Exhibit 10.1

 

EXECUTION VERSION

 

 

 

AMENDED AND RESTATED CREDIT AGREEMENT

 

dated as of

 

November 25, 2009

 

and amended and restated as of

 

June 3, 2011

 

among

 

CLOUD PEAK ENERGY RESOURCES LLC,

 

the GUARANTORS party hereto,

 

the LENDERS party hereto,

 

the ISSUING BANKS party hereto,

 

and

 

MORGAN STANLEY SENIOR FUNDING, INC.,
as Administrative Agent and Swingline Lender

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

 

MORGAN STANLEY SENIOR FUNDING, INC., PNC BANK, NATIONAL ASSOCIATION, WELLS FARGO
BANK, NATIONAL ASSOCIATION, CREDIT SUISSE SECURITIES (USA) LLC, RBC CAPITAL
MARKETS, CREDIT AGRICOLE CORPORATE AND INVESTMENT BANK, GOLDMAN SACHS LENDING
PARTNERS LLC and U.S. BANK NATIONAL ASSOCIATION
as Joint Lead Arrangers and Joint Bookrunner

 

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

 

PNC BANK, NATIONAL ASSOCIATION and WELLS FARGO BANK, NATIONAL ASSOCIATION
as Joint Syndication Agents

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

 

CREDIT SUISSE AG, ROYAL BANK OF CANADA, CREDIT AGRICOLE CORPORATE AND INVESTMENT
BANK,
as Joint Documentation Agents

 

 

 

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

 

TABLE OF CONTENTS

 

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

 

 

PAGE

 

 

ARTICLE 1

DEFINITIONS

 

 

Section 1.01.  Defined Terms

2

Section 1.02.  Classification of Loans and Borrowings

34

Section 1.03.  Terms Generally

34

Section 1.04.  Accounting Terms

35

 

 

ARTICLE 2

THE CREDITS

 

 

Section 2.01.  Commitments

35

Section 2.02.  Loans and Borrowings

35

Section 2.03.  Requests for Revolving Borrowings

36

Section 2.04.  Swingline Loans

36

Section 2.05.  Letters of Credit

38

Section 2.06.  Funding of Borrowings

46

Section 2.07.  Interest Elections

47

Section 2.08.  Termination and Reduction of Commitments

48

Section 2.09.  Repayment of Loans; Evidence of Debt

48

Section 2.10.  Prepayment of Loans

49

Section 2.11.  Fees

50

Section 2.12.  Interest

51

Section 2.13.  Alternate Rate of Interest

52

Section 2.14.  Increased Costs

52

Section 2.15.  Break Funding Payments

53

Section 2.16.  Taxes

54

Section 2.17.  Payments Generally; Pro Rata Treatment; Sharing of Set-offs

56

Section 2.18.  Mitigation Obligations; Replacement of Lenders

58

Section 2.19.  Incremental Facilities

59

Section 2.20.  Defaulting Lenders

61

 

 

ARTICLE 3

REPRESENTATIONS AND WARRANTIES

 

 

Section 3.01.  Organization; Powers

63

Section 3.02.  Authorization; Enforceability

63

Section 3.03.  Governmental Approvals; No Conflicts

63

Section 3.04.  Financial Statements; No Material Adverse Change

64

Section 3.05.  Properties

64

Section 3.06.  Litigation and Environmental Matters

66

Section 3.07.  Compliance with Laws and Agreements

67

Section 3.08.  Investment Company Status; Regulatory Restrictions on Borrowing

67

Section 3.09.  Taxes

67

Section 3.10.  ERISA

67

Section 3.11.  Disclosure

67

 

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

 

Section 3.12.  Subsidiaries

68

Section 3.13.  Insurance

68

Section 3.14.  Labor Matters

68

Section 3.15.  Solvency

68

Section 3.16.  Use of Proceeds

68

Section 3.17.  Guarantors

69

Section 3.18.  Sanctioned Persons

69

Section 3.19.  Margin Stock

69

 

 

ARTICLE 4

CONDITIONS

 

 

Section 4.01.  Effective Date

69

Section 4.02.  Each Credit Event

71

Section 4.03.  Restatement Effective Date

71

 

 

ARTICLE 5

AFFIRMATIVE COVENANTS

 

 

Section 5.01.  Financial Statements and Other Information

74

Section 5.02.  Notice of Material Events

75

Section 5.03.  Information Regarding Collateral

76

Section 5.04.  Existence; Conduct of Business

76

Section 5.05.  Payment of Obligations

77

Section 5.06.  Maintenance of Real Property

77

Section 5.07.  Maintenance of Personal Property

77

Section 5.08.  Insurance

77

Section 5.09.  Casualty and Condemnation

78

Section 5.10.  Proper Records; Rights to Inspect and Appraise

78

Section 5.11.  Compliance with Laws

78

Section 5.12.  Use of Proceeds and Letters of Credit

79

Section 5.13.  Additional Subsidiaries

79

Section 5.14.  Further Assurances

79

Section 5.15.  Preparation of Environmental Reports

80

Section 5.16.  Operation of Mines

80

Section 5.17.  Maintenance of Material Contracts

80

Section 5.18.  Title Opinions

80

Section 5.19.  Post-Closing Actions

80

 

 

ARTICLE 6

NEGATIVE COVENANTS

 

 

Section 6.01.  Debt; Certain Equity Securities

81

Section 6.02.  Liens

83

Section 6.03.  Fundamental Changes

84

Section 6.04.  Investments

84

Section 6.05.  Asset Sales

86

Section 6.06.  Hedging Agreements

87

Section 6.07.  Restricted Payments

87

Section 6.08.  Transactions with Affiliates

88

Section 6.09.  Restrictive Agreements

88

 

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

 

Section 6.10.  Amendment of Material Documents

89

Section 6.11.  Net Cash Interest Expense Coverage Ratio

89

Section 6.12.  Leverage Ratio

90

 

 

ARTICLE 7

EVENTS OF DEFAULT

 

 

ARTICLE 8

THE ADMINISTRATIVE AGENT

 

 

Section 8.01.  Appointment and Authorization

92

Section 8.02.  Rights and Powers as a Lender

93

Section 8.03.  Limited Duties and Responsibilities

93

Section 8.04.  Authority to Rely on Certain Writings, Statements and Advice

93

Section 8.05.  Sub-Agents and Related Parties

94

Section 8.06.  Resignation; Successor Administrative Agent

94

Section 8.07.  Credit Decisions by Lenders

94

 

 

ARTICLE 9

MISCELLANEOUS

 

 

Section 9.01.  Notices

95

Section 9.02.  Waivers; Amendments

96

Section 9.03.  Expenses; Indemnity; Damage Waiver

97

Section 9.04.  Successors and Assigns

99

Section 9.05.  Survival

102

Section 9.06.  Counterparts; Integration; Effectiveness

102

Section 9.07.  Severability

103

Section 9.08.  Right of Set-off

103

Section 9.09.  Governing Law; Jurisdiction; Consent to Service of Process

103

Section 9.10.  WAIVER OF JURY TRIAL

104

Section 9.11.  Headings

104

Section 9.12.  Confidentiality

104

Section 9.13.  PATRIOT Act

105

Section 9.14.  No Fiduciary Duty

105

 

SCHEDULES:

 

Schedule 1.01(a)

List of Restricted Subsidiaries

Schedule 1.01(b)

List of Excluded Subsidiaries

Schedule 2.01

Commitments

Schedule 3.05(c)

Material Property Claims

Schedule 3.05(e)

Material Properties

Schedule 3.06

Disclosed Matters

Schedule 3.12

List of Subsidiaries

Schedule 5.18

Federal and State Mining Leases

Schedule 5.19

Post-Closing Actions

Schedule 6.01

Existing Debt

 

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

 

Schedule 6.02

Existing Liens

Schedule 6.04

Existing Investments

Schedule 6.09

Existing Restrictions

 

EXHIBITS:

 

Exhibit A

Form of Assignment

Exhibit B-1

Form of Effective Date Opinion of Borrower’s Counsel

Exhibit B-2

Form of Effective Date Opinion of Borrower’s Regulatory Counsel

Exhibit B-3

Form of Effective Date Opinion of Borrower’s In-House Counsel

Exhibit B-4

Form of Effective Date Opinion of RTEA’s In-House Counsel

Exhibit B-5

Form of Effective Date Opinion of Administrative Agent’s Regulatory Counsel

Exhibit B-6

Form of Restatement Effective Date Opinion of Borrower’s Counsel

Exhibit B-7

Form of Restatement Effective Date Opinion of Borrower’s In-House Counsel

Exhibit C

Form of Guarantee and Security Agreement

Exhibit D

Form of Notice of LC Request

Exhibit E-1

Form of Borrowing Request

Exhibit E-2

Form of Swingline Borrowing Request

Exhibit F

Form of Note

Exhibit G

Form of Interest Election Request

Exhibit H

Certificate Regarding Non-Bank Status

 

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

 

AMENDED AND RESTATED CREDIT AGREEMENT (this “Agreement”) dated as of
November 25, 2009, and amended and restated as of June 3, 2011, among CLOUD PEAK
ENERGY RESOURCES LLC, as Borrower, the GUARANTORS party hereto, the LENDERS
party hereto, the ISSUING BANKS party hereto and MORGAN STANLEY SENIOR
FUNDING, INC., as Administrative Agent and Swingline Lender.

 

RECITALS:

 

The Borrower, certain of the Lenders, the Issuing Banks and Morgan Stanley
Senior Funding, Inc., as Administrative Agent and Swingline Lender, are party to
the Credit Agreement dated as of November 25, 2009 (the “Original Credit
Agreement”).  In connection with the Original Credit Agreement, the Borrower:

 

(i)  caused certain of its Subsidiaries to guarantee obligations of the Borrower
under the Original Credit Agreement and under certain Permitted Hedging
Agreements; and to secure its guarantee thereof by granting Liens on its assets
to the Administrative Agent as provided in the Security Documents; and

 

(ii)  secured its obligations hereunder and under such Permitted Hedging
Agreements, and caused such guarantor Subsidiaries to secure their obligations
under such guarantees, in each case through pledges and other security interests
on substantially all of their assets, all as further provided in the Security
Documents.

 

Upon satisfaction of the conditions set forth in Section 4.03, the Original
Credit Agreement is being amended and restated in the form of this Agreement and
the Borrower and each other Credit Party shall reaffirm their obligations under
the guarantees, the Security Documents and any other Loan Document to which it
is a party.

 

In consideration of the mutual covenants and agreements herein contained, the
parties hereto hereby covenant and agree as follows:

 

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

 

ARTICLE 1
DEFINITIONS

 

Section 1.01.  Defined Terms.  As used in this Agreement, the following terms
have the meanings specified below:

 

“ABR”, when used in reference to any Loan or Borrowing, refers to whether such
Loan, or the Loans comprising such Borrowing, are bearing interest at a rate
determined by reference to the Alternate Base Rate.

 

“Acquired Debt” means, with respect to any specified Person, (a) Debt of any
other Person existing at the time such other Person is merged with or into or
became a Subsidiary of such specified Person, whether or not such Debt is
incurred in connection with, or in contemplation of, such other Person merging
with or into, or becoming a Restricted Subsidiary of, such specified Person, and
(b) Debt secured by a Lien encumbering an asset acquired by such specified
Person.

 

“Acquisition” means, with respect to any Person (the “acquiror”), any direct or
indirect acquisition by such acquiror of all or substantially all of the Equity
Interests in another Person, all or substantially all of the coal or other
mineral reserves of such other Person or any other assets or business of any
other Person constituting a business unit, line of business or division of such
other Person.

 

“Acquisition Agreement” means the Acquisition Agreement dated as of November 25,
2009 between Holdings and RTEA.

 

“Acquisition Documents” means the LLC Agreement, the Management Services
Agreement, the Tax Receivable Agreement and the RTEA Coal Supply Agreement (as
such terms are defined in the Master Separation Agreement).

 

“Adjusted LIBO Rate” means, with respect to any Eurodollar Borrowing for any
Interest Period, an interest rate per annum (rounded upwards, if necessary, to
the next 1/16 of 1%) equal to (a) the LIBO Rate for such Interest Period
multiplied by (b) the Statutory Reserve Adjustment.

 

“Administrative Agent” means Morgan Stanley Senior Funding, Inc., in its
capacity as administrative agent under the Loan Documents.

 

“Administrative Questionnaire” means an Administrative Questionnaire in a form
supplied by the Administrative Agent.

 

“Affiliate” means, with respect to a specified Person, another Person that
directly, or indirectly through one or more intermediaries Controls or is
Controlled by or is under common Control with, such specified Person.  “Control”
means the possession, directly or indirectly, of the power to direct or cause
the direction of the management or policies of a Person, whether through the
ability to exercise voting power, by contract or otherwise.  “Controlled” has a
meaning correlative thereto.

 

2

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

 

“Agent Parties” means, collectively, the Administrative Agent, the Joint Lead
Arrangers and the Joint Syndication Agents.

 

“Agreement” means this Amended and Restated Credit Agreement.

 

“Alternate Base Rate” means, for any day, a rate per annum equal to the greatest
of (a) the Prime Rate in effect on such day, (b) the Federal Funds Effective
Rate in effect on such day plus ½ of 1% and (c) the Adjusted LIBO Rate for a one
month Interest Period determined on such day (or if such day is not a Business
Day, the immediately preceding Business Day) plus 1%.  Any change in the
Alternate Base Rate due to a change in the Prime Rate, the Federal Funds
Effective Rate or the Adjusted LIBO Rate shall be effective from and including
the effective date of such change in the Prime Rate, the Federal Funds Effective
Rate or the Adjusted LIBO Rate, as applicable.

 

“Applicable Margins” has the meaning assigned to such term in Section 2.19.

 

“Applicable Percentage” means, with respect to any Lender, the percentage of the
total Commitments represented by such Lender’s Commitment.  If the Commitments
have terminated or expired, the Applicable Percentages shall be determined based
upon the Commitments most recently in effect, giving effect to any assignments.

 

“Applicable Rate” means, for any day, with respect to any ABR Loan or Eurodollar
Revolving Loan, or with respect to the Unused Commitment Fees payable hereunder,
as the case may be, the applicable rate per annum set forth below under the
caption “ABR Spread”, “Eurodollar Spread” or “Unused Commitment Fee Rate”, as
the case may be, (a) from the Restatement Effective Date to the date on which
the Administrative Agent receives a Compliance Certificate pursuant to
Section 5.01(c) for the fiscal quarter ending June 30, 2011, the percentages per
annum set forth below for Pricing Level 4 and (b) thereafter, the applicable
percentage per annum set forth below determined by reference to the Leverage
Ratio as set forth in the most recent Compliance Certificate received by the
Administrative Agent pursuant to Section 5.01(c):

 

Pricing
Level

 

Leverage Ratio

 

ABR
Spread

 

Eurodollar
Spread

 

Unused Commitment
Fee Rate

 

1

 

< 1.00 to 1.00

 

0.75

%

1.75

%

0.25

%

2

 

< 1.25 to 1.00

and

> 1.00 to 1.00

 

1.00

%

2.00

%

0.375

%

3

 

< 1.50  to 1.00

and

> 1.25 to 1.00

 

1.25

%

2.25

%

0.50

%

4

 

> 1.50 to 1.00

 

1.50

%

2.50

%

0.50

%

 

Any increase or decrease in the Applicable Rate resulting from a change in the
Leverage Ratio shall become effective as of the first Business Day immediately
following the date a Compliance Certificate is delivered pursuant to
Section 5.01(c); provided, however, that if a Compliance Certificate is not
delivered when due in accordance with such Section, then, upon the request of
the Required Lenders, Pricing Level 4 shall apply as of the first Business Day
after the date on which such Compliance Certificate was required to have been
delivered and shall remain in effect until the date on which such Compliance

 

3

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

 

Certificate is delivered.  Notwithstanding anything to the contrary contained in
this definition, the determination of the Applicable Rate for any period shall
be subject to the provisions of Section 2.12(f).

 

“Assignment” means an assignment and assumption agreement entered into by a
Lender and an assignee (with the consent of any party whose consent is required
by Section 9.04), and accepted by the Administrative Agent, in the form of
Exhibit A or any other form approved by the Administrative Agent.

 

“Attributable Indebtedness” means, at any date, in respect of Capital Leases of
any Person, the capitalized amount thereof that would appear on a balance sheet
of such Person prepared in accordance with GAAP.

 

“Availability Period” means the period from and including the Effective Date to
but excluding the earlier of the Maturity Date and the date of termination of
all the Commitments.

 

“Available Equity Basket Amount” means, at any date, an amount equal to (i) 100%
of the aggregate net cash proceeds received by the Borrower from issuances by
the Borrower of Equity Interests or from issuances by Holdings of Equity
Interests (other than Disqualified Equity Interests), the net cash proceeds of
which are contributed to the Borrower as additional common Equity Interests
(other than Disqualified Equity Interests), in each case, since the Effective
Date less (ii) the aggregate amount of such Available Equity Basket Amount
otherwise applied under the Agreement, provided that solely to the extent that
such payments are included in the calculation of EBITDA for a period by
operation of clause (b)(xiv) of the definition thereof, payments by RTEA or its
Affiliates (other than the Borrower and its Subsidiaries) on behalf of the
Borrower or its Subsidiaries in connection with the Acquisition Documents that
are contributions or deemed to be contributions, directly or indirectly, to the
equity capital of the Borrower shall not be considered an issuance of Equity
Interests for purposes of determining the Available Equity Basket Amount.

 

“Available Net Income Basket Amount” means, at any date, an amount equal to
(i) 50% of cumulative Consolidated Net Income from the period beginning with the
first full fiscal quarter of the Borrower beginning after the Restatement
Effective Date and ending with the fiscal quarter ending on or most recently
prior to such date (or, if such cumulative amount is negative, $0) less (ii) the
aggregate amount of such Available Net Income Basket Amount otherwise applied
under the Agreement.

 

“BLM” means the Bureau of Land Management.

 

“Borrower” means Cloud Peak Energy Resources LLC, a Delaware limited liability
company.

 

“Borrowing” means (a) Revolving Loans of the same Type made, converted or
continued on the same day and, in the case of Eurodollar Loans, as to which the
same Interest Period is in effect or (b) a Swingline Loan.

 

4

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

 

“Borrowing Request” means a request by the Borrower, substantially in the form
of Exhibit E-1 or E-2 hereto, as applicable, for a Borrowing in accordance with
Section 2.03.

 

“Business Day” means any day that is not a Saturday, Sunday or other day on
which commercial banks in New York City are authorized or required by law to
remain closed; provided that, when used in connection with a Eurodollar Loan,
the term “Business Day” shall also exclude any day on which banks are not open
for dealings in dollar deposits in the London interbank market.

 

“Capital Lease” means, with respect to any Person, any lease of any property
which, in conformity with GAAP, is required to be capitalized on the balance
sheet of such Person.

 

“Capital Lease Obligations” of any Person means obligations of such Person to
pay rent or other amounts under any lease of (or other arrangement conveying the
right to use) real or personal property, or a combination thereof, which
obligations are required under GAAP to be classified and accounted for as
capital leases on a balance sheet of such Person.  The amount of such
obligations will be the capitalized amount thereof determined in accordance with
GAAP.

 

“Capital Stock” means, with respect to any Person, any and all shares of stock
of a corporation, partnership interests or other equivalent interests (however
designated, whether voting or non-voting) in such Person’s equity, entitling the
holder to receive a share of the profits and losses, and a distribution of
assets, after liabilities, of such Person.

 

“Cash Equivalents” means:

 

(a)                                  U.S. Government Obligations or certificates
representing an ownership interest in U.S. Government Obligations with
maturities not exceeding two years from the date of acquisition,

 

(b)                                 (i) demand deposits, (ii) time deposits and
certificates of deposit with maturities of two years or less from the date of
acquisition, (iii) bankers’ acceptances with maturities not exceeding two years
from the date of acquisition, and (iv) overnight bank deposits, in each case
with any bank or trust company organized or licensed under the laws of the
United States or any state thereof (including any branch of a foreign bank
licensed under any such laws) having capital, surplus and undivided profits in
excess of $250,000,000 (or the foreign currency equivalent thereof) whose
short-term debt is rated “A-2” or higher by S&P or “P-2” or higher by Moody’s,

 

(c)                                  commercial paper maturing within 364 days
from the date of acquisition thereof and having, at such date of acquisition,
rated at least A-1 by S&P or P-1 by Moody’s;

 

(d)                                 readily marketable direct obligations issued
by any state, commonwealth or territory of the U.S. or any political subdivision
thereof, in each case rated at least A-1 by S&P or P-1 by Moody’s with
maturities not exceeding two years from the date of acquisition;

 

5

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

 

(e)                                  bonds, debentures, notes or other
obligations with maturities not exceeding two years from the date of acquisition
issued by any corporation, partnership, limited liability company or similar
entity whose long term unsecured debt has a credit rating of A2 or better by
Moody’s and A or better by S&P;

 

(f)                                    investment funds at least 95% of the
assets of which consist of investments of the type described in clauses
(a) through (e) above (determined without regard to the maturity and duration
limits for such investments set forth in such clauses, provided that the
weighted average maturity of all investments held by any such fund is two years
or less);

 

(g)                                 fully collateralized repurchase agreements
with a term of not more than 30 days for securities described in clause
(a) above and entered into with a financial institution satisfying the criteria
described in clause (b) above; and

 

(h)                                 in the case of a Foreign Subsidiary,
substantially similar investments, of comparable credit quality, denominated in
the currency of any jurisdiction in which such person conducts business.

 

“Change in Control” means:

 

(a)                                  any “person” or “group” (as such terms are
used for purposes of Sections 13(d) and 14(d) of the Exchange Act), other than
(in the case of the Borrower) Holdings, is or becomes the “beneficial owner” (as
such term is used in Rules 13d-3 under the Exchange Act), directly or
indirectly, of more than 49% of the total voting power of the Voting Stock of
Holdings or the Borrower;

 

(b)                                 individuals who on the Restatement Effective
Date constituted the board of directors of Holdings (or, from and after the
time, if any, at which the Borrower shall have a board of directors, individuals
who, on such date, constituted the board of directors of the Borrower), together
with any new directors whose election by the board of directors or whose/
nomination for election by the equity holders of Holdings or the Borrower, as
applicable, was approved by a majority of the directors then still in office who
were either directors or whose election or nomination for election was
previously so approved, cease for any reason to constitute a majority of the
board of directors of Holdings or the Borrower, as applicable, then in office;

 

(c)                                  Holdings ceases to be the managing member
of the Borrower; or

 

(d)                                 the adoption of a plan relating to the
liquidation or dissolution of Holdings or the Borrower (other than as
contemplated in Section 6.03(iv)).

 

“Change in Law” means (a) the adoption of any law, rule or regulation after the
Restatement Effective Date, (b) any change in any law, rule or regulation or in
the interpretation or application thereof by any Governmental Authority after
the Restatement Effective Date or (c) compliance by any Lender or Issuing Bank
(or, for purposes of Section 2.14(b), by any lending office of such Lender or by
such Lender or

 

6

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

 

Issuing Bank’s holding company, if any) with any request, guideline or directive
(whether or not having the force of law) of any Governmental Authority made or
issued after the Restatement Effective Date; provided that notwithstanding
anything herein to the contrary, (x) the Dodd-Frank Wall Street Reform and
Consumer Protection Act and all requests, rules, guidelines or directives
thereunder or issued in connection therewith and (y) all requests, rules,
guidelines or directives promulgated by the Bank for International Settlements,
the Basel Committee on Banking Supervision (or any successor or similar
authority) or the United States or foreign regulatory authorities, in each case
pursuant to Basel III, shall in each case be deemed to be a “Change in Law”,
regardless of the date enacted, adopted or issued.

 

“Class”, when used in reference to any Loan or Borrowing, refers to whether such
Loan, or the Loans comprising such Borrowing, are Revolving Loans or Swingline
Loans.

 

“Cloud Peak Companies” means the Borrower, Holdings and the Restricted
Subsidiaries.

 

“Coal Business” means the Powder River Basin coal mining business contributed to
the Borrower on or about the time of the Effective Date.

 

“Code” means the Internal Revenue Code of 1986, as amended from time to time.

 

“Collateral” means any and all “Collateral”, as defined in any Security
Document.

 

“Collateral and Guarantee Requirement” means the requirement that:

 

(a)                                  the Administrative Agent shall have
received from each Credit Party either (i) a counterpart of the Security
Agreement duly executed and delivered on behalf of such Credit Party or (ii) in
the case of any Person that becomes a Credit Party after the Effective Date, a
supplement to the Security Agreement, in the form specified therein, duly
executed and delivered on behalf of such Credit Party;

 

(b)                                 all outstanding Equity Interests owned by
any Credit Party and that are required to be pledged pursuant to the Security
Agreement (except that the Credit Parties shall not be required to pledge more
than 66% of the outstanding voting Equity Interests in any Foreign Subsidiary)
shall have been pledged pursuant to the Security Agreement and the
Administrative Agent shall have received all certificates or other instruments
representing such Equity Interests of Subsidiaries of such Credit Party,
together with stock powers or other instruments of transfer with respect thereto
endorsed in blank;

 

(c)                                  all documents and instruments, including
Uniform Commercial Code financing statements and Mortgages, required by law or
reasonably requested by the Administrative Agent to be filed, registered or
recorded to create the Liens intended to be created by the Security Documents
and perfect or record such Liens to the extent, and with the priority, required
by the Security

 

7

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

 

Agreement, shall have been filed, registered or recorded or delivered to the
Administrative Agent for filing, registration or recording;

 

(d)                                 the Administrative Agent shall have received
(i) counterparts of a Mortgage with respect to each Mortgaged Property duly
executed, notarized and delivered by the record owner of such Mortgaged
Property; it being understood that with respect to the legal descriptions
attached to the Mortgages encumbering the Mortgaged Properties described by this
clause (i), in the event the Administrative Agent determines that any Mortgage
does not include all of the real property (including fixtures and improvements)
which is owned or leased by Borrower or a Restricted Subsidiary at that
particular site, then upon written notice of the Administrative Agent, Borrower
or any Restricted Subsidiary shall execute and deliver (at the sole cost and
expense of Borrower) all necessary documentation, including without limitation
an amendment to the applicable Mortgage, to cause the unencumbered portion of
said real property to be included in such Mortgage and (ii) such legal opinions
and other documents as the Administrative Agent or the Required Lenders may
reasonably request with respect to any such Mortgage or Mortgaged Property
(including, without limitation, a completed Federal Emergency Management Agency
Standard Flood Hazard Determination with respect to each portion of the
Mortgaged Property constituting improved residential or commercial real estate
or a mobile home); provided, that no Credit Party shall be required to take such
actions under this clause (d) with respect to any property acquired or leased
after the Effective Date that it would not have been required to take with
respect to properties owned or leased on the Effective Date;

 

(e)                                  each Credit Party shall have obtained all
consents and approvals required to be obtained by it in connection with the
execution and delivery of all Security Documents to which it is a party, the
performance of its obligations thereunder and the granting of the Liens granted
by it thereunder; provided, that no Person that becomes a Credit Party after the
Effective Date shall be required to obtain any consents or approvals in
connection with the execution and delivery of Security Documents after the
Effective Date that it would not have been required to obtain under the Security
Documents if it had been a Credit Party on the Effective Date; and

 

(f)                                    each Credit Party shall have taken all
other action required under the Security Documents to perfect, register and/or
record the Liens granted by it thereunder, including, without limitation, any
required filings with the BLM or state land management agencies; provided, that
no Credit Party shall be required to take any actions to perfect, register
and/or record Liens granted after the Effective Date other than those required
by the Security Documents for Liens granted as of the Effective Date.

 

“Commitment” means, with respect to each Lender, the commitment of such Lender
to make Revolving Loans and to acquire participations in Letters of Credit and
Swingline Loans hereunder, expressed as an amount representing the maximum
aggregate amount of such Lender’s Revolving Credit Exposure hereunder, as such
commitment may be (a) increased from time to time pursuant to Section 2.19,
(b) reduced from time to time pursuant to Section 2.08 or (c) reduced or
increased from time to time

 

8

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

 

pursuant to assignments by or to such Lender pursuant to Section 9.04 (it being
understood that the total Commitments of all the Lenders shall not be reduced or
increased in the aggregate pursuant to Section 9.04).  The amount of each
Lender’s Commitment on the Restatement Effective Date is set forth on Schedule
2.01.  The initial Commitment amount of each Person that becomes a Lender after
the Restatement Effective Date is (x) in the case of any New Lender that becomes
a Lender pursuant to Section 2.19, in the documents implementing any such
increase or addition or (y) in the Assignment and Assumption pursuant to which
such Lender shall have assumed its Commitment, as applicable.  The initial
aggregate amount of the Lenders’ Commitments is $500,000,000.

 

“Compliance Certificate” has the meaning specified in Section 5.01(c).

 

“Consolidated Current Liabilities” means, as of any date of determination, the
aggregate amount of liabilities of the Borrower and its consolidated Restricted
Subsidiaries which may properly be classified as current liabilities (including
taxes accrued as estimated, but excluding Specified Coal Agreement Obligations),
after eliminating (a) all intercompany items between the Borrower and any
Restricted Subsidiary or between Restricted Subsidiaries; and (b) all current
maturities of long-term Debt.

 

“Consolidated Interest Expense” means, for any period, the consolidated interest
expense of the Borrower and its Restricted Subsidiaries, plus, to the extent not
included in such consolidated interest expense, and to the extent incurred,
accrued or payable by the Borrower or its Restricted Subsidiaries, without
duplication, (i) interest expense in respect of Attributable Debt of Capital
Leases, (ii) imputed interest expense in respect of Specified Coal Agreement
Obligations, (iii) amortization of debt discount and debt issuance costs,
(iv) capitalized interest, (v) non-cash interest expense, (vi) any interest,
premiums, fees or discounts paid or incurred on the sale of accounts receivable
(and any amortization thereof) payable by the Borrower or any Restricted
Subsidiary in connection with a Permitted Receivables Financing, and any yields
or other charges or other amounts comparable to, or in the nature of, interest
payable by the Borrower or any Restricted Subsidiary under any Permitted
Receivables Financing, as determined on a consolidated basis and in accordance
with GAAP and (vii) any fees paid pursuant to Section 2.11(b).  Consolidated
Interest Expense shall be determined for any period after giving effect to any
net payments made or received and costs incurred by the Borrower and its
Restricted Subsidiaries with respect to any related interest rate Hedging
Agreements.

 

“Consolidated Net Cash Interest Expense” means for any period Consolidated
Interest Expense, less (i) to the extent included in determining Consolidated
Interest Expense for such period, (v) any fees paid pursuant to Section 2.11(b),
(w) any non-cash interest or other non-cash charges otherwise included in
Consolidated Interest Expense for such period, (x) imputed interest expense in
respect of Capital Leases, (y) imputed interest expense in respect of Specified
Coal Agreement Obligations and (z) any one-time financing fees paid in
connection with the Effective Date Transactions, the Restatement Transactions or
upon any amendment to the Agreement and (ii) the consolidated cash interest
income of the Borrower and the Restricted Subsidiaries for such period received
on cash or Cash Equivalents, other than any such cash interest income received
in respect

 

9

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

 

of cash or Cash Equivalents pledged or otherwise subject to a Lien in favor of
any obligations of the Borrower or any of its Affiliates.

 

“Consolidated Net Income” means, for any period (i) the aggregate net income (or
loss) of the Borrower and its Restricted Subsidiaries for such period determined
on a consolidated basis in conformity with GAAP, minus (but without duplication)
(ii) for any period in which the Borrower is a pass-through entity for purposes
of U.S. federal taxes, any Permitted Tax Distributions made with respect to such
period, provided that the following (without duplication) will be excluded in
computing Consolidated Net Income:

 

(a)                                  the net income (or loss) of any Person that
is a non wholly-owned Restricted Subsidiary (including any joint venture that is
a Restricted Subsidiary), except to the extent of the Borrower’s share,
determined pro rata with its percentage interest (direct or indirect) of common
stock of such Person, of such Person’s net income earned during such period;

 

(b)                                 the net income (or loss) of any Person other
than a Restricted Subsidiary (including any joint venture that is not a
Restricted Subsidiary) except to the extent of distributions of cash actually
received by the Borrower or a Guarantor with respect to such period;

 

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

 

(d)                                 any net after-tax (provided that, for any
period in which the Borrower is a pass-through entity for purposes of U.S.
federal taxes, net of the amount included in a Permitted Tax Distribution made
with respect thereto) gains or losses (less all fees and expenses or charges
relating thereto) attributable to asset sales or other Dispositions, in each
case other than in the ordinary course of business;

 

(e)                                  any net after-tax (provided that, for any
period in which the Borrower is a pass-through entity for purposes of U.S.
federal taxes, net of the amount included in a Permitted Tax Distribution made
with respect thereto) extraordinary gains or losses; and

 

(f)                                    the cumulative effect of a change in
accounting principles.

 

“Consolidated Net Tangible Assets” means, as of any date of determination,
(a) the sum of all amounts that would, in accordance with GAAP, be set forth
opposite the caption “total assets” (or any like caption) on a consolidated
balance sheet of Borrower and its Restricted Subsidiaries minus (b) the sum of
all amounts that would, in accordance with GAAP, be set forth opposite the
captions “goodwill” or other intangible

 

10

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

 

categories (or any like caption) on a consolidated balance sheet of Borrower and
its Restricted Subsidiaries minus (c) Consolidated Current Liabilities, all
determined as of such date and after giving pro forma effect to any transactions
occurring on such date.

 

“Control” means possession, directly or indirectly, of the power to direct or
cause the direction of the management or policies of a Person, whether through
the ability to exercise voting power, by contract or otherwise.  “Controlling”
and “Controlled” have meanings correlative thereto.

 

“Credit Event” has the meaning set forth in Section 4.02.

 

“Credit Parties” means the Borrower and the Guarantors.

 

“Debt” means, with respect to any Person, without duplication,

 

(a)                                  all indebtedness of such Person for
borrowed money;

 

(b)                                 all obligations of such Person evidenced by
bonds, debentures, notes or other similar instruments (other than any
obligations in respect of performance bonds, bid bonds, appeal bonds, surety
bonds, reclamation bonds and completion guarantees and similar obligations in
respect of Specified Coal Agreements or under any Mining Law or Environmental
Law or with respect to workers’ compensation benefits);

 

(c)                                  all obligations of such Person in respect
of letters of credit, bankers’ acceptances or other similar instruments (solely
to the extent such letters of credit, bankers’ acceptances or other similar
instruments have been drawn);

 

(d)                                 all obligations of such Person to pay the
deferred and unpaid purchase price of property or services provided by
third-party service providers which are recorded as liabilities under GAAP,
excluding (i) trade payables arising in the ordinary course of business,
(ii) inter-company payables, (iii) working capital-based and other customary
post-closing adjustments in acquisition transactions and (iv) salary and other
employee compensation obligations incurred in the ordinary course;

 

(e)                                  the Attributable Indebtedness of such
Person in respect of Capital Leases;

 

(f)                                    the amount of all Permitted Receivables
Financings of such Person;

 

(g)                                 Disqualified Equity Interests issued by the
Borrower; and

 

(h)                                 all Debt of other Persons Guaranteed by such
Person to the extent so Guaranteed;

 

(i)                                     all Debt of other Persons secured by a
Lien on any asset of such Person, whether or not such Debt is assumed by such
Person;

 

11

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

 

(j)                                     all obligations of such Person under
Hedging Agreements;

 

provided, that in no event shall Debt include (i) Specified Coal Agreement
Obligations, (ii) obligations (other than obligations with respect to Debt for
borrowed money or other Funded Debt) related to surface rights under an
agreement for the acquisition of surface rights for the production of coal
reserves in the ordinary course of business in a manner consistent with
historical practice of the Borrower (including RTEA, as its predecessor) and its
Subsidiaries, or (iii) obligations under the TRA.

 

The amount of Debt of any Person will be deemed to be:

 

(i)                                     with respect to Debt secured by a Lien
on an asset of such Person but not otherwise the obligation, contingent or
otherwise, of such Person, the lesser of (x) the fair market value of such asset
on the date the Lien attached and (y) the principal amount of such Debt;

 

(ii)                                  with respect to any Debt issued with
original issue discount, the face amount of such Debt less the remaining
unamortized portion of the original issue discount of such Debt;

 

(iii)                               with respect to any Hedging Agreement, the
amount payable (determined after giving effect to all contractually permitted
netting) if such Hedging Agreement terminated at that time due to default by
such Person; and

 

(iv)                              otherwise, the outstanding principal amount
thereof.

 

“Decker” means Decker Coal Company, an unincorporated joint venture under the
laws of Montana, of which the Borrower indirectly owns 50% of the Equity
Interests.

 

“Default” means any event or condition which constitutes an Event of Default or
which upon notice, lapse of time or both would, unless cured or waived, become
an Event of Default.

 

“Defaulting Lender” means any Lender that (a) fails to make any Loan at a time
when the conditions precedent set forth in Article 4 to make a Loan hereunder
are satisfied unless such failure has been cured, or fails to fund
participations in Letters of Credit within three Business Days of the date
required to be funded unless such failure has been cured, (b) is or becomes (or
whose parent company is or becomes) the subject of a bankruptcy or insolvency
proceeding, other than via an Undisclosed Administration, (c) notifies the
Borrower, the Administrative Agent, any Issuing Bank or any Lender in writing
that it does not intend to comply with any of its funding obligations under this
Agreement or has made a public statement to the effect that it does not intend
to comply with its funding obligations under this Agreement or under other
agreements generally in which it commits to extend credit or (d) fails, within
three Business Days after written request by the Administrative Agent, to
confirm that it will comply with the terms of this Agreement relating to its
obligations to fund prospective Loans and participations in then outstanding
Letters of Credit, provided that such Lender shall cease to be a Defaulting
Lender under this clause (c) upon receipt of such information; provided,
further, that a

 

12

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

 

Lender shall not be a Defaulting Lender solely by virtue of the ownership or
acquisition of any ownership interest in such Lender or parent company thereof
or the exercise of control over a Lender or parent company thereof by a
Governmental Authority or instrumentality thereof.

 

“Disclosed Matters” means the actions, suits, proceedings and environmental
matters disclosed in Schedule 3.06.

 

“Disposition” or “Dispose” means the sale, transfer, license, lease or other
disposition of any property by any Person (including any sale and leaseback
transaction and any sale of Equity Interests, but excluding any issuance by such
Person of its own Equity Interests), including any sale, assignment, transfer or
other disposal, with or without recourse, of any notes or accounts receivable or
any rights and claims associated therewith.

 

“Disqualified Equity Interests” means any Equity Interest that, by its terms (or
by the terms of any security into which it is convertible, or for which it is
exchangeable, in each case, at the option of the holder of such Equity
Interest), or upon the happening of any event, matures or is mandatorily
redeemable, pursuant to a sinking fund obligation or otherwise, or redeemable at
the option of the holder of the Equity Interest, in whole or in part, on or
prior to the date that is 91 days after the Maturity Date.

 

“dollars” or “$” refers to lawful money of the United States.

 

“EBITDA” means, for any period, the sum of

 

(a)                                  Consolidated Net Income, plus

 

(b)                                 in each case to the extent deducted in
calculating Consolidated Net Income for such period and as determined on a
consolidated basis (including without limitation, any of the following items
that have been paid under or in respect of the Acquisition Documents):

 

(i)                                     Consolidated Interest Expense for such
period;

 

(ii)                                  the provision for Taxes based on income,
profits or capital, including, without limitation, state franchise and similar
Taxes (provided that, but without duplication, and for any period in which the
Borrower is a pass-through entity for purposes of U.S. federal taxes, the amount
of any Permitted Tax Distributions with respect to such period);

 

(iii)                               depreciation, depletion, amortization
(including, without limitation, amortization of intangibles, deferred financing
fees and any amortization included in pension, OPEB or other employee benefit
expenses) and all other non-cash items reducing Consolidated Net Income
(including, without limitation, write-downs and impairment of property, plant,
equipment and intangibles and other long-lived assets and the impact of purchase
accounting) but excluding, in each case, non-cash charges in a period which
reflect cash expenses paid or to be paid in

 

13

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

 

another period, less all non-cash items increasing Consolidated Net Income;

 

(iv)                              all non-recurring or unusual losses (and less
all non-recurring or unusual gains);

 

(v)                                 all non-cash start-up and transition costs,
business optimization expenses and other non-cash restructuring charges;

 

(vi)                              the non-cash portion of “straight-line” rent
expense;

 

(vii)                           non-cash compensation expense or other non-cash
expenses or charges arising from the granting of stock options, the granting of
stock appreciation rights and similar arrangements (including any repricing,
amendment, modification, substitution or change of any such stock option, stock
appreciation rights or similar arrangements);

 

(viii)                        any debt extinguishment costs;

 

(ix)                                accretion of asset retirement obligations in
accordance with SFAS No. 143, Accounting for Asset Retirement Obligations, and
any similar accounting in prior periods;

 

(x)                                   net after-tax losses attributable to asset
sales, and net after-tax extraordinary losses (provided that, for any period in
which the Borrower is a pass-through entity for purposes of U.S. federal taxes,
net of the amount included in a Permitted Tax Distribution made with respect
thereto);

 

(xi)                                any transaction costs, fees and expenses
incurred on or about the Effective Date in respect of the Effective Date
Transactions;

 

(xii)                             (A) mark-to-market losses (and less any
mark-to-market gains) relating to any Permitted Hedging Agreements and (B) any
mark-to-market losses attributed to short positions in any actual or synthetic
forward sales contracts relating to coal or any other similar device or
instrument or other instrument classified as a “derivative” pursuant to SFAS
133;

 

(xiii)                          commissions, premiums, discounts, fees or other
charges relating to performance bonds, bid bonds, appeal bonds, surety bonds,
reclamation and completion guarantees and other similar obligations;

 

(xiv)                         any expense that is required to be paid or has
been paid that is recognized on the income statement of the Borrower and its
Subsidiaries as an expense, to the extent that such expense has been reimbursed
(including through any contribution or deemed contribution to the equity capital
of the Borrower) by RTEA and its Affiliates (other than the Borrower and its
Subsidiaries) to or on behalf of the Borrower and its Subsidiaries pursuant to
the Acquisition Documents (but in any

 

14

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

 

event without duplication of any such reimbursement payment that is added in
arriving at Consolidated Net Income for such period); and

 

(xv)                            any indemnification payments made to RTEA and
its Affiliates (other than the Borrower and its Subsidiaries) pursuant to the
Acquisition Documents in respect of non-recurring items, provided, however, that
the aggregate amount of all such payments to be added back pursuant to this
clause (xv) shall not exceed $10 million in the aggregate;

 

minus

 

(c)                                  the sum of (in each case without
duplication and to the extent the respective amounts described in subclauses
(i) and (ii) of this clause (c) increased such Consolidated Net Income for the
respective period for which EBITDA is being determined):

 

(i)                                     non-cash items increasing Consolidated
Net Income of Borrower and the Restricted Subsidiaries for such period (but
excluding any such items (A) in respect of which cash was received in a prior
period or will be received in a future period or (B) which represent the
reversal of any accrual of, or cash reserve for, anticipated cash charges in any
prior period), and

 

(ii)                                  the cash portion of “straight-line” rent
expense which exceeds the amount expensed in respect of such rent expense.

 

“Effective Date” means the date on which each of the conditions specified in
Section 4.01 was satisfied (or waived in accordance with Section 9.02).

 

“Effective Date Transactions” means collectively, the transactions that occurred
on or prior to the Effective Date pursuant to the Transaction Documents,
including without limitation the Loan Financing Transactions, the IPO and the
issuance of the Senior Notes.

 

“Environment” means soil, land surface or subsurface strata, water, surface
waters (including navigable waters, ocean waters within applicable territorial
limits, streams, ponds, drainage basins, and wetlands), ground waters, drinking
water supply, water related sediments, air, plant and animal life, and any other
environmental medium.

 

“Environmental Laws” means all laws (including common law), rules, regulations,
codes, ordinances, orders, decrees, judgments, injunctions or binding agreements
issued, promulgated or entered into by any Governmental Authority, relating in
any way to the Environment, the preservation, restoration or reclamation of
natural resources, or the presence, use, storage, discharge, management, release
or threatened release of any pollutants, contaminants or hazardous or toxic
substances, wastes or material or the effect of the environment on human health
and safety.

 

“Environmental Liability” means any liability, contingent or otherwise
(including any liability for damages, costs of remediation, fines, penalties or
indemnities), directly or indirectly resulting from or based on (a) violation of
any

 

15

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

 

Environmental Law or Environmental Permit, (b) the generation, use, handling,
transportation, storage, treatment or disposal of any Hazardous Material,
(c) exposure to any Hazardous Material, (d) the release or threatened release of
any Hazardous Material into the Environment, (e) the preservation, restoration
or reclamation of natural resources or (f) any contract, agreement or other
consensual arrangement pursuant to which liability is assumed or imposed with
respect to any of the foregoing.

 

“Environmental Permits” means any and all permits, licenses, registrations,
certifications, exemptions and any other authorization required under any
applicable Environmental Law.

 

“Equity Interests” means (i) shares of capital stock, partnership interests,
membership interests in a limited liability company, beneficial interests in a
trust or other equity ownership interests in a Person or (ii) any warrants,
options or other rights to acquire such shares or interests.

 

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended
from time to time.

 

“ERISA Affiliate” means any trade or business (whether or not incorporated)
that, together with the Borrower or any Subsidiary, is treated as a single
employer under Section 414(b) or (c) of the Code or, solely for purposes of
Section 302 of ERISA and Section 412 of the Code, is treated as a single
employer under Section 414 of the Code.

 

“ERISA Event” means (a) any “reportable event”, as defined in Section 4043 of
ERISA or the regulations issued thereunder with respect to a Plan (except an
event for which the 30-day notice period is waived); (b) the failure to satisfy
the minimum funding standard with respect to a Plan within the meaning of
Section 412 of the Code or Section 303 or 304 of ERISA), whether or not waived;
(c) a determination that any Plan is in “at risk” status (as defined in
Section 303(i)(4) of ERISA or Section 430(i)(4) of the Code; (d) the filing
pursuant to Section 431 or Section 304 of ERISA of an application for the
extension of any amortization period; (e) the failure to timely make a
contribution required to be made with respect to any Plan or Multiemployer Plan
that would result in the imposition of an encumbrance under Section 412 of the
Code or Section 302 of ERISA; (f) the filing of a notice to terminate any Plan
if such termination would require material additional contributions in order to
be considered a standard termination within the meaning of Section 4041(b) of
ERISA; (g) the filing under Section 4041(c) of ERISA of a notice of intent to
terminate any Plan or the termination of any Plan under Section 4041(c) of
ERISA; (h) the filing pursuant to Section 412(d) of the Code or
Section 303(d) of ERISA of an application for a waiver of the minimum funding
standard with respect to any Plan; (i) the incurrence by the Borrower or any
ERISA Affiliate of any liability under Title IV of ERISA with respect to the
termination of any Plan; (j) the receipt by the Borrower or any ERISA Affiliate
from the PBGC or a plan administrator of any written notice relating to the
commencement of proceedings to terminate any Plan or Plans or to appoint a
trustee to administer any Plan; (k) the incurrence by the Borrower or any ERISA
Affiliate of any liability with respect to withdrawal or partial withdrawal from
any Plan or Multiemployer Plan; or (l) the receipt by the Borrower or any ERISA
Affiliate of any written notice, or the receipt by any Multiemployer Plan from
the Borrower or any ERISA Affiliate of any written notice, concerning the
imposition of

 

16

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

 

Withdrawal Liability or a determination that a Multiemployer Plan is, or is
expected to be, in “endangered” or “critical” status within the meaning of
Section 305 of ERISA.

 

“Eurodollar”, when used with respect to any Loan or Borrowing, refers to whether
such Loan, or the Loans comprising such Borrowing, are bearing interest at a
rate determined by reference to the Adjusted LIBO Rate.

 

“Events of Default” has the meaning specified in Article 7.

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

 

“Excluded Subsidiary” means (i) those entities listed on Schedule 1.01(b) (an
“Initial Excluded Subsidiary”) and (ii) any other Subsidiary of the Borrower
that, after the Effective Date, the Borrower notifies the Administrative Agent
in writing is an “Excluded Subsidiary”, but only to the extent that such
Subsidiary (a) has no Debt other than Non-Recourse Debt (other than any Debt of
an Initial Excluded Subsidiary outstanding on the Effective Date), (b) is not a
party to any agreement or contract with the Borrower or any Restricted
Subsidiary of the Borrower except as permitted by Section 6.08, (c) is a Person
with respect to which neither the Borrower nor any of its Restricted
Subsidiaries has any direct or indirect obligation to subscribe for additional
Equity Interests in such Person, (d) has not guaranteed any Debt of the Borrower
or any of its Restricted Subsidiaries and (e) does not own any Equity Interests
of the Borrower or any Restricted Subsidiary.

 

“Excluded Taxes” means, with respect to the Administrative Agent, any
Lender, Issuing Bank or any other recipient of any payment to be made by or on
account of any obligation of the Borrower hereunder, (a) any Taxes imposed,
deducted or withheld by reason of any present or former connection between the
recipient and the jurisdiction imposing the Tax (other than on account of the
execution, delivery, performance, filing, recording, or enforcement of, this
Agreement and the other Loan Documents, and recipient’s participation in the
transactions contemplated by this Agreement and the other Loan Documents),
(b) any branch profits Taxes imposed by the United States of America or any
similar Tax imposed by any other jurisdiction in which the Borrower is located,
(c) in the case of an Issuing Bank, a Lender (other than an assignee pursuant to
a request by the Borrower under Section 2.18(b)) or an Agent Party, any
withholding tax (and any penalties and/or interest arising therefrom or with
respect thereto) that is (i) imposed, deducted or withheld with respect to
amounts payable to such Lender, Issuing Bank or Agent Party at the time such
Lender, Issuing Bank or Agent Party becomes a party to this Agreement (or
designates a new lending office) or (ii) attributable to such Lender’s, Issuing
Bank’s or Agent Party’s failure to comply with Section 2.16(e) (disregarding the
last sentence of Section 2.16(e)(ii) for such purpose unless such
Lender, Issuing Bank or Agent Party is not legally able to deliver any form or
certificate pursuant to Section 2.16(e)(ii) due to a Change in Law after the
date such Lender, Issuing Bank or Agent Party becomes a party hereto), except
with respect to clause (i) above to the extent that such Issuing Bank or Lender
(or its assignor, if any) was entitled, at the time of designation of a new
lending office (or assignment), to receive additional amounts from the Borrower
with respect to such withholding tax (and any penalties and/or interest arising
therefrom or with respect thereto) pursuant to Section 2.16(a), and (d) Taxes
imposed under FATCA.

 

17

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

 

“FATCA” means Sections 1471 through 1474 of the Code, as of the date of this
Agreement (and any amended or successor versions thereof that are substantively
comparable and not materially more onerous to comply with), and any current or
future regulations or official interpretations thereof.

 

“Federal Funds Effective Rate” means, for any day, the weighted average (rounded
upwards, if necessary, to the next 1/100 of 1%) of the rates on overnight
Federal funds transactions with members of the Federal Reserve System arranged
by Federal funds brokers, as published on the next succeeding Business Day by
the Federal Reserve Bank of New York, or, if such rate is not so published on
such Business Day, the average (rounded upwards, if necessary, to the next 1/100
of 1%) of the quotations for such day for such transactions received by the
Administrative Agent from three Federal funds brokers of recognized standing
selected by it.

 

“Federal Reserve Board” means the Board of Governors of the Federal Reserve
System of the United States.

 

“Financial Officer” means the chief financial officer, principal accounting
officer, treasurer or controller of the Borrower.

 

“Fiscal Quarter” means a fiscal quarter of the Borrower.

 

“Fiscal Year” means a fiscal year of the Borrower.

 

“Foreign Subsidiary” means a Subsidiary (which may be a corporation, limited
liability company, partnership or other legal entity) organized under the laws
of a jurisdiction outside the United States, other than any such entity that is
treated as a partnership, disregarded entity or other “look-through” entity (for
purposes of federal taxation under the Code) of the Borrower or one of its
Subsidiaries organized under the laws of the United States or a state or other
subdivision thereof so long as treating such Subsidiary as other than a Foreign
Subsidiary would not cause at any time an inclusion by RTEA, Holdings or any
Affiliate thereof under Section 951(a)(1)(B) of the Code.

 

“Funded Debt” means, at any time, and determined on a consolidated basis without
duplication, the consolidated Debt of the Borrower and its Restricted
Subsidiaries of the type referred to in clauses (a), (b), (c) (but only with
respect to reimbursement obligations related thereto), (e), (f), (g), (h) and
(i) in the definition of Debt (but in the case of clauses (h) and (i), only to
the extent that the Debt of other Persons so Guaranteed or secured is itself of
the type referred to in clauses (a), (b), (c) (but only with respect to
reimbursement obligations related thereto), (e) or (f) of such definition.

 

“GAAP” means generally accepted accounting principles as in effect in the United
States on the Effective Date, applied on a basis consistent (except for changes
concurred in by the Borrower’s independent public accountants) with the most
recent audited consolidated financial statements of the Borrower and its
consolidated Subsidiaries delivered to the Lenders.

 

“Governmental Authority” means the government of the United States, any other
nation or any political subdivision thereof, whether state or local, and any
agency, authority, instrumentality, regulatory body, court, central bank or
other entity exercising

 

18

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

 

executive, legislative, judicial, taxing, regulatory or administrative powers or
functions of or pertaining to government.

 

“Guarantee” by any Person (the “guarantor”) means any obligation, contingent or
otherwise, of the guarantor guaranteeing any Debt or other obligation of any
other Person (the “primary obligor”), whether directly or indirectly, and
including any written obligation of the guarantor, (a) to purchase or pay (or
advance or supply funds for the purchase or payment of) such Debt or other
obligation or to purchase (or advance or supply funds for the purchase of) any
security for the payment thereof, (b) to maintain working capital, equity
capital or any other financial statement condition or liquidity of the primary
obligor so as to enable the primary obligor to pay such Debt or other obligation
or (c) as an account party in respect of any letter of credit or letter of
guaranty issued to support such Debt or other obligation; provided that the term
“Guarantee” shall not include endorsements for collection or deposit in the
ordinary course of business.

 

“Guarantors” means each Wholly-Owned Restricted Subsidiary of the Borrower other
than any Foreign Subsidiary.

 

“Hazardous Material” means all explosive or radioactive substances or wastes and
all hazardous or toxic substances, wastes or other pollutants, including
petroleum or petroleum distillates, asbestos or asbestos-containing materials,
polychlorinated biphenyls, radon gas, infectious or medical wastes, and all
other substances or wastes of any nature, in each case subject to regulation
under or which could give rise to liability under any Environmental Law,
including, without limitation, coal ash, coal combustion by-products or waste,
boiler slag, scrubber residue or flue desulphurization residue.

 

“Hedging Agreement” means any interest rate protection agreement, foreign
currency exchange agreement, commodity price protection agreement or other
interest rate, currency exchange rate or commodity price hedging arrangement or
any actual or synthetic forward sale contracts or any other similar device or
instrument.

 

“Holdings” means Cloud Peak Energy Inc., a Delaware corporation.

 

“Improvements” has the meaning assigned to such term in the Mortgages.

 

“Increasing Lender” has the meaning assigned to such term in Section 2.19.

 

“Incremental Amendment” has the meaning assigned to such term in Section 2.19.

 

“Incremental Facilities” has the meaning assigned to such term in Section 2.19.

 

“Incremental Revolving Increase” has the meaning assigned to such term in
Section 2.19.

 

“Incremental Term Facility” has the meaning assigned to such term in
Section 2.19.

 

“Indemnified Taxes” means all Taxes except Excluded Taxes.

 

19

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

 

“Interest Election Request” means a request by the Borrower, substantially in
the form of Exhibit G hereto or such other form reasonably acceptable to the
Administrative Agent, to convert or continue a Revolving Borrowing in accordance
with Section 2.07.

 

“Interest Payment Date” means (a) with respect to any ABR Loan (other than a
Swingline Loan), (x) the last day of each March, June, September and
December and (y) any day on which an ABR Loan is converted to a Eurodollar Loan,
(b) with respect to any Eurodollar Loan, the last day of the Interest Period
applicable to the Borrowing of which such Loan is a part and, in the case of a
Eurodollar Borrowing with an Interest Period of more than three months’
duration, each day prior to the last day of such Interest Period that occurs at
intervals of three months’ duration after the first day of such Interest Period,
and (c) with respect to any Swingline Loan, the day that such Loan is required
to be repaid.

 

“Interest Period” means, with respect to any Eurodollar Borrowing, the period
commencing on the date of such Borrowing and ending on the numerically
corresponding day in the calendar month that is one, two, three or six months
(or, with the consent of each Lender, nine months) thereafter, as the Borrower
may elect; provided that (i) if any Interest Period would end on a day other
than a Business Day, such Interest Period shall be extended to the next
succeeding Business Day unless, in the case of a Eurodollar Borrowing only, such
next succeeding Business Day would fall in the next calendar month, in which
case such Interest Period shall end on the next preceding Business Day and
(ii) any Interest Period pertaining to a Eurodollar Borrowing that commences on
the last Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the last calendar month of such Interest
Period) shall end on the last Business Day of the last calendar month of such
Interest Period.  For purposes hereof, the date of a Borrowing initially shall
be the date on which such Borrowing is made and, in the case of a Revolving
Borrowing, thereafter shall be the effective date of the most recent conversion
or continuation of such Borrowing.

 

“Investment” means, as to any Person, any direct or indirect acquisition or
investment by such Person, whether by means of (a) the purchase or other
acquisition of Equity Interests or debt or other securities of another Person,
(b) a loan, advance or capital contribution to, Guarantee or assumption of debt
of, or purchase or other acquisition of any other debt or equity participation
or interest in, another Person, including any partnership or joint venture
interest in such other Person or (c) the purchase or other acquisition (in one
transaction or a series of transactions) of all or substantially all of the
property and assets or business of another Person or assets constituting a
business unit, line of business or division of such Person.  For purposes of
covenant compliance, the amount of any Investment shall be the amount actually
invested, without adjustment for subsequent increases or decreases in the value
of such Investment, less any amount paid, repaid, returned, distributed or
otherwise received in cash in respect of such Investment.

 

“Investment Grade Date” means the first date (after the Effective Date) on which
the Borrower has, simultaneously, (i) a corporate credit rating equal to or
higher than Baa3 (or the equivalent) by Moody’s and (ii) a corporate family
rating equal to or higher than BBB- (or the equivalent) by S&P; provided that
the Borrower has not been placed on “negative watch” by Moody’s or S&P at such
time.

 

20

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

 

“IPO” means the initial public offering of capital stock of Holdings on the
Effective Date.

 

“IPO Registration Statement” means the registration statement on Form S-1,
including the prospectus related thereto, filed by Holdings with the Securities
and Exchange Commission in connection with the IPO, together with all amendments
and supplements thereto as of the Effective Date.

 

“ISP” means the International Standby Practices 1998, International Chamber of
Commerce Publication No. 590.

 

“Issuing Bank” means Morgan Stanley Bank, N.A., Credit Suisse AG, Cayman Islands
branch, Royal Bank of Canada, JPMorgan Chase Bank, N.A., Wells Fargo Bank,
National Association, Bank of America, N.A. and any other Lender that, at the
request of the Borrower and with the consent of the Administrative Agent (not to
be unreasonably withheld or delayed), agrees to become an Issuing Bank in
substitution for an institution that is then acting as an Issuing Bank or as an
additional Issuing Bank; provided that there shall not be more than four
(4) Issuing Banks at any one time.  Each Issuing Bank may, in its discretion,
arrange for one or more Letters of Credit to be issued by Affiliates of such
Issuing Bank, in which case the term “Issuing Bank” shall include any such
Affiliate with respect to Letters of Credit issued by such Affiliate.

 

“Joint Lead Arrangers” means (i) prior to the Restatement Effective Date, Morgan
Stanley Senior Funding, Inc., Credit Suisse AG, Cayman Islands branch and RBC
Capital Markets, in each case in its capacity as joint lead arrangers under the
Original Credit Agreement, and (ii) on and after the Restatement Effective Date,
Morgan Stanley Senior Funding, Inc., PNC Bank, National Association, Wells Fargo
Bank, National Association, Credit Suisse Securities (USA) LLC, RBC Capital
Markets, Credit Agricole Corporate and Investment Bank, Goldman Sachs Lending
Partners LLC and U.S. Bank, National Association, in each case in its capacity
as joint lead arrangers under the Agreement.

 

“Joint Syndication Agents” means (i) prior to the Restatement Effective Date,
Credit Suisse AG, Cayman Islands branch and RBC Capital Markets, in each case in
its capacity as joint syndication agents under the Original Credit Agreement and
(ii) on and after the Restatement Effective Date, PNC Bank, National Association
and Wells Fargo Bank, National Association, in each case in its capacity as
joint syndication agents under the Agreement.

 

“LBA” means the acquisition of federal coal through an application for a federal
coal lease submitted in accordance with the BLM competitive leasing regulations.

 

“LBM” means the acquisition of federal coal through an application to modify an
existing coal lease submitted in accordance with the BLM non-competitive leasing
regulations.

 

“LC Disbursement” means a payment made by an Issuing Bank pursuant to a Letter
of Credit.

 

21

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

 

“LC Exposure” means, at any time, the sum of (a) the aggregate undrawn amount of
all outstanding Letters of Credit at such time plus (b) the aggregate amount of
all LC Disbursements that have not yet been reimbursed by or on behalf of the
Borrower at such time.  The LC Exposure of any Lender at any time shall be its
Applicable Percentage of the total LC Exposure at such time.

 

“Lender Affiliate” means, (a) with respect to any Lender, (i) an Affiliate of
such Lender or (ii) any entity (whether a corporation, partnership, trust or
otherwise) that is engaged in making, purchasing, holding or otherwise investing
in bank loans and similar extensions of credit in the ordinary course of its
business and is administered or managed by such Lender or an Affiliate of such
Lender and (b) with respect to any Lender that is a fund which invests in bank
loans and similar extensions of credit, any other fund that invests in bank
loans and similar extensions of credit and is managed by the same investment
advisor as such Lender or by an Affiliate of such investment advisor.

 

“Lender Parties” means the Lenders, the Issuing Banks and the Administrative
Agent.

 

“Lenders” means the Persons listed on Schedule 2.01 and any other Person that
shall have become a party hereto pursuant to an Assignment, other than any such
Person that ceases to be a party hereto pursuant to an Assignment.  Unless the
context requires otherwise, the term “Lenders” includes the Swingline Lender.

 

“Letter of Credit” has the meaning specified in Section 2.05(a).

 

“Leverage Ratio” means, on any day, the ratio of (a) Funded Debt as of such day
to (b) EBITDA for the period of four consecutive Fiscal Quarters ended on such
day (or, if such day is not the last day of a Fiscal Quarter, ended on the last
day of the Fiscal Quarter most recently ended before such day).

 

“LIBO Rate” means, with respect to any Eurodollar Borrowing for any Interest
Period, (x) the rate per annum appearing on Page BBAM 1 on the Bloomberg Service
(or on any successor or substitute page of such service, or any successor to or
substitute for such service, providing rate quotations comparable to those
currently provided on such page of such service, as determined by the
Administrative Agent from time to time for purposes of providing quotations of
interest rates applicable to dollar deposits in the London interbank market) at
approximately 11:00 a.m., London time, two Eurodollar Business Days prior to the
commencement of such Interest Period, as the rate for dollar deposits with a
maturity comparable to such Interest Period or (y) if the rate referred to in
clause (x) is not available at such time for any reason, then the rate at which
dollar deposits of $5,000,000 and for a maturity comparable to such Interest
Period are offered by the principal London office of the Administrative Agent in
immediately available funds in the London interbank market at approximately
11:00 a.m., London time, two Business Days before the beginning of such Interest
Period.

 

“Lien” means any mortgage, pledge, security interest, encumbrance, lien or
charge of any kind (including any conditional sale or other title retention
agreement or Capital Lease).

 

22

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

 

“Loan Documents” means this Agreement, any Notes and the Security Documents.

 

“Loan Financing Transactions” means the execution, delivery and performance by
each Credit Party of the Loan Documents to which it is to be a party, the
borrowing of Loans, the use of the proceeds thereof and the issuance of Letters
of Credit hereunder.

 

“Loans” means loans made by the Lenders to the Borrower pursuant to this
Agreement.  Unless the context requires otherwise, the term “Loans” includes
Swingline Loans.

 

“Long-Term Debt” means any Debt that, in accordance with GAAP, constitutes (or,
when incurred, constituted) a long-term liability.

 

“Master Separation Agreement” means the Master Separation Agreement by and among
Rio Tinto America Inc., a Delaware corporation, RTEA, Kennecott Management
Services Company, Holdings, the Borrower and the subsidiaries listed on the
signature pages thereto to be entered into on or prior to the Effective Date.

 

“Material Adverse Effect” means any event or circumstance, either individually
or in the aggregate, that has had or would reasonably be expected to have a
material (a) adverse effect on (i) the business, assets, operations or condition
(financial or otherwise) of the Borrower and its Restricted Subsidiaries taken
as a whole (which for the avoidance of doubt shall not include any impact on the
Borrower and/or its Restricted Subsidiaries resulting from the winding up of
operations at the Decker Mine), or (ii) the ability of the Credit Parties (taken
as a whole) to perform any of their payment obligations under any Loan Document
or (b) impairment of the rights of or benefits available to any Lender Party
under any Loan Document.

 

“Material Debt” means Debt (other than obligations in respect of the Loans and
Letters of Credit), or obligations in respect of one or more Hedging Agreements,
of the Borrower and its Restricted Subsidiaries in an aggregate principal amount
exceeding $50,000,000.  For purposes of determining Material Debt, the
“principal amount” of the obligations of the Borrower or any of its Restricted
Subsidiaries in respect of any Hedging Agreement at any time will be the maximum
aggregate amount (after giving effect to any netting agreements) that the
Borrower or such Restricted Subsidiary would be required to pay if such Hedging
Agreement were terminated at such time; provided, however, that Material Debt
shall not include any guarantees or Letters of Credit in respect of any
performance, surety, reclamation or similar bonds securing obligations of the
Borrower or any of its Subsidiaries.

 

“Maturity Date” means June 3, 2016.

 

“Mine” means any excavation or opening into the earth now and hereafter made
from which coal is or can be extracted from any of the Real Properties.

 

“Mining Laws” means any and all applicable federal, state, local and foreign
statutes, laws, regulations, legally-binding guidance, ordinances, rules,
judgments, orders, decrees or common law causes of action relating to mining
operations and activities under the Mineral Leasing Act of 1920, the Federal
Coal Leasing Amendments Act or the

 

23

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

 

Surface Mining Control and Reclamation Act, each as amended or its replacement,
and their state and local counterparts or equivalents.

 

“Mining Lease” means a lease, license or other use agreement which provides the
Borrower or any Subsidiary the real property and water rights, other interests
in land, including coal, mining and surface rights, easements, rights of way and
options, and rights to timber and natural gas (including coalbed methane and gob
gas) necessary or desirable in order to recover coal from any Mine.  Leases
which provide Borrower or any other Subsidiary the right to construct and
operate a conveyor, crusher plant, silo, load out facility, rail spur, shops,
offices and related facilities on the surface of the Real Property containing
such reserves shall also be deemed a Mining Lease.

 

“Mining Permits” means any and all material permits, licenses, registrations,
certifications, exemptions and any other authorization required under any
applicable Mining Law or otherwise necessary to recover coal from any Mine being
operated by the Borrower or any other Subsidiary.

 

“Moody’s” means Moody’s Investors Service, Inc.

 

“Mortgage” means a mortgage, deed of trust, assignment of leases and rents,
leasehold mortgage or other security document granting a Lien on any Mortgaged
Property, Fixture or As-Extracted Collateral (as such terms are defined in the
UCC) to secure the Secured Obligations.  Each Mortgage must be reasonably
satisfactory in form and substance to the Administrative Agent.

 

“Mortgaged Property” means any Real Property that is either (i) identified as a
Mortgaged Property on Schedule 3.05(e) or (ii) subject to a Transaction Lien
granted after the Effective Date pursuant to Section 5.13 or 5.14.

 

“Multiemployer Plan” means a multiemployer plan as defined in
Section 4001(a)(3) of ERISA.

 

“New Lender” has the meaning assigned to such term in Section 2.19.

 

“Non-Recourse Debt” means Debt (i) as to which neither the Borrower nor any of
its Restricted Subsidiaries provides a Guarantee or other support in the form of
keep-well and (ii) as to which the holders of such Debt do not otherwise have
recourse to the stock or assets of the Borrower or any of its Restricted
Subsidiaries (other than the Equity Interests of an Excluded Subsidiary).

 

“Note” means a promissory note made by the Borrower in favor of a Lender
evidencing Loans made by such Lender, substantially in the form of Exhibit F
hereto, as may be amended, supplemented or modified from time to time.

 

“Notice of LC Request” has the meaning specified in Section 2.05(b).

 

“OID” has the meaning specified in Section 2.19

 

“Other Taxes” means any and all present or future recording, stamp, documentary,
excise, transfer, sales, property or similar taxes, charges or levies arising

 

24

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

 

from any payment made under any Loan Document or from the execution, delivery or
enforcement of, or otherwise with respect to, any Loan Document.

 

“Original Credit Agreement” has the meaning specified in the RECITALS hereto.

 

“Participant Register” has the meaning specified in Section 9.04(h).

 

“Participants” has the meaning specified in Section 9.04(e).

 

“PATRIOT Act” means the Uniting and Strengthening America by Providing
Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001
(Title III of Pub. L. No. 107-56).

 

“PBGC” means the Pension Benefit Guaranty Corporation referred to and defined in
ERISA and any successor entity performing similar functions.

 

“Perfection Certificate” means a certificate in the form of Exhibit E to the
Security Agreement or any other form approved by the Administrative Agent.

 

“Permit Area” means, with respect to any Mine, all land covered by the Mining
Permits with respect to such Mine.

 

“Permitted Business” means any of the following, whether domestic or foreign:
the mining, production, marketing, sale, trading and transportation (including,
without limitation, any business related to terminals) of natural resources
including coal, ancillary natural resources and mineral products, and any
business that is ancillary or complementary to the foregoing.

 

“Permitted Hedging Agreements” means Hedging Agreements entered into in the
ordinary course of business of the Borrower and its Restricted Subsidiaries to
hedge interest rate, foreign currency or commodity risk or otherwise for
non-speculative purposes (regardless of whether such agreement or instrument is
classified as a “derivative” pursuant to SFAS 133 and required to be
marked-to-market).

 

“Permitted Liens” means:

 

(a)                                  Liens imposed by law for taxes that are not
yet due or are being contested in compliance with Section 5.05;

 

(b)                                 carriers’, warehousemen’s, mechanics’,
materialmen’s, repairmen’s and other like Liens imposed by law, arising in the
ordinary course of business and securing obligations that are not overdue by
more than 30 days or are being contested in compliance with Section 5.05;

 

(c)                                  pledges or deposits made in the ordinary
course of business (i) in compliance with workers’ compensation, unemployment
insurance and other social security laws or regulations or to secure liabilities
to insurance carriers under insurance arrangements in respect of such
obligations, (ii) to secure payment of reclamation liabilities or (iii) in
support of obligations under existing coal sales contracts (and extensions or
renewals thereof on similar terms);

 

25

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

 

(d)                                 existing or future grants of coal bed
methane leases or oil and gas or other hydrocarbon leases granted by any
Governmental Authority or other third party and associated pipelines, collection
facilities, accessways and easements pertaining to the same;

 

(e)                                  surface use agreements, easements, zoning
restrictions, rights of way, encroachments, pipelines, leases (other than
Capital Lease Obligations), licenses, special assessments, trackage rights,
transmission and transportation lines related to Mining Leases or mineral right
and/or other Real Property including any reconveyance obligations to a surface
owner following mining, royalty payments, and other obligations under surface
owner purchase or leasehold arrangements necessary to obtain surface disturbance
rights to access the subsurface coal deposits and similar encumbrances on Real
Property imposed by law or arising in the ordinary course of business that do
not secure any monetary obligation and do not materially detract from the value
of the affected property or interfere with the ordinary conduct of business of
the Borrower or any Subsidiary;

 

(f)                                    pledges, deposits or non-exclusive
licenses to use intellectual property rights of the Borrower or its Subsidiaries
to secure the performance of bids, tenders, trade contracts, leases, public or
statutory obligations, surety and appeal bonds, reclamation bonds, performance
bonds and other obligations of a like nature, in each case in the ordinary
course of business;

 

(g)                                 judgment liens in respect of judgments that
do not constitute an Event of Default under clause (k) of Article 7;

 

(h)                                 Production Payments, royalties, dedication
of reserves under supply agreements, Liens in favor of the owner in connection
with any Mining Leases, or similar rights or interests granted, taken subject
to, or otherwise imposed on properties consistent with normal practices in the
mining industry and any precautionary UCC financing statement filing in respect
of leases (and not any Debt) entered into the ordinary course of business;

 

(i)                                     rights of owners of interests in
overlying, underlying or intervening strata and/or mineral interests not owned
by Borrower or one of its Subsidiaries, with respect to Real Property where the
Borrower or applicable Subsidiary’s ownership is only surface or severed mineral
or is otherwise subject to mineral severances in favor of one or more third
parties;

 

(j)                                     layback arrangements, joint operation
arrangements and similar arrangements with adjoining coal operators;

 

(k)                                  Liens for Specified Coal Agreements arising
as a result of Specified Coal Agreement Obligations or obligations to grant
surface or water rights;

 

(l)                                     Liens on joint venture interests in
favor of joint venture partners to secure obligations arising under the
respective joint venture agreements;

 

26

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

 

(m)                               with respect to water rights, Liens imposed by
the doctrine of prior appropriation (including seniority of water rights), the
necessity to put the water to a beneficial use, restrictions imposed by the
applicable Governmental Authority and the actual availability of water
(including restrictions on the use of ground water);

 

(n)                                 farm, grazing, hunting, recreational and
residential leases with respect to which the Borrower or any Subsidiary is a
lessor encumbering portions of the Real Properties  to the extent such leases
would be granted or permitted by a prudent operator of mining properties similar
in use and configuration to Real Properties.

 

(o)                                 encumbrances typically found upon Real
Property used for mining purposes in the applicable jurisdiction in which the
applicable Real Property is located to the extent such encumbrances would be
permitted or granted by a prudent operator of mining property similar in use and
configuration to such Real Property (e.g., surface rights agreements, wheelage
agreements and reconveyance agreements);

 

(p)                                 rights and easements of owners (i) of
undivided interests in any of the Real Property where the Borrower or its
Subsidiaries own less than 100% of the fee interest, (ii) of interests in the
surface of any Real Property where the Borrower or its Subsidiaries do not own
or lease such surface interest, (iii) and lessees, if any, of coal or other
minerals (including oil, gas and coalbed methane) where the Borrower or its
Subsidiaries do not own such coal or other minerals, and (iv) and lessees of
other coal seams and other minerals (including oil, gas and coalbed methane) not
owned or leased by the Borrower or its Subsidiaries;

 

(q)                                 with respect to any Real Property in which
Borrower or any Subsidiary holds a leasehold interest, terms, agreements,
provisions, conditions, and limitations (other than royalty and other payment
obligations which are otherwise permitted hereunder) contained in the leases
granting such leasehold interest and the rights of lessors thereunder (and their
heirs, executors, administrators, successors, and assigns);

 

(r)                                    rights of others to subjacent or lateral
support and absence of subsidence rights or to the maintenance of barrier
pillars or restrictions on mining within certain areas as provided by any Mining
Lease, unless in each case waived by such other person; and

 

(s)                                  Liens securing obligations in respect of
trade-related letters of credit permitted under Section 6.01(xii) covering only
the goods (or the documents of title in respect of such goods) financed by such
letters of credit and the proceeds and products thereof;

 

provided, that the term “Permitted Liens” shall not include any Lien that
secures Debt for borrowed money or other Funded Debt and such Liens, in the
aggregate, do not have a Material Adverse Effect on the operation of the
business in the ordinary course of the Credit Parties as currently conducted.

 

27

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

 

“Permitted Receivables Financing” means any receivables financing facility or
arrangement pursuant to which a Securitization Subsidiary purchases or otherwise
acquires Receivables of the Borrower or any Restricted Subsidiary and enters
into a third party financing thereof on terms that the managing member of the
Borrower has concluded are customary and market terms fair to the Borrower and
its Restricted Subsidiaries.

 

“Permitted Tax Distributions” means distributions by the Borrower to Holdings in
an aggregate amount with respect to any period not in excess of (i) so long as
the Borrower is a limited liability company (or is a substantially similar
pass-through entity for federal, state or local income tax purposes), all
amounts that Holdings is required to pay in federal, state and local income and
alternative minimum taxes with respect to such period solely to the extent
attributable to the business and operations of the Borrower and its
Subsidiaries, as determined in good faith by the Borrower in consultation with
its tax advisors and after taking into account all available credits and
deductions plus (ii) without duplication of amounts due under clause (i), the
cumulative amount of payments necessary to permit Holdings to make any required
payments under the Tax Receivable Agreement with respect to such period, but
solely to the extent attributable to the business and operations of the Borrower
and its Subsidiaries, except for any amount representing a termination payment
thereunder plus (iii) without duplication of amounts due under clause (i), all
amounts that Holdings is required to pay with respect to any present or future
tax, levy, assessment or fee of any nature imposed by any governmental authority
related to (x) the continuation of Holdings’ existence, good standing or
authority to do business and (y) Holdings obtaining, renewing or modifying any
other consent, approval or permit of, or registration or filing with, any
Governmental Authority for the operation of its business without regard to any
other businesses it may have other than the business and operations of the
Borrower and its Subsidiaries.

 

“Person” means any natural person, corporation, limited liability company,
trust, joint venture, association, company, partnership, Governmental Authority
or other entity.

 

“Plan” means any employee pension benefit plan (except a Multiemployer Plan)
subject to the provisions of Title IV of ERISA or Section 412 of the Code or
Section 302 of ERISA, and in respect of which the Borrower or any ERISA
Affiliate is (or, if such plan were terminated, would under Section 4069 of
ERISA be deemed to be) a “contributing sponsor” as defined in
Section 4001(a)(13) of ERISA.

 

“Prime Rate” means the rate of interest per annum published by the Wall Street
Journal, U.S. edition, from time to time, as the prime rate.

 

“Private Coal Agreement” means an agreement between the Borrower and/or one or
more of its Subsidiaries, on the one hand, and a seller or lessee (in each case,
that is not a Governmental Authority) (the “Transferee”) under which the
Borrower and its Subsidiaries acquire coal through (i) a lease from such
Transferee, (ii) the purchase of one or more coal deposit or other assets from
such Transferee or (iii) the exchange of coal assets between the Borrower and
its Subsidiaries, on the one hand, and such Transferee, on the other.

 

“Production Payments” means with respect to any Person, all production payment
obligations and other similar obligations with respect to coal and other natural

 

28

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

 

resources of such Person that are recorded as a liability or deferred revenue on
the financial statements of such Person in accordance with GAAP.

 

“Productive Assets” means long-term or capital assets (or all of the capital
stock or other Equity Interests of a Person holding principally long-term or
capital assets and that becomes a Restricted Subsidiary) that are used or usable
by the Borrower or its Restricted Subsidiaries in a Permitted Business.

 

“Pro Forma Basis”, “Pro Forma Compliance” and “Pro Forma Effect” means, for
purposes of calculating compliance with each of the financial covenants set
forth in Section 6.11 and Section 6.12 in respect of a Specified Transaction,
that the following transactions in connection therewith shall be deemed to have
occurred as of the first day of the applicable period of measurement in such
covenant:  (a) income statement items (whether positive or negative)
attributable to the property or Person subject to such Specified Transaction,
(i) in the case of a Disposition of all or substantially all of the assets or
Equity Interests of any Subsidiary or of any division or product line or coal or
other mine or mineral reserves, the Person or property so Disposed of shall be
excluded, and (ii) in the case of an Acquisition, the Person or property so
acquired shall be included, (b) any retirement of Debt and (c) any incurrence or
assumption of Debt by the Borrower or any Restricted Subsidiary in connection
therewith (and if such Debt has a floating or formula rate, such Debt shall have
an implied rate of interest for the applicable period for purposes of this
definition determined by utilizing the rate which is or would be in effect with
respect to such Debt as at the relevant date of determination).

 

“Real Property” shall mean, collectively, all right, title and interest of the
Borrower or any other Subsidiary (including any leasehold or mineral estate) in
and to any and all parcels of real property owned or operated by the Borrower or
any other Subsidiary, whether by lease, license or other use agreement,
including but not limited to, coal leases and surface use agreements, together
with, in each case, all Improvements and appurtenant fixtures (including all
conveyors, preparation plants or other coal processing facilities, silos, shops
and load out and other transportation facilities), easements and other property
and rights incidental to the ownership, lease or operation thereof, including
but not limited to, access rights, water rights and extraction rights for
minerals.

 

“Receivables” means accounts receivable (including all rights to payment)
created by or arising from the sale of goods, leases of goods or the rendition
of services, no matter how evidenced (including in the form of a chattel paper).

 

“Register” has the meaning specified in Section 9.04(c).

 

“Related Parties” means, with respect to any specified Person, such Person’s
Affiliates and the respective directors, officers, members, partners, employees,
agents and advisors of such Person and its Affiliates.

 

“Required Lenders” means, at any time, Lenders having Revolving Credit Exposures
and unused Commitments representing more than 50% of the sum of the total
Revolving Credit Exposures and unused Commitments at such time; provided that
the unused Commitment of, and the portion of the total Revolving Credit
Exposures held or deemed held by, any Defaulting Lender shall be excluded for
purposes of making a determination of Required Lenders.

 

29

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

 

“Restatement Effective Date” means June 3, 2011, subject to satisfaction of all
of the conditions to effectiveness specified in Section 4.03.

 

“Restatement Transactions” means the execution, delivery and performance by the
Credit Parties of the amendment and restatement of the Original Credit Agreement
in the form of this Agreement and the payment of the fees and expenses incurred
in connection therewith.

 

“Restricted Payment” means any (i) dividend or other distribution (whether in
cash, securities or other property) with respect to any Equity Interest in the
Borrower or any of its Subsidiaries, or any payment or other distribution
(whether in cash, securities or other property), including any sinking fund or
similar deposit, on account of the purchase, redemption, retirement,
acquisition, cancellation or termination of any Equity Interest in the Borrower
or any of its Subsidiaries or (ii) any prepayment, purchase, repurchase
redemption of, or other payment in respect of, Subordinated Debt other than
payments of interest when due and principal when due in accordance with the
scheduled maturity thereof; provided that indemnity payments under the Master
Separation Agreement shall not be deemed to be Restricted Payments even if
calculated with reference to percentage equity ownership of the Borrower or
Holdings.

 

“Restricted Subsidiary” of a Person means any Subsidiary of the Borrower other
than an Excluded Subsidiary.  Schedule 1.01(a) sets forth all Restricted
Subsidiaries as of the Restatement Effective Date.

 

“Revolving Credit Exposure” means, with respect to any Lender at any time, the
sum of the outstanding principal amount of such Lender’s Revolving Loans and its
LC Exposure and Swingline Exposure at such time.

 

“RTEA” means Rio Tinto Energy America Inc., a Delaware corporation.

 

“S&P” means Standard & Poor’s Ratings Services, a division of The McGraw-Hill
Companies, Inc.

 

“SEC” means the Securities and Exchange Commission.

 

“Second Lien Senior Secured Debt” means Debt of the Credit Parties secured by
Liens on the Collateral on a junior basis pursuant to intercreditor
arrangements, which shall contain customary market terms and conditions for
second lien financings and otherwise be in form and substance reasonably
satisfactory to the Administrative Agent.

 

“Secured Guarantee” has the meaning specified in Section 1 of the Security
Agreement.

 

“Secured Obligations” has the meaning specified in Section 1 of the Security
Agreement.

 

“Secured Parties” has the meaning specified in Section 1 of the Security
Agreement.

 

30

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

 

“Securitization Subsidiary” means a Subsidiary of the Borrower (a) that is
designated a “Securitization Subsidiary” by the managing member of the Borrower,
(b) that does not engage in, and whose charter prohibits it from engaging in,
any activities other than Permitted Receivables Financings and any activity
necessary, incidental or related thereto, (c) no portion of the Debt or any
other obligation, contingent or otherwise, of which (x) is Guaranteed by the
Borrower or any Restricted Subsidiary of the Borrower, (y) is recourse to or
obligates the Borrower or any Restricted Subsidiary of the Borrower in any way,
or (z) subjects any property or asset of the Borrower or any Restricted
Subsidiary of the Borrower, directly or indirectly, contingently or otherwise,
to the satisfaction thereof, and (d) with respect to which neither the Borrower
nor any Restricted Subsidiary of the Borrower (other than an Excluded
Subsidiary) has any obligation to maintain or preserve its financial condition
or cause it to achieve certain levels of operating results, other than, in
respect of clauses (c) and (d), pursuant to customary representations,
warranties, covenants and indemnities entered into in connection with a
Permitted Receivables Financing.

 

“Security Agreement” means the Guarantee and Security Agreement among the Credit
Parties and the Administrative Agent, dated as of November 25, 2009 and
substantially in the form of Exhibit C.

 

“Security Documents” means the Security Agreement, the Mortgages and each other
security agreement, instrument or document executed and delivered pursuant to
Section 5.13 or 5.14 to secure any of the Secured Obligations.

 

“Senior Notes” means the $300,000,000 8.250% Senior Notes of the Borrower and
Cloud Peak Energy Finance Corp. due 2017 and the $300,000,000 8.500% Senior
Notes of the Borrower and Cloud Peak Energy Finance Corp. due 2019, each issued
on the Effective Date pursuant to the Senior Notes Indenture.

 

“Senior Notes Indenture” means that certain Indenture dated as of November 25,
2009 among the Borrower and Cloud Peak Energy Finance Corp., as issuers, the
guarantors party thereto, Wilmington Trust Company, as trustee, and Citibank,
N.A., as securities administrator .

 

“Senior Notes Documents” means the Senior Notes Indenture and all other
instruments, agreements and other documents evidencing or governing the Senior
Notes or providing for any Guarantee or other right in respect thereof.

 

“Solvent” and “Solvency” mean, with respect to any Person on any date of
determination, that on such date (a) the fair value of the property of such
Person is greater than the total amount of liabilities, including, without
limitation, contingent liabilities, of such Person, (b) the present fair salable
value of the assets of such Person is not less than the amount that will be
required to pay the probable liability of such Person on its debts as they
become absolute and matured, (c) such Person does not intend to, and does not
believe that it will, incur debts or liabilities beyond such Person’s ability to
pay such debts and liabilities as they mature and (d) such Person is not engaged
in business or a transaction, and is not about to engage in business or a
transaction, for which such Person’s property would constitute an unreasonably
small capital.  The amount of contingent liabilities at any time shall be
computed as the amount that, in light of all the

 

31

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

 

facts and circumstances existing at such time, represents the amount that can
reasonably be expected to become an actual or matured liability.

 

“Specified Coal Agreement Obligations” means installment or deferred payment
obligations or royalty payment obligations or obligations in connection with the
acquisition of related surface rights, in each case, in connection with a
Specified Coal Agreement owed solely to the seller or lessor thereunder (and not
to a bank or other third-party financer), but excluding, in any event, any
Funded Debt.

 

“Specified Coal Agreements” means any LBA, LBM, State Coal Lease and Private
Coal Agreements.

 

“Specified Transaction” means any (a) Disposition of all or substantially all
the assets of or all the Equity Interests of any Restricted Subsidiary or of any
division or product line or coal or other mine or mineral reserves of any
Restricted Subsidiary, (b) Acquisition, or (c) the proposed incurrence of Debt
or making of a Restricted Payment in respect of which compliance with the
financial covenants set forth in Section 6.11 and Section 6.12 is by the terms
of this Agreement required to be calculated on a Pro Forma Basis.

 

“State Coal Lease” means the acquisition of coal owned by a State in accordance
with the coal leasing regulations of such State.

 

“Statutory Reserve Adjustment” means a fraction (expressed as a decimal), the
numerator of which is the number one and the denominator of which is the number
one minus the aggregate of the maximum reserve percentages (including any
marginal, special, emergency or supplemental reserves) expressed as a decimal
established by the Federal Reserve Board to which the Administrative Agent is
subject with respect to eurocurrency funding (currently referred to as
“Eurocurrency Liabilities” in Regulation D of the Federal Reserve Board).  Such
reserve percentages will include those imposed pursuant to such Regulation D. 
Eurodollar Loans will be deemed to constitute eurocurrency funding and to be
subject to such reserve requirements without benefit of or credit for proration,
exemptions or offsets that may be available from time to time to any Lender
under such Regulation D or any comparable regulation.  The Statutory Reserve
Adjustment will be adjusted automatically on and as of the effective date of any
change in any applicable reserve percentage.

 

“Subordinated Debt” means Debt of any Credit Party that, by its terms, is
subordinated in right of payment to the obligations hereunder in respect of the
Loans (but not including Second Lien Senior Secured Debt that is subordinated
only in respect of the security interest on the Collateral).

 

“subsidiary” means, with respect to any Person (the “parent”) at any date,
(a) any corporation, joint venture, limited liability company, partnership or
other entity the accounts of which would be consolidated with those of the
parent in the parent’s consolidated financial statements if such financial
statements were prepared in accordance with GAAP as of such date and (b) any
other corporation, limited liability company, partnership or other entity of
which securities or other ownership interests representing more than 50% of the
equity or more than 50% of the ordinary voting power or, in the case of a
partnership, more than 50% of the general partnership interests are, as

 

32

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

 

of such date, owned, controlled or held by the parent and/or one or more of its
subsidiaries.

 

“Subsidiary” means any subsidiary of the Borrower.

 

“Swingline Exposure” means, at any time, the aggregate outstanding principal
amount of the Swingline Loans at such time.  The Swingline Exposure of any
Lender at any time will be its Applicable Percentage of the total Swingline
Exposure at such time.

 

“Swingline Lender” means Morgan Stanley Senior Funding, Inc., in its capacity as
the lender of Swingline Loans hereunder.

 

“Swingline Loan” means a Loan made pursuant to Section 2.04.

 

“Taxes” means any present or future tax, levy, import, duty, charge, deduction,
withholding, assessment or fee of any nature (including interest, penalties, and
additions thereto) that is imposed by any Governmental Authority or other taxing
authority.

 

“Tax Receivable Agreement” or “TRA” means the Tax Receivable Agreement dated as
of November 19, 2009 between RTEA and Holdings.

 

“Transaction Documents” means, collectively, the Acquisition Documents, the IPO
Registration Statement, the Senior Notes Documents and the Loan Financing
Documents.

 

“Transaction Liens” means the Liens on Collateral granted by the Credit Parties
under the Security Documents.

 

“2010 10-K” means the Borrower’s Report on Form 10-K with respect to the
Borrower’s fiscal year ended December 31, 2010, filed with the SEC in accordance
with the Exchange Act.

 

“2011 10-Q” means the Borrower’s Report on Form 10-Q with respect to the
Borrower’s fiscal quarter ended March 31, 2011, filed with the SEC in accordance
with the Exchange Act.

 

“Type”, when used with respect to any Loan or Borrowing, refers to whether the
rate of interest on such Loan, or on the Loans comprising such Borrowing, is
determined by reference to the Adjusted LIBO Rate or the Alternate Base Rate.

 

“UCP” means The Uniform Customs and Practice for Documentary Credits, 2007
Revision, ICC Publication No. 600.

 

“Unfunded Pension Liability” means the excess of a Plan’s benefit liabilities
under Section 4001(a)(16) of ERISA, over the current value of that Plan’s
assets, determined in accordance with the assumptions used for funding the Plan
pursuant to Section 412 of the Code for the applicable plan year.

 

“Undisclosed Administration” means in relation to a Lender the appointment of an
administrator, provisional liquidator, conservator, receiver, trustee, custodian
or other similar official by a supervisory authority or regulator under or based
on the law in the

 

33

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

 

country where such Lender is subject to home jurisdiction supervision if
applicable law requires that such appointment is not to be publicly disclosed.

 

“United States” means the United States of America.

 

“Unused Commitment Fee” has the meaning set forth in Section 2.11.

 

“U.S. Government Obligations” means obligations issued or directly and fully
guaranteed or insured by the United States or by any agent or instrumentality
thereof, provided that the full faith and credit of the United States is pledged
in support thereof.

 

“Voting Stock” means with respect to any Person, Capital Stock of any class or
kind ordinarily having the power to vote for the election of directors, managers
or other voting members of the governing body of such Person.

 

“Withdrawal Liability” means liability to a Multiemployer Plan as a result of a
complete or partial withdrawal from such Multiemployer Plan, as such terms are
defined in Part I of Subtitle E of Title IV of ERISA.

 

“Wholly-Owned Restricted Subsidiary” means at any time a Restricted Subsidiary
all of the outstanding Equity Interests of which (other than directors’
qualifying shares) are at such time owned by the Borrower and/or one or more
Wholly-Owned Restricted Subsidiaries of the Borrower.

 

Section 1.02.  Classification of Loans and Borrowings.  For purposes of this
Agreement, Loans may be classified and referred to by Class (e.g., a “Revolving
Loan”) or by Type (e.g., a “Eurodollar Loan”) or by Class and Type (e.g., a
“Eurodollar Revolving Loan”).  Borrowings also may be classified and referred to
by Class (e.g., a “Revolving Borrowing”) or by Type (e.g., a “Eurodollar
Borrowing”) or by Class and Type (e.g., a “Eurodollar Revolving Borrowing”).

 

Section 1.03.  Terms Generally.  The definitions of terms herein (including
those incorporated by reference to another document) apply equally to the
singular and plural forms of the terms defined.  Whenever the context may
require, any pronoun includes the corresponding masculine, feminine and neuter
forms.  The words “include”, “includes” and “including” shall be deemed to be
followed by the phrase “without limitation”.  The word “will” shall be construed
to have the same meaning and effect as the word “shall”.  Unless the context
requires otherwise, (a) any definition of or reference to any agreement,
instrument or other document herein shall be construed as referring to such
agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein), (b) any reference
herein to any Person shall be construed to include such Person’s successors and
assigns, (c) the words “herein”, “hereof” and “hereunder”, and words of similar
import, shall be construed to refer to this Agreement in its entirety and not to
any particular provision hereof, (d) all references herein to Articles,
Sections, Exhibits and Schedules shall be construed to refer to Articles and
Sections of, and Exhibits and Schedules to, this Agreement and (e) the word
“property” shall be construed to refer to any and all tangible and intangible
assets and properties, including cash, securities, accounts and contract rights.

 

34

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

 

Section 1.04.  Accounting Terms.  Except as otherwise expressly provided herein,
all terms of an accounting or financial nature shall be construed in accordance
with GAAP.

 

ARTICLE 2
THE CREDITS

 

Section 2.01.  Commitments.  Subject to the terms and conditions set forth
herein, each Lender agrees to make Revolving Loans to the Borrower from time to
time during the Availability Period in an aggregate principal amount that will
not result in (a) such Lender’s Revolving Credit Exposure exceeding such
Lender’s Commitment or (b) the sum of the total Revolving Credit Exposures
exceeding the total Commitments.  Within the foregoing limits and subject to the
terms and conditions set forth herein, the Borrower may borrow, prepay and
reborrow Revolving Loans.

 

Section 2.02.  Loans and Borrowings.  (a)  Each Revolving Loan shall be made as
part of a Borrowing consisting of Revolving Loans made by the Lenders ratably in
accordance with their respective Commitments.  The failure of any Lender to make
any Loan required to be made by it shall not relieve any other Lender of its
obligations hereunder; provided that the Commitments of the Lenders are several
and no Lender shall be responsible for any other Lender’s failure to make Loans
as required.

 

(b)                       Subject to Section 2.13, each Revolving Borrowing
shall be comprised entirely of ABR Loans or Eurodollar Loans as the Borrower may
request in accordance herewith.  Each Swingline Loan shall be an ABR Loan.  Each
Lender at its option may make any Eurodollar Loan by causing any domestic or
foreign branch or Affiliate of such Lender to make such Loan; provided that any
exercise of such option shall not affect the obligation of the Borrower to repay
such Loan in accordance with the terms of this Agreement.

 

(c)                        At the commencement of each Interest Period for any
Eurodollar Revolving Borrowing, such Borrowing shall be in an aggregate amount
that is an integral multiple of $1,000,000 and not less than $5,000,000.  At the
time that each ABR Revolving Borrowing is made, such Borrowing shall be in an
aggregate amount that is an integral multiple of $1,000,000 and not less than
$5,000,000; provided that an ABR Revolving Borrowing may be in an aggregate
amount that is equal to the entire unused balance of the total Commitments or
that is required to finance the reimbursement of an LC Disbursement as
contemplated by Section 2.05(e).  Each Swingline Loan shall be in an amount that
is an integral multiple of $500,000 and not less than $500,000.  Borrowings of
more than one Type and Class may be outstanding at the same time; provided that
there shall not at any time be more than a total of ten (10) Eurodollar
Revolving Borrowings outstanding.

 

(d)                       Notwithstanding any other provision of this Agreement,
the Borrower shall not be entitled to request, or to elect to convert or
continue, any Borrowing if the Interest Period requested with respect thereto
would end after the Maturity Date.

 

35

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

 

Section 2.03.  Requests for Revolving Borrowings.  To request a Revolving
Borrowing, the Borrower shall notify the Administrative Agent of such request by
telephone (a) in the case of a Eurodollar Borrowing, not later than 11:00 a.m.,
New York City time, three Business Days before the date of the proposed
Borrowing or (b) in the case of an ABR Borrowing, not later than 11:00 a.m., New
York City time, one Business Day before the date of the proposed Borrowing;
provided that any such notice of an ABR Revolving Borrowing to finance the
reimbursement of an LC Disbursement as contemplated by Section 2.05(e) may be
given not later than 10:00 a.m., New York City time, on the date of the proposed
Borrowing.  Each such telephonic Borrowing Request shall be irrevocable and
shall be confirmed promptly by hand delivery or telecopy to the Administrative
Agent of a Borrowing Request in a form approved by the Administrative Agent and
signed by the Borrower.  Each such telephonic and written Borrowing Request
shall specify the following information in compliance with Section 2.02:

 

(i)             the aggregate amount of the requested Borrowing;

 

(ii)          the date of such Borrowing, which shall be a Business Day;

 

(iii)       whether such Borrowing is to be an ABR Borrowing or a Eurodollar
Borrowing;

 

(iv)      in the case of a Eurodollar Borrowing, the initial Interest Period to
be applicable thereto, which shall be a period contemplated by the definition of
the term “Interest Period”; and

 

(v)         the location and number of the Borrower’s account to which funds are
to be disbursed, which shall comply with the requirements of Section 2.06.

 

If no election as to the Type of Revolving Borrowing is specified, then the
requested Revolving Borrowing shall be an ABR Borrowing.  If no Interest Period
is specified with respect to any requested Eurodollar Revolving Borrowing, then
the Borrower shall be deemed to have selected an Interest Period of one month’s
duration, subject to the definition of Interest Period.  Promptly following
receipt of a  Borrowing Request in accordance with this Section, the
Administrative Agent shall advise each Lender of the details thereof and of the
amount of such Lender’s Loan to be made as part of the requested Borrowing.

 

Section 2.04.  Swingline Loans.  (a)  Subject to the terms and conditions set
forth herein, the Swingline Lender agrees to make Swingline Loans to the
Borrower from time to time during the Availability Period, in an aggregate
principal amount at any time outstanding that will not result in (i) the
aggregate principal amount of outstanding Swingline Loans exceeding $10,000,000
or (ii) the sum of the total Revolving Credit Exposures exceeding the total
Commitments; provided that the Swingline Lender shall not be required to make a
Swingline Loan to refinance an outstanding Swingline Loan.  Within the foregoing
limits and subject to the terms and conditions set forth herein, the Borrower
may borrow, prepay and reborrow Swingline Loans.  Notwithstanding anything to
the contrary contained in this Section 2.04 or elsewhere in this Agreement, the
Swingline Lender shall not be obligated to make any Swingline Loan at a time
when a Lender is a Defaulting Lender unless the Swingline Lender has entered
into arrangements

 

36

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

 

satisfactory to it and the Borrower to eliminate the Swingline Lender’s risk
with respect to the Defaulting Lender’s or Defaulting Lenders’ participation in
such Swingline Loans, including by cash collateralizing such Defaulting Lender’s
or Defaulting Lenders’ Applicable Percentage of the outstanding Swingline Loans.

 

(b)                       To request a Swingline Loan, the Borrower shall notify
the Administrative Agent of such request by telephone (confirmed by telecopy),
not later than 12:00 noon, New York City time, on the day of a proposed
Swingline Loan.  Each such notice shall be irrevocable and shall specify the
requested date (which shall be a Business Day) and amount of the requested
Swingline Loan.  The Administrative Agent will promptly advise the Swingline
Lender of any such notice received from the Borrower.  The Swingline Lender
shall make each Swingline Loan available to the Borrower by means of a credit to
the general deposit account of the Borrower with the Swingline Lender (or, in
the case of a Swingline Loan made to finance the reimbursement of an LC
Disbursement as provided in Section 2.05(e), by remittance to the relevant
Issuing Bank) by 3:00 p.m., New York City time, on the requested date of such
Swingline Loan.

 

(c)                        The Swingline Lender may by written notice given to
the Administrative Agent not later than 10:00 a.m., New York City time, on any
Business Day require the Lenders to acquire participations on such Business Day
in all or a portion of the Swingline Loans outstanding.  Such notice shall
specify the aggregate amount of Swingline Loans in which Lenders will
participate.  Promptly upon receipt of such notice, the Administrative Agent
will give notice thereof to each Lender, specifying in such notice such Lender’s
Applicable Percentage of such Swingline Loan or Loans.  Each Lender hereby
absolutely and unconditionally agrees, upon receipt of notice as provided above,
to pay to the Administrative Agent, for the account of the Swingline Lender,
such Lender’s Applicable Percentage of such Swingline Loan or Loans.  Each
Lender acknowledges and agrees that its obligation to acquire participations in
Swingline Loans pursuant to this paragraph is absolute and unconditional and
shall not be affected by any circumstance whatsoever, including the occurrence
and continuance of a Default or reduction or termination of the Commitments, and
that each such payment shall be made without any offset, abatement, withholding
or reduction whatsoever, subject to Section 2.16.  Each Lender shall comply with
its obligation under this paragraph by wire transfer of immediately available
funds, in the same manner as provided in Section 2.06 with respect to Loans made
by such Lender (and Section 2.06 shall apply, mutatis mutandis, to the payment
obligations of the Lenders), and the Administrative Agent shall promptly pay to
the Swingline Lender the amounts so received by it from the Lenders.  The
Administrative Agent shall notify the Borrower of any participations in any
Swingline Loan acquired pursuant to this paragraph, and thereafter payments in
respect of such Swingline Loan shall be made to the Administrative Agent and not
to the Swingline Lender.  Any amounts received by the Swingline Lender from the
Borrower (or other party on behalf of the Borrower) in respect of a Swingline
Loan after receipt by the Swingline Lender of the proceeds of a sale of
participations therein shall be promptly remitted to the Administrative Agent;
any such amounts received by the Administrative Agent shall be promptly remitted
by the Administrative Agent to the Lenders that shall have made their payments
pursuant to this paragraph and to the Swingline Lender, as their interests may
appear; provided that any such payment so remitted shall be repaid to the
Swingline Lender or to the Administrative Agent, as applicable, if and to the
extent such payment is required to be refunded to the Borrower for any reason. 
The purchase of

 

37

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

 

participations in a Swingline Loan pursuant to this paragraph shall not relieve
the Borrower of any default in the payment thereof.

 

Section 2.05.  Letters of Credit.  (a) General.  Subject to the terms and
conditions set forth herein, each Issuing Bank agrees to issue and amend
(including, without limitation, to increase or decrease the stated amount of
each Letter of Credit) at the request and for the account of the Borrower, one
or more irrevocable standby letters of credit denominated in dollars in such
Issuing Bank’s then current standard form with such revisions as shall be
requested by the Borrower and approved by such Issuing Bank (each, a “Letter of
Credit”), at any time and from time to time during the Availability Period, in
an aggregate amount that will not result in (a) the sum of the total Revolving
Credit Exposures exceeding the total Commitments (disregarding, solely for
purposes of this clause (a), the Commitment and outstanding Loans of any
Defaulting Lender at such time) and (b) the aggregate face amount in respect of
all Letters of Credit issued and outstanding (together with any related and
unpaid reimbursement obligations) by such Issuing Bank (other than Morgan
Stanley Bank, N.A. and Credit Suisse AG, Cayman Islands branch) exceeding the
limit thereof (if any) separately agreed in writing between such Issuing Bank
and the Borrower and set forth for such Issuing Bank in the Register maintained
by the Administrative Agent pursuant to Section 9.04(c).  In the event of any
inconsistency between the terms and conditions of this Agreement and the terms
and conditions of any Notice of LC Request submitted by the Borrower or any
Letter of Credit, the terms and conditions of this Agreement shall control.  The
relevant Issuing Bank shall not be under any obligation to issue a Letter of
Credit if any order, judgment or decree of any Governmental Authority or
arbitrator shall by its terms purport to enjoin or restrain such Issuing Bank
from issuing any Letter of Credit, or any law, rule, regulation or orders of any
Governmental Authority applicable to such Issuing Bank or any request or
directive (whether or not having the force of law) from any Governmental
Authority with jurisdiction over such Issuing Bank shall prohibit, or request
that such Issuing Bank refrain from, the issuance of letters of credit generally
or any Letter of Credit in particular or shall impose upon such Issuing Bank
with respect to any Letter of Credit any restriction, reserve or capital
requirement (for which such Issuing Bank is not otherwise compensated hereunder)
not in effect on the Restatement Effective Date, or shall impose upon such
Issuing Bank any unreimbursed loss, cost or expense that was not applicable on
the Restatement Effective Date and that such Issuing Bank in good faith deems
material to it; provided that for purposes of the foregoing and notwithstanding
anything herein to the contrary, (x) the Dodd-Frank Wall Street Reform and
Consumer Protection Act and all requests, rules, guidelines or directives
thereunder or issued in connection therewith and (y) all requests, rules,
guidelines or directives promulgated by the Bank for International Settlements,
the Basel Committee on Banking Supervision (or any successor or similar
authority) or the United States or foreign regulatory authorities, in each case
pursuant to Basel III, shall in each case be deemed to be enacted, adopted or
issued after the Restatement Effective Date, regardless of the date actually
enacted, adopted or issued.

 

(b)         Notice of Issuance, Amendment, Renewal, Extension; Certain
Conditions.  To request the issuance of a Letter of Credit (or the amendment,
renewal or extension of an outstanding Letter of Credit), the Borrower shall
hand deliver or telecopy (or transmit by electronic communication, if
arrangements for doing so have been approved by the relevant Issuing Bank) to
the relevant Issuing Bank and the Administrative Agent (at least two
(2) Business Days in advance of the requested date of issuance, amendment,

 

38

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

 

renewal or extension) a notice substantially in the form of Exhibit D hereto
(the “Notice of LC Request”) requesting the issuance of a Letter of Credit, or
identifying the Letter of Credit to be amended, renewed or extended, and
specifying the requested date of issuance of such Letter of Credit (which shall
be a Business Day) and, as applicable, specifying the date of amendment, renewal
or extension (which shall be a Business Day), the date on which such Letter of
Credit is to expire (which shall comply with paragraph (c) of this Section), the
amount of such Letter of Credit, the name and address of the beneficiary thereof
and such other information as shall be necessary to prepare, amend, renew or
extend such Letter of Credit.  If requested by the Issuing Bank, the Borrower
also shall submit a letter of credit application on the Issuing Bank’s standard
form in connection with any request for a Letter of Credit; provided that,
unless otherwise agreed by the Borrower and the Issuing Bank, if any term in
such standard form conflicts with the terms of this Agreement, this Agreement
shall govern.  Such Issuing Bank will issue, amend, renew or extend the
requested Letter of Credit for the account of the Borrower in such Issuing
Bank’s then current standard form with such revisions as shall be requested by
the Borrower and approved by such Issuing Bank within two (2) Business Days of
the date of the receipt of the Notice of LC Request and all related information
required by such Issuing Bank to permit it to comply (and to determine that it
is in compliance) with applicable laws and its own internal policies.  A Letter
of Credit shall be issued, amended, renewed or extended only if (and upon
issuance, amendment, renewal or extension of each Letter of Credit the Borrower
shall be deemed to represent and warrant that), after giving effect to such
issuance, amendment, renewal or extension the sum of the total Revolving Credit
Exposures shall not exceed the total Commitments.

 

(c)                        Expiration Date.  Each Letter of Credit shall expire
at or prior to the close of business on the earlier of (i) the date one year
after the date of the issuance of such Letter of Credit (or, in the case of any
renewal or extension thereof, one year after such renewal or extension) and
(ii) the date that is five (5) Business Days prior to the Maturity Date;
provided that any Letter of Credit with a one-year tenor may (x) be issued on a
date that is within one year of the Maturity Date, or (y) provide for the
automatic renewal thereof for additional one-year periods, (which, in no event,
shall extend beyond the date referred to in clause (ii) of this paragraph
(c) unless, in each case, on the date of issuance of such Letters of Credit,
such Letters of Credit are cash collateralized in a manner reasonably acceptable
to the relevant Issuing Bank.

 

(d)                       Participations.  By the issuance of a Letter of Credit
(or an amendment to a Letter of Credit increasing the amount thereof) and
without any further action on the part of the relevant Issuing Bank or the
Lenders, such Issuing Bank hereby grants to each Lender, and each Lender hereby
acquires from such Issuing Bank, a participation in such Letter of Credit equal
to such Lender’s Applicable Percentage of the aggregate amount available to be
drawn under such Letter of Credit.  In consideration and in furtherance of the
foregoing, each Lender hereby absolutely and unconditionally agrees to pay to
the Administrative Agent, for the account of the relevant Issuing Bank, such
Lender’s Applicable Percentage of each LC Disbursement made by such Issuing Bank
and not reimbursed by the Borrower on the date due as provided in paragraph
(e) of this Section, or of any reimbursement payment required to be refunded to
the Borrower for any reason.  Each Lender acknowledges and agrees that its
obligation to acquire participations pursuant to this paragraph in respect of
Letters of Credit is absolute and unconditional and shall not be affected by any
circumstance whatsoever, including any amendment, renewal or extension of any
Letter of Credit or the occurrence and continuance of a

 

39

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

 

Default or reduction or termination of the Commitments, and that each such
payment shall be made without any offset, abatement, withholding or reduction
whatsoever, subject to Section 2.16.

 

(e)                        Reimbursement.  If any Issuing Bank shall make any LC
Disbursement in respect of a Letter of Credit, the Borrower shall reimburse such
LC Disbursement by paying to the Administrative Agent an amount equal to such LC
Disbursement not later than 5:00 p.m., New York City time, on the date that such
LC Disbursement is made, if the Borrower shall have received notice of such LC
Disbursement prior to 3:00 p.m., New York City time, on such date, or, if such
notice has not been received by the Borrower prior to such time on such date,
then not later than 5:00 p.m., New York City time, on (i) the Business Day that
the Borrower receives such notice, if such notice is received prior to
3:00 p.m., New York City time, on the day of receipt, or (ii) the Business Day
immediately following the day that the Borrower receives such notice, if such
notice is not received prior to such time on the day of receipt; provided that,
notwithstanding the amount requirements otherwise set forth in Section 2.02, the
Borrower may, subject to the conditions to borrowing set forth herein, request
in accordance with Section 2.03 or 2.04 that such payment be financed with an
ABR Revolving Borrowing or Swingline Loan in an equivalent amount and, to the
extent so financed, the Borrower’s obligation to make such payment shall be
discharged and replaced by the resulting ABR Revolving Borrowing or Swingline
Loan.  If the Borrower fails to make such payment when due, the Administrative
Agent shall notify each Lender of the applicable LC Disbursement, the payment
then due from the Borrower in respect thereof and such Lender’s Applicable
Percentage thereof.  Promptly following receipt of such notice, each Lender
shall pay to the Administrative Agent its Applicable Percentage of the payment
then due from the Borrower, in the same manner as provided in Section 2.06 with
respect to Loans made by such Lender (and Section 2.06 shall apply, mutatis
mutandis, to the payment obligations of the Lenders), and the Administrative
Agent shall promptly pay to the relevant Issuing Bank the amounts so received by
it from the Lenders.  Promptly following receipt by the Administrative Agent of
any payment from the Borrower pursuant to this paragraph, the Administrative
Agent shall distribute such payment to the relevant Issuing Bank or, to the
extent that Lenders have made payments pursuant to this paragraph to reimburse
such Issuing Bank, then to such Lenders and such Issuing Bank as their interests
may appear.  Any payment made by a Lender pursuant to this paragraph to
reimburse an Issuing Bank for any LC Disbursement (other than the funding of ABR
Revolving Loans or a Swingline Loan as contemplated above) shall not constitute
a Loan and shall not relieve the Borrower of its obligation to reimburse such LC
Disbursement.

 

(f)                          Obligations Absolute; Claims Against Issuing Banks;
Waivers; Exculpations; Limitations of Liability; Ratification.  The Borrower’s
obligations hereunder to reimburse LC Disbursements as provided in paragraph
(e) of this Section shall be absolute, unconditional and irrevocable and shall
be performed strictly in accordance with the terms of this Agreement,
irrespective of:

 

(i)                       any lack of validity or enforceability relating to or
against the Borrower or any Credit Party for any reason of this Agreement or the
Loan Documents.

 

40

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

 

(ii)                    if any other person shall at any time have Guaranteed
any of the Borrower’s obligations hereunder or granted any security therefore,
any change in the time, manner or place of payment of or any other term of the
obligations of such other person,

 

(iii)                 any exchange, change or release of any Collateral, or any
release or waiver of any Guarantee, for any of the Borrower’s obligations
hereunder,

 

(iv)                the existence of any claim, setoff, defense or other right
that the Borrower or any other person may have at any time against any
beneficiary of the Letter of Credit (including any second or substitute
beneficiary or transferee under a transferable letter of credit and any
successor of a beneficiary by operation of law), any assignee of proceeds of the
Letter of Credit, any Issuing Bank or any other person, whether in connection
with any transaction contemplated by this Agreement, a Letter of Credit or any
unrelated transaction, or

 

(v)                   any presentation under a Letter of Credit being forged,
fraudulent, invalid, insufficient or abusive or any statement therein being
untrue or inaccurate,

 

(vi)                any payment under a Letter of Credit against a presentation
that does not comply with the terms and conditions of the Letter of Credit, or

 

(vii)             any other circumstance that might, but for the provisions of
this Section, constitute a legal or equitable discharge of or defense to any or
all of the Borrower’s obligations hereunder.

 

(g)                       Without limiting the foregoing, it is expressly agreed
that the absolute, unconditional and irrevocable obligation of the Borrower to
reimburse or pay the relevant Issuing Bank pursuant to this Agreement will not
be excused by ordinary negligence, gross negligence, wrongful conduct or willful
misconduct (as finally determined by a court of competent jurisdiction) of such
Issuing Bank.  However, the foregoing shall not excuse the relevant Issuing Bank
from liability to the Borrower in any independent action or proceeding brought
by the Borrower against such Issuing Bank following such reimbursement or
payment by the Borrower to the extent of any unavoidable direct damages suffered
by the Borrower that are caused directly by such Issuing Bank’s gross negligence
or willful misconduct; provided that (i) such Issuing Bank shall be deemed to
have acted with due diligence and reasonable care if it acts in accordance with
standard letter of credit practice of commercial banks located in New York City;
and (ii) the Borrower’s aggregate remedies against such Issuing Bank for
wrongfully honoring a presentation or wrongfully retaining honored documents
shall in no event exceed the aggregate amount paid by the Borrower to such
Issuing Bank with respect to the honored presentation, plus interest.

 

(h)                       Without limiting any other provision of this
Agreement, the relevant Issuing Bank and, as applicable, its correspondents (if
any):

 

(i)                       may rely upon any oral, telephonic, facsimile,
electronic, written or other communication believed in good faith (i.e., honesty
in fact) to have been

 

41

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

 

authorized by the Borrower, whether or not given or signed by an authorized
person,

 

(ii)                    shall not be responsible for errors, omissions,
interruptions or delays in transmission or delivery of any message, advice or
document in connection with a Letter of Credit, whether transmitted by courier,
mail, telex, any other telecommunication, or otherwise (whether or not
encrypted), or for errors in interpretation of technical terms or in translation
(and such Issuing Bank and its correspondents may transmit Letter of Credit
terms without translating them),

 

(iii)                 shall not be responsible for the identity or authority of
any signer or the form, accuracy, genuineness, falsification or legal effect of
any presentation or payment instruction under a Letter of Credit if such
presentation or instruction appears on its face to be in compliance with a
Letter of Credit, even if the purported signer is a customer of such Issuing
Bank or its signature is otherwise known to such Issuing Bank,

 

(iv)                shall not be responsible for any acts or omissions by, or
the solvency of, the beneficiary, any nominated person or any other person,

 

(v)                   may honor any presentation under a Letter of Credit
(A) which appears on its face to substantially or reasonably comply with the
terms and conditions of a Letter of Credit, whether or not it appears on its
face to strictly, exactly or literally comply, (B) which is or appears on its
face to have been signed or presented by any purported successor of the
beneficiary or any other party in whose name a Letter of Credit requires or
authorizes that any draft or other document be signed, presented or issued,
including any administrator, executor, trustee in bankruptcy, liquidator,
receiver, or successor by merger or consolidation, or (C) which is or appears on
its face to have been signed or presented by the beneficiary after a change of
name of the beneficiary,

 

(vi)                may replace an original Letter of Credit, waive a
requirement for its presentation, or provide a replacement or copy to the
beneficiary,

 

(vii)             may assert or waive application of any provision of the UCP or
the ISP and other customs and practice primarily benefiting letter of credit
issuers,

 

(viii)          may disregard any requirement of a Letter of Credit that
presentation be made to it at a particular place or by a particular time of day
(but not any requirement for presentation by a particular day),

 

(ix)                  may honor a previously dishonored presentation under a
Letter of Credit, whether pursuant to court order, to settle or compromise any
claim that it wrongfully dishonored, or otherwise, and shall be entitled to
reimbursement to the same extent (if any) as if it had initially honored plus
reimbursement of any interest paid by it,

 

42

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

 

(x)                     may pay any paying or negotiating bank (designated or
permitted by the terms of a Letter of Credit) claiming that it rightfully
honored or is entitled to reimbursement or indemnity under the laws or practice
of the place where it is located,

 

(xi)                  may make any payment under or in connection with a Letter
of Credit by any means it chooses, including by wire transfer or by check,

 

(xii)               may dishonor any presentation (A) with the Borrower’s
authorization or (B) for which the Borrower is unable or unwilling to reimburse
or indemnify such Issuing Bank; provided that the Borrower recognizes and agrees
that the circumstances described in this paragraph may not relieve such Issuing
Bank or its correspondents from any obligations to the beneficiary, any
confirmer or other nominated person, or any other person,

 

(xiii)            may select any branch or Affiliate of such Issuing Bank or any
other bank to act as advising, transferring, confirming and/or nominated bank
under the law and practice of the place where it is located (if the application
submitted by the Borrower for a Letter of Credit does not prohibit advice,
transfer, confirmation and/or nomination or such selection),

 

(xiv)           shall not be responsible for any other action or inaction taken
or suffered by such Issuing Bank or its correspondents under or in connection
with a Letter of Credit or any presentation or demand, if required or permitted
under any applicable domestic or foreign law or the ISP and/or UCP,

 

(xv)              shall have no obligation to issue any Letter of Credit or take
any action which would violate any provision of law applicable to such Issuing
Bank or a Letter of Credit or which such Issuing Bank determines could subject
it to an unreasonable legal risk or liability, and

 

(xvi)           none of the circumstances described in this
Section 2.05(h) shall impair or waive such Issuing Bank’s rights and remedies
against the Borrower or place such Issuing Bank or any of its correspondents
under any liability to the Borrower.

 

(i)                           Neither the relevant Issuing Bank nor any of its
correspondents shall be liable in contract, tort, or otherwise for any punitive,
exemplary, consequential or special damages.  Examples of damages which are
indirect and may not be shifted to or recovered from such Issuing Bank include
damages to the extent attributable to:

 

(i)                       any change in the value of any foreign currency or any
services, goods or other property for which payment is supported by a Letter of
Credit,

 

(ii)                    forged documents or fraud by the beneficiary or any
other person (except to the extent that such Issuing Bank had knowledge of the
foregoing) or

 

(iii)                 breach by the beneficiary of any obligation underlying a
Letter of Credit.

 

43

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

 

(j)                           Independence; Borrower Responsibility.

 

(i)                       The Borrower acknowledges that the rights and
obligations of the relevant Issuing Bank under each Letter of Credit are
independent of the existence, performance or nonperformance of any contract or
arrangement underlying the Letter of Credit, including contracts or arrangements
between such Issuing Bank and the Borrower and contracts or arrangements between
the Borrower and the beneficiary.  The relevant Issuing Bank may, without
incurring any liability to the Borrower or impairing its entitlement to
reimbursement or indemnity under this Agreement, (i) honor a Letter of Credit
despite notice from the Borrower of, and without any duty to inquire into, any
defense to honor or any adverse claim or other right against the beneficiary or
any other person, or (ii) dishonor a Letter of Credit for fraud or forgery.  The
relevant Issuing Bank shall have no duty to request or require the presentation
of any document, including any default certificate, not required to be presented
under the terms and conditions of a Letter of Credit.  The relevant Issuing Bank
shall have no duty to seek any waiver of discrepancies from the Borrower, nor
any duty to grant any waiver of discrepancies which the Borrower approves or
requests.

 

(ii)                    The Borrower is responsible for preparing or approving
the text of each Letter of Credit.  The Borrower shall use the relevant Issuing
Bank’s then-current standard form together with such amendments thereto as are
acceptable to such Issuing Bank in its sole discretion. The Borrower’s ultimate
responsibility for the final text shall not be affected by any assistance the
relevant Issuing Bank may provide such as drafting or recommending text or by
such Issuing Bank’s use or refusal to use text submitted by the Borrower.  The
Borrower acknowledges that the Borrower has been represented by legal counsel of
its choice in connection with the execution and delivery of this Agreement and
with respect to the issuance and form of each Letter of Credit, that the
relevant Issuing Bank does not represent or warrant that the Letter of Credit
will satisfy the Borrower’s requirements or intentions, and that the Borrower is
responsible for the suitability of the Letter of Credit for the Borrower’s
purposes.

 

(k)                        Non-Documentary Conditions.  The Issuing Banks are
authorized (but shall not hereby be required) to honor any presentation without
regard to any non documentary term or condition stated in the Letter of Credit.

 

(l)                           Transfers.  If a Letter of Credit is in
transferable form, no Issuing Bank shall have a duty to determine the proper
identity of anyone appearing in any transfer request, draft or other document as
transferee, nor shall any Issuing Bank be responsible for the validity or
correctness of any transfer made pursuant to documents that appear on their face
to be substantially in accordance with the terms and conditions of the Letter of
Credit.

 

(m)                     Extensions and Modifications; Waivers of Discrepancies. 
This Agreement shall be binding upon the Borrower with respect to any
replacement, extension, transfer or modification of a Letter of Credit or waiver
of discrepancies authorized by the Borrower.  The Borrower’s obligations to the
relevant Issuing Bank under this Agreement or in respect of each Letter of
Credit shall not be reduced or impaired by any agreement by such Issuing Bank
and the beneficiary extending or shortening such Issuing Bank’s

 

44

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

 

time after presentation to examine documents or to honor or give notice of
discrepancies.  Except as provided elsewhere in this Agreement or as may be
provided in a Letter of Credit or otherwise specifically agreed to in writing by
the relevant Issuing Bank in its sole discretion, such Issuing Bank shall have
no duty to (i) extend the expiration date or term of any Letter of Credit or
(ii) otherwise amend or modify any Letter of Credit.

 

(n)                       Disbursement Procedures.  The relevant Issuing Bank
shall, promptly following its receipt thereof, examine all documents purporting
to represent a demand for payment under a Letter of Credit.  The relevant
Issuing Bank shall promptly notify the Administrative Agent by telephone
(confirmed by telecopy) or electronic mail of such demand for payment and
whether such Issuing Bank has made or will make an LC Disbursement thereunder;
provided that any failure to give or delay in giving such notice shall not
relieve the Borrower of its obligation to reimburse such Issuing Bank and the
Lenders with respect to any such LC Disbursement.

 

(o)                       Interim Interest.  If any Issuing Bank shall make any
LC Disbursement, then, unless the Borrower shall reimburse such LC Disbursement
in full on the date such LC Disbursement is made, the unpaid amount thereof
shall bear interest, for each day from and including the date such LC
Disbursement is made to but excluding the date that the Borrower reimburses such
LC Disbursement, at the rate per annum then applicable to ABR Revolving Loans;
provided that, if the Borrower fails to reimburse such LC Disbursement when due
pursuant to paragraph (e) of this Section, then Section 2.12(d) shall apply. 
Interest accrued pursuant to this paragraph shall be for the account of the
relevant Issuing Bank, except that interest accrued on and after the date of
payment by any Lender pursuant to paragraph (e) of this Section to reimburse
such Issuing Bank shall be for the account of such Lender to the extent of such
payment.

 

(p)                       Replacement of Issuing Bank.  Any Issuing Bank may be
replaced at any time by written agreement among the Borrower, the Administrative
Agent, the replaced Issuing Bank and the successor Issuing Bank.  The
Administrative Agent shall notify the Lenders of any such replacement of an
Issuing Bank.  At the time any such replacement shall become effective, the
Borrower shall pay all unpaid fees accrued for the account of the replaced
Issuing Bank pursuant to Section 2.11(b).  From and after the effective date of
any such replacement, (i) the successor Issuing Bank shall have all the rights
and obligations of an Issuing Bank under this Agreement with respect to Letters
of Credit to be issued thereafter and (ii) references herein to the term
“Issuing Bank” shall be deemed to refer to such successor or to any previous
Issuing Bank, or to such successor and all previous Issuing Banks, as the
context shall require.  After the replacement of an Issuing Bank hereunder, the
replaced Issuing Bank shall remain a party hereto and shall continue to have all
the rights and obligations of an Issuing Bank under this Agreement with respect
to Letters of Credit issued by it prior to such replacement, but shall not be
required to issue additional Letters of Credit.

 

(q)                       Cash Collateralization.  If any Event of Default shall
occur and be continuing, on the Business Day that the Borrower receives notice
from the Administrative Agent or the Required Lenders (or, if the maturity of
the Loans has been accelerated, Lenders with LC Exposure representing greater
than 50% of the total LC Exposure) demanding the deposit of cash collateral
pursuant to this paragraph, the Borrower shall deposit in an account with the
Administrative Agent, in the name of the Administrative Agent and for the
benefit of the Lenders, an amount in cash equal to the

 

45

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

 

LC Exposure as of such date plus any accrued and unpaid interest thereon;
provided that the obligation to deposit such cash collateral shall become
effective immediately, and such deposit shall become immediately due and
payable, without demand or other notice of any kind, upon the occurrence of any
Event of Default with respect to the Borrower described in clause (h) or (i) of
Article 7.  Such deposit shall be held by the Administrative Agent as collateral
for the payment and performance of the obligations of the Borrower under this
Agreement.  The Administrative Agent shall have exclusive dominion and control,
including the exclusive right of withdrawal, over such account.  Cash in such
account shall earn interest and at the option and sole discretion of the
Administrative Agent and at the Borrower’s risk and expense, amounts in such
account may be invested in Cash Equivalents.  Interest or profits, if any, on
such investments shall accumulate in such account.  Moneys in such account shall
be applied by the Administrative Agent to reimburse the relevant Issuing Bank
for LC Disbursements for which it has not been reimbursed and, to the extent not
so applied, shall be held for the satisfaction of the reimbursement obligations
of the Borrower for the LC Exposure at such time or, if the maturity of the
Loans has been accelerated (but subject to the consent of Lenders with LC
Exposure representing greater than 50% of the total LC Exposure), be applied to
satisfy other obligations of the Borrower under this Agreement.  If the Borrower
is required to provide an amount of cash collateral hereunder as a result of the
occurrence of an Event of Default, such amount (to the extent not applied as
aforesaid) shall be returned to the Borrower within three Business Days after
all Events of Default have been cured or waived.

 

Section 2.06.  Funding of Borrowings.  (a) Each Lender shall make each Loan to
be made by it hereunder on the proposed date thereof by wire transfer of
immediately available funds by 12:00 noon, New York City time, to the account of
the Administrative Agent most recently designated by it for such purpose by
notice to the Lenders; provided that Swingline Loans shall be made as provided
in Section 2.04.  The Administrative Agent will make such Loans available to the
Borrower by promptly crediting the amounts so received, in like funds, to an
account of the Borrower maintained with the Administrative Agent in New York
City and designated by the Borrower in the applicable Borrowing Request;
provided that ABR Revolving Loans made to finance the reimbursement of an LC
Disbursement as provided in Section 2.05(e) shall be remitted by the
Administrative Agent to the relevant Issuing Bank.

 

(b)                       Unless the Administrative Agent shall have received
notice from a Lender prior to the proposed date of any Borrowing that such
Lender will not make available to the Administrative Agent such Lender’s share
of such Borrowing, the Administrative Agent may assume that such Lender has made
such share available on such date in accordance with paragraph (a) of this
Section and may, in reliance upon such assumption, make available to the
Borrower a corresponding amount.  In such event, if a Lender has not in fact
made its share of the applicable Borrowing available to the Administrative
Agent, then the applicable Lender and the Borrower severally agree to pay to the
Administrative Agent forthwith on demand such corresponding amount with interest
thereon, for each day from and including the date such amount is made available
to the Borrower to but excluding the date of payment to the Administrative
Agent, at (i) in the case of such Lender, the greater of the Federal Funds
Effective Rate and a rate determined by the Administrative Agent in accordance
with banking industry rules on interbank compensation or (ii) in the case of the
Borrower, the interest rate applicable to

 

46

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

 

ABR Loans.  If such Lender pays such amount to the Administrative Agent, then
such amount shall constitute such Lender’s Loan included in such Borrowing.

 

Section 2.07.  Interest Elections.  (a) Each Revolving Borrowing initially shall
be of the Type specified in the applicable Borrowing Request and, in the case of
a Eurodollar Revolving Borrowing, shall have an initial Interest Period as
specified in such Borrowing Request.  Thereafter, the Borrower may elect to
convert such Borrowing to a different Type or to continue such Borrowing and, in
the case of a Eurodollar Revolving Borrowing, may elect Interest Periods
therefor, all as provided in this Section.  The Borrower may elect different
options with respect to different portions of the affected Borrowing, in which
case each such portion shall be allocated ratably among the Lenders holding the
Loans comprising such Borrowing, and the Loans comprising each such portion
shall be considered a separate Borrowing.  This Section shall not apply to
Swingline Borrowings, which may not be converted or continued.

 

(b)                       To make an election pursuant to this Section, the
Borrower shall notify the Administrative Agent of such election by telephone by
the time that a Borrowing Request would be required under Section 2.03 if the
Borrower were requesting a Revolving Borrowing of the Type resulting from such
election to be made on the effective date of such election.  Each such
telephonic Interest Election Request shall be irrevocable and shall be confirmed
promptly by hand delivery or telecopy to the Administrative Agent of a written
Interest Election Request  in a form approved by the Administrative Agent and
signed by the Borrower.

 

(c)                        Each telephonic and written Interest Election Request
shall specify the following information in compliance with Section 2.03:

 

(i)                       the Borrowing to which such Interest Election Request
applies and, if different options are being elected with respect to different
portions thereof, the portions thereof to be allocated to each resulting
Borrowing (in which case the information to be specified pursuant to clauses
(iii) and (iv) below shall be specified for each resulting Borrowing);

 

(ii)                    the effective date of the election made pursuant to such
Interest Election Request, which shall be a Business Day;

 

(iii)                 whether the resulting Borrowing is to be an ABR Borrowing
or a Eurodollar Borrowing; and

 

(iv)                if the resulting Borrowing is a Eurodollar Borrowing, the
Interest Period to be applicable thereto after giving effect to such election,
which shall be a period contemplated by the definition of the term “Interest
Period”.

 

If any such Interest Election Request requests a Eurodollar Borrowing but does
not specify an Interest Period, then the Borrower shall be deemed to have
selected an Interest Period of one month’s duration, subject to the definition
of the term “Interest Period”.

 

47

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

 

(d)                       Promptly following receipt of an Interest Election
Request, the Administrative Agent shall advise each Lender of the details
thereof and of such Lender’s portion of each resulting Borrowing.

 

(e)                        If the Borrower fails to deliver a timely Interest
Election Request with respect to a Eurodollar Revolving Borrowing prior to the
end of the Interest Period applicable thereto, then, unless such Borrowing is
repaid as provided herein or an Event of Default is continuing, at the end of
such Interest Period such Borrowing shall be converted to an Interest Period of
one month’s duration, subject to the definition of the term “Interest Period”. 
Notwithstanding any contrary provision hereof, if an Event of Default has
occurred and is continuing and the Administrative Agent, at the request of the
Required Lenders, so notifies the Borrower, then, so long as an Event of Default
is continuing (i) no outstanding Revolving Borrowing may be converted to or
continued as a Eurodollar Borrowing and (ii) unless repaid, each Eurodollar
Revolving Borrowing shall be converted to an ABR Borrowing at the end of the
Interest Period applicable thereto.

 

Section 2.08.  Termination and Reduction of Commitments.  (a) Unless previously
terminated, the Commitments shall terminate on the Maturity Date.

 

(b)                       The Borrower may at any time terminate, or from time
to time reduce, the Commitments; provided that (i) each reduction of the
Commitments shall be in an amount that is an integral multiple of $5,000,000 and
not less than $10,000,000 and (ii) the Borrower shall not terminate or reduce
the Commitments if, after giving effect to any concurrent prepayment of the
Loans in accordance with Section 2.10, the sum of the Revolving Credit Exposures
would exceed the total Commitments.

 

(c)                        The Borrower shall notify the Administrative Agent of
any election to terminate or reduce the Commitments under paragraph (b) of this
Section at least three (3) Business Days prior to the effective date of such
termination or reduction, specifying such election and the effective date
thereof.  Promptly following receipt of any notice, the Administrative Agent
shall advise the Lenders of the contents thereof.  Each notice delivered by the
Borrower pursuant to this Section shall be irrevocable; provided that a notice
of termination of the Commitments delivered by the Borrower may state that such
notice is conditioned upon the effectiveness of other credit facilities, in
which case such notice may be revoked by the Borrower (by notice to the
Administrative Agent on or prior to the specified effective date) if such
condition is not satisfied.  Any termination or reduction of the Commitments
shall be permanent.  Each reduction of the Commitments shall be made ratably
among the Lenders in accordance with their respective Commitments.

 

Section 2.09.  Repayment of Loans; Evidence of Debt.  (a) The Borrower hereby
unconditionally promises to pay (i) to the Administrative Agent for the account
of each Lender the then unpaid principal amount of each Revolving Loan on the
Maturity Date and (ii) to the Swingline Lender the then unpaid principal amount
of each Swingline Loan on the earlier of the Maturity Date and the first date
after such Swingline Loan is made that is the 15th or last day of a calendar
month and is at least four (4) Business Days after such Swingline Loan is made;
provided that on each date that a Revolving Borrowing is made, the Borrower
shall repay all Swingline Loans then outstanding.

 

48

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

 

(b)                       Each Lender shall maintain in accordance with its
usual practice an account or accounts evidencing the indebtedness of the
Borrower to such Lender resulting from each Loan made by such Lender, including
the amounts of principal and interest payable and paid to such Lender from time
to time hereunder.

 

(c)                        The Administrative Agent shall maintain accounts in
which it shall record (i) the amount of each Loan made hereunder, the Class and
Type thereof and the Interest Period applicable thereto, (ii) the amount of any
principal or interest due and payable or to become due and payable from the
Borrower to each Lender hereunder and (iii) the amount of any sum received by
the Administrative Agent hereunder for the account of the Lenders and each
Lender’s share thereof.

 

(d)                       The entries made in the accounts maintained pursuant
to paragraph (b) or (c) of this Section shall be conclusive evidence of the
existence and amounts of the obligations recorded therein absent manifest error;
provided that the failure of any Lender or the Administrative Agent to maintain
such accounts or any error therein shall not in any manner affect the obligation
of the Borrower to repay the Loans in accordance with the terms of this
Agreement.

 

(e)                        Any Lender may request that Loans made by it be
evidenced by a promissory note.  In such event, the Borrower shall prepare,
execute and deliver to such Lender a promissory note payable to such Lender (or,
if requested by such Lender, to such Lender and its registered assigns) and in a
form approved by the Administrative Agent.  Thereafter, the Loans evidenced by
such promissory note and interest thereon shall at all times (including after
assignment pursuant to Section 9.04) be represented by one or more promissory
notes in such form payable to the payee named therein (or to such payee and its
registered assigns).

 

Section 2.10.  Prepayment of Loans.  (a) The Borrower shall have the right at
any time and from time to time to prepay any Borrowing in whole or in part,
subject to the provisions of this Section.

 

(b)                       The Borrower shall notify the Administrative Agent
(and, in the case of prepayment of a Swingline Loan, the Swingline Lender) by
telephone (confirmed by telecopy) of any prepayment hereunder (i) in the case of
prepayment of a Eurodollar Revolving Borrowing, not later than 11:00 a.m., New
York City time, three (3) Business Days before the date of prepayment, (ii) in
the case of prepayment of an ABR Revolving Borrowing, not later than 11:00 a.m.,
New York City time, one (1) Business Day before the date of prepayment or
(iii) in the case of prepayment of a Swingline Loan, not later than 12:00 noon,
New York City time, on the date of prepayment.  Each such notice shall be
irrevocable and shall specify the prepayment date and the principal amount of
each Borrowing or portion thereof to be prepaid, which prepayment amount shall
be $1,000,000 or an integral multiple of $500,000 in excess thereof; provided
that, if a notice of prepayment is given in connection with a conditional notice
of termination of the Commitments as contemplated by Section 2.08, then such
notice of prepayment may be revoked if such notice of termination is revoked in
accordance with Section 2.08.  Promptly following receipt of any such notice
relating to a Revolving Borrowing, the Administrative Agent shall advise the
Lenders of the contents thereof.   Each partial prepayment of any Revolving
Borrowing shall be in an amount that would be permitted in the case of an
advance of a Revolving Borrowing of the same Type as provided in

 

49

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

 

Section 2.02.  Each prepayment of a Revolving Borrowing shall be applied ratably
to the Loans included in the prepaid Borrowing.  Prepayments shall be
accompanied by accrued interest to the extent required by Section 2.12.

 

(c)                        Excess Revolving Credit Exposures.  If, immediately
after any reduction of the Commitments pursuant to Section 2.08(b), the total
Revolving Credit Exposures would exceed the total Commitments, the Borrower
shall, concurrently with such reduction, prepay Revolving Borrowings or
Swingline Loans in an amount equal to such excess.

 

Section 2.11.  Fees.  (a) The Borrower agrees to pay to the Administrative Agent
for the account of each Lender an unused commitment fee (an “Unused Commitment
Fee”), which shall accrue at the Applicable Rate noted under the caption “Unused
Commitment Fee Rate” on the average daily unused amount of the Commitment of
such Lender (determined, solely for purposes of determining the Unused
Commitment Fee, without regard to any outstanding Swingline Loans) during the
period from the Effective Date to but excluding the date on which such
Commitment terminates; provided that no Unused Commitment Fee shall accrue on
the Commitment of a Defaulting Lender so long as such Lender shall be a
Defaulting Lender.  Accrued Unused Commitment Fees shall be payable in arrears
on the last day of March, June, September and December of each year and on the
date on which the Commitments terminate, commencing on the first such date to
occur after the Effective Date.  All Unused Commitment Fees shall be computed on
the basis of a year of 360 days and shall be payable for the actual number of
days elapsed (including the first day but excluding the last day).

 

(b)                       The Borrower agrees to pay (i) to the Administrative
Agent for the account of each Lender a participation fee with respect to its
participations in Letters of Credit, which shall accrue at the same Applicable
Rate used to determine the interest rate applicable to Eurodollar Revolving
Loans on the average daily amount of such Lender’s LC Exposure (excluding any
portion thereof attributable to unreimbursed LC Disbursements) during the period
from and including the Effective Date to but excluding the later of the date on
which such Lender’s Commitment terminates and the date on which such Lender
ceases to have any LC Exposure, and (ii) to the relevant Issuing Bank a fronting
fee, which shall accrue at the rate of 0.25% per annum on the average daily
amount of the LC Exposure (excluding any portion thereof attributable to
unreimbursed LC Disbursements) during the period from and including the
Effective Date to but excluding the later of the date of termination of the
Commitments and the date on which there ceases to be any LC Exposure, as well as
such Issuing Bank’s standard and customary fees with respect to the issuance,
amendment, renewal or extension of any Letter of Credit or processing of
drawings thereunder.  Participation fees and fronting fees accrued through and
including the last day of March, June, September and December of each year shall
be payable on the third Business Day following such last day, commencing on the
first such date to occur after the Effective Date; provided that all such fees
shall be payable on the date on which the Commitments terminate and any such
fees accruing after the date on which the Commitments terminate shall be payable
on demand.  Any other fees payable to the Issuing Banks pursuant to this
paragraph shall be payable within 10 days after demand.  All participation fees
and fronting fees shall be computed on the basis of a year of 360 days and shall
be payable for the actual number of days elapsed (including the first day but
excluding the last day).

 

50

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

 

(c)                        The Borrower agrees to pay to the Administrative
Agent, for its own account, fees payable in the amounts and at the times
separately agreed upon in writing between the Borrower and the Administrative
Agent.

 

(d)                       All fees payable hereunder shall be paid on the dates
due, in immediately available funds, to the Administrative Agent (or to the
relevant Issuing Bank, in the case of fees payable to it) for distribution, in
the case of the Unused Commitment Fees and participation fees, to the Lenders. 
Fees paid shall not be refundable under any circumstances.

 

Section 2.12.  Interest.  (a) The Loans comprising each ABR Borrowing (including
each Swingline Loan) shall bear interest at the Alternate Base Rate plus the
Applicable Rate under the caption “ABR Spread.”

 

(b)                       The Loans comprising each Eurodollar Borrowing shall
bear interest at the Adjusted LIBO Rate for the Interest Period in effect for
such Borrowing plus the Applicable Rate under the caption “Eurodollar Spread.”

 

(c)                        Notwithstanding the foregoing, if at any time an
Event of Default is continuing (including, without limitation, as a result of
any principal of or interest on any Loan or any fee or other amount payable by
the Borrower hereunder not being paid when due, whether at stated maturity, upon
acceleration or otherwise) each amount that has not been paid when due under the
Loan Documents (whether at the stated maturity, by acceleration or otherwise)
shall bear interest, after as well as before judgment, at a rate per annum equal
to (i) in the case of principal of any Loan, 2% plus the rate otherwise
applicable to such Loan as provided in the preceding paragraphs of this Section
or (ii) in the case of any other amount, 2% plus the rate applicable to ABR
Loans as provided in paragraph (a) of this Section.

 

(d)                       Accrued interest on each Loan shall be payable in
arrears on each Interest Payment Date for such Loan and, in the case of
Revolving Loans, upon termination of the Commitments; provided that (i) interest
accrued pursuant to paragraph (c) of this Section shall be payable on demand,
(ii) in the event of any repayment or prepayment of any Loan (other than a
prepayment of an ABR Revolving Loan prior to the end of the Availability
Period), accrued interest on the principal amount repaid or prepaid shall be
payable on the date of such repayment or prepayment and (iii) in the event of
any conversion of any Eurodollar Revolving Loan prior to the end of the current
Interest Period therefor, accrued interest on such Loan shall be payable on the
effective date of such conversion.

 

(e)                        All interest hereunder shall be computed on the basis
of a year of 360 days, except that interest computed by reference to the
Alternate Base Rate at times when the Alternate Base Rate is based on the Prime
Rate shall be computed on the basis of a year of 365 days (or 366 days in a leap
year), and in each case shall be payable for the actual number of days elapsed
(including the first day but excluding the last day).  The applicable Alternate
Base Rate, Adjusted LIBO Rate or LIBO Rate shall be determined by the
Administrative Agent in good faith, and such determination shall be conclusive
absent manifest error.

 

51

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

 

(f)                          If, as a result of any restatement of or other
adjustment to the financial statements of the Borrower or for any other reason,
the Borrower or the Lenders determine that (i) the Leverage Ratio as calculated
by the Borrower as of any applicable date was inaccurate and (ii) a proper
calculation of the Leverage Ratio would have resulted in higher pricing for such
period, the Borrower shall immediately and retroactively be obligated to pay to
the Administrative Agent for the account of the applicable Lenders or Issuing
Banks, as the case may be, promptly on demand by the Administrative Agent (or,
after the occurrence of an actual or deemed entry of an order for relief with
respect to the Borrower under the Bankruptcy Code of the United States,
automatically and without further action by the Administrative Agent, any Lender
or the Issuing Bank), an amount equal to the excess of the amount of interest
and fees that should have been paid for such period over the amount of interest
and fees actually paid for such period.  This paragraph shall not limit the
rights of the Administrative Agent, any Lender or the Issuing Bank, as the case
may be, under Section 2.12(c) or under Article 7.  The Borrower’s obligations
under this paragraph shall survive the termination of the Commitments and the
repayment of all other obligations hereunder.

 

Section 2.13.  Alternate Rate of Interest.  If prior to the commencement of any
Interest Period for a Eurodollar Borrowing:

 

(a)                        the Administrative Agent determines (which
determination shall be conclusive absent manifest error) that adequate and
reasonable means do not exist for ascertaining the Adjusted LIBO Rate or the
LIBO Rate, as applicable, for such Interest Period; or

 

(b)                       the Administrative Agent is advised by the Required
Lenders that the Adjusted LIBO Rate or the LIBO Rate, as applicable, for such
Interest Period will not adequately and fairly reflect the cost to such Lenders
(or Lender) of making or maintaining their Loans (or its Loan) included in such
Borrowing for such Interest Period;

 

then the Administrative Agent shall give notice thereof to the Borrower and the
Lenders by telephone or telecopy as promptly as practicable thereafter and,
until the Administrative Agent notifies the Borrower and the Lenders that the
circumstances giving rise to such notice no longer exist, (i) any Interest
Election Request that requests the conversion of any Revolving Borrowing to, or
continuation of any Revolving Borrowing as, a Eurodollar Borrowing shall be
ineffective and (ii) if any Borrowing Request requests a Eurodollar Revolving
Borrowing, such Borrowing shall be made as an ABR Borrowing; provided that if
the circumstances giving rise to such notice affect only one Type of Borrowings,
then the other Type of Borrowings shall be permitted.

 

Section 2.14.  Increased Costs.  (a) If any Change in Law shall:

 

(i)                       impose, modify or deem applicable any reserve, special
deposit or similar requirement against assets of, deposits with or for the
account of, or credit extended by, any Lender (except any such reserve
requirement reflected in the Adjusted LIBO Rate) or Issuing Bank; or

 

52

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

 

(ii)                    impose on any Lender or Issuing Bank or the London
interbank market any other condition affecting this Agreement or Eurodollar
Loans made by such Lender or any Letter of Credit or participation therein;

 

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

 

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

 

(c)                        A certificate of a Lender or Issuing Bank setting
forth the amount or amounts necessary to compensate such Lender or the Issuing
Bank or its holding company, as the case may be, as specified in paragraph
Section 2.14(a) or Section 2.14(b) of this Section shall be delivered to the
Borrower and shall be conclusive absent manifest error.  The Borrower shall pay
such Lender or Issuing Bank, as the case may be, the amount shown as due on any
such certificate within 10 days after receipt thereof.  Notwithstanding the
foregoing, any increased costs due to Taxes shall be governed solely by Section
2.16.

 

(d)                       Failure or delay on the part of any Lender or Issuing
Bank to demand compensation pursuant to this Section shall not constitute a
waiver of such Lender or Issuing Bank’s right to demand such compensation;
provided that the Borrower shall not be required to compensate a Lender or
Issuing Bank pursuant to this Section for any increased costs or reductions
incurred more than 270 days prior to the date that such Lender or Issuing Bank,
as the case may be, notifies the Borrower of the Change in Law giving rise to
such increased costs or reductions and of such Lender or Issuing Bank’s
intention to claim compensation therefor; provided further that, if the Change
in Law giving rise to such increased costs or reductions is retroactive, then
the 270-day period referred to above shall be extended to include the period of
retroactive effect thereof.

 

Section 2.15.  Break Funding Payments.  In the event of (a) the payment of any
principal of any Eurodollar Loan other than on the last day of an Interest
Period applicable thereto (including as a result of an Event of Default), (b)
the conversion of any

 

53

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

 

Eurodollar Loan other than on the last day of the Interest Period applicable
thereto, (c) the failure to borrow, convert, continue or prepay any Eurodollar
Loan on the date specified in any notice delivered pursuant hereto (regardless
of whether such notice may be revoked under Section 2.10(b) and is revoked in
accordance therewith) or (d) the assignment of any Eurodollar Loan other than on
the last day of the Interest Period applicable thereto as a result of a request
by the Borrower pursuant to Section 2.18, then, in any such event, the Borrower
shall compensate each Lender for the loss, cost and expense attributable to such
event.  In the case of a Eurodollar Loan, such loss, cost or expense to any
Lender shall be deemed to include an amount determined by such Lender to be the
excess, if any, of (i) the amount of interest which would have accrued on the
principal amount of such Loan had such event not occurred, at the Adjusted LIBO
Rate that would have been applicable to such Loan, for the period from the date
of such event to the last day of the then current Interest Period therefor (or,
in the case of a failure to borrow, convert or continue, for the period that
would have been the Interest Period for such Loan), over (ii) the amount of
interest which would accrue on such principal amount for such period at the
interest rate which such Lender would bid were it to bid, at the commencement of
such period, for dollar deposits of a comparable amount and period from other
banks in the eurodollar market.  A certificate of any Lender setting forth any
amount or amounts that such Lender is entitled to receive pursuant to this
Section shall be delivered to the Borrower and shall be conclusive absent
manifest error.  The Borrower shall pay such Lender the amount shown as due on
any such certificate within 10 days after receipt thereof.

 

Section 2.16.  Taxes.  (a) Any and all payments by or on account of any
obligation of the Borrower hereunder shall be made free and clear of and without
deduction for any Taxes, subject to the following sentence.  If the Borrower
shall be required to deduct any Taxes from any and all payments by or on account
of any obligation of the Borrower hereunder, then (i) with respect to
Indemnified Taxes or Other Taxes, the sum payable shall be increased as
necessary so that after making all required deductions (including deductions
applicable to additional sums payable under this Section) the Administrative
Agent, Lender or Issuing Bank (as the case may be) receives an amount equal to
the sum it would have received had no such deductions for Indemnified Taxes or
Other Taxes been made, (ii) the Borrower shall make such deductions and (iii)
the Borrower shall pay the full amount deducted to the relevant Governmental
Authority in accordance with applicable law.

 

(b)                       Without duplication, the Borrower shall pay any Other
Taxes to the relevant Governmental Authority in accordance with applicable law.

 

(c)                        Without duplication, the Borrower shall indemnify the
Administrative Agent, each Issuing Bank and each Lender, within 15 days after
written demand therefor, for the full amount of any Indemnified Taxes or Other
Taxes paid by the Administrative Agent, such Issuing Bank or such Lender, as the
case may be, on or with respect to any payment by or on account of any
obligation of the Borrower hereunder (including Indemnified Taxes or Other Taxes
imposed or asserted on or attributable to amounts payable under this Section)
and reasonable out-of-pocket expenses arising therefrom or with respect thereto,
whether or not such Indemnified Taxes or Other Taxes were correctly or legally
imposed or asserted by the relevant Governmental Authority.  A certificate as to
the amount of any Indemnified Taxes or Other Taxes paid by the Lender, Issuing
Bank or the Administrative Agent on its own behalf or on behalf of a Lender or

 

54

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

 

an Issuing Bank, as the case may be, delivered to the Borrower shall be
conclusive absent manifest error.

 

(d)                       As soon as practicable after any payment of
Indemnified Taxes or Other Taxes by the Borrower to a Governmental Authority,
the Borrower shall deliver to the Administrative Agent the original or a
certified copy of a receipt issued by such Governmental Authority evidencing
such payment or other evidence of such payment reasonably satisfactory to the
Administrative Agent.

 

(e)                        (i) Any Lender, Issuing Bank or Agent Party that is
entitled to an exemption from or reduction of withholding tax under the law of
the jurisdiction in which the Borrower is located, or any treaty to which such
jurisdiction is a party, with respect to payments under this Agreement shall
deliver to the Borrower and/or to any applicable Governmental Authority (with a
copy to the Administrative Agent), at the time or times prescribed by applicable
law, such properly completed and executed documentation prescribed by applicable
law or reasonably requested by the Borrower as will permit such payments to be
made without withholding or at a reduced rate of withholding.

 

(ii) Without limiting the generality of the foregoing, each Lender, Issuing Bank
and Agent Party shall deliver to the Borrower and the Administrative Agent on or
prior to the date on which such Lender, Issuing Bank or Agent Party, as
applicable, becomes a party to this Agreement (and from time to time thereafter
upon the expiration or invalidity of any of the certificates or IRS forms
described below or upon the request of the Borrower or the Administrative
Agent), two (2) original copies of whichever of the following is applicable:

 

(A) duly completed and executed IRS Form W-8BEN (or successor forms)
establishing eligibility for benefits of an income tax treaty to which the
United States is a party or that such party is not subject to deduction or
withholding of United States federal income tax,

 

(B) duly completed and executed IRS Form W-8ECI (or successor forms),
establishing that such party is not subject to deduction or withholding of
United States federal income tax,

 

(C) in the case of a party claiming the benefits of the exemption for portfolio
interest under Section 881(c) of the Code, (x) duly executed Certificate
Regarding Non-Bank Status, substantially in the form of Exhibit H, and (y) duly
completed and executed IRS Form W-8BEN (or successor forms), or

 

(D) IRS Form W-9 (or successor forms), establishing that such party is not
subject to backup withholding or information reporting requirements.

 

Notwithstanding any other provisions of this paragraph, any Lender, Issuing Bank
or Agent Party shall not be required to deliver any form or certificate pursuant
to this subparagraph (ii) that such Lender, Issuing Bank or Agent Party, as
applicable, is not legally able to deliver.

 

55

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

 

(iii) If a payment made to a Lender, Issuing Bank or Agent Party under any Loan
Document would be subject to U.S. federal withholding Tax imposed by FATCA if
such Lender, Issuing Bank or Agent Party were to fail to comply with the
applicable reporting requirements of FATCA (including those contained in Section
1471(b) or 1472(b) of the Code, as applicable), such Lender, Issuing Bank or
Agent Party, as the case may be, shall deliver to Borrower and the
Administrative Agent, at the time or times prescribed by law and at  such time
or times reasonably requested by Borrower or the Administrative Agent, such
documentation prescribed by applicable law (including as prescribed by Section
1471(b)(3)(C)(i) of the Code) and such additional documentation reasonably
requested by Borrower or the Administrative Agent as may be necessary for
Borrower and the Administrative Agent to comply with their obligations under
FATCA, to determine that such Lender, Issuing Bank or Agent Party has complied
with its obligations under FATCA or to determine the amount to deduct and
withhold from any such  payments. Solely for purposes of this Section
2.16(e)(iii), “FATCA” shall include any amendments made to FATCA after the date
of this Agreement.

 

(f)                          If the Administrative Agent, an Issuing Bank or a
Lender determines, in its reasonable discretion, that it has received a refund
of any Taxes or Other Taxes as to which it has been indemnified by the Borrower
or with respect to which the Borrower has paid additional amounts pursuant to
this Section 2.16, it shall pay over such refund to the Borrower (but only to
the extent of indemnity payments made, or additional amounts paid, by the
Borrower under this Section 2.16 with respect to the Taxes or Other Taxes giving
rise to such refund), net of all out-of-pocket expenses of the Administrative
Agent, such Issuing Bank or such Lender, as applicable, and without interest
(other than any interest paid by the relevant Governmental Authority with
respect to such refund); provided that the Borrower, upon the request of the
Administrative Agent, such Issuing Bank or such Lender, agrees to repay the
amount paid over to the Borrower (plus any penalties, interest or other charges
imposed by the relevant Governmental Authority) to the Administrative Agent,
such Issuing Bank or such Lender in the event the Administrative Agent, such
Issuing Bank or such Lender is required to repay such refund to such
Governmental Authority. This Section shall not be construed to require the
Administrative Agent, any Issuing Bank or any Lender to make available its tax
returns (or any other information relating to its taxes which it deems
confidential) to the Borrower or any other Person.

 

(g)                       At the Borrower’s request and at the Borrower’s cost,
each Lender, Issuing Bank and Agent Party shall take reasonable steps (i) to
contest such Lender’s, such Issuing Bank’s or Agent Party’s, as applicable,
liability for Taxes that have not been paid or (ii) to seek a refund of Taxes,
if such steps would not subject such Lender, Issuing Bank or Agent Party, as
applicable, to any unreimbursed cost or expense and would not otherwise be
disadvantageous to such Lender, Issuing Bank or Agent Party, as applicable.

 

Section 2.17.  Payments Generally; Pro Rata Treatment; Sharing of Set-offs.  (a)
The Borrower shall make each payment required to be made by it hereunder
(whether of principal, interest, fees or reimbursement of LC Disbursements, or
of amounts payable under Section 2.14, 2.15 or 2.16, or otherwise) prior to
3:00 pm, New York City time, on the date when due, in immediately available
funds, without set off or counterclaim.  Any amounts received after such time on
any date may, in the discretion of the Administrative Agent, be deemed to have
been received on the next succeeding Business Day for purposes of calculating
interest thereon.  All such payments shall be made to the

 

56

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

 

Administrative Agent at its offices at One Pierrepoint Plaza, 7th Floor, 300
Cadman Plaza West, Brooklyn, New York 11201, except payments to be made directly
to an Issuing Bank or Swingline Lender as expressly provided herein and except
that payments pursuant to Sections 2.14, 2.15, 2.16 and 9.03 shall be made
directly to the Persons entitled thereto.  The Administrative Agent shall
distribute any such payments received by it for the account of any other Person
to the appropriate recipient promptly following receipt thereof.  If any payment
hereunder shall be due on a day that is not a Business Day, the date for payment
shall be extended to the next succeeding Business Day, and, in the case of any
payment accruing interest, interest thereon shall be payable for the period of
such extension.  All payments hereunder shall be made in dollars.

 

(b)                       If at any time insufficient funds are received by and
available to the Administrative Agent to pay fully all amounts of principal,
unreimbursed LC Disbursements, interest and fees then due hereunder, such funds
shall be applied (i) first, towards payment of interest and fees then due
hereunder, ratably among the parties entitled thereto in accordance with the
amounts of interest and fees then due to such parties, and (ii) second, towards
payment of principal and unreimbursed LC Disbursements then due hereunder,
ratably among the parties entitled thereto in accordance with the amounts of
principal and unreimbursed LC Disbursements then due to such parties; provided
that if such payment is (x) a prepayment of the principal amount of any Loans or
unreimbursed LC Disbursements for which a Defaulting Lender has funded its
participation obligations and (y) made at a time when the conditions set forth
in Section 4.02 are satisfied, such payment shall be applied solely to prepay
the Loans and reimbursement obligations owed to, all non-Defaulting Lenders pro
rata prior to being applied to the prepayment of any Loans or reimbursement
obligations owed to, any Defaulting Lender.

 

(c)                        If any Lender shall, by exercising any right of set
off or counterclaim or otherwise, obtain payment in respect of any principal of
or interest on any of its Revolving Loans or participations in LC Disbursements
or Swingline Loans resulting in such Lender receiving payment of a greater
proportion of the aggregate amount of its Revolving Loans and participations in
LC Disbursements and Swingline Loans and accrued interest thereon than the
proportion received by any other Lender, then the Lender receiving such greater
proportion shall purchase (for cash at face value) participations in the
Revolving Loans and participations in LC Disbursements and Swingline Loans of
other Lenders to the extent necessary so that the benefit of all such payments
shall be shared by the Lenders ratably in accordance with the aggregate amount
of principal of and accrued interest on their respective Revolving Loans and
participations in LC Disbursements and Swingline Loans; provided that (i) if any
such participations are purchased and all or any portion of the payment giving
rise thereto is recovered,  such participations shall be rescinded and the
purchase price restored to the extent of such recovery, without interest, and
(ii) the provisions of this paragraph shall not be construed to apply to any
payment made by the Borrower pursuant to and in accordance with the express
terms of this Agreement or any payment obtained by a Lender as consideration for
the assignment of or sale of a participation in any of its Loans or
participations in LC Disbursements to any assignee or participant, other than to
the Borrower or any Subsidiary or Affiliate thereof (as to which the provisions
of this paragraph shall apply).  The Borrower consents to the foregoing and
agrees, to the extent it may effectively do so under applicable law, that any
Lender acquiring a participation pursuant to the foregoing arrangements may
exercise against the Borrower rights of set-

 

57

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

 

off and counterclaim with respect to such participation as fully as if such
Lender were a direct creditor of the Borrower in the amount of such
participation.

 

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

 

(e)                        If any Lender shall fail to make any payment required
to be made by it pursuant to Section 2.04(c), 2.05(d) or (e), 2.06(b), 2.17(d)
or 9.03(c), then the Administrative Agent may, in its good faith discretion
(notwithstanding any contrary provision hereof), apply any amounts thereafter
received by the Administrative Agent for the account of such Lender to satisfy
such Lender’s obligations under such Sections until all such unsatisfied
obligations are fully paid.

 

Section 2.18.  Mitigation Obligations; Replacement of Lenders.  (a) If any
Lender requests compensation under Section 2.14, or if the Borrower is required
to pay any additional amount to any Lender or any Governmental Authority for the
account of any Lender pursuant to Section 2.16, then such Lender shall use
reasonable efforts to designate a different lending office for funding or
booking its Loans hereunder or to assign its rights and obligations hereunder to
another of its offices, branches or affiliates, if, in the judgment of such
Lender, such designation or assignment (i) would eliminate or reduce amounts
payable pursuant to Section 2.14 or 2.16, as the case may be, in the future and
(ii) would not subject such Lender to any unreimbursed cost or expense and would
not otherwise be disadvantageous to such Lender.  The Borrower hereby agrees to
pay all reasonable costs and expenses incurred by any Lender in connection with
any such designation or assignment.

 

(b)                       If any Lender requests compensation under Section
2.14, or if the Borrower is required to pay any additional amount to any Lender
or any Governmental Authority for the account of any Lender pursuant to Section
2.16, or if any Lender becomes a Defaulting Lender, or any Lender becomes a
“Nonconsenting Lender” (hereinafter defined), then the Borrower may, at its sole
expense and effort, upon notice to such Lender and the Administrative Agent,
require such Lender to assign and delegate, without recourse (in accordance with
and subject to the restrictions contained in Section 9.04), all its interests,
rights and obligations under this Agreement to an assignee that shall assume
such obligations (which assignee may be another Lender, if a Lender accepts such
assignment); provided that (i) if a Commitment is being assigned, the Borrower
shall have received the consent of each Issuing Bank, which consent, in each
case, shall not unreasonably be withheld or delayed, (ii) such Lender shall have
received payment of an amount equal to the outstanding principal of its Loans
and participations in

 

58

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

 

LC Disbursements and Swingline Loans, accrued interest thereon, accrued fees and
all other amounts payable to it hereunder, from the assignee (to the extent of
such outstanding principal and accrued interest and fees) or the Borrower (in
the case of all other amounts) and (iii) in the case of any such assignment
resulting from a claim for compensation under Section 2.14 or payments required
to be made pursuant to Section 2.16, such assignment will result in a reduction
in such compensation or payments.  A Lender shall not be required to make any
such assignment and delegation if, prior thereto, as a result of a waiver by
such Lender or otherwise, the circumstances entitling the Borrower to require
such assignment and delegation cease to apply. In the event that (x) the
Borrower or the Administrative Agent has requested the Lenders to consent to a
departure or waiver of any provisions of the Loan Documents or to agree to any
amendment thereto and (y) the Required Lenders have agreed to such consent,
waiver or amendment, then any Lender who does not agree to such consent, waiver
or amendment shall be deemed a “Nonconsenting Lender”. Any such replacement
shall not be deemed a waiver of any rights that the Borrower shall have against
the replaced Lender.

 

Section 2.19.  Incremental Facilities.  (a) At any time the Borrower, may, if it
so elects, (i) increase the aggregate amount of the revolving Commitments (each,
an “Incremental Revolving Increase”) or (ii) request the addition of one or more
new tranches of term loans (each, an “Incremental Term Facility” and, together
with the Incremental Revolving Increases, the “Incremental Facilities”), either
by designating one or more financial institutions not theretofore a Lender
(each, a “New Lender”) to become a Lender (such designation to be effective only
with the prior written consent of the Administrative Agent, which consent will
not be unreasonably withheld or delayed), and/or by agreeing with one or more
existing Lenders (each, an “Increasing Lender”) that each such Lender’s
Commitment shall be increased.  Upon execution and delivery by the Borrower and
such Lender or other financial institution of an instrument in form reasonably
satisfactory to the Administrative Agent providing for such new or increased
Commitment, addressing the other matters related thereto contemplated in this
Section, and, with respect to an Incremental Term Facility, providing for
appropriate modifications for obligations of Lenders, commitments and loans
(each, an “Incremental Amendment”), each such New Lender and Increasing Lender
shall have a Commitment as set forth in such instrument with all the rights and
obligations of a Lender with such a Commitment hereunder, the commitments of
Lenders agreeing to provide such Incremental Facilities shall become
“Commitments” hereunder and any Incremental Facilities shall, when made,
constitute “Loans” under this Agreement; provided that:

 

(i)                       no Event of Default shall have occurred and be
continuing immediately before or immediately after giving effect to the
establishment of and any borrowings under such Incremental Facilities;

 

(ii)                    after giving effect to such Incremental Facilities, the
Borrower is in Pro Forma Compliance with the covenants contained in Section 6.11
and Section 6.12, calculated (x) in the case of an Incremental Term Facility, as
if Loans had been made in an aggregate principal amount equal to the full amount
of Commitments available under such Incremental Term Facility, (y) in the case
of an Incremental Revolving Increase, giving effect only to the portion of such
Incremental Revolving Increase for which there is Revolving Credit Exposure at
such time and (z) based on the relevant financial statements delivered pursuant
to

 

59

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

 

Section 5.01, as though such incurrence occurred at the beginning of the period
covered thereby;

 

(iii)                               the Borrower shall provide prompt notice of
the establishment of such Incremental Facilities to the Administrative Agent,
who shall promptly notify the Lenders;

 

(iv)                              any such Incremental Facilities shall be in an
amount greater than or equal to $10,000,000;

 

(v)                                 the aggregate principal amount of
Incremental Facilities established pursuant to this Section 2.19 shall not
exceed $200,000,000;

 

(vi)                              any Incremental Revolving Increase shall not
constitute a separate tranche of Commitments but an increase thereof, and shall
have the same terms as the outstanding Loans;

 

(vii)                           (A) the applicable yield relating to any term
loans incurred pursuant to such Incremental Amendment, as applicable, shall not
be greater than the Applicable Rate for each relevant Pricing Level referred to
in the definition thereof (the “Applicable Margins”) plus 0.75% per annum unless
the Applicable Margins for the existing Loans are increased so that the yield
applicable to the applicable Incremental Facility does not exceed the Applicable
Margins by more than 0.75% per annum; provided that in determining the yield
applicable to the initial Loans and the loans to be made under applicable
Incremental Facility, (A) original issue discount (“OID”) or upfront fees (which
shall be deemed to constitute like amounts of OID) payable by the Borrower to
the Lenders of the existing Loans or the applicable Incremental Facility in the
syndication thereof shall be included (with OID being equated to interest based
on an assumed four-year life to maturity or, if less, the remaining life to
maturity of the applicable Incremental Facility), (B) customary arrangement or
commitment fees payable to the joint bookrunners (or their affiliates) or to one
or more arrangers (or their affiliates) of the applicable Incremental Facility
shall be excluded and (C) if such Incremental Facility includes a “LIBOR floor”,
such amount shall be equated to interest margin for purposes of determining any
increase to the applicable yield.

 

(viii)                        no Incremental Term Facility shall have a maturity
date earlier than 180 days after the Maturity Date;

 

(ix)                                the loans under any Incremental Facilities
shall rank pari passu in right of payment and of security with the Revolving
Loans;

 

(x)                                   the Borrower may incur Incremental
Facilities pursuant to this Section 2.19 no more than four times;

 

(xi)                                any restrictions specified in any prior
Incremental Amendment shall have been complied with; and

 

(xii)                             in the case of any New Lender under any
Incremental Revolving Increase, all consents required pursuant to Section 9.04
shall have been obtained.

 

60

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

 

(b)                       On the effective date of any Incremental Revolving
Increase pursuant to this Section 2.19, (i) each New Lender shall pay to the
Agent an amount equal to its pro rata share of the aggregate outstanding Loans
and (ii) any Increasing Lender shall pay to the Administrative Agent an amount
equal to the increase in its pro rata share of the aggregate outstanding Loans,
in each case such payments shall be for the account of each other Lender.  Upon
receipt of such amount by the Administrative Agent, (i) each other Lender shall
be deemed to have ratably assigned that portion of its outstanding Loans that is
being reduced to the New Lenders and the Increasing Lenders in accordance with
such New Lenders’ or Increasing Lender’s new Commitment or the increased portion
thereof as applicable, and (ii) the Administrative Agent shall promptly
distribute to each other Lender its ratable share of the amounts received by the
Administrative Agent pursuant to this paragraph.

 

(c)                        Each Lender acknowledges and agrees that (a) each
Lender under an Incremental Term Facility may, to the extent provided with
respect thereto, vote as the same class as the Revolving Loans and (b) an
Incremental Amendment in connection with an Incremental Term Facility may
provide that prepayments made pursuant to Section 2.10 may be applied to the
loans made under any Incremental Term Facility before application thereof to any
Revolving Loans.

 

Section 2.20.  Defaulting Lenders.  (a) If any Letters of Credit are outstanding
at the time a Lender becomes a Defaulting Lender, and the Commitments have not
been terminated in accordance with Article 7, then:

 

(i)                                     so long as no Default has occurred and
is continuing, all or any part of the aggregate amount available to be drawn
under all outstanding Letters of Credit shall be reallocated among the Lenders
that are not Defaulting Lenders (“non-Defaulting Lenders”) in accordance with
their Applicable Percentage (disregarding any Defaulting Lender’s Commitment)
but only to the extent that the sum of (A) the aggregate principal amount of all
Loans made by such non-Defaulting Lenders (in their capacity as Lenders) and
outstanding at such time, plus (B) such non-Defaulting Lenders’ Applicable
Percentage (before giving effect to the reallocation contemplated herein) of the
aggregate amount available to be drawn under all outstanding Letters of Credit,
plus (C) the aggregate principal amount of all Loans made by each Issuing Bank
pursuant to Section 2.02 that have not been ratably funded by such
non-Defaulting Lenders and outstanding at such time, plus (D) such Defaulting
Lender’s Applicable Percentage of the aggregate amount available to be drawn
under such Letters of Credit, does not exceed the total of all non-Defaulting
Lenders’ Commitments.

 

(ii)                                  if the reallocation described in
clause (i) above cannot, or can only partially, be effected, the Borrower shall
within one Business Day following notice by the Administrative Agent, cash
collateralize such Defaulting Lender’s Applicable Percentage of the aggregate
amount available to be drawn under such Letters of Credit (after giving effect
to any partial reallocation pursuant to clause (i) above) by paying cash
collateral to the applicable Issuing Bank for so long as such Letters of Credit
are outstanding;

 

(iii)                               if the Applicable Percentage of Letters of
Credit of the non-Defaulting Lenders are reallocated pursuant to this
Section 2.20, then the fees

 

61

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

 

payable to the Lenders pursuant to Section 2.11(b) shall be adjusted in
accordance with such non-Defaulting Lenders’ Applicable Percentage of Letters of
Credit; or

 

(iv)                              if any Defaulting Lender’s Applicable
Percentage of Letters of Credit is neither cash collateralized nor reallocated
pursuant to this Section 2.20, then, without prejudice to any rights or remedies
of any Issuing Bank or any Lender or the Borrower hereunder, all letter of
credit fees payable under Section 2.11(b) with respect to such Defaulting
Lender’s Applicable Percentage of Letters of Credit shall be payable to the
applicable Issuing Bank until such Lender’s Applicable Percentage of Letters of
Credit is cash collateralized and/or reallocated.

 

(b)                       So long as any Lender is a Defaulting Lender, no
Issuing Bank shall be required to issue, amend or increase any Letter of Credit,
unless it is satisfied that the related exposure will be 100% covered by the
Commitments of the non-Defaulting Lenders and/or cash collateral will be
provided by the applicable Borrower in accordance with Section 2.20, and
participating interests in any such newly issued or increased Letter of Credit
shall be allocated among non-Defaulting Lenders in a manner consistent with
Section 2.20(a)(i) (and Defaulting Lenders shall not participate therein).

 

(c)                        No Commitment of any Lender shall be increased or
otherwise affected, and, except as otherwise expressly provided in this
Section 2.20, performance by the Borrower of its obligations shall not be
excused or otherwise modified as a result of the operation of this
Section 2.20.  The rights and remedies against a Defaulting Lender under this
Section 2.20 are in addition to any other rights and remedies which the
Borrower, the Administrative Agent, any Issuing Bank, or any Lender may have
against such Defaulting Lender.

 

(d)                       Any payment of principal, interest, fees or other
amounts received by the Administrative Agent for the account of that Defaulting
Lender (whether voluntary or mandatory, at maturity, pursuant to Article 7 or
otherwise, and including any amounts made available to the Administrative Agent
by that Defaulting Lender pursuant to Section 9.08), shall be applied at such
time or times as may be determined by the Administrative Agent as follows:
first, to the payment of any amounts owing by that Defaulting Lender to the
Administrative Agent hereunder; second, to the payment on a pro rata basis of
any amounts owing by that Defaulting Lender to any Issuing Bank hereunder or the
Swingline Lender; third, if so determined by the Administrative Agent or
requested by any Issuing Bank or the Swingline Lender, to be held as cash
collateral for future funding obligations of that Defaulting Lender of any
participation in any Swingline Loan or Letter of Credit; fourth, as the Borrower
may request (so long as no Default or Event of Default exists), to the funding
of any Loan in respect of which that Defaulting Lender has failed to fund its
portion thereof as required by this Agreement, as determined by the
Administrative Agent; fifth, if so determined by the Administrative Agent and
the Borrower, to be held in a non-interest bearing deposit account and released
in order to satisfy obligations of that Defaulting Lender to fund Loans under
this Agreement; sixth, to the payment of any amounts owing to the Lenders, the
Issuing Banks or the Swingline Lender as a result of any judgment of a court of
competent jurisdiction obtained by any Lender, Issuing Bank or Swingline Lender
against that Defaulting Lender as a result of that Defaulting Lender’s breach of
its obligations under

 

62

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

 

this Agreement; seventh, so long as no Default or Event of Default exists, to
the payment of any amounts owing to the Borrower as a result of any judgment of
a court of competent jurisdiction obtained by the Borrower against that
Defaulting Lender as a result of that Defaulting Lender’s breach of its
obligations under this Agreement; and eighth, to that Defaulting Lender or as
otherwise directed by a court of competent jurisdiction; provided that if
(x) such payment is a payment of the principal amount of any Loans or any LC
Disbursements that have not yet been reimbursed by or on behalf of the Borrower
at such time in respect of which that Defaulting Lender has not fully funded its
appropriate share and (y) such Loans or such LC Disbursements were made at a
time when the conditions set forth in Section 4.02 were satisfied or waived,
such payment shall be applied solely to pay the Loans of, and LC Disbursements
owed to, all non-Defaulting Lenders on a pro rata basis prior to being applied
to the payment of any Loans of, or LC Disbursements owed to, that Defaulting
Lender.  Any payments, prepayments or other amounts paid or payable to a
Defaulting Lender that are applied (or held) to pay amounts owed by a Defaulting
Lender or to post cash collateral pursuant to this Section 2.20(d) shall be
deemed paid to and redirected by that Defaulting Lender, and each Lender
irrevocably consents hereto.

 

ARTICLE 3
REPRESENTATIONS AND WARRANTIES

 

The Borrower and, as to itself only, each other Credit Party represents and
warrants to the Lender Parties that:

 

Section 3.01.  Organization; Powers.  Each Cloud Peak Company is duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
organization, has all requisite power and authority to carry on its business as
now conducted and, except where failures to do so, in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect, is qualified to
do business in, and is in good standing in, every jurisdiction where such
qualification is required.

 

Section 3.02.  Authorization; Enforceability.  The Loan Documents that have been
or are to be entered into by the applicable Credit Party are within its
corporate or limited liability company powers and have been duly authorized by
all necessary corporate or limited liability company action and, if required,
stockholder or member action.  Each Loan Document to which the applicable Credit
Party is a party constitutes (or, in the case of any Loan Document entered into
after the Effective Date, when executed and delivered by such Person, will
constitute) a legal, valid and binding obligation of such Credit Party, in each
case enforceable in accordance with its terms, subject to applicable bankruptcy,
insolvency, reorganization, moratorium and other laws affecting creditors’
rights generally and subject to general principles of equity, regardless of
whether considered in a proceeding in equity or at law.

 

Section 3.03.  Governmental Approvals; No Conflicts.  The entry into the Loan
Documents and the performance of the Loan Financing Transactions contemplated
thereunder (a) do not require any consent or approval of, registration or filing
with, or other action by, any Governmental Authority, except (i) such as have
been obtained or made and are in full force and effect in all material respects,
(ii) filings, consents and

 

63

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

 

notices necessary to perfect or acknowledge, or for the exercise of remedies
under, the Transaction Liens and (iii) notices required under the Mining Permits
(including to the Bureau of Alcohol, Tobacco and Firearms) and Environmental
Permits regarding a change in control solely to the extent required for the
exercise of remedies under the Security Documents, which will be given to the
applicable Governmental Authority on or prior to the date by which such notices
are due, (b) will not violate any charter, by-laws or organizational documents
of the Borrower or any of its Restricted Subsidiaries, (c) will not violate any
applicable law or regulation (including any Environmental Law or Mining Law) or
any order of any Governmental Authority (including any Environmental Permit or
Mining Permit), (d) will not violate or result in a default under any indenture,
lease (including any Mining Lease), agreement or other instrument binding upon
the Borrower or any of its Restricted Subsidiaries or any of their respective
properties, or give rise to a right thereunder to require the Borrower or any of
its Restricted Subsidiaries to make any payment, except in each case referred to
in clause (c) or (d) to the extent that failure to do so would not reasonably be
expected to have a Material Adverse Effect and (e) will not result in the
creation or imposition of any Lien (other than the Transaction Liens) on any
property of the Borrower or any of its Restricted Subsidiaries.

 

Section 3.04.  Financial Statements; No Material Adverse Change.  (a) The
Borrower has heretofore furnished to the Lenders (i) its consolidated balance
sheet as of December 31, 2010 and the related consolidated statements of income,
stockholders’ equity and cash flows for the Fiscal Year then ended, reported on
by Pricewaterhouse Coopers LLP, Independent Registered Public Accounting Firm,
and (ii) its consolidated balance sheet as of March 31, 2011 and the related
consolidated statements of income, stockholders’ equity and cash flows for the
Fiscal Quarter then ended and for the portion of the Fiscal Year then ended, all
certified by its chief financial officer.  Such financial statements present
fairly, in all material respects, the financial position of the Borrower and its
consolidated Subsidiaries as of such dates and their results of operations and
cash flows for such periods in accordance with GAAP, subject to normal year-end
adjustments and the absence of footnotes in the case of the statements referred
to in clause (ii) above.

 

(b)                       After giving effect to the Restatement Transactions,
neither the Borrower nor any of its Subsidiaries has, as of the Restatement
Effective Date, any material contingent liabilities, unusual material long-term
commitments or unrealized losses, except as disclosed in the financial
statements referred to above or the notes thereto and except for the Disclosed
Matters.

 

(c)                        Since December 31, 2010, there has been no Material
Adverse Effect.

 

Section 3.05.  Properties. (a) Subject to the Liens expressly permitted by
Section 6.02, the Borrower and each Restricted Subsidiary is the sole owner of,
and has good record title to, the Real Property described in Schedule
3.05(e) and is the sole owner of and has good and valid title to, all other real
and personal property material to its business, including the real and personal
property described in Schedule 3.05(e), in each case except where the failure to
have such title or interest does not or would not reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect.  The Borrower
and each Restricted Subsidiary owns and has maintained, in all material respects
and in accordance with normal coal mining industry practice, all of the
machinery, equipment, vehicles, preparation plants or other coal processing
facilities, loadouts and other transportation facilities and other tangible
personal property now

 

64

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

 

owned or leased by the Borrower and the Restricted Subsidiaries that is
necessary to conduct their business as it is now conducted, except where the
failure to do so in the aggregate does not or would not reasonably be expected
to have a Material Adverse Effect.  All Real Property described in Schedule
3.05(e) and all other properties and assets comprising the Collateral are free
and clear of Liens, other than Liens expressly permitted by Section 6.02.

 

(b)                       The Borrower and each Restricted Subsidiary has
complied with all obligations under all leases (including Mining Leases) to
which it is a party, except where the failure to comply does not or would not
have a Material Adverse Effect, and all such leases are in full force and
effect, except leases in respect of which the failure to be in full force and
effect does not or would not reasonably be expected to have a Material Adverse
Effect.  Subject to the Liens expressly permitted by Section 6.02, the Borrower
and each Restricted Subsidiary enjoys peaceful and undisturbed possession under
all such Mining Leases, other than leases in respect of which the failure to
enjoy peaceful and undisturbed possession would not reasonably be expected to
have, in the aggregate, a Material Adverse Effect.

 

(c)                        Except as set forth on Schedule 3.05(c), and except
for such claims that do not and would not reasonably be expected to cause a
Material Adverse Effect, neither the Borrower nor any of the Restricted
Subsidiaries has received written or, to the knowledge of the Borrower and the
Restricted Subsidiaries, other notice of material claims, which are still
outstanding or unresolved, that the Borrower or any Restricted Subsidiary has
mined any coal that it did not have the right to mine or mined any coal in such
a manner as to give rise to any material claims for loss, waste or trespass,
and, to the knowledge of the Borrower and each Restricted Subsidiary, no facts
exist upon which such a claim could be based.

 

(d)                       The Borrower and each of its Restricted Subsidiaries
owns, or is licensed to use, all trademarks, tradenames, copyrights, patents and
other intellectual property necessary for use in its business, the use thereof
by the Borrower and its Restricted Subsidiaries does not infringe upon the
rights of any other Person, except for infringements that, in the aggregate, do
not and would not reasonably be expected to result in a Material Adverse Effect.

 

(e)                        Schedule 3.05(e) sets forth a brief description of
each material Mining Lease (including coal leases and surface rights), each
material Improvement, each material Mining Permit and each other material item
of Collateral owned or controlled by the Borrower or any Restricted Subsidiary
as of the Restatement Effective Date and the nature of the Borrower’s or each of
its Restricted Subsidiaries’ interest therein, in each case that is material to
the Coal Business.

 

(f)                          Except as disclosed in Schedule 3.06 or by the
Borrower in its 2010 10-K or 2011 10-Q, there are no developments affecting any
of the Mortgaged Property pending or, to the knowledge of any Credit Party
threatened, which might materially detract from the value, materially interfere
with any present or intended use or materially adversely affect the
marketability of such Mortgaged Property, other than any such developments that
do not and would not, in the aggregate, reasonably be expected to result in a
Material Adverse Effect.

 

65

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

 

(g)                       None of the Borrower and their Restricted Subsidiaries
is obligated under any right of first refusal, option or other contractual right
to sell, assign or otherwise dispose of any Mortgaged Property or any interest
therein, except for Liens permitted under Section 6.02 or Section 6.05.

 

(h)                       With respect to each Mortgaged Property on which
significant surface Improvements are located, subject to the Liens expressly
permitted by Section 6.02, there are no rights or claims of parties in
possession, encroachments, overlaps, boundary line disputes or other matters
which would be disclosed by an accurate survey or inspection of the premises
except as do not and would not reasonably be expected to have, in the aggregate,
a Material Adverse Effect.

 

(i)                           As of the Restatement Effective Date, each of the
Borrower and its Restricted Subsidiaries has proven or probable reserves of coal
in place on Mining Leases for which the Borrower and its Restricted Subsidiaries
either now have (or are highly confident they will obtain in the ordinary course
of business when needed) all Mining Permits, surface use agreements and other
ancillary rights, in each case, necessary for the operation of such leases as a
Mine at levels consistent with the mining plan provided to the Lenders on or
about the Effective Date.

 

Section 3.06.  Litigation and Environmental Matters.  (a) Except as set forth in
the Disclosed Matters or, with respect to Section 3.06(i) only, as disclosed in
the 2010 10-K or 2011 10-Q:

 

(i)                                     There are no actions, suits or
proceedings by or before any arbitrator or Governmental Authority pending
against or, to the knowledge of the Borrower, threatened against or affecting
the Borrower or any Restricted Subsidiary as to which there is a reasonable
likelihood of adverse determinations that, in the aggregate, would reasonably be
expected to result in a Material Adverse Effect.

 

(ii)                                  Neither the Borrower nor any Restricted
Subsidiary has been notified in writing, or, to the knowledge of the Borrower
and each Restricted Subsidiary, otherwise notified, by the Federal Office of
Surface Mining or the agency of any state administering the Surface Mining
Control and Reclamation Act of 1977, as amended, or any comparable state statute
that it is: (i) ineligible to receive additional surface mining permits; or
(ii) under investigation to determine whether their eligibility to receive any
Mining Permit should be revoked, i.e., “permit blocked”; in each case, except as
would not reasonably be expected to have a Material Adverse Effect.  To the
knowledge of the Borrower, no facts exist that presently or upon the giving of
notice or the lapse of time or otherwise would render the Borrower or any
Restricted Subsidiary ineligible to receive surface mining permits.

 

(b)                       Except for noncompliance, Environmental Liability or
claims that do not and would not reasonably be expected to result in a Material
Adverse Effect, neither the Borrower nor any Restricted Subsidiary nor any
Guarantor and no Real Property now or previously owned, leased or operated by
any such entity (i) has failed to comply with any Environmental Law or to
obtain, maintain or comply with any Environmental Permit, (ii) is subject to any
Environmental Liability (other than Environmental Liabilities for

 

66

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

 

reclamation obligations for which adequate reserves have been made on the
financial statements of the Borrower and its Subsidiaries in accordance with
GAAP or for which no reserves are so required), or (iii) has received written
notice of any claim with respect to any Environmental Liability.

 

(c)                        Since the Restatement Effective Date, there has been
no change in the status of the Disclosed Matters that, individually or in the
aggregate, has resulted in a Material Adverse Effect.

 

Section 3.07.  Compliance with Laws and Agreements.  The Borrower and each
Restricted Subsidiary is in compliance with all applicable laws, regulations and
orders (including any zoning, ordinance, code or approval, Mining Law, or Mining
Permit), excluding any Environmental Law (it being understood that Environmental
Law is covered in Section 3.06), of any Governmental Authority, in each case
applicable to it or its property, and all indentures, agreements and other
instruments binding on it or its property, except where failures to do so, in
the aggregate, do not and would not reasonably be expected to result in a
Material Adverse Effect.

 

Section 3.08.  Investment Company Status; Regulatory Restrictions on Borrowing. 
Neither the Borrower nor any Restricted Subsidiary is an “investment company” as
defined in, or subject to regulation under, the Investment Company Act of 1940. 
Neither the Borrower nor any Restricted Subsidiary is subject to regulation
under any law, treaty, rule or regulation or determination of an arbitrator or
court or other Governmental Authority (other than Regulations G, U and X of the
Federal Reserve Board) which limits its ability to incur any Debt under this
Agreement or any promissory note.

 

Section 3.09.  Taxes.  The Borrower and each Subsidiary has timely filed or
caused to be filed all Tax returns and reports required to have been filed by it
on or prior to the time when the same have become due and has paid or caused to
be paid on or prior to the time when the same have become due, all Taxes
required to have been paid by it, except (a) any Taxes that are being contested
in good faith by appropriate proceedings and for which the Borrower or relevant
Subsidiary has set aside on its books adequate reserves with respect thereto in
accordance with GAAP, or (b) to the extent that failures to do so, in the
aggregate, do not and would not reasonably be expected to result in a Material
Adverse Effect.

 

Section 3.10.  ERISA.  No ERISA Event has occurred or is reasonably expected to
occur that, when taken together with all other ERISA Events for which liability
is reasonably expected to occur, would reasonably be expected to result in a
Material Adverse Effect.  There exists no Unfunded Pension Liability with
respect to any Plan that would reasonably be expected to result in a Material
Adverse Effect.

 

Section 3.11.  Disclosure.  Except as disclosed in the 2010 10-K or 2011 10-Q or
otherwise pursuant to the Loan Documents, as of the Restatement Effective Date
the Borrower has disclosed to the Lenders all agreements, instruments and
corporate or other restrictions to which the Borrower or any Subsidiary is
subject that are known to Borrower, and all other matters known to any of them,
that, in the aggregate, would reasonably be expected to result in a Material
Adverse Effect.  No written reports, financial statements, certificates or other
information furnished by or on behalf of any

 

67

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

 

Credit Party to the Administrative Agent or any Lender in connection with the
negotiation of this Agreement or any other Loan Document or delivered hereunder
or thereunder (as modified or supplemented by other information so furnished)
contains any material misstatement of fact or omits to state any material fact
necessary to make the statements therein, when made and in the light of the
circumstances under which they were made, not materially misleading; provided
that, with respect to projected financial information, the Borrower represents
only that such information was prepared in good faith based on assumptions
believed to be reasonable at the time.

 

Section 3.12.  Subsidiaries.  Schedule 3.12 sets forth the name of, and the
ownership interest of the Borrower in, each of its Subsidiaries and identifies
each Subsidiary that is a Guarantor, in each case as of the Restatement
Effective Date.  All of the Borrower’s Restricted Subsidiaries are, and will at
all times be, fully consolidated in its consolidated financial statements.

 

Section 3.13.  Insurance.  As of the Restatement Effective Date, all premiums in
respect of insurance required to be maintained by the Borrower and its
Subsidiaries under Section 5.08 have, to the extent then required to be paid,
been paid.  All insurance required to be maintained by the Borrower and its
Subsidiaries under Section 5.08 is in effect.  No Mortgage encumbers improved
Real Property that is located in an area that has been identified by the
Secretary of Housing and Urban Development as an area having special flood
hazards within the meaning of the National Flood Insurance Act of 1968 unless
flood insurance available under such Act has been obtained in accordance with
Section 5.08(c).

 

Section 3.14.  Labor Matters.  As of the Restatement Effective Date, except as
otherwise disclosed in the 2010 10-K or 2011 10-Q, there are no strikes,
lockouts or slowdowns against the Borrower or any Restricted Subsidiary pending
or, to the knowledge of the Borrower, threatened.  The hours worked by and
payments made to employees of the Borrower and each Restricted Subsidiary have
not violated the Fair Labor Standards Act or any other applicable Federal,
state, local or foreign law dealing with such matters.  All payments due from
the Borrower or any Restricted Subsidiary, or for which any claim may be made
against the Borrower or any Restricted Subsidiary, on account of wages and
employee health and welfare insurance and other benefits, have been paid or
accrued as a liability on the books of the Borrower or such Restricted
Subsidiary, except where the failure to make such payment would not reasonably
be expected to cause a Material Adverse Effect.  The consummation of the
Restatement Transactions will not give rise to any right of termination or right
of renegotiation on the part of any union under any collective bargaining
agreement by which the Borrower or any Restricted Subsidiary is bound.

 

Section 3.15.  Solvency.  Immediately after the Restatement Transactions to
occur on the Restatement Effective Date are consummated, the Credit Parties, on
a consolidated basis, will be Solvent.

 

Section 3.16.  Use of Proceeds.  The Borrower shall use the proceeds of the
Loans solely in accordance with Section 5.12.

 

68

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

 

Section 3.17.  Guarantors.  On the Restatement Effective Date, the Guarantors
identified on the signature pages hereto constitute all of the Subsidiaries
required to be Guarantors in accordance with the terms of this Agreement,
including Section 5.13.

 

Section 3.18.  Sanctioned Persons.  None of Holdings, the Borrower or any
Subsidiary nor any director or officer of Holdings, the Borrower or any
Subsidiary is currently subject to any U.S. sanctions administered by the Office
of Foreign Assets Control of the U.S. Treasury Department (“OFAC”); and the
Borrower will not directly or indirectly use the proceeds of the Loans or the
Letters of Credit or otherwise make available such proceeds to any Person, for
the purpose of financing the activities of any Person currently subject to any
U.S. sanctions administered by OFAC.

 

Section 3.19.  Margin Stock.  None of Holdings, Borrower, or any of their
Subsidiaries is engaged principally, or as one of its important activities, in
the business of extending credit for the purpose of buying or carrying “margin
stock” (as such term is defined in Regulation U of the Federal Reserve Board).

 

ARTICLE 4
CONDITIONS

 

Section 4.01.  Effective Date.  The Effective Date occurred on November 25,
2009, and was subject to satisfaction of the following conditions:

 

(a)                        The Administrative Agent shall have received from
each party hereto either (i) a counterpart of this Agreement signed on behalf of
such party or (ii) written evidence satisfactory to the Administrative Agent
(which may include telecopy transmission of a signed signature page) that such
party has signed a counterpart of this Agreement.

 

(b)                       The Administrative Agent shall have received a Note
for the account of each Lender requesting a Note to be delivered in connection
with the Effective Date.

 

(c)                        The Administrative Agent shall have received a
reasonably satisfactory written opinion (addressed to the Administrative Agent
and the Lenders and dated the Effective Date) of each of (i) Fried, Frank,
Harris, Shriver & Jacobsen LLP, special counsel for the Borrower, substantially
in the form of Exhibit B-1, (ii) Holland & Hart LLP, special regulatory counsel
to the Borrower, substantially in the form of Exhibit B-2, (iii) Amy Stefonick,
internal counsel to the Borrower, and Kevin Baker, internal counsel to RTEA,
substantially in the form of Exhibits B-3 and B-4, respectively, (iv) Parsons
Behle & Latimer, special regulatory counsel to the Administrative Agent,
substantially in the form of Exhibit B-5 and (v) local counsel in each
jurisdiction where a Mortgaged Property is located, and, in the case of each
opinion required by this subsection, covering such other matters relating to the
Credit Parties or the Loan Documents as the Required Lenders shall reasonably
request.

 

(d)                       The Administrative Agent shall have received such
documents and certificates as the Administrative Agent or its counsel may
reasonably request relating to the organization, existence and good standing of
each Credit Party, the authorization of

 

69

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

 

 

the Loan Documents and any other legal matters relating to the Credit Parties,
the Loan Documents, all in form and substance reasonably satisfactory to the
Administrative Agent and its counsel.

 

(e)                        The Administrative Agent shall have received a
certificate, dated the Effective Date and signed by the President, a Vice
President or a Financial Officer of the Borrower, confirming compliance with the
conditions set forth in clauses (b) and (c) of Section 4.02.

 

(f)                          The Credit Parties shall have paid, or have caused
to be paid, all invoiced fees and other amounts due and payable to the Lender
Parties on or before the Effective Date, including, to the extent invoiced, all
out-of-pocket expenses (including fees, charges and disbursements of counsel)
required to be reimbursed or paid by any Credit Party under the Loan Documents.

 

(g)                       Evidence that the Collateral and Guarantee Requirement
shall have been satisfied and the Administrative Agent shall have received a
completed Perfection Certificate dated the Effective Date and signed by a
Financial Officer or other executive officer of the Borrower, together with all
attachments contemplated thereby, including the results of a search of the
Uniform Commercial Code (or equivalent) filings made with respect to the Credit
Parties in the jurisdictions contemplated by the Perfection Certificate and
copies of the financing statements (or similar documents) disclosed by such
search and evidence reasonably satisfactory to the Administrative Agent that the
Liens indicated by such financing statements (or similar documents) are
permitted by Section 6.02 or have been released.

 

(h)                       The Administrative Agent shall have received evidence
that all insurance required by Section 5.08 is in effect.

 

(i)                           Prior to or substantially simultaneously with the
initial Credit Event, the acquisition of Equity Interests in the Borrower by
Holdings shall be consummated in accordance with the terms of the Acquisition
Agreement and no provision thereof shall have been amended or waived in any
material respect that is adverse to the interests of the Lenders without the
prior written consent of the Administrative Agent.

 

(j)                           Each of the IPO and the offering of the Senior
Notes shall be consummated simultaneously with the occurrence of the Effective
Date, resulting in combined aggregate gross cash proceeds of at least
$900,000,000.

 

(k)                        The Administrative Agent shall have received copies
of the Transaction Documents and all certificates, opinions and other documents
delivered thereunder (without material amendment, modification or waiver thereof
which is adverse to the Lenders (as reasonably determined by the Administrative
Agent)).

 

(l)                           The Lenders shall have received a pro forma
consolidated balance sheet of the Borrower as of September 30, 2009, reflecting
all pro forma adjustments as if the Effective Date Transactions had been
consummated on such date, and such pro forma consolidated balance sheet shall be
consistent in all material respects with the forecasts and other information
previously provided to the Lenders.

 

70

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

 

(m)                     The Administrative Agent shall have received an opinion
from Duff & Phelps LLC, in form and substance and with detailed support for the
conclusions expressed therein, in each case reasonably satisfactory to the
Administrative Agent, that the Credit Parties are and, immediately after giving
effect to the Effective Date Transactions on the Effective Date will be,
Solvent.

 

(n)                       The Administrative Agent shall have received, not
later than three Business Days prior to the Effective Date, all documentation
and other information with respect to the Borrower required by regulatory
authorities under applicable “know-your-customer” and anti-money laundering
rules and regulations, including without limitation the PATRIOT Act.

 

(o)                       On and as of the Effective Date (and immediately after
giving effect to any Credit Event and other Transaction to occur on the
Effective Date and the application of all proceeds thereof as contemplated by
the Transaction Documents), (i) the representations and warranties of each
Credit Party set forth in the Loan Documents shall be true and correct and
(ii) no Default shall have occurred and be continuing.

 

Section 4.02.  Each Credit Event.  The obligation of each Lender to make a Loan
on the occasion of any Borrowing, the obligation of the Swingline Lender to make
any Swingline Loan and the obligation of each Issuing Bank to issue, amend,
renew or extend any Letter of Credit (each such event, a “Credit Event”), are
each subject to the following conditions:

 

(a)                        The Administrative Agent (or, if applicable, the
relevant Issuing Bank or the Swingline Lender) shall have received a request
with respect to such Credit Event in accordance with the terms of this
Agreement.

 

(b)                       The representations and warranties of each Credit
Party set forth in the Loan Documents shall be true (or, in the case of any
representation and warranty that is not by its express terms limited by a
materiality or “Material Adverse Effect” exception or qualifier, true in all
material respects) on and as of the date of such Credit Event, provided that, to
the extent that such representations and warranties specifically refer to an
earlier date, they shall be true and correct in all material respects as of such
date.

 

(c)                        At the time of such Credit Event, no Default shall
exist, or would exist after giving effect to such Credit Event and the
application of the proceeds therefrom.

 

Each Borrowing, each Swingline Loan and each issuance, amendment, renewal or
extension of a Letter of Credit shall be deemed to constitute a representation
and warranty by the Borrower on the date thereof as to the matters specified in
clauses (b) and (c) of this Section.

 

Section 4.03.  Restatement Effective Date.  (a)  The effectiveness of the
amendment and restatement of the Original Credit Agreement in the form of this
Agreement is subject to the satisfaction of the following conditions precedent:

 

(i)                                     The Administrative Agent shall have
received from the Borrower, the Guarantors, each Lender, each Issuing Bank, the
Administrative Agent and the Swingline Lender either (x) a counterpart of this
Agreement

 

71

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

 

signed on behalf of such party or (y) written evidence satisfactory to the
Administrative Agent (which may include telecopy transmission of a signed
signature page) that such party has signed a counterpart of this Agreement.

 

(ii)                                  The Administrative Agent shall have
received an opinion (addressed to the Administrative Agent and the Lenders and
dated the Restatement Effective Date) of each of (x) Vinson & Elkins LLP,
special counsel for the Borrower, substantially in the form of Exhibit B-6 and
(y) Amy Stefonick, internal counsel to the Borrower, substantially in the form
of Exhibit B-7.

 

(iii)                               The Administrative Agent shall have received
a certificate of the Secretary of each Credit Party relating to the
organization, existence and good standing of each Loan Party, the authorization
of this Agreement, such Credit Party’s board of directors (or equivalent) and
matters pertaining to dissolution and liquidation, in substantially the same
form as the Secretary’s certificates delivered in connection with the Effective
Date.

 

(iv)                              The Administrative Agent shall have received a
certificate dated as of the Restatement Effective Date, and signed by a Vice
President or Financial Officer of the Borrower, certifying that (x) the
representations and warranties set forth in Article 3 of this Agreement are true
(or, in the case of any representation and warranty that is not by its express
terms limited by a materiality or “Material Adverse Effect” exception or
qualifier, true in all material respects) as of the Restatement Effective Date,
(y) after giving effect to the Restatement Transactions, no Default or Event of
Default has occurred and is continuing and (z) the conditions set forth in this
Section 4.03 have been satisfied on and as of the Restatement Effective Date.

 

(v)                                 The Administrative Agent shall have received
payment from the Borrower, for the account of each Lender that executes and
delivers a counterpart signature page to this Agreement an upfront fee in an
amount separately agreed to in writing and payable on the Restatement Effective
Date (upon the satisfaction of all other conditions for the occurrence thereof),
in immediately available funds and, once paid, such fee or any part thereof
shall not be refundable.

 

(vi)                              The Borrower shall have paid all invoiced fees
and other amounts due and payable to the Lender Parties on or before the
Restatement Effective Date, including, to the extent invoiced, all out-of-pocket
expenses of the Administrative Agent (or any of its Affiliates) (including fees,
charges and disbursements of counsel to the Administrative Agent) required to be
reimbursed or paid by the Borrower under the Loan Documents, together with all
other fees separately agreed to in writing by the Borrower and the
Administrative Agent (or any of its Affiliates).

 

(vii)                           Since December 31, 2010, there has been no
change, occurrence or development that, individually or in the aggregate, has
had or could reasonably be expected to have a Material Adverse Effect.

 

72

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

 

(viii)                        The Administrative Agent shall have received a
Note for the account of each Lender requesting a Note to be delivered in
connection with the Restatement Effective Date.

 

Promptly after the Restatement Effective Date, the Administrative Agent shall
notify the Borrower and the Lenders of the occurrence of the Restatement
Effective Date, and such notice shall be conclusive and binding.

 

(b)                       It is the intention of each of the parties hereto
(including each Guarantor) that the Original Credit Agreement be amended and
restated so as to preserve the perfection and priority of all security interests
securing indebtedness and obligations under the Original Credit Agreement and
the guarantees thereof and all Debt and obligations of the Credit Parties
hereunder and thereunder shall be secured by the Security Documents and that
this Agreement does not constitute a novation of the obligations and liabilities
existing under the Original Credit Agreement.  In addition, each of the other
Loan Documents shall continue in full force and effect and, from and after the
Restatement Effective Date, all references to the “Credit Agreement” contained
therein shall be deemed to refer to this Agreement.

 

(c)                        All schedules to the Original Credit Agreement are
amended and restated in the forms attached hereto, and such schedules will
thereafter be schedules to this Agreement.

 

(d)                       Except as set forth below, all exhibits to the
Original Credit Agreement, in the forms thereof immediately prior to the
Restatement Effective Date, will continue to be exhibits to this Agreement.  In
addition, new Exhibits B-6 and B-7 in the forms of Exhibits B-6 and B-7 attached
hereto shall be added as exhibits to this Agreement.

 

(e)                        The changes to the definitions of “Applicable Rate”
and “Available Net Income Basket Amount” in Section 1.01 of this Agreement
effected pursuant to the Restatement Transactions shall apply and be effective
on and after the Restatement Effective Date.  The definitions of “Applicable
Rate” and “Available Net Income Basket Amount” in Section 1.01 of the Original
Credit Agreement shall apply and be effective for the period ending on, but not
including, the Restatement Effective Date.

 

(f)                          Each Credit Party hereby (i) confirms that each
Loan Document to which it is a party or is otherwise bound and all Collateral
encumbered thereby will continue to guarantee or secure, as the case may be, to
the fullest extent possible in accordance with the Loan Documents, the payment
and performance of the Secured Obligations, as the case may be, and
(ii) confirms that it has granted to the Administrative Agent for the benefit of
the Secured Parties a continuing lien on and security interest in and to such
Credit Party’s right, title and interest in, to and under all Collateral as
collateral security for the prompt payment and performance in full when due of
the Secured Obligations (whether at stated maturity, by acceleration or
otherwise).

 

(g)                       Each Credit Party acknowledges and agrees that any of
the Loan Documents (other than the Original Credit Agreement) to which it is a
party or otherwise bound prior to the execution and delivery of this Agreement
shall continue in full force and effect and that all of its obligations
thereunder shall be valid and enforceable and shall not be impaired or limited
by the execution or effectiveness of the amendment and

 

73

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

 

restatement of the Original Credit Agreement.  Each Credit Party represents and
warrants that all representations and warranties contained in the Loan Documents
to which it is a party are true and accurate (or, in the case of any
representation and warranty that is not by its express terms limited by a
materiality or “Material Adverse Effect” exception or qualifier, true in all
material respects) on and as of the Restatement Effective Date to the same
extent as though made on and as of that date, except to the extent such
representations and warranties specifically relate to an earlier date, in which
case they were true and accurate (or, in the case of any representation and
warranty that is not by its express terms limited by a materiality or “Material
Adverse Effect” exception or qualifier, true in all material respects) on and as
of such earlier date.

 

(h)                       After giving effect to all assignments of Commitments
of certain Persons who were “Lenders” under the Original Credit Agreement
immediately prior to the Restatement Effective Date, each made in accordance
with Section 9.04(b) (the “Pre-Restatement Terminating Lenders”), and the
termination of the Commitments of certain Pre-Restatement Terminating Lenders
pursuant to Section 2.08 (and (i) the Borrower hereby terminates each such
Commitment and (ii) the parties hereto hereby consent thereto and waive any
deviation from any ratable, notice or other requirements that might otherwise
apply to such termination), each effective upon the effectiveness of the
amendment and restatement contemplated on the Restatement Effective Date, the
Commitments of the Lenders shall be as set forth in Schedule 2.01.

 

ARTICLE 5
AFFIRMATIVE COVENANTS

 

Until all the Commitments have expired or terminated and the principal of and
interest on each Loan and all fees payable hereunder have been paid in full and
all Letters of Credit have expired or been cancelled and all LC Disbursements
have been reimbursed, the Borrower covenants and agrees with the Lenders that:

 

Section 5.01.  Financial Statements and Other Information.  The Borrower will
furnish to the Administrative Agent and each Lender:

 

(a)                        within 90 days after the end of each Fiscal Year, its
audited consolidated balance sheet as of the end of such Fiscal Year and the
related statements of operations, stockholders’ equity and cash flows for such
Fiscal Year, setting forth in each case in comparative form the figures for the
previous Fiscal Year, all reported on by Pricewaterhouse Coopers LLP or other
independent registered public accounting firm of recognized national standing
(without a “going concern” or like qualification or exception and without any
qualification or exception as to the scope of such audit) as presenting fairly
in all material respects the financial position, results of operations and cash
flows of the Borrower and its consolidated Subsidiaries on a consolidated basis
in accordance with GAAP;

 

(b)                       within 45 days after the end of each of the first
three Fiscal Quarters of each Fiscal Year, its consolidated balance sheet as of
the end of such Fiscal Quarter and the related statements of operations,
stockholders’ equity and cash flows for such Fiscal Quarter and for the then
elapsed portion of such Fiscal Year, setting forth in each case in

 

74

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

 

comparative form the figures for the corresponding period or periods of (or, in
the case of the balance sheet, as of the end of) the previous Fiscal Year, all
certified by a Financial Officer as presenting fairly in all material respects
the financial position, results of operations and cash flows of the Borrower and
its consolidated Subsidiaries on a consolidated basis in accordance with GAAP,
subject to normal year-end adjustments and the absence of footnotes;

 

(c)                        concurrently with each delivery of financial
statements under clause (a) or (b) above, a certificate (the “Compliance
Certificate”) of a Financial Officer (i) certifying as to whether a Default has
occurred and is continuing and, if a Default has occurred and is continuing,
specifying the details thereof and any action taken or proposed to be taken with
respect thereto, (ii) setting forth reasonably detailed calculations
demonstrating compliance with Sections 6.11 and 6.12 and (iii) stating whether
any change in GAAP or in the application thereof related to the Borrower or its
Subsidiaries has occurred since the date of the Borrower’s audited financial
statements referred to in Section 3.04 and, if any such change has occurred,
specifying the effect of such change on the financial statements accompanying
such Compliance Certificate;

 

(d)                       promptly after the same become publicly available,
copies of all periodic and other reports, proxy statements and other materials
filed by Holdings or the Borrower with the SEC, or any Governmental Authority
succeeding to any or all of the functions of the SEC, or with any national
securities exchange, or distributed by Holdings to its shareholders generally,
as the case may be; and

 

(e)                        as soon as practicable following any request
therefor, such other information regarding the operations (including as to coal
reserves), business affairs and financial condition of the Borrower and its
Subsidiaries in such detail as is commercially reasonably available to the
Borrower and its Subsidiaries, or compliance with the terms of any Loan
Document, as the Administrative Agent or any Lender through the Administrative
Agent may reasonably request, in each case, solely with respect to the
Administrative Agent’s or Lender’s credit review of the Borrower and its
Restricted Subsidiaries in connection with the Loan Financing Transactions
contemplated by the Loan Documents.

 

Documents required to be delivered pursuant to Section 5.01(a),
Section 5.01(b) or Section 5.01(d) which are made available via EDGAR, or any
successor system of the SEC, in the Borrower’s Annual Report on Form 10-K,
Quarterly Report on Form 10-Q or Current Report on Form 8-K, as applicable,
shall be deemed delivered to the Lenders on the date such documents are made so
available, with notice thereof by the Borrower to the Administrative Agent.

 

Section 5.02.  Notice of Material Events.  The Borrower will furnish to the
Administrative Agent and each Lender prompt written notice of the following:

 

(a)                        the occurrence of any Default;

 

(b)                       the occurrence of a “default” or “event of default”
(however denominated) or any event requiring a mandatory offer to purchase or
right of redemption, under the Senior Notes;

 

75

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

 

(c)                        the filing or commencement of any action, suit or
proceeding by or before any arbitrator or Governmental Authority against or
affecting the Borrower or any Subsidiary or any Affiliate thereof that, if
adversely determined, would reasonably be expected to result in a Material
Adverse Effect;

 

(d)                       the loss, delay, denial, termination or material and
adverse modification of the terms of any material lease from any Governmental
Authority or any material coal contract, with or without the consent of the
Borrower or any of its Affiliates that would reasonably be expected to result in
a Material Adverse Effect;

 

(e)                        the occurrence of any ERISA Event that, alone or
together with any other ERISA Events that have occurred, would reasonably be
expected to result in liabilities of the Borrower and its Subsidiaries in an
aggregate amount exceeding $10,000,000; and

 

(f)                          any other development that results in, or would
reasonably be expected to result in, a Material Adverse Effect.

 

Each notice delivered under this Section shall be accompanied by a statement of
a Financial Officer or other executive officer of the Borrower setting forth the
details of the event or development requiring such notice and any action taken
or proposed to be taken with respect thereto.

 

Section 5.03.  Information Regarding Collateral.  (a) The Borrower will furnish
to the Administrative Agent (for distribution to each Lender by the
Administrative Agent) prompt written notice of any change in (i) any Credit
Party’s corporate name or any trade name used to identify it in the conduct of
its business or any Credit Party’s chief executive office, its principal place
of business, or any office or facility at which Collateral owned by it is
located (including the establishment of any such new office or facility),
(ii) any Credit Party’s identity or corporate structure or (iii) any Credit
Party’s Federal Taxpayer Identification Number.  The Borrower will not effect or
permit any change referred to in the preceding sentence unless all filings have
been made under the Uniform Commercial Code and all other actions have been
taken that are required so that such change will not at any time adversely
affect the validity, perfection or priority of any Transaction Lien on any of
the Collateral.

 

(b)                       Each year, at the time annual financial statements
with respect to the preceding Fiscal Year are delivered pursuant to
Section 5.01(a), the Borrower will deliver to the Administrative Agent (for
distribution to each Lender by the Administrative Agent) a certificate of a
Financial Officer and its chief legal officer setting forth the information
required pursuant to Section 1 of the Perfection Certificate or confirming that
there has been no material change in such information since the date of the
Perfection Certificate delivered on the Effective Date or the date of the most
recent certificate delivered pursuant to this subsection.

 

Section 5.04.  Existence; Conduct of Business.  The Borrower and its Restricted
Subsidiaries will do or cause to be done all things reasonably necessary to
preserve, renew and keep in full force and effect its (i) legal existence and
(ii) the rights, licenses, qualifications, permits, privileges, franchises,
patents, copyrights, trademarks and trade names material to the conduct of its
business, except where the failure to do so would not reasonably be expected to
result in a Material Adverse Effect; provided that the foregoing

 

76

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

 

shall not prohibit any merger, consolidation, liquidation or dissolution
permitted under Section 6.03 or sale, transfer, lease or other disposal of
property permitted under Section 6.05.

 

Section 5.05.  Payment of Obligations.  The Borrower and each Restricted
Subsidiary will pay its Debt and other obligations, including Tax liabilities,
before the same shall become delinquent or in default, except where (a) the
validity or amount thereof is being contested in good faith by appropriate
proceedings, (b) the Borrower or relevant Restricted Subsidiary has set aside on
its books adequate reserves with respect thereto in accordance with GAAP,
(c) such contest effectively suspends collection of the contested obligation and
the enforcement of any Lien securing such obligation and (d) the failure to make
payment pending such contest would not reasonably be expected to result in a
Material Adverse Effect.

 

Section 5.06.  Maintenance of Real Property.  The Borrower and each Restricted
Subsidiary will maintain in good standing all of the Mining Leases and other
agreements related to Real Property and will promptly perform all material
obligations thereunder, except where the failure to do so would not reasonably
be expected to result in a Material Adverse Effect, provided that nothing in the
foregoing shall be deemed to preclude termination of the Mining Lease upon
expiration or termination of its term after completion of mining.

 

Section 5.07.  Maintenance of Personal Property.  The Borrower and each
Restricted Subsidiary will maintain all material personal property necessary to
the conduct of its business in good working order and condition in accordance
with the standards of a good operator in the open pit coal mining business,
ordinary wear and tear excepted and from time to time make, or cause to be made,
all needful and proper repairs, renewals, additions, improvements and
replacements thereto necessary in order that the business carried on in
connection therewith, if any, may be properly conducted at all times, except
where the failure to do so would not reasonably be expected to result in a
Material Adverse Effect.

 

Section 5.08.  Insurance.  (a) The Borrower and its Subsidiaries will maintain
with financially sound and reputable insurance companies selected by the
Borrower and that are not Affiliates of the Borrower, insurance with respect to
its properties and business against risks (including in any event fire and
extended coverage insurance, commercial general liability insurance and business
interruption insurance) of the kinds customarily insured against by Persons
engaged in the same or similar business or required by law, of such types and in
such amounts, including with respect to self-insurance deductible levels, as are
customarily carried under similar circumstances by such other Persons.

 

(b)                       Fire and extended coverage policies (and any policies
required to be maintained pursuant to subsection (a) of this Section) maintained
with respect to any Collateral shall be endorsed or otherwise amended to include
(i) a non-contributing mortgagee clause (regarding Improvements) and lenders’
loss payable clause (regarding personal property), in each case in favor of the
Administrative Agent and providing for losses thereunder to be payable to the
Administrative Agent or its designee as sole loss payee, and (ii) such other
provisions as the Administrative Agent may reasonably require from time to time
to protect the interests of the Secured Parties.  Commercial general

 

77

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

 

liability policies shall be endorsed to name the Administrative Agent as an
additional insured.  Each such policy referred to in this subsection also shall
provide that it shall not be canceled, modified or not renewed (i) by reason of
nonpayment of premium except upon at least 10 days’ prior written notice thereof
by the insurer to the Administrative Agent (giving the Administrative Agent the
right to cure defaults in the payment of premiums) or (ii) for any other reason
except upon at least 30 days’ prior written notice thereof by the insurer to the
Administrative Agent.  The Borrower shall deliver to the Administrative Agent,
prior to the cancellation, modification or nonrenewal of any such policy of
insurance, a copy of a renewal or replacement policy (or other evidence of
renewal of a policy previously delivered to the Administrative Agent) together
with evidence satisfactory to the Administrative Agent of payment of the premium
therefor.  For the avoidance of doubt, unless an Event of Default has occurred
and is continuing, payments made in respect of property to the Administrative
Agent as loss payee under each policy referred to in this subsection shall be
made available as soon as reasonably practicable to the Borrower to repair or
replace such damaged property.

 

(c)                                  With respect to each Mortgaged Property,
the Borrower shall obtain flood insurance in such total amount as the
Administrative Agent may from time to time require, if at any time the area in
which any improvements located on any Mortgaged Property is designated a “flood
hazard area” in any Flood Insurance Rate Map published by the Federal Emergency
Management Agency (or any successor agency), and otherwise comply with the
National Flood Insurance Program as set forth in the Flood Disaster Protection
Act of 1973, as amended from time to time.

 

Section 5.09.  Casualty and Condemnation.  The Borrower will furnish to the
Administrative Agent and the Lenders prompt written notice of any loss or other
insured damage to any material portion of the Collateral (which, for the
avoidance of doubt, shall not include the conduct of mining operations in the
ordinary course) or the commencement of any action or proceeding for the taking
of any Collateral or any part thereof or interest therein under power of eminent
domain or by condemnation or similar proceeding, in each case to the extent that
such action would reasonably be expected to result in a Material Adverse Effect.

 

Section 5.10.  Proper Records; Rights to Inspect and Appraise.  The Borrower and
each Restricted Subsidiary will keep proper books of record and account in which
complete and correct entries are made of all transactions relating to its
business and activities in accordance with GAAP.  The Borrower and each
Restricted Subsidiary will permit any representatives designated by the
Administrative Agent or the Required Lenders, upon reasonable prior notice, to
visit and inspect its properties, to examine and make extracts from its books
and records, and to discuss its affairs, finances and condition with its
officers and independent accountants, all at such reasonable times and as often
as reasonably requested; provided, however, so long as no Event of Default has
occurred and is continuing, such inspections shall be limited to two (2) per
year.

 

Section 5.11.  Compliance with Laws.  The Borrower and each Restricted
Subsidiary will comply with all laws, rules, regulations and orders of any
Governmental Authority applicable to it or its property (owned or leased) and
all Environmental Laws, Mining Laws and all Environmental Permits and Mining
Permits, except where failures to do so, in the aggregate, do not and would not
reasonably be expected to result in a Material Adverse Effect.

 

78

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

 

Section 5.12.  Use of Proceeds and Letters of Credit.  The proceeds of the Loans
will be used only for general corporate purposes.  No part of the proceeds of
any Loan will be used, directly or indirectly, for any purpose that entails a
violation of any of the Regulations of the Federal Reserve Board, including
Regulations T, U and X.  Letters of Credit will be requested and used only
(i) to support payment obligations of the Borrower and its Restricted
Subsidiaries, including to collateralize reclamation bonds, performance bonds,
bid bonds, surety bonds and other similar instruments, (ii) in support of
certain obligations under the Transaction Documents and (iii) for other general
corporate purposes.

 

Section 5.13.  Additional Subsidiaries.  If any additional Subsidiary (other
than an Excluded Subsidiary) is formed or acquired after the Effective Date, the
Borrower will, within three Business Days after such Subsidiary is formed or
acquired, notify the Administrative Agent and the Lenders thereof and, cause any
Equity Interest in or Debt of such Subsidiary owned by or on behalf of any
Credit Party to be added to the Collateral to the extent required by the
Security Agreement.  If such Subsidiary is or subsequently becomes a
Wholly-Owned Restricted Subsidiary and is not prohibited by applicable law or
regulation from guaranteeing the Borrower’s obligations hereunder, the Borrower
shall promptly cause the Collateral and Guarantee Requirement to be satisfied
with respect to such Subsidiary, whereupon such Subsidiary will become a
“Guarantor” and “Grantor” for purposes of the Loan Documents.

 

Section 5.14.  Further Assurances.  (a) The Credit Parties will execute and
deliver any and all further documents, financing statements, agreements and
instruments, and take all such further actions (including the filing and
recording of financing statements, fixture filings, mortgages, deeds of trust
and other documents), that may be required under any applicable law, or that the
Administrative Agent or the Required Lenders may reasonably request, to cause
the Collateral and Guarantee Requirement to be and remain satisfied, all at the
Borrower’s expense.  The Borrower will provide to the Administrative Agent, from
time to time upon request, evidence reasonably satisfactory to the
Administrative Agent as to the perfection and priority of the Transaction Liens
created or intended to be created by the Security Documents.

 

(b)                       If any material assets (including any Real Property)
are acquired by the Borrower or any Guarantor after the Effective Date (other
than assets constituting Collateral that become subject to Transaction Liens
upon acquisition thereof), the Borrower will notify the Administrative Agent and
the Lenders thereof, and, if requested by the Administrative Agent or the
Required Lenders, will cause such assets to be subjected to a Transaction Lien
securing the Secured Obligations and will take, or cause the relevant Guarantor
to take, such actions as shall be necessary or reasonably requested by the
Administrative Agent to grant and perfect (to the extent possible) or record
such Transaction Lien, including actions described in Section 5.14(a), all at
the Borrower’s expense, provided that no Credit Party shall be required to take
such actions under this clause (b) with respect to any newly acquired assets
that it would not have been required to take under the Security Documents with
respect to assets owned or held by Credit Parties as of the Effective Date.

 

(c)                        If at any time Holdings proposes to Guarantee the
Senior Notes of the Borrower or any of its Subsidiaries, the Borrower shall
ensure that Holdings shall, prior to or simultaneously with providing such
Guarantee, provide to the Administrative Agent

 

79

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

 

 

a Guarantee of the Loans and all other Secured Obligations all substantially on
the terms of the Guarantee contained in the Security Agreement, and take such
other actions in connection therewith, including actions described in
Section 5.14(a), as the Administrative Agent shall reasonably request, all at
the Borrower’s expense.

 

Section 5.15. Preparation of Environmental Reports.  In addition to any other
rights hereunder, not more often than once per Permit Area established after the
Effective Date during the term of this Agreement (or more frequently during the
continuance of an Event of Default), at the reasonable request of the
Administrative Agent, the Borrower will provide to the Lenders within 90 days
after such request, at the expense of the Borrower, an environmental or mining
site assessment or audit report summarizing any material Environmental
Liabilities for any of its Real Properties described in such request, prepared
by an environmental or mining consulting firm reasonably acceptable to the
Administrative Agent (or for so long as no Event of Default has occurred and is
continuing, an internally prepared environmental report consistent with the
Borrower’s policies and procedures on environmental reports), in each case
showing compliance with, or the Borrower’s or applicable Subsidiary’s plan to
achieve compliance with, Environmental Laws subject to ordinary course normal
practices and procedures of the coal mining industry with respect to such
Environmental Liabilities or matters.

 

Section 5.16.  Operation of Mines.  The Borrower will, and shall cause each of
its Restricted Subsidiaries to, operate their mines in all material respects in
accordance with sound coal mining practices and Mining Laws and Mining Permits,
except where the failure to do so would not reasonably be expected to result in
a Material Adverse Effect.

 

Section 5.17.  Maintenance of Material Contracts.  The Borrower will, and will
cause each of its Restricted Subsidiaries to, comply with the provisions of and
to maintain in full force and effect all material licenses, material permits,
and material coal purchase and supply contracts to which any such Person is a
party, except where the failure to so maintain in full force and effect a
material license, material permit or a material contract would not be reasonably
expected to result in a Material Adverse Effect.

 

Section 5.18.  Title Opinions. The Credit Parties shall deliver to the
Administrative Agent (for distribution to each Lender by the Administrative
Agent), within 120 days after the Effective Date, with respect to any Mining
Lease identified as being a “Federal or State Mining Lease” in Schedule 5.18, a
title opinion in a form reasonably satisfactory to the Administrative Agent or
the Required Lenders. It is acknowledged that this obligation was satisfied
prior to the Restatement Effective Date.

 

Section 5.19.  Post-Closing Actions.  The Borrower shall, or shall cause the
applicable Credit Party to, complete the actions listed on Schedule 5.19 within
30 days after the Restatement Effective Date or by such later date as the
Administrative Agent (in its sole discretion) may otherwise agree.

 

80

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

 

ARTICLE 6
NEGATIVE COVENANTS

 

Until all the Commitments have expired or terminated and the principal of and
interest on each Loan and all fees payable hereunder have been paid in full and
all Letters of Credit have expired or been cancelled and all LC Disbursements
have been reimbursed, the Borrower covenants and agrees with the Lenders that:

 

Section 6.01.  Debt; Certain Equity Securities.  Neither the Borrower nor any
Restricted Subsidiary will create, incur, assume or permit to exist any Debt
(including Acquired Debt), and no Restricted Subsidiary shall issue any
preferred stock, except:

 

(i)                                Debt created under the Loan Documents;

 

(ii)                             the Senior Notes;

 

(iii)                          Second Lien Senior Secured Debt in an aggregate
principal amount not to exceed, at the time incurred, the greater of
(x) $140,000,000 and (y) 12% of Consolidated Net Tangible Assets determined at
the date of the incurrence of such Second Lien Senior Secured Debt, provided,
that no Default shall have occurred and be continuing or result therefrom, and
provided further that after giving effect thereto, the Borrower is in Pro Forma
Compliance with the covenants contained in Section 6.11 and Section 6.12,
calculated based on the relevant financial statements delivered pursuant to
Section 5.01, as though such incurrence occurred at the beginning of the period
covered thereby;

 

(iv)                         Debt existing on the Restatement Effective Date and
listed in Schedule 6.01 and extensions, renewals and replacements of any such
Debt that do not increase the outstanding principal amount thereof except in the
amount of reasonable fees incurred in connection with any such replacement of
Debt or result in an earlier maturity date or decreased weighted average life
thereof;

 

(v)                            Debt of the Borrower or any Restricted Subsidiary
to the Borrower or any Restricted Subsidiary and Debt of any Subsidiary to the
Borrower or any Restricted Subsidiary; provided that (x) Debt owed by any
Restricted Subsidiary that is not a Credit Party to the Borrower or any
Guarantor shall be subject to Section 6.04 and (y) Debt owed by a Credit Party
to any Restricted Subsidiary that is not a Credit Party shall be subordinated to
the Secured Obligations on customary terms and conditions reasonably
satisfactory to the Administrative Agent;

 

(vi)                         Guarantees by the Borrower or any Restricted
Subsidiary of Debt of the Borrower or any Restricted Subsidiary and Guarantees
by any Subsidiary of Debt of the Borrower or any Restricted Subsidiary; provided
that Guarantees by the Borrower or any Guarantor of Debt of any Subsidiary that
is not a Credit Party shall be subject to Section 6.04;

 

(vii)                      Guarantees by the Borrower or any Restricted
Subsidiary of borrowings by current or former officers, managers, directors,
employees or consultants in connection with the purchase of Equity Interests of
Holdings by

 

81

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

 

any such person in an aggregate principal amount not to exceed $2,500,000 at any
one time outstanding;

 

(viii)                   Debt of the Borrower or any Restricted Subsidiary
(A) in existence on the date any Person becomes a Restricted Subsidiary as a
result of an Acquisition or other acquisition by the Borrower and its other
Restricted Subsidiaries or (B) incurred to finance the acquisition, construction
or improvement of any assets, including Capital Lease Obligations and any Debt
assumed in connection with the acquisition of any such assets or secured by a
Lien on any such assets before the acquisition thereof; and extensions, renewals
and replacements of any such Debt under this clause (viii) that do not increase
the outstanding principal amount thereof or result in an earlier maturity date
or decreased weighted average life thereof; provided that the aggregate
principal amount of Debt outstanding at any time and permitted by this clause
(viii) shall not exceed the greater of $100,000,000 and 8% of Consolidated Net
Tangible Assets determined at such date;

 

(ix)                           Debt in connection with Permitted Receivables
Financings, provided that the aggregate principal amount of all Debt at any time
outstanding pursuant to such Permitted Receivables Financings shall not exceed
the greater of $100,000,000 and 9% of Consolidated Net Tangible Assets
determined at such date;

 

(x)                              Debt of Foreign Subsidiaries engaged in
Permitted Businesses for general corporate purposes in an aggregate amount not
to exceed $10,000,000 at any time outstanding;

 

(xi)                           Debt related to the financing of insurance policy
premiums; provided that (A) such insurance is for the benefit of the Borrower or
its Restricted Subsidiaries and (B) the aggregate principal amount of Debt
permitted by this clause shall not exceed $7,500,000 at any time outstanding;

 

(xii)                        Debt under trade-related letters of credit obtained
in the ordinary course;

 

(xiii)                     for so long as Holdings is paying certain obligations
on behalf of the Borrower and its Subsidiaries, Guarantees by the Borrower or
any Restricted Subsidiary of obligations relating to the establishment of one or
more commercial bank accounts of Holdings used to pay obligations solely under
the Acquisition Documents or otherwise of, or on behalf of, the Borrower and its
Subsidiaries or in connection with Holdings’ role as the managing member of the
Borrower, in an aggregate amount not to exceed $5,000,000 at any time
outstanding;

 

(xiv)                    Debt under any Permitted Hedge Agreement; and

 

(xv)                       other unsecured Debt of any Credit Party (including
unsecured Debt of any Person that becomes a Credit Party after the Effective
Date); provided that if the aggregate principal amount of such Debt (considered
with any other related Debt issued in connection with a particular transaction)
shall

 

82

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

 

exceed $5,000,000, the Borrower shall be in Pro Forma Compliance with the
covenants contained in Sections 6.11 and 6.12 at the time such Debt is incurred
or such Person becomes a Credit Party.

 

Section 6.02.  Liens.  Neither the Borrower nor any Restricted Subsidiary will
create or permit to exist any Lien on any property now owned or hereafter
acquired by it, or assign or sell accounts receivable or rights in respect
thereof, except:

 

(i)                                Transaction Liens;

 

(ii)                             Permitted Liens;

 

(iii)                          Liens securing Second Lien Senior Secured Debt
permitted by Section 6.01(iii);

 

(iv)                         any Lien on any property of the Borrower or any
Restricted Subsidiary existing on the Restatement Effective Date and listed in
Schedule 6.02 and any modifications, replacements, renewals or extensions
thereof; provided that the Lien does not (x) extend to any additional property
or (y) secure any additional obligations, in each case other than the initial
property so subject to such Lien and the Debt and other obligations originally
so secured, and any modifications, replacements, renewals, extensions or
refinancings thereof permitted hereunder;

 

(v)                            Liens on assets acquired, constructed or improved
by the Borrower or any Restricted Subsidiary; provided that (A) the Debt secured
by such Liens is permitted by Section 6.01(viii), and (B) such Liens will not
apply to any other property of the Borrower or any Restricted Subsidiary, and
any extension, renewal or replacements thereof;

 

(vi)                         Liens on accounts receivable and related property
pursuant to any Permitted Receivables Financing;

 

(vii)                      any Lien granted in favor of the Swingline Lender or
any Issuing Bank pursuant to arrangements designed to eliminate such Swingline
Lender’s or Issuing Bank’s risk with respect to any Defaulting Lender’s or
Defaulting Lenders’ participation in Swingline Loans or Letters of Credit,
respectively, as contemplated by Section 2.20;

 

(viii)                   Liens in favor of a banking institution arising by
operation of law or any contract, including in support of guarantees permitted
under Section 6.01(xiii), encumbering deposits (including the right of set-off)
held by such banking institutions incurred in the ordinary course of business
and which are within the general parameters customary in the banking industry;
or

 

(ix)                           Liens not permitted by the foregoing clauses of
this Section 6.02 securing other obligations in an aggregate amount outstanding
or, if less in each case, on assets with an aggregate fair market value
(determined immediately prior to the incurrence of such Lien), that together do
not exceed the greater of

 

83

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

 

$35,000,000 and 3.0% of Consolidated Net Tangible Assets determined at such
date.

 

Section 6.03.  Fundamental Changes.  Neither the Borrower nor any Restricted
Subsidiary will merge into or consolidate with any other Person, or liquidate or
dissolve, or permit any other Person to merge into or consolidate with it,
except that, if at the time thereof and immediately after giving effect thereto
no Default shall have occurred and be continuing (and the Borrower shall be in
compliance with Sections 6.11 and 6.12 after giving Pro Forma Effect thereto),
(i) any Subsidiary may merge into the Borrower in a transaction in which the
Borrower is the surviving entity, (ii) any Restricted Subsidiary may merge into
any Subsidiary in a transaction in which the surviving entity is a Restricted
Subsidiary and (if any party to such merger is a Guarantor) is a Guarantor,
(iii) any Subsidiary (except a Guarantor) may liquidate or dissolve if the
Borrower determines in good faith that such liquidation or dissolution is in the
best interests of the Borrower and is not materially disadvantageous to the
Lenders and (iv) the Borrower may merge with Holdings in a transaction in which
the Borrower is the surviving entity; provided that, if any such merger (other
than the merger referred to in clause (iv)) involves a Person that is not a
wholly owned Subsidiary immediately before such merger, such merger shall not be
permitted unless also permitted by Section 6.04.  The Borrower shall not, and
shall not permit any of its Restricted Subsidiaries to, engage in any business
other than Permitted Businesses, and at all times the Borrower and its
Restricted Subsidiaries, determined as a whole, shall be principally engaged in
Permitted Businesses.

 

Section 6.04.  Investments.  Neither the Borrower nor any Restricted Subsidiary
will purchase, hold or acquire (including pursuant to any merger with any Person
that was not a wholly-owned Restricted Subsidiary before such merger) any
Investment except:

 

(a)                        Cash Equivalents;

 

(b)                       Investments existing on the Restatement Effective Date
and listed on Schedule 6.04;

 

(c)                        Investments in Credit Parties (including immediately
after giving effect to and as a result of such Investment);

 

(d)                       Investments by the Borrower and its Restricted
Subsidiaries in Persons other than Credit Parties; provided that:

 

(i)                                unless the Investment Grade Date has
occurred, the aggregate amount of Investments by the Borrower and its Restricted
Subsidiaries under this clause (d) shall not at any time exceed the sum of
(x) the greater of (A) $100,000,000 and (B) 8% of Consolidated Net Tangible
Assets determined at such date plus (y) if positive, the Available Net Income
Basket Amount plus (z) if positive, the Available Equity Basket Amount; and

 

(ii)                             if such Investment comprises an Acquisition:

 

84

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

 

(A)  immediately before and immediately after giving Pro Forma Effect to any
such Acquisition, no Event of Default shall have occurred and be continuing;

 

(B)  any Person or other property acquired in such Acquisition is in a Permitted
Business; and

 

(C)  unless the aggregate principal amount of Debt incurred by the Borrower and
its Restricted Subsidiaries in connection with such Acquisition (including
without limitation Acquired Debt) is less than $5,000,000, immediately after
giving effect to such Acquisition, the Borrower shall be in Pro Forma Compliance
with Section 6.11 and Section 6.12, determined on the basis of the financial
information most recently delivered to the Administrative Agent and the Lenders
pursuant to Section 5.01(a) or Section 5.01(b) as though such Acquisition had
been consummated as of the first day of the fiscal period covered thereby (and
such compliance shall be evidenced by a certificate from a Financial Officer of
the Borrower demonstrating such compliance calculation in reasonable detail).

 

(e)                        Investments received in connection with the
bankruptcy or reorganization of, or settlement of delinquent accounts and
disputes with, customers and suppliers, in each case in the ordinary course of
business;

 

(f)                          Investments made pursuant to surety bonds,
reclamation bonds, performance bonds, bid bonds, appeal bonds and similar
obligations, in each case, to the extent such surety bonds, reclamation bonds,
performance bonds, bid bonds, appeal bonds and similar obligations are permitted
under this Agreement;

 

(g)                       Investments in the Equity Interests of Holdings in
connection with certain purchases or redemptions of Equity Interests held by
officers, directors and employees or any Plan in an aggregate amount not to
exceed $5,000,000 per annum when combined with any purchases or redemptions of
Equity Interests of the Borrower permitted by Section 6.07(c);

 

(h)                       loans and advances to current or former officers,
managers, directors, employees or consultants of Holdings, the Borrower or any
Restricted Subsidiary in an aggregate amount not to exceed $2,000,000 at any
time outstanding;

 

(i)                           Investments arising as a result of Permitted
Receivables Financings;

 

(j)                           Hedging Agreements permitted by Section 6.06;

 

(k)                        Production Payments, royalties, dedication of
reserves under supply agreements or similar rights or interests granted, taken
subject to, or otherwise imposed on properties with normal practices in the
mining industry;

 

(l)                           Investments resulting from pledges and deposits
permitted under the definition of “Permitted Liens”;

 

85

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

 

(m)                     additional Investments necessary for the conduct of the
Borrower’s business in the ordinary course for each of Decker, Wyoming Quality
Healthcare Coalition and Montana Royalty Company, Ltd., in an aggregate amount
not to exceed $55,000,000;

 

(n)                       Investments consisting of indemnification obligations
in respect of performance bonds, bid bonds, appeal bonds, surety bonds,
reclamation bonds and completion guarantees and similar obligations in respect
of Specified Coal Agreements or under any Mining Law or Environmental Law or
with respect to workers’ compensation benefits, in each case entered into in the
ordinary course of business, and pledges or deposits made in the ordinary course
of business in support of obligations under existing coal sales contracts (and
extensions or renewals thereof on similar terms); and

 

(o)                       other Investments not permitted by the foregoing
clauses of this Section 6.04 in an aggregate amount not to exceed at the time
made the sum of (x) the greater of (i) $75,000,000 and (ii) 6% of Consolidated
Net Tangible Assets determined at such date, plus (y) if positive, the Available
Net Income Basket Amount plus (z) if positive, the Available Equity Basket
Amount.

 

Section 6.05.  Asset Sales.  Neither the Borrower nor any Restricted Subsidiary
will sell, transfer, lease or otherwise dispose of any property, including any
Equity Interest owned by it, nor will any Restricted Subsidiary issue any
additional Equity Interest in such Restricted Subsidiary, except:

 

(a)                        sales of inventory, used, obsolete or surplus
equipment or reserves, dispositions related to the burn-off of mines and Cash
Equivalents in the ordinary course of business and dispositions of surface
rights and termination of Mining Leases after the completion of mining and
reclamation, and termination or abandonment of water rights no longer needed for
mining;

 

(b)                       sales, transfers and other dispositions to the
Borrower or a Restricted Subsidiary; provided that any such sales, transfers or
dispositions involving a Subsidiary that is not a Credit Party shall comply with
Section 6.08;

 

(c)                        licensing and cross-licensing arrangements involving
any technology or other intellectual property of the Borrower or any Restricted
Subsidiary in the ordinary course of business consistent with past practice;
provided, however, that any such license or cross-license of technology or other
intellectual property shall be on a non-exclusive basis;

 

(d)                       Dispositions of assets by virtue of an asset exchange
or swap with a third party in any transaction (x) with an aggregate fair market
value less than or equal to $12,500,000, (y) involving a coal-for-coal swap or
(z) consisting of a coal swap involving any Real Property;

 

(e)                        exchanges and relocation of easements for pipelines,
oil and gas infrastructure and similar arrangements in the ordinary course of
business;

 

(f)                          Dispositions not permitted by the foregoing clauses
of this Section 6.05 with an aggregate fair market value not exceeding 5% of
Consolidated Net Tangible

 

86

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

 

Assets (determined as of the date of the balance sheet of the Borrower and its
Restricted Subsidiaries most recently delivered pursuant to Section 3.04(b) or
Section 5.01, as applicable) in any fiscal year, provided that any Disposition
or series of related Dispositions made pursuant to this clause (g) of assets or
property with an aggregate fair market value in excess of $7,500,000 shall be
made for fair value and for consideration comprising at least 80% cash and Cash
Equivalents, and provided further that solely for purposes of the determination
under the foregoing proviso, Cash Equivalents shall be deemed to include
Productive Assets.

 

Section 6.06.  Hedging Agreements.  Neither the Borrower nor any Subsidiary will
enter into or be an obligor with respect to any Hedging Agreement except
Permitted Hedging Agreements.

 

Section 6.07.  Restricted Payments.  Neither the Borrower nor any Subsidiary
will declare or make, or agree to pay or make, directly or indirectly, any
Restricted Payment except:

 

(a)                        the Borrower may make Permitted Tax Distributions to
Holdings;

 

(b)                       the Borrower may make payments to Holdings to fund
dividends on Holdings’ common stock or repurchase Holdings’ common stock, in an
aggregate amount for all such dividends or repurchases under this clause (b) in
any year not to exceed the product of (x) 2.5%, (y) the average price of
Holdings’ common stock over the immediately prior calendar year preceding such
dividend payment or repurchase date (adjusted appropriately to reflect
subsequent stock splits, subdivisions and reclassifications) and (z) the number
of shares outstanding of Holdings’ common stock on the last Business Day of such
immediately prior calendar year, provided that no Default shall have occurred
and be continuing as a result therefrom;

 

(c)                        the Borrower may redeem, repurchase or otherwise
acquire or retire its Equity Interests from current or former officers,
managers, directors, employees or consultants (or their respective estates or
immediate family members) of Holdings or any Subsidiary in an aggregate amount
not to exceed $5,000,000 per annum when combined with any investments in the
Equity Interests of Holdings permitted by Section 6.04(g); provided that no
Default shall have occurred and be continuing as a result therefrom;

 

(d)                       the Borrower may make Restricted Payments on or prior
to the Effective Date to consummate the Effective Date Transactions;

 

(e)                        the Borrower and each Restricted Subsidiary may
declare and make Restricted Payments payable solely in the Equity Interests
(other than Disqualified Equity Interests) of such Person;

 

(f)                          each Restricted Subsidiary may make Restricted
Payments payable, on a pro rata basis or on a basis more favorable to the
Borrower, to all holders of any class of Equity Interests of such Restricted
Subsidiary at least 50% of which is held, directly or indirectly through other
Restricted Subsidiaries, by the Borrower;

 

(g)                       so long as no Event of Default shall have occurred and
be continuing immediately before or after giving effect thereto, the Borrower
may make other payments

 

87

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

 

or distributions not otherwise permitted under this Section 6.07 in an aggregate
amount, for all such Restricted Payments made pursuant to this clause (i) after
the Restatement Effective Date, not to exceed the sum of (x) $100,000,000 plus
(y) 50% of the sum of (A) if positive, the Available Net Income Basket Amount
plus (B) if positive, the Available Equity Basket Amount.

 

Section 6.08.  Transactions with Affiliates.  Neither the Borrower nor any
Restricted Subsidiary will sell, lease or otherwise transfer any property to, or
purchase, lease or otherwise acquire any property from, or otherwise engage in
any other transaction with, any of its Affiliates (other than transactions in
the ordinary course of business that are on terms and conditions, taken as a
whole, not less favorable to the Borrower or any Restricted Subsidiary than
could be obtained on an arm’s length basis from unrelated third parties) if the
aggregate value of such transaction or series of related transactions with such
Affiliate exceeds $10,000,000, except:

 

(a)                        transactions between or among the Borrower and the
Guarantors not involving any other Affiliate;

 

(b)                       any Restricted Payment permitted by Section 6.07;

 

(c)                        transactions arising under the Transaction Documents
(as such documents are in effect on the Restatement Effective Date, and as
amended or modified thereafter on terms that are not materially less favorable
to the Borrower and its Restricted Subsidiaries, taken as a whole, considered in
the aggregate taking into account all such substantially contemporaneous
amendments and modifications of the Transaction Documents);

 

(d)                       arrangements with respect to the procurement of
services of directors, officers, independent contractors, consultants or
employees in the ordinary course of business and the payment of customary
compensation (including bonuses) and other benefits (including retirement,
health, stock option and other benefit plans) and reasonable reimbursement
arrangements in connection therewith;

 

(e)                        the payment of fees and indemnities to directors,
officers, consultants and employees of Holdings and the Restricted Subsidiaries
in the ordinary course of business;

 

(f)                          transactions with any joint venture or similar
arrangements (including, without limitation, any cash management activities
relating thereto); provided, however that such arrangements are on terms no less
favorable to the Borrower and its Restricted Subsidiaries, on the one hand, and
the relevant joint venture partner and its Affiliates, on the other hand, taking
into account all related arrangements and transactions entered into by the
Borrower and its Restricted Subsidiaries, on the one hand, and the relevant
joint venture partner and its Affiliates, on the other hand; and

 

(g)                       the payment of fees and expenses relating to the
Effective Date Transactions on the Effective Date.

 

Section 6.09.  Restrictive Agreements.  Neither the Borrower nor any Restricted
Subsidiary will, directly or indirectly, enter into or permit to exist any
agreement or other arrangement that prohibits, restricts or imposes any
condition on (a) the ability of any

 

88

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

 

Credit Party to create or permit to exist any Lien on any of its property or
(b) the ability of any Subsidiary to pay dividends or other distributions with
respect to any shares of its capital stock or to make or repay loans or advances
to the Borrower or any Restricted Subsidiary or to Guarantee Debt of the
Borrower or any Restricted Subsidiary; provided that (i) the foregoing shall not
apply to restrictions and conditions imposed by law or by any Loan Document or
the Transaction Document (as such documents are in effect on the Restatement
Effective Date, and as amended or modified thereafter on terms that are not
materially less favorable to the Borrower and its Restricted Subsidiaries, taken
as a whole, considered in the aggregate taking into account all such
substantially contemporaneous amendments and modifications of the Transaction
Documents), (ii) the foregoing shall not apply to restrictions and conditions
existing on the Restatement Effective Date and identified on Schedule 6.09 (but
shall apply to any amendment or modification expanding the scope of, or any
extension or renewal of, any such restriction or condition), (iii) the foregoing
shall not apply to customary restrictions and conditions contained in agreements
relating to the sale of a Restricted Subsidiary or an asset pending such sale,
provided that such restrictions and conditions apply only to the Restricted
Subsidiary or such asset that is to be sold and such sale is permitted
hereunder, (iv) clause (a) of this Section shall not apply to restrictions or
conditions imposed by any agreement relating to secured Debt permitted by this
Agreement on property securing such Debt; and (v) clause (a) of this
Section shall not apply to customary provisions in leases restricting the
assignment thereof or any restrictions imposed pursuant to Specified Coal
Agreements or Mining Leases.

 

Section 6.10.  Amendment of Material Documents.  Neither the Borrower nor any
Restricted Subsidiary will amend, modify or waive any of its rights under
(a) any document evidencing or governing, or under which was issued, any
Subordinated Debt or any Second Lien Senior Secured Debt, in each case in a
manner adverse to the interests of the Lenders hereunder or (b) if such
amendment, modification or waiver would reasonably be expected to have a
Material Adverse Effect, its certificate of incorporation, by-laws or other
organizational documents.

 

Section 6.11.  Net Cash Interest Expense Coverage Ratio.  The Borrower will not
permit the ratio of (a) EBITDA to (b) Consolidated Net Cash Interest Expense, in
each case for any period of four consecutive Fiscal Quarters ending on any date
during any period set forth below and determined on a Pro Forma Basis, to be
less than the ratio set forth below opposite such period:

 

Period

 

Ratio

Effective Date through June 30, 2013

 

2.50 to 1.0

July 1, 2013 through Maturity Date

 

2.75 to 1.0

 

89

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

 

Section 6.12.  Leverage Ratio.  The Borrower will not permit the Leverage Ratio
at any time during any period set forth below (in each case determined on a Pro
Forma Basis) to exceed the ratio set forth opposite such period:

 

Period

 

Ratio

Effective Date through June 30, 2013

 

3.75 to 1.0

July 1, 2013 through Maturity Date

 

3.50 to 1.0

 

ARTICLE 7
EVENTS OF DEFAULT

 

If any of the following events (“Events of Default”) shall occur:

 

(a)                        the Borrower shall fail to pay any principal of any
Loan or any LC Disbursement reimbursement obligation when the same shall become
due, whether at the due date thereof or at a date fixed for prepayment thereof
or otherwise;

 

(b)                       the Borrower shall fail to pay when due any interest
on any Loan or any fee or other amount (except an amount referred to in clause
(a) above) payable to any Lender Party under any Loan Document, and such failure
shall continue unremedied for a period of three (3) Business Days;

 

(c)                        any representation, warranty or certification made or
deemed made by or on behalf of any Credit Party in or in connection with any
Loan Document or any amendment or modification thereof or waiver thereunder or
in any report, certificate, financial statement or other document furnished
pursuant to any Loan Document or any amendment or modification thereof or waiver
thereunder, shall prove to have been incorrect in any material respect when made
or deemed made;

 

(d)                       the Borrower shall fail to observe or perform any
covenant or agreement contained in Section 5.02, 5.04 (with respect to the
existence of the Borrower) or 5.12 or in Article 6;

 

(e)                        any Credit Party shall fail to observe or perform any
covenant or agreement contained in any Loan Document (other than those specified
in clause (a), (b) or (d) above), and such failure shall continue unremedied for
a period of  30 days after notice thereof from the Administrative Agent to the
Borrower (which notice will be given at the request of any Lender);

 

(f)                          the Borrower or any Restricted Subsidiary shall
fail to make a payment or payments (whether of principal or interest) in respect
of Material Debt when the same shall become due (beyond the period of grace, if
any, provided in the instrument or agreement under which such Material Debt was
created), whether at the due date thereof, at a date fixed for prepayment or
upon acceleration;

 

(g)                       any event or condition occurs that results in
(i) Material Debt becoming due before its final scheduled maturity or (ii) that
enables or permits (with or without the

 

90

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

 

giving of notice, the lapse of time or both) the holder or holders of Material
Debt or any trustee or agent on its or their behalf to cause Material Debt to
become due, or to require the prepayment, repurchase, redemption or defeasance
thereof, before its scheduled maturity; provided that this clause shall not
apply to secured Debt that becomes due as a result of a voluntary sale or
transfer of the property securing such Debt;

 

(h)                       an involuntary proceeding shall be commenced or an
involuntary petition shall be filed seeking (i) liquidation, reorganization or
other relief in respect of the Borrower or any of its Restricted Subsidiaries or
its debts, or of a substantial part of its assets, under any Federal, state or
foreign bankruptcy, insolvency, receivership or similar law now or hereafter in
effect or (ii) the appointment of a receiver, trustee, custodian, sequestrator,
conservator or similar official for the Borrower or any of its Restricted
Subsidiaries or for a substantial part of its assets, and, in any such case,
such proceeding or petition shall continue undismissed for 60 days or an order
or decree approving or ordering any of the foregoing shall be entered;

 

(i)                           the Borrower or any of its Restricted Subsidiaries
shall (i) voluntarily commence any proceeding or file any petition seeking
liquidation, reorganization or other relief under any Federal, state or foreign
bankruptcy, insolvency, receivership or similar law now or hereafter in effect,
(ii) consent to the institution of, or fail to contest in a timely and
appropriate manner, any proceeding or petition described in clause (h) above,
(iii) apply for or consent to the appointment of a receiver, trustee, custodian,
sequestrator, conservator or similar official for the Borrower or any of its
Restricted Subsidiaries or for a substantial part of its assets, (iv) file an
answer admitting the material allegations of a petition filed against it in any
such proceeding, (v) make a general assignment for the benefit of creditors or
(vi) take any action for the purpose of effecting any of the foregoing;

 

(j)                           the Borrower or any of its Restricted Subsidiaries
shall become unable, admit in writing its inability or fail generally to pay its
debts as they become due;

 

(k)                        one or more judgments for the payment of money in an
aggregate amount exceeding $50,000,000 shall be rendered against the Borrower or
any of its Restricted Subsidiaries and shall remain undischarged for a period of
30 consecutive days during which execution shall not be effectively stayed, or
any action shall be legally taken by a judgment creditor to attach or levy upon
any asset of the Borrower or any of its Restricted Subsidiaries to enforce any
such judgment;

 

(l)                           an ERISA Event shall have occurred that, in the
opinion of the Required Lenders, when taken either alone or together with all
other ERISA Events that have occurred, would reasonably be expected to result in
a Material Adverse Effect;

 

(m)                     any Lien purported to be created under any Security
Document shall cease to be, or shall be asserted by any Credit Party not to be,
a valid and perfected Lien  on any material portion of the Collateral to the
extent provided, and with the priority required by (but, (x) in the case of
priority, only to the extent that any prior Lien not contemplated or permitted
under the Loan Documents is material and (y) in any event, subject to Liens
permitted by Section 6.02), the applicable Security Document, except (i) as a
result of a sale or other disposition of the applicable Collateral in a
transaction permitted under the Loan Documents or (ii) as a result of the
Administrative Agent’s

 

91

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

 

failure to maintain possession of any stock certificates, promissory notes or
other documents delivered to it under the Security Agreement;

 

(n)                       a Change in Control shall occur;

 

(o)                       any Guarantor’s Secured Guarantee shall at any time
fail to constitute a valid and binding agreement of such Guarantor or any party
shall so assert in writing; or

 

(p)                       one or more surety, reclamation or similar bonds
securing obligations of the Borrower or any Restricted Subsidiary of the
Borrower (or any required guaranties thereof or required letters of credit with
respect thereto) with an aggregate face amount of $50,000,000 or more shall be
actually terminated, suspended or revoked and not replaced within 30 days of
such termination, suspension or revocation by  one or more of the following:
surety, reclamation or similar bonds, letters of credit, cash collateral (to the
extent permitted under Section 6.02), or alternative guaranty products
acceptable to the recipient thereof; or

 

(q)                       there shall occur any material uninsured damage to or
loss, theft or destruction of any of the Collateral that has a Material Adverse
Effect on the Lenders or any other of the Borrower’s or any of its Restricted
Subsidiaries’ assets are attached, seized, levied upon or subjected to a writ or
distress warrant; or such come within the possession of any receiver, trustee,
custodian or assignee for the benefit of creditors and the same is not cured
within thirty (30) days thereafter.

 

then, and in every such event (except an event with respect to the Borrower or
any Restricted Subsidiary described in clause (h) or (i) above), and at any time
thereafter during the continuance of such event, the Administrative Agent may,
and at the request of the Required Lenders shall, by notice to the Borrower,
take either or both of the following actions, at the same or different times: 
(i) terminate the Commitments, and thereupon the Commitments shall terminate
immediately, and (ii) declare the Loans then outstanding to be due and payable
in whole (or in part, in which case any principal not so declared to be due and
payable may thereafter be declared to be due and payable), and thereupon the
principal of the Loans so declared to be due and payable, together with accrued
interest thereon and all fees and other obligations of the Borrower accrued
hereunder, shall become due and payable immediately, without presentment,
demand, protest or other notice of any kind, all of which are waived by the
Borrower; and in the case of any event with respect to the Borrower described in
clause (h) or (i) above, the Commitments shall automatically terminate and the
principal of the Loans then outstanding, together with accrued interest thereon
and all fees and other obligations of the Borrower accrued hereunder, shall
automatically become due and payable, without presentment, demand, protest or
other notice of any kind, all of which are waived by the Borrower.

 

ARTICLE 8
THE ADMINISTRATIVE AGENT

 

Section 8.01.  Appointment and Authorization.  Each Lender Party irrevocably
appoints the Administrative Agent as its agent and authorizes the Administrative
Agent

 

92

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

 

(i) to sign and deliver the Security Documents and (ii) to take such actions on
its behalf and to exercise such powers as are delegated to the Administrative
Agent by the terms of the Loan Documents, together with such actions and powers
as are reasonably incidental thereto.

 

Section 8.02.  Rights and Powers as a Lender.  A bank serving as the
Administrative Agent shall, in its capacity as a Lender, have the same rights
and powers as any other Lender and may exercise the same as though it were not
the Administrative Agent.  Such bank and its Affiliates may accept deposits
from, lend money to and generally engage in any kind of business with the
Borrower or any of its Subsidiaries or Affiliates thereof as if it were not the
Administrative Agent.

 

Section 8.03.  Limited Duties and Responsibilities.  The Administrative Agent
shall not have any duties or obligations except those expressly set forth in the
Loan Documents.  Without limiting the generality of the foregoing, (a) the
Administrative Agent shall not be subject to any fiduciary or other implied
duties, regardless of whether a Default has occurred and is continuing, (b) the
Administrative Agent shall not have any duty to take any discretionary action or
exercise any discretionary powers, except discretionary rights and powers
expressly contemplated by the Loan Documents that the Administrative Agent is
required in writing to exercise by the Required Lenders (or such other number or
percentage of the Lenders as shall be necessary under the circumstances as
provided in Section 9.02) and (c) except as expressly set forth in the Loan
Documents, the Administrative Agent shall not have any duty to disclose, and
shall not be liable for any failure to disclose, any information relating to the
Borrower or any of its Restricted Subsidiaries that is communicated to or
obtained by the bank serving as Administrative Agent or any of its Affiliates in
any capacity.  The Administrative Agent shall not be liable for any action taken
or not taken by it with the consent or at the request of the Required Lenders
(or such other number or percentage of the Lenders as shall be necessary under
the circumstances as provided in Section 9.02) or in the absence of its own
gross negligence or willful misconduct.  The Administrative Agent shall be
deemed not to have knowledge of any Default unless and until written notice
thereof is given to the Administrative Agent the Borrower or a Lender, and the
Administrative Agent shall not be responsible for or have any duty to ascertain
or inquire into (i) any statement, warranty or representation made in or in
connection with any Loan Document, (ii) the contents of any certificate, report
or other document delivered thereunder or in connection therewith, (iii) the
performance or observance of any of the covenants, agreements or other terms or
conditions set forth in any Loan Document, (iv) the validity, enforceability,
effectiveness or genuineness of any Loan Document or any other agreement,
instrument or document or (v) the satisfaction of any condition set forth in
Article 4 or elsewhere in any Loan Document, other than to confirm receipt of
items expressly required to be delivered to the Administrative Agent.

 

Section 8.04.  Authority to Rely on Certain Writings, Statements and Advice. 
The Administrative Agent shall be entitled to rely on, and shall not incur any
liability for relying on, any notice, request, certificate, consent, statement,
instrument, document or other writing believed by it to be genuine and to have
been signed or sent by the proper Person.  The Administrative Agent also may
rely on any statement made to it orally or by telephone and believed by it to be
made by the proper Person, and shall not incur any liability for relying
thereon.  The Administrative Agent may consult with legal counsel (who may be
counsel for the Borrower or its Restricted Subsidiaries), independent

 

93

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

 

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

 

Section 8.05.  Sub-Agents and Related Parties.  The Administrative Agent may
perform any and all its duties and exercise its rights and powers by or through
one or more sub-agents appointed by it.  The Administrative Agent and any such
sub-agent may perform any and all its duties and exercise its rights and powers
through their respective Related Parties.  The exculpatory provisions of the
preceding Sections of this Article shall apply to any such sub-agent and to the
Related Parties of the Administrative Agent and any such sub-agent, and shall
apply to activities in connection with the syndication of the credit facilities
provided for herein as well as activities as Administrative Agent.

 

Section 8.06.  Resignation; Successor Administrative Agent.  Subject to the
appointment and acceptance of a successor Administrative Agent as provided in
this Section, the Administrative Agent may resign at any time by notifying the
Lenders, the Issuing Banks and the Borrower.  Upon any such resignation, the
Required Lenders shall have the right to appoint a successor that is a bank or
trust company organized under the laws of the United States or any State or
district thereof with an office in New York, New York, which has a combined
capital surplus of at least $200,000,000 (an “Eligible Successor Agent”), with
the consent of the Borrower (which consent shall not be unreasonably withheld or
delayed).  If no successor shall have been so appointed by the Required Lenders
and shall have accepted such appointment within 30 days after the retiring
Administrative Agent gives notice of its resignation, then the retiring
Administrative Agent may, on behalf of the Lenders and the Issuing Banks, and
after consultation with the Borrower, appoint a successor Administrative Agent,
which shall be an Eligible Successor Agent.  Upon acceptance of its appointment
as Administrative Agent hereunder by a successor, such successor shall succeed
to and become vested with all the rights, powers, privileges and duties of the
retiring Administrative Agent, and the retiring Administrative Agent shall be
discharged from its duties and obligations hereunder.  The fees payable by the
Borrower to a successor Administrative Agent shall be the same as those payable
to its predecessor unless otherwise agreed by the Borrower and such successor. 
After the Administrative Agent’s resignation hereunder, the provisions of this
Article and Section 9.03 shall continue in effect for the benefit of such
retiring Administrative Agent, its sub-agents and their respective Related
Parties in respect of any actions taken or omitted to be taken by any of them
while the retiring Administrative Agent was acting as Administrative Agent. 
Notwithstanding anything to the contrary herein, the Required Lenders shall be
entitled to replace the Administrative Agent with an Eligible Successor Agent
with the consent of the Borrower (which consent shall not be unreasonably
withheld or delayed), and from and after such replacement, all references herein
to the Administrative Agent shall be references to such financial institution.

 

Section 8.07.  Credit Decisions by Lenders.  Each Lender acknowledges that it
has, independently and without reliance on the Administrative Agent or any other
Lender and based on such documents and information as it has deemed appropriate,
made its own credit analysis and decision to enter into this Agreement.  Each
Lender also acknowledges that it will, independently and without reliance on the
Administrative Agent or any other Lender and based on such documents and
information as it shall from time to time deem appropriate, continue to make its
own decisions in taking or not taking

 

94

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

 

action under or based on this Agreement, any other Loan Document or related
agreement or any document furnished hereunder or thereunder.

 

ARTICLE 9
MISCELLANEOUS

 

Section 9.01.  Notices.  (a)  Except in the case of notices and other
communications expressly permitted to be given by telephone, all notices and
other communications provided for herein shall be in writing and shall be
delivered by hand or overnight courier service, mailed by certified or
registered mail or sent by telecopy, as follows:

 

(i)                                     if to the Borrower, to:

 

Cloud Peak Energy Resources LLC
385 Interlocken Crescent, Suite 400
Broomfield, CO 80021
Attention:  Oscar Martinez,

Vice President and Treasurer

Tel: 720- 566-2931

 

With a copy to:

 

Cloud Peak Energy Resources LLC
385 Interlocken Crescent, Suite 400
Broomfield, CO 80021
Attention:  Bryan Pechersky, Esq.,

Senior Vice President and  General Counsel

Tel: 720-566-2938

 

with a copy (which shall not constitute notice for any purpose under the Loan
Documents) to:

 

Vinson & Elkins LLP
666 Fifth Avenue, 26th Floor
New York, New York 10103-0040

Attention: Michael McKay

Tel:  212.237.0115

Fax:  917.849.5311

email:  mmckay@velaw.com

 

(ii)                                  if to the Administrative Agent, to:

 

Morgan Stanley Senior Funding, Inc.

One Pierrepoint Plaza, 7th Floor

300 Cadman Plaza West

Brooklyn, New York 11201

Attention:  MS Agency / Beejal Sakaria

 

95

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

 

Telecopy No. 212.507.6680

 

(iii)                               if to the Swingline Lender, to:

 

Morgan Stanley Senior Funding, Inc.

One Pierrepoint Plaza, 7th Floor

300 Cadman Plaza West

Brooklyn, New York 11201

Attention:  MS Agency / Beejal Sakaria

Telecopy No. 212.507.6680

 

(iv)                              if to any Issuing Bank, to it at its address
(or telecopy number) set forth in its Administrative Questionnaire;

 

(v)                                 if to any other Lender, to it at its address
(or telecopy number) set forth in its Administrative Questionnaire.

 

(b)                       Notices and other communications to the Lenders
hereunder may be delivered or furnished by electronic communications pursuant to
procedures approved by the Administrative Agent; provided that the foregoing
shall not apply to notices pursuant to Article 2 unless otherwise agreed by the
Administrative Agent and the applicable Lender.  The Administrative Agent or the
Borrower may, in its discretion, agree to accept notices and other
communications to it hereunder by electronic communications pursuant to
procedures approved by it; provided that approval of such procedures may be
limited to particular notices or communications.

 

(c)                        Any party hereto may change its address or telecopy
number for notices and other communications hereunder by notice to the
Administrative Agent and the Borrower.  All notices and other communications
given to any party hereto in accordance with the provisions of this Agreement
will be deemed to have been given on the date of receipt.

 

Section 9.02.  Waivers; Amendments.  (a) No failure or delay by any Lender Party
in exercising any right or power hereunder or under any other Loan Document
shall operate as a waiver thereof, nor shall any single or partial exercise of
any such right or power, or any abandonment or discontinuance of steps to
enforce such a right or power, preclude any other or further exercise thereof or
the exercise of any other right or power.  The rights and remedies of the Lender
Parties under the Loan Documents are cumulative and are not exclusive of any
rights or remedies that they would otherwise have.  No waiver of any provision
of any Loan Document or consent to any departure by any Credit Party therefrom
shall in any event be effective unless the same shall be permitted by subsection
(b) of this Section, and then such waiver or consent shall be effective only in
the specific instance and for the purpose for which given.  Without limiting the
generality of the foregoing, neither the making of a Loan nor the issuance,
amendment, renewal or extension of a Letter of Credit shall be construed as a
waiver of any Default, regardless of whether any Lender Party had notice or
knowledge of such Default at the time.

 

(b)                       No Loan Document or provision thereof may be waived,
amended or modified except, in the case of this Agreement, by an agreement or
agreements in writing entered into by the Borrower and the Required Lenders or,
in the case of any other Loan

 

96

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

 

Document, by an agreement or agreements in writing entered into by the parties
thereto with the consent of the Required Lenders; provided that no such
agreement shall:

 

(i)                           increase the Commitment of any Lender (or
reinstate any Commitment terminated pursuant to Article 7) without its written
consent;

 

(ii)                        reduce the principal amount of any Loan or LC
Disbursement or reduce the rate of interest thereon, or reduce any fee payable
hereunder, without the written consent of each Lender Party affected thereby;

 

(iii)                     postpone the maturity of any Loan, or the required
date of reimbursement of any LC Disbursement, or any date for the payment of any
interest or fee payable hereunder, or reduce the amount of, waive or excuse any
such payment, or postpone the scheduled date of expiration of any Commitment,
without the written consent of each Lender Party affected thereby;

 

(iv)                    change 2.17(b) or 2.17(c) in a manner that would alter
the pro rata sharing of payments required thereby, without the written consent
of each Lender;

 

(v)                       change any provision of this Section or the percentage
set forth in the definition of “Required Lenders” or any other provision of any
Loan Document specifying the number or percentage of Lenders (or Lenders of any
Class) required to take any action thereunder, without the written consent of
each Lender;

 

(vi)                    release any material Guarantor from its Secured
Guarantee (except as expressly provided in the Security Agreement), or limit its
liability in respect of its Secured Guarantee, without the written consent of
each Lender;

 

(vii)                 release all or substantially all of the Collateral from
the Transaction Liens, without the written consent of each Lender; or

 

provided further that no such agreement shall amend, modify or otherwise affect
the rights or duties of the Administrative Agent, the Issuing Banks or the
Swingline Lender without its prior written consent.

 

(c)                        Notwithstanding the foregoing, if the Required
Lenders enter into or consent to any waiver, amendment or modification pursuant
to subsection (b) of this Section, no consent of any other Lender will be
required if, when such waiver, amendment or modification becomes effective,
(i) the Commitment of each Lender not consenting thereto terminates and (ii) all
amounts owing to it or accrued for its account hereunder are paid in full.

 

Section 9.03.  Expenses; Indemnity; Damage Waiver.  (a) The Borrower shall pay
(i) all reasonable out-of-pocket expenses incurred by the Administrative Agent
and its Affiliates, including the reasonable fees, charges and disbursements of 
counsel for the Administrative Agent, in connection with the syndication of the
credit facilities provided for herein, the preparation and administration of the
Loan Documents and any amendments, modifications or waivers of the provisions
thereof (whether or not the

 

97

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

 

transactions contemplated hereby or thereby shall be consummated), (ii) all
reasonable out-of-pocket expenses incurred by any Issuing Bank in connection
with the issuance, amendment, renewal or extension of any Letter of Credit or
any demand for payment thereunder and (iii) all out-of-pocket expenses incurred
by any Lender Party and any Agent Party including the fees, charges and
disbursements of any counsel for any Lender Party and any Agent Party, in
connection with the enforcement or protection of its rights in connection with
the Loan Documents (including its rights under this Section), the Letters of
Credit or the Loans, including all such out-of-pocket expenses incurred during
any workout, restructuring or negotiations in respect of the Letters of Credit
or the Loans.

 

(b)                       The Borrower shall indemnify each of the Lender
Parties and each Agent Party and their respective Related Parties (each such
Person being called an “Indemnitee”) against, and hold each Indemnitee harmless
from, any and all losses, claims, damages, liabilities and related expenses,
including the fees, charges and disbursements of counsel for any Indemnitee,
incurred by or asserted against any Indemnitee arising out of, in connection
with, or as a result of (i) the execution or delivery of any Loan Document or
any other agreement or instrument contemplated hereby, the performance by the
parties to the Loan Documents of their respective obligations thereunder or the
consummation of the Effective Date Transactions or Restatement Transactions,
(ii) any Loan or Letter of Credit or the use of the proceeds therefrom
(including any refusal by any Issuing Bank to honor a demand for payment under a
Letter of Credit if the documents presented in connection with such demand do
not strictly comply with the terms of such Letter of Credit), (iii) any actual
or alleged presence or release of Hazardous Material on or from any Mortgaged
Property or any other property currently or formerly owned or operated by the
Borrower or any Subsidiary, or any other Environmental Liability resulting from
the ownership or operation of the Mines or any other Real Property by, or
relating in any way to the Borrower or any Subsidiary or any Guarantor or
(iv) any actual or prospective claim, litigation, investigation or proceeding
relating to any of the foregoing, whether based on contract, tort or any other
theory and regardless of whether any Indemnitee is a party thereto; provided
that such indemnity shall not be available to any Indemnitee to the extent that
such losses, claims, damages, liabilities or related expenses are determined by
a court of competent jurisdiction by final and nonappealable judgment to have
resulted from such Indemnitee’s gross negligence or willful misconduct.

 

(c)                        To the extent that the Borrower fails to pay any
amount required to be paid by it to the Administrative Agent, any Issuing Bank
or the Swingline Lender under subsection (a) or (b) of this Section, each Lender
severally agrees to pay to the Administrative Agent, the relevant Issuing Bank
or the Swingline Lender, as the case may be, such Lender’s pro rata share
(determined as of the time that the applicable unreimbursed expense or indemnity
payment is sought) of such unpaid amount; provided that the unreimbursed expense
or indemnified loss, claim, damage, liability or related expense, as the case
may be, was incurred by or asserted against the Administrative Agent, such
Issuing Bank or the Swingline Lender in its capacity as such.  For purposes
hereof, a Lender’s “pro rata share” shall be determined based on its share of
the sum of the total Revolving Credit Exposures and unused Commitments at the
time (in each case, determined as if no Lender were a Defaulting Lender).

 

(d)                       To the extent permitted by applicable law, the
Borrower shall not assert, and hereby waives, any claim against any Indemnitee,
on any theory of liability, for

 

98

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

 

special, indirect, consequential or punitive damages (as opposed to direct or
actual damages) arising out of, in connection with, or as a result of, this
Agreement or any agreement or instrument contemplated hereby, the Effective Date
Transactions, the Restatement Transactions, any Loan or Letter of Credit or the
use of the proceeds thereof.

 

(e)                        All amounts due under this Section shall be payable
within ten (10) days after written demand therefor.

 

Section 9.04.  Successors and Assigns.  (a) The provisions of this Agreement
shall be binding on and inure to the benefit of the parties hereto and their
respective successors and assigns permitted hereby (including any Affiliate of
an Issuing Bank that issues any Letter of Credit), except that (i) the Borrower
may not assign or otherwise transfer any of its rights or obligations hereunder
without the prior written consent of each Lender (and any attempted assignment
or transfer by the Borrower without such consent shall be null and void) and
(ii) no Lender may assign or otherwise transfer its rights or obligations
hereunder except in accordance with this Section.  Nothing in this Agreement,
expressed or implied, shall be construed to confer upon any Person (except the
parties hereto, their respective successors and assigns permitted hereby
(including any Affiliate of an Issuing Bank that issues any Letter of Credit)
and, to the extent expressly provided herein, the Related Parties of the Lender
Parties) any legal or equitable right, remedy or claim under or by reason of
this Agreement.

 

(b)                       Any Lender may assign to one or more assignees all or
a portion of its rights and obligations under this Agreement (including all or a
portion of any Commitment it has at the time and any Loans at the time owing to
it); provided that:

 

(i)                                     the Administrative Agent must give prior
written consent to any such assignment, other than an assignment of any
Commitment to an assignee that is a Lender or an Affiliate of such a Lender with
a Commitment immediately prior to giving effect to such assignment (which
consent shall not be unreasonably withheld or delayed);

 

(ii)                                  the Borrower must give prior written
consent to any such assignment (which consent shall not be unreasonably withheld
or delayed), other than any assignment to a Lender, a Lender Affiliate, an
Approved Fund or, if an Event of Default has occurred and is continuing, any
other assignee; provided that the Borrower shall be deemed to have consented to
any such assignment unless it shall object thereto by written notice to the
Administrative Agent within five (5) Business Days after having received notice
thereof;

 

(iii)                               the Issuing Banks must give prior written
consent to any such assignment (which consent shall not be unreasonably withheld
or delayed);

 

(iv)                              each partial assignment shall be made as an
assignment of a proportionate part of all the assigning Lender’s rights and
obligations under this Agreement;

 

(v)                                 unless each of the Borrower and the
Administrative Agent otherwise consent, the amount of the Commitment or Loans of
the assigning Lender subject to each such assignment (determined as of the date
on which the

 

99

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

 

relevant Assignment is delivered to the Administrative Agent) shall not be less
than $5,000,000; provided that this (v) shall not apply to an assignment to a
Lender or a Lender Affiliate or an assignment of the entire remaining amount of
the assigning Lender’s Commitment or Loans;

 

(vi)                              the parties to each assignment shall execute
and deliver to the Administrative Agent an Assignment;

 

(vii)                           no such assignment shall be made to (A) the
Borrower or any of the Borrower’s Affiliates or Subsidiaries or (B) to any
Defaulting Lender or any of its Subsidiaries, or any Person who, upon becoming a
Lender hereunder, would constitute any of the foregoing Persons described in
this clause (B); and

 

the assignee, if it shall not be a Lender, shall deliver to the Administrative
Agent a completed Administrative Questionnaire in which the assignee designates
one or more credit contacts to whom all syndicate-level information will be made
available and who may receive such information in accordance with the assignee’s
compliance procedures and applicable laws, including Federal and state
securities laws.

 

For the purposes of this Section 9.04(b), the term “Approved Fund” has the
following meaning:

 

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

 

Subject to acceptance and recording thereof pursuant to subsection (c) of this
Section, from and after the effective date specified in each Assignment the
assignee thereunder shall be a party hereto and, to the extent of the interest
assigned by such Assignment, have the rights and obligations of a Lender under
this Agreement, and the assigning Lender thereunder shall, to the extent of the
interest assigned by such Assignment, be released from its obligations and not
entitled to its rights under this Agreement.  Notwithstanding the foregoing, in
the case of an Assignment covering all of the assigning Lender’s rights and
obligations under this Agreement, such Lender shall cease to be a party hereto
but shall continue to be entitled to the benefits and subject to the obligations
of Sections 2.14, 2.15, 2.16 and 9.03 with respect to facts and circumstances
occurring prior to the effective date of such Assignment.  Any assignment or
transfer by a Lender of rights or obligations under this Agreement that does not
comply with this subsection shall be treated for purposes of this Agreement as a
sale by such Lender of a participation in such rights and obligations in
accordance with subsection (e) of this Section.

 

(c)                        The Administrative Agent, acting for this purpose as
an agent of the Borrower, shall maintain at one of its offices in New York City
a copy of each Assignment delivered to it and a register for the recordation of
the names and addresses of the Lenders, their respective Commitments and the
principal amounts of the Loans and LC Disbursements owing to each Lender
pursuant to the terms hereof from time to time (the “Register”).  The entries in
the Register shall be conclusive absent manifest error,

 

100

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

 

and the parties hereto may treat each Person whose name is recorded in the
Register pursuant to the terms hereof as a Lender for all purposes of this
Agreement, notwithstanding notice to the contrary.  The Register shall be
available for inspection by any party hereto at any reasonable time and from
time to time upon reasonable prior notice.

 

(d)                       Upon its receipt of a duly completed Assignment
executed by an assigning Lender and an assignee, the assignee’s completed
Administrative Questionnaire (unless the assignee shall already be a Lender
hereunder), the processing and recordation fee referred to in subsection (b) of
this Section and any written consent to such assignment required by subsection
(b) of this Section, the Administrative Agent shall promptly accept such
Assignment and record the information contained therein in the Register.  No
assignment shall be effective for purposes of this Agreement unless it has been
recorded in the Register as provided in this subsection.

 

(e)                        Any Lender may, without the consent of the Borrower
or any other Lender Party, sell participations to one or more banks or other
entities (“Participants”) in all or a portion of such Lender’s rights and
obligations under this Agreement (including all or a portion of its Commitments
and the Loans owing to it); provided that (i) such Lender’s obligations under
this Agreement shall remain unchanged, (ii) such Lender shall remain solely
responsible to the other parties hereto for the performance of such obligations
and (iii) the Borrower and the other Lender Parties shall continue to deal
solely and directly with such Lender in connection with such Lender’s rights and
obligations under this Agreement.  Any agreement or instrument pursuant to which
a Lender sells such a participation shall provide that such Lender shall retain
the sole right to enforce the Loan Documents and to approve any amendment,
modification or waiver of any provision of the Loan Documents; provided that
such agreement or instrument may provide that such Lender will not, without the
consent of the Participant, agree to any amendment, modification or waiver
described in clauses (i), (ii), (iii), (vi) or (vii) of the first proviso to
Section 9.02(b) that affects such Participant.  Subject to subsection (f) of
this Section, each Participant shall be subject to the obligations and entitled
to the benefits of Sections 2.14, 2.15 and 2.16 to the same extent as if it were
a Lender and had acquired its interest by assignment pursuant to subsection
(b) of this Section.  To the extent permitted by law, each Participant also
shall be entitled to the benefits of Section 9.08 as though it were a Lender,
provided that such Participant agrees to be subject to Section 2.17(c) as though
it were a Lender.

 

(f)                          A Participant shall not be entitled to receive any
greater payment under Section 2.14 or 2.16 than the applicable Lender would have
been entitled to receive with respect to the participation sold to such
Participant, unless the sale of the participation to such Participant is made
with the Borrower’s prior written consent.  For the avoidance of doubt, a
Participant shall not be entitled to the benefits of Section 2.16 unless the
Borrower is notified of the participation sold to such Participant and such
Participant agrees, for the benefit of the Borrower, to comply with
Section 2.16(d) as though it were a Lender.

 

(g)                       Any Lender may at any time pledge or assign a security
interest in all or any portion of its rights under this Agreement to secure
obligations of such Lender, including any pledge or assignment to secure
obligations to a Federal Reserve Bank or any central bank, and this
Section shall not apply to any such pledge or assignment of a

 

101

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

 

security interest; provided that no such pledge or assignment of a security
interest shall release a Lender from any of its obligations hereunder or
substitute any such pledgee or assignee for such Lender as a party hereto.

 

(h)                       In the case of a participation, the applicable Lender,
acting solely for this purpose as a non-fiduciary agent of the Borrower, shall
maintain a register on which it enters the name and address of each Participant
and the amount of each Participant’s interest in the Commitments and the
principal amounts of the Loans and LC Disbursements owing to such Lender (the
“Participant Register”). The entries in the Participant Register shall be
conclusive absent manifest error, and such Lender shall treat each Person whose
name is recorded in the Participant Register as the owner of such Loan or other
obligation hereunder for all purposes of this Agreement notwithstanding any
notice to the contrary. Any such Participant Register shall be available for
inspection by the Administrative Agent at any reasonable time and from time to
time upon reasonable prior notice); provided that the applicable Lender shall
have no obligation to show such Participant Register to any Person except to the
extent such disclosure is necessary to establish that such Loan or other
obligation is in registered form under Section 5f.103-1(c) of the Treasury
regulations as a result of a request or inquiry by a Governmental Authority.

 

Section 9.05.  Survival.  All covenants, agreements, representations and
warranties made by the Credit Parties in the Loan Documents and in certificates
or other instruments delivered in connection with or pursuant to the Loan
Documents shall be considered to have been relied upon by the other parties
hereto and shall survive the execution and delivery of the Loan Documents and
the making of any Loans and issuance of any Letters of Credit, regardless of any
investigation made by any such other party or on its behalf and notwithstanding
that any Lender Party may have had notice or knowledge of any Default or
incorrect representation or warranty at the time any credit is extended
hereunder, and shall continue in full force and effect as long as any principal
of or accrued interest on any Loan or any fee or other amount payable hereunder
is outstanding and unpaid or any Letter of Credit is outstanding or any
Commitment has not expired or terminated.  The provisions of Sections 2.14,
2.15, 2.16 and 9.03 and Article 8 shall survive and remain in full force and
effect regardless of the consummation of the Effective Date Transactions, the
Restatement Transactions, the repayment of the Loans, the expiration or
termination of the Letters of Credit and the Commitments or the termination of
this Agreement or any provision hereof.

 

Section 9.06.  Counterparts; Integration; Effectiveness.  This Agreement may be
executed in counterparts (and by different parties hereto on different
counterparts), each of which shall constitute an original, but all of which when
taken together shall constitute a single contract.  This Agreement, the other
Loan Documents and any separate letter agreements with respect to fees payable
to the Administrative Agent constitute the entire contract among the parties
relating to the subject matter hereof and supersede any and all previous
agreements and understandings, oral or written, relating to the subject matter
hereof.  Except as provided in Section 4.01, this Agreement (i) will become
effective when the Administrative Agent shall have signed this Agreement and
received counterparts hereof that, when taken together, bear the signatures of
each of the other parties hereto and (ii) thereafter will be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns.  Delivery of an executed

 

102

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

 

counterpart of a signature page of this Agreement by telecopy or pdf by email
will be effective as delivery of a manually executed counterpart of this
Agreement.

 

Section 9.07.  Severability.  If any provision of any Loan Document is invalid,
illegal or unenforceable in any jurisdiction then, to the fullest extent
permitted by law, (i) such provision shall, as to such jurisdiction, be
ineffective to the extent (but only to the extent) of such invalidity,
illegality or unenforceability, (ii) the other provisions of the Loan Documents
shall remain in full force and effect in such jurisdiction and shall be
liberally construed in favor of the Lender Parties in order to carry out the
intentions of the parties thereto as nearly as may be possible and (iii) the
invalidity, illegality or unenforceability of any such provision in any
jurisdiction shall not affect the validity, legality or enforceability of such
provision in any other jurisdiction.

 

Section 9.08.  Right of Set-off.  If an Event of Default shall have occurred and
be continuing, each Lender and each of its Affiliates is authorized at any time
and from time to time, to the fullest extent permitted by law, to set off and
apply any and all deposits (general or special, time or demand, provisional or
final, but in no event any escrow accounts) at any time held and other
obligations at any time owing by such Lender or Affiliate to or for the credit
or the account of the Borrower against any obligations of the Borrower now or
hereafter existing hereunder and held by such Lender, irrespective of whether or
not such Lender shall have made any demand hereunder and although such
obligations may be unmatured.  The rights of each Lender under this Section are
in addition to other rights and remedies (including other rights of setoff) that
such Lender may have.

 

Section 9.09.  Governing Law; Jurisdiction; Consent to Service of Process. 
(a) This Agreement shall be construed in accordance with and governed by the law
of the State of New York.

 

(b)                       The Borrower, the Administrative Agent and each Lender
irrevocably and unconditionally submit, for itself and its property, to the
exclusive jurisdiction of the Supreme Court of the State of New York sitting in
New York County and of the United States District Court of the Southern District
of New York, and any relevant appellate court, in any action or proceeding
arising out of or relating to any Loan Document, or for recognition or
enforcement of any judgment (and in the case of the Borrower, for any collateral
or similar enforcement proceeding, to the courts of any jurisdiction where its
assets are located), and each party hereto irrevocably and unconditionally
agrees that all claims in respect of any such action or proceeding shall be
heard and determined in such New York State court or, to the extent permitted by
law, in such Federal court.  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.

 

(c)                        The Borrower irrevocably and unconditionally waives,
to the fullest extent it may legally and effectively do so, any objection that
it may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to any Loan Document in any court referred
to in subsection (b) of this Section.  Each party hereto irrevocably waives, to
the fullest extent permitted by law, the defense of an inconvenient forum to the
maintenance of any such suit, action or proceeding in any such court.

 

103

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

 

(d)                       Each party hereto irrevocably consents to service of
process in the manner provided for notices in Section 9.01.  Nothing in any Loan
Document will affect the right of any party hereto to serve process in any other
manner permitted by law.

 

Section 9.10.  WAIVER OF JURY TRIAL.  EACH PARTY HERETO WAIVES, TO THE FULLEST
EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN
ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO ANY
LOAN DOCUMENT OR ANY TRANSACTION CONTEMPLATED THEREBY (WHETHER BASED ON
CONTRACT, TORT OR ANY OTHER THEORY).  EACH PARTY HERETO (A) CERTIFIES THAT NO
REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY
OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK
TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER
PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER
THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

 

Section 9.11.  Headings.  Article and Section headings and the Table of Contents
herein are for convenience of reference only, are not part of this Agreement and
shall not affect the construction of, or be taken into consideration in
interpreting, this Agreement.

 

Section 9.12.  Confidentiality.  (a) Each Lender Party agrees to maintain the
confidentiality of the Information (as defined below), except that Information
may be disclosed (b) to its and its Affiliates’ directors, officers, members,
partners, employees and agents, including accountants, legal counsel and other
advisors (it being understood that the Persons to whom such disclosure is made
will be informed of the confidential nature of such Information and instructed
to keep such Information confidential), (c) to the extent requested by any
regulatory authority, (d) to the extent required by applicable laws or
regulations or by any subpoena or similar legal process, (e) to any other party
to this Agreement, (f) in connection with the exercise of any remedy hereunder
or any suit, action or proceeding relating to any Loan Document or the
enforcement of any right thereunder, (g) in connection with pledges and
assignments made pursuant to Section 9.04(g), (h) subject to an agreement
containing provisions substantially the same (or at least as restrictive) as
those of this Section, to (i) any actual or prospective assignee of or
Participant in any of its rights or obligations under this Agreement or (ii) any
actual or prospective counterparty (or its advisors) to any swap or derivative
transaction relating to the Borrower and its obligations, (i) with the consent
of the Borrower or (j) to the extent such Information either (i) becomes
publicly available other than as a result of a breach of this Section or
(ii) becomes available to any Lender Party on a nonconfidential basis from a
source other than the Borrower.  For the purposes of this Section, “Information”
means all information received from the Borrower relating to the Borrower or its
business, other than any such information that is available to any Lender Party
on a nonconfidential basis before disclosure by the Borrower; provided that, in
the case of information received from the Borrower after the Effective Date,
such information is clearly identified at the time of delivery as confidential. 
Any Person required to maintain the confidentiality of Information as provided
in this Section shall be considered to have complied with its obligation to do
so if such Person has exercised the same degree of care

 

104

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

 

to maintain the confidentiality of such Information as such Person would accord
to its own confidential information.

 

EACH LENDER ACKNOWLEDGES THAT INFORMATION AS DEFINED IN
SECTION 9.12(a) FURNISHED TO IT PURSUANT TO THIS AGREEMENT MAY INCLUDE MATERIAL
NON-PUBLIC INFORMATION CONCERNING THE BORROWER AND ITS RELATED PARTIES OR THEIR
RESPECTIVE SECURITIES, AND CONFIRMS THAT IT HAS DEVELOPED COMPLIANCE PROCEDURES
REGARDING THE USE OF MATERIAL NON-PUBLIC INFORMATION AND THAT IT WILL HANDLE
SUCH MATERIAL NON-PUBLIC INFORMATION IN ACCORDANCE WITH THOSE PROCEDURES AND
APPLICABLE LAW, INCLUDING FEDERAL AND STATE SECURITIES LAWS.

 

ALL INFORMATION, INCLUDING REQUESTS FOR WAIVERS AND AMENDMENTS, FURNISHED BY THE
BORROWER OR THE ADMINISTRATIVE AGENT PURSUANT TO, OR IN THE COURSE OF
ADMINISTERING, THIS AGREEMENT WILL BE SYNDICATE-LEVEL INFORMATION, WHICH
MAY CONTAIN MATERIAL NON-PUBLIC INFORMATION ABOUT THE BORROWER, THE CREDIT
PARTIES AND THEIR RELATED PARTIES OR THEIR RESPECTIVE SECURITIES.  ACCORDINGLY,
EACH LENDER REPRESENTS TO THE BORROWER AND THE ADMINISTRATIVE AGENT THAT IT HAS
IDENTIFIED IN ITS ADMINISTRATIVE QUESTIONNAIRE A CREDIT CONTACT WHO MAY RECEIVE
INFORMATION THAT MAY CONTAIN MATERIAL NON-PUBLIC INFORMATION IN ACCORDANCE WITH
ITS COMPLIANCE PROCEDURES AND APPLICABLE LAW.

 

Section 9.13.  PATRIOT Act.  Each Lender hereby notifies the Borrower that
pursuant to the requirements of the PATRIOT Act, it is required to obtain,
verify and record information that identifies the Credit Parties, which
information includes the name and address of the such Credit Party and other
information that will allow such Lender to identify such Credit Party in
accordance with the PATRIOT Act.

 

Section 9.14.  No Fiduciary Duty.  Each Agent, each Lender and their Affiliates
(collectively, solely for purposes of this paragraph, the “Lenders”), may have
economic interests that conflict with those of the Credit Parties, their
stockholders and/or their affiliates.  Each Credit Party agrees that nothing in
the Credit Documents or otherwise will be deemed to create an advisory,
fiduciary or agency relationship or fiduciary or other implied duty between any
Lender, on the one hand, and such Credit Party, its stockholders or its
affiliates, on the other.  The Credit Parties acknowledge and agree that (i) the
transactions contemplated by the Credit Documents (including the exercise of
rights and remedies hereunder and thereunder) are arm’s-length commercial
transactions between the Lenders, on the one hand, and the Credit Parties, on
the other, and (ii) in connection therewith and with the process leading
thereto, (x) no Lender has assumed an advisory or fiduciary responsibility in
favor of any Credit Party, its stockholders or its affiliates with respect to
the transactions contemplated hereby (or the exercise of rights or remedies with
respect thereto) or the process leading thereto (irrespective of whether any
Lender has advised, is currently advising or will advise any Credit Party, its
stockholders or its Affiliates on other matters) or any other obligation to any
Credit Party except the

 

105

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

 

obligations expressly set forth in the Credit Documents and (y) each Lender is
acting solely as principal and not as the agent or fiduciary of any Credit
Party, its management, stockholders, creditors or any other Person.  Each Credit
Party acknowledges and agrees that it has consulted its own legal and financial
advisors to the extent it deemed appropriate and that it is responsible for
making its own independent judgment with respect to such transactions and the
process leading thereto.  Each Credit Party agrees that it will not claim that
any Lender has rendered advisory services of any nature or respect, or owes a
fiduciary or similar duty to such Credit Party, in connection with such
transaction or the process leading thereto.

 

106

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

 

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

 

 

CLOUD PEAK ENERGY RESOURCES LLC, as Borrower

 

 

 

 

 

By:

/s/ Colin Marshall

 

 

Name: Colin Marshall

 

 

Title: President and CEO

 

 

 

ANTELOPE COAL LLC

 

CABALLO ROJO LLC

 

CABALLO ROJO HOLDINGS LLC

 

CLOUD PEAK ENERGY SERVICES COMPANY

 

CLOUD PEAK ENERGY FINANCE CORP.

 

CORDERO MINING LLC

 

CORDERO MINING HOLDINGS LLC

 

CORDERO OIL AND GAS LLC

 

KENNECOTT COAL SALES LLC

 

NERCO LLC

 

NERCO COAL LLC

 

NERCO COAL SALES LLC

 

NORTHERN COAL TRANSPORTATION LLC

 

PROSPECT LAND AND DEVELOPMENT LLC

 

RESOURCE DEVELOPMENT LLC

 

SEQUATCHIE VALLEY COAL CORPORATION

 

SPRING CREEK COAL LLC

 

WESTERN MINERALS LLC,

 

as Guarantors

 

 

 

By:

/s/ Michael Barrett

 

 

Name: Michael Barrett

 

 

Title: EVP and CFO

 

 

 

MORGAN STANLEY SENIOR FUNDING, INC., as Administrative Agent and Swingline
Lender

 

 

 

 

 

By:

/s/ Kevin D. Emerson

 

 

Name: Kevin D. Emerson

 

 

Title: Authorized Signatory

 

 

 

 

 

MORGAN STANLEY BANK, N.A., as Issuing Bank

 

 

 

 

 

By:

/s/ Kevin D. Emerson

 

 

Name: Kevin D. Emerson

 

 

Title: Authorized Signatory

 

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

 

 

WELLS FARGO BANK, NATIONAL ASSOCIATION, as Issuing Bank

 

 

 

By:

/s/ Troy S. Akagi

 

 

Name: Troy S. Akagi

 

 

Title: Senior Vice President

 

 

 

CREDIT SUISSE AG, CAYMAN ISLANDS BRANCH, as Issuing Bank

 

 

 

 

 

By:

/s/ Mikhail Faybusovich

 

 

Name: Mikhail Faybusovich

 

 

Title: Director

 

 

 

 

By:

/s/ Kevin Buddhdew

 

 

Name: Kevin Buddhdew

 

 

Title: Associate

 

 

 

 

ROYAL BANK OF CANADA,
as Issuing Bank

 

 

 

 

 

By:

/s/ Jason S. York

 

 

Name: Jason S. York

 

 

Title: Authorized Signatory

 

 

 

 

JPMORGAN CHASE BANK, N.A.
as Issuing Bank

 

 

 

 

 

By:

/s/ Brian Knapp

 

 

Name: Brian Knapp

 

 

Title: Vice President

 

 

 

 

BANK OF AMERICA, N.A.,
as Issuing Bank

 

 

 

 

 

By:

/s/ Adam H. Fey

 

 

Name: Adam H. Fey

 

 

Title: Director

 

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

 

 

MORGAN STANLEY BANK, N.A., as
Lender

 

 

 

By:

/s/ Kevin D. Emerson

 

 

Name: Kevin D. Emerson

 

 

Title: Authorized Signatory

 

 

 

 

PNC BANK, NATIONAL ASSOCIATION,
as Lender

 

 

 

 

 

 

By:

/s/ Alison Kirker

 

 

Name: Alison Kirker

 

 

Title: Credit Officer

 

 

 

 

WELLS FARGO BANK, NATIONAL ASSOCIATION, as Lender

 

 

 

 

 

By:

/s/ Troy S. Akagi

 

 

Name: Troy S. Akagi

 

 

Title: Senior Vice President

 

 

 

CREDIT SUISSE AG, CAYMAN ISLANDS BRANCH, as Lender

 

 

 

 

 

By:

/s/ Chris Day

 

 

Name: Chris Day

 

 

Title: Vice President

 

 

 

 

By:

/s/ Rahul Parmar

 

 

Name: Rahul Parmar

 

 

Title: Associate

 

 

 

 

ROYAL BANK OF CANADA,
as Lender

 

 

 

 

 

By:

/s/ Jason S. York

 

 

Name: Jason S. York

 

 

Title: Authorized Signatory

 

 

 

 

CREDIT AGRICOLE CORPORATE AND INVESTMENT BANK,
as Lender

 

 

 

 

 

By:

/s/ Matthias Guillet

 

 

Name: Matthias Guillet

 

 

Title: Director

 

 

 

 

By:

/s/ Blake Wright

 

 

Name: Blake Wright

 

 

Title: Managing Director

 

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

 

 

GOLDMAN SACHS BANK USA,
as Lender

 

 

 

 

 

By:

/s/ Mark Walton

 

 

Name: Mark Walton

 

 

Title: Authorized Signatory

 

 

 

 

U.S. BANK NATIONAL ASSOCIATION,
as Lender

 

 

 

 

 

By:

/s/ Blake Malia

 

 

Name: Blake Malia

 

 

Title: Vice President

 

 

 

 

UMB BANK COLORADO, N.A.,
as Lender

 

 

 

 

 

By:

/s/ Debbie A. Wright

 

 

Name: Debbie A. Wright

 

 

Title: Senior Vice President

 

 

 

THE BANK OF NOVA SCOTIA,
as Lender

 

 

 

 

 

By:

/s/ Ray Clarke

 

 

Name: Ray Clarke

 

 

Title: Managing Director

 

 

 

 

By:

/s/ Elizabeth Daponte

 

 

Name: Elizabeth Daponte

 

 

Title: Director

 

 

 

 

 

 

 

JPMORGAN CHASE BANK, N.A.
as Lender

 

 

 

 

 

By:

/s/ Brian Knapp

 

 

Name: Brian Knapp

 

 

Title: Vice President

 

 

 

 

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

 

 

BANK OF AMERICA, N.A.,
as Lender

 

 

 

 

 

By:

/s/ Adam H. Fey

 

 

Name: Adam H. Fey

 

 

Title: Director

 

 

 

 

COMERICA BANK,
as Lender

 

 

 

 

 

By:

/s/ Fatima Arshad

 

 

Name: Fatima Arshad

 

 

Title: Vice President

 

 

 

 

CITIBANK, N.A.
as Lender

 

 

 

 

 

By:

/s/ Thomas Ng

 

 

Name: Thomas Ng

 

 

Title: Vice President

 

 

 

 

NATIXIS, NEW YORK BRANCH,
as Lender

 

 

 

 

 

By:

/s/ Amaury Courtial

 

 

Name: Amaury Courtial

 

 

Title: Managing Director

 

 

 

 

By:

/s/ Vincent Lauras

 

 

Name: Vincent Lauras

 

 

Title: Senior Managing Director

 

 

 

 

ING CAPITAL LLC,
as Lender

 

 

 

 

 

By:

/s/ Remko van de Water

 

 

Name: Remko van de Water

 

 

Title: Director

 

 

 

 

RAYMOND JAMES BANK, FSB,
as Lender

 

 

 

 

 

By:

/s/ Garrett McKinnon

 

 

Name: Garrett McKinnon

 

 

Title: Senior Vice President

 

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

 

 

THE NORTHERN TRUST COMPANY,
as Lender

 

 

 

 

 

By:

/s/ Morgan A. Lyons

 

 

Name: Morgan A. Lyons

 

 

Title: Senior Vice President

 

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