement/ Reporting Frequency

Weekly reporting/settlement

 

 

Structural Modifications

 

Lock in 15% Foreign Obligor Eligibility at PNC/Credit Agricole, regardless of
credit rating

 

PNC will have full discretion to take control of Huntington account and mandate
more frequent settlement

 

70% cap on eligible receivables to be removed

 

Other

Waiver of Termination Event associated with cross-default, change in control
provision and all disclosed covenant defaults, breaches of reps and warranties,
etc; bring down of reps and warrants to be made as of the restructuring
effective date

 

Required on-site due diligence

 

Permit a second annual field exam at Borrower's expense if deemed necessary by
PNC/Credit Agricole

 

Amendment to the definition of Government Obligors to clarify the existing
eligibility

 

$100,000 fee for forbearance through August 15, 2016

 

 

 

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Schedule 8

 

Description of Amendments to Governance and Affiliate Documents14

The following description summarizes the material terms of (a) the proposed
amendments to each of the Existing FEGP LLC Agreement, the Existing FELP LP
Agreement, the PSA, the MSA, the Call/Put Agreement and the Option Agreement,
(b) certain approvals, authorizations and other actions to be adopted and/or
taken by the Board, and (c) the Equity Adjustment Agreement, the Colt Assignment
and the Letter Agreements, all of which shall be in form and substance
acceptable to the Required Consenting Noteholders.  

 

FEGP Governance Documents Modifications:

 

Board Observer:

The Existing FEGP LLC Agreement shall be amended to provide for the appointment
of a Board observer, mutually agreed upon by the Required Consenting Noteholders
and the Partnership, which Board observer shall (subject to such observer’s
agreement to be bound by reasonable confidentiality obligations and subject
further to agreed exceptions for privilege and conflicts of interest) be
entitled to (i) attend all meetings of each Governing Body (including, without
limitation, the Synergy and Conflicts Committee), and (ii) receive copies of all
materials (including written consents) given to members of any Governing Body at
the same time such materials are provided to such members.  Any such observer
may be replaced only by holders of a majority in principal amount of the Second
Lien Notes.

Waiver of Preemptive Rights:

Each of Murray and Reserves will waive its rights under Section 6.6(e)(iv) of
the Existing FEGP LLC Agreement in respect of the issuance of any Common Units
in connection with the exchange of Exchangeable PIK Notes or exercise of
Warrants.

Synergy and Conflicts Committee:

The Board shall adopt resolutions to create a Synergy and Conflicts Committee
with the responsibilities set forth on Schedule 9.  In addition the members of
the Board that are Independent Directors shall nominate, and the Board shall
appoint, a chief accounting officer of FEGP that is not affiliated with any
Significant Equityholder.

 

14 

Capitalized terms used in this Schedule 8 without definitions shall have the
meanings given to such terms in the Amended and Restated Term Sheet to which
this Schedule 8 is attached.

 

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Additional Modifications:

Upon a Failure to Redeem, the following provisions in the Existing FEGP LLC
Agreement shall automatically terminate, have no force and effect and be
excised:  (i) Sections 6.6(d), 6.6(e)(ii) and 6.6(e)(v); (ii) the following
words in Section 6.4(c), “including in

any event at least one (1) MEC Director”; (iii) the following words in the first
sentence of Section 10.5, “or from and after January 1, 2023, if the Company has
not otherwise already affected an Initial Public Offering, MEC (so long as MEC
owns at least 10% of the IDR Units), may,”; (iv) the following words in the
second sentence of Section 10.5, “(with respect to MEC, by written direction to
the Company)”; and (v) the last sentence in Section 10.5.  In addition, upon a
Failure to Redeem, (x) Section 6.2(c)(i) shall be amended such that an MEC
Director (as defined in the FEGP LLC Agreement) does not have the right to be on
the Synergy and Conflicts Committee; (y) Section 6.4(d) shall be amended such
that MEC (as defined in the FEGP LLC Agreement) does not have the right to
designate an observer to attend meetings of the Synergy and Conflicts Committee;
and (z) Section 11.6 shall be amended and restated so that amendments that
adversely affect the rights of Murray or its affiliates are not made to Sections
3.3(a), 5.1, 6.1(a), 6.3, 6.4(b), 6.6(a), 6.6(b), 6.6(c), 6.6(e), 6.6(f), 6.10,
and 6.11 without the prior written consent of Murray.  Additional modifications
as necessary to be agreed among FELP, Murray, and Reserves.  

Upon a Failure to Redeem, the current chief executive officer of FEGP shall
automatically be removed and the Board shall appoint a new chief executive
officer of FEGP.

 

Section 11.6 shall be amended so that amendments that adversely affect the
rights of Murray or its affiliates are not made to Sections 5.1, 6.1(a),
6.2(c)(i), 6.3, 6.4(b), 6.4(d), 6.6(a), 6.6(b), 6.6(c), 6.6(d), 6.6(e), 6.6(f),
6.6(h), 6.6(i), 6.6(j), 6.10, 6.11, 6.13, 11.6, or 11.7 without the prior
written consent of Murray.

 

PSA-Related Modifications:

 

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Option Agreement:

The Option Agreement shall be amended as follows.

The sixty-one (61) day waiting period shall be excised from Section 2.2 of the
Option Agreement.

The “Expiration Time” (as defined in the Option Agreement) shall be 11:59 p.m.
New York time on September 30, 2017.

The “Option Consideration” (as defined in the Option Agreement) shall be fifteen
million dollars ($15,000,000.00).

The “Option Conditions” (as defined in the Option Agreement) shall be excised
and the term “Option Conditions” shall be defined to include the Note
Redemption, payment of the Option

Consideration, the satisfaction by Murray and FELP of their

obligations under the Financing Letter Agreement, the satisfaction by Murray of
its obligations under the Equity Adjustment Agreement, the satisfaction by
Murray of obligations related to the release or protection of Reserves and its
affiliates from all obligations under certain environmental reclamation bonds,
and delivery of the additional release among Murray and the Foresight Investors.

 

If the Option Conditions are not satisfied, Reserves shall pay $12.5 million to
Murray American Coal, Inc., a subsidiary of Murray, within thirty days of
September 30, 2017.

The non-compete shall be eliminated.

The Amended and Restated Limited Liability Company Agreement of Foresight Energy
GP LLC attached as an exhibit thereto shall be amended to provide for (i) a
requirement that Murray effectuate the release of Reserves and its affiliates
from all obligations under certain environmental reclamation bonds (whether by
replacement of such bonds or otherwise), (ii) the Company to have the right to
enter into an MSA that shall require an annual payment to Murray of $20 million
per year, and (iii) other amendments as agreed between Reserves and Murray

Call/Put Agreement:

The Call/Put Agreement shall be terminated.

MSA:

The MSA shall be amended so that the MSA will terminate automatically upon a
Failure to Redeem.

The MSA shall be amended to provide (or replaced with a new MSA that provides)
that the annual payment to Murray by FEGP on account of the MSA shall increase
to $20 million per year upon the Note Redemption and exercise of the Option.  

 

 

FELP LP Agreement Amendment:

Limited Preemptive Right:

Section 5.8 of the Existing FELP LP Agreement shall be amended such that the
preemptive right set forth therein does not apply to the issuance of Common
Units upon conversion of the Exchangeable PIK Notes or the exercise of Warrants.

 

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Limits on the Discretion of the General Partner:

The discretion of the General Partner (as defined in the Existing FELP LP
Agreement) to adopt certain conventions, make certain special allocations, and
make certain amendments to the FELP LP Agreement, all in an effort to preserve
and achieve uniformity of

the Limited Partner Interests (as defined in the Existing FELP LP Agreement)
shall be limited such that no such conventions may be adopted, no such special
allocations may be made and no such amendments may be made if, in any such case,
the same would result in a material adverse effect on the treatment of the
Exchangeable PIK Notes, the Warrants and/or the holders of any thereof.  The
Existing FELP LP Agreement shall be amended to include provisions to such
effect.

 

Equity Adjustment Agreement:

Reserves to be issued Common Units by FELP to get Reserves’ ownership of 25% of
Common Units, subject to $25 million cap on value transferred.

 

Letter Agreements:

(1) A letter agreement governing the rights of Reserves with respect to its
Exchangeable PIK Notes upon a Note Redemption or exercise by the Murray Group of
the Purchase Right and (2) a letter agreement governing the release by Robert
Murray and Robert Moore of potential fraudulent conveyance claims against
Reserves (and its affiliates).

 

Colt Assignment:

An agreement between Colt LLC and Murray American Coal, Inc. pursuant to which
Colt LLC indefeasibly assigns to Murray American Coal, Inc. certain minimum
royalty payments under certain coal mining leases.

 

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Schedule 9

 

Description of Material Responsibilities of Synergy and Conflicts Committee15

 

The Synergy and Conflicts Committee shall be comprised of the three independent
members of the Board that constitute Independent Directors.  Replacement of any
members of the Synergy and Conflicts Committee shall be in accordance with the
Existing FEGP LLC Agreement, as amended by the FEGP LLC Agreement Amendment (as
amended, the “FEGP LLC Agreement”), so long as such members are only Independent
Directors.

 

The Synergy and Conflicts Committee shall be responsible for (i) reviewing,
approving, or denying approval of any unbudgeted affiliate or synergy
transactions involving the Partnership, in each case having a value in excess of
$5 million; and (ii) reviewing, approving, or denying approval of any
transaction which would, if consummated, provide financing for or be materially
related to the redemption of the Exchangeable PIK Notes and will be delegated
all right, power and authority of the Board in respect thereof.

 

The Synergy and Conflicts Committee shall also serve as the general conflicts
committee of the Board.  

 

To the extent permitted by the FEGP LLC Agreement, the Synergy and Conflicts
Committee shall (i) have the right to retain independent financial and legal
advisors of its own choosing, (ii) be empowered to act on behalf of the
Partnership independently of any affiliates or interested directors, and (iii)
have the power to enforce the decision made by it (including any decision to
reject any proposed transaction with any affiliate of the Partnership).

1.

 

15 

Capitalized terms used in this Schedule 9 without definitions shall have the
meanings given to such terms in the Amended and Restated Term Sheet to which
this Schedule 9 is attached.

 

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Schedule 10

 

 

Full Participation of Eligible Holders

98% (Minimum) Participation of Eligible Holders

 

Holders of Affiliate Notes(1):

 

 

$180.0 million of Exchangeable PIK Notes

 

$8.4 million of Second Lien Notes (2)

 

 

$176.4 million of Exchangeable PIK Notes

 

$9.9 million of Second Lien Notes(2)

Eligible Holders:

$120.0 million of Exchangeable PIK Notes

 

$291.6 million of Second Lien Notes(2)

 

4.5% Warrants

 

$117.6 million of Exchangeable PIK Notes

 

$285.8 million of Second Lien Notes(2)

 

4.5% Warrants

 

(1)

The Reserves Investor Group owns $83.0 million in aggregate principal amount of
Senior Notes.

(2)

Excludes Second Lien Notes to be issued in the Transaction in consideration of
accrued and unpaid interest on the Senior Notes.

 

 

 

 

 

 

 

 

 

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EXHIBIT C

 

Form of Joinder

 

The undersigned hereby acknowledges that it has reviewed and understands the
A&R Transaction Support Agreement, dated as of July [22], 2016 (as amended,
supplemented or otherwise modified from time to time, the “Agreement”)16 by and
among by and among Foresight Energy LLC, a Delaware limited liability company
(“Foresight Energy”), certain subsidiaries of Foresight Energy, and Foresight
Energy LP (collectively, the “Partnership”) and the undersigned Lenders (as
defined therein, and together with their permitted successors and assigns, each
a “Consenting Lenders” and, collectively, the “Consenting Lenders”), (iii)
Foresight Reserves LP (“Reserves”), Mr. Christopher Cline (“Cline”); Cline
Resources and Development Company (“Cline R&D”), Mr. Michael J. Beyer (“Beyer”),
Munsen LLC (“Munsen”), Filbert Holdings LLC (“Filbert”), Candice Cline 2004
Irrevocable Trust (“Candice Cline Trust”), Alex T. Cline 2004 Irrevocable Trust
(“Alex Cline Trust”), Christopher L. Cline 2004 Irrevocable Trust (“Christopher
Cline Trust”), and Kameron N. Cline 2004 Irrevocable Trust (“Kameron Cline
Trust”) and Forest Glen Investments LLC (“Forest Glen,” together with Reserves,
Cline, Cline R&D, Beyer, Munsen, Filbert, Candice Cline Trust, Alex Cline Trust,
Christopher Cline Trust and Kameron Cline Trust, the “Cline Group”); and (iv)
Murray Energy Corp. (“Murray”), and agrees to be bound as a Consenting Lender by
the terms and conditions thereof binding on the Consenting Lenders for as long
as the Agreement is in place.

The undersigned hereby makes the representations and warranties of the
Consenting Lender set forth in Section 4(a) of the Agreement to each other
Party, effective as of the date hereof.

This joinder agreement shall be governed by the governing law set forth in the
A&R Transaction Support Agreement.

Date:  _________________, 2016

[Consenting Lender]

By:_________________________________

Name:

Title:

Debt held (in principal face value) under the Credit Agreement:  $

 

 

 

Attention:  

Fax:   

Email:  

 

16

Defined terms used but not otherwise defined herein shall have the meanings
ascribed to them in the Agreement.