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

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

 
EXHBIT 10.1
 
LIMITED CONSENT AND SECOND AMENDMENT
TO AMENDED AND RESTATED CREDIT AGREEMENT
 
This LIMITED CONSENT AND SECOND AMENDMENT TO AMENDED AND RESTATED CREDIT
AGREEMENT (this “Agreement”) is entered into as of July 19, 2007, by and among
A. T. MASSEY COAL COMPANY, INC., a Virginia corporation (the “Administrative
Borrower”), individually and as agent on behalf of the other Loan Parties (such
term and each other capitalized term used but not defined herein having the
meaning given to it in Article I of the Credit Agreement referenced below), the
Required Lenders signatory hereto, UBS AG, STAMFORD BRANCH, as administrative
agent (the “Administrative Agent”), and THE CIT GROUP/BUSINESS CREDIT, INC., as
collateral agent and as security trustee (the “Collateral Agent”; and together
with the Administrative Agent, the “Agents”) for the Secured Parties and Issuing
Bank.
 
RECITALS
 
WHEREAS, the Administrative Borrower, the other Borrowers, the Guarantors, the
Administrative Agent, the Collateral Agent and Lenders entered into that certain
Amended and Restated Credit Agreement dated as of August 15, 2006 (as amended,
supplemented, restated or otherwise modified from time to time, the “Credit
Agreement”);
 
WHEREAS, the Administrative Borrower (on behalf of itself and each of the other
Loan Parties), the Administrative Agent, the Collateral Agent, and the Required
Lenders entered into that certain Limited Waiver, Consent and First Amendment to
Credit Agreement effective as of March 12, 2007;
 
WHEREAS, the Administrative Borrower has informed the Administrative Agent of
its desire to form one or more corporations (each an “Insurance Subsidiary”), as
direct or indirect Wholly-Owned Subsidiaries of the Administrative Borrower to
engage in the Insurance Business (as defined in Section 2.1 hereof);
 
WHEREAS, the parties acknowledge that federal and state insurance laws and
regulations will impose certain restrictions on the business and activities of
the Insurance Subsidiaries, including their ability to declare and issue
Dividends, to grant or permit Liens on their assets, to guarantee Obligations of
their parent corporations and to incur Indebtedness and such insurance laws and
regulations may preclude or restrict any transfer or pledge of the Equity
Interests of the Insurance Subsidiaries;
 
WHEREAS, the Administrative Borrower (on behalf of itself and each of the other
Loan Parties) has requested that Agents and the Required Lenders (i) consent to
the formation of one or more Insurance Subsidiaries under Section 6.12 of the
Credit Agreement as direct or indirect Wholly-Owned Subsidiaries of the
Administrative Borrower, and (ii) amend certain Sections of the Credit Agreement
to permit the capitalization of such Insurance Subsidiaries, to permit the
incurrence of Indebtedness and other obligations by the Insurance Subsidiaries
in the ordinary course of their business and the granting of Liens (except Liens
on the Collateral) to secure such obligations and to relieve the Insurance
Subsidiaries of certain covenants and restrictions otherwise applicable to
Subsidiaries under the provisions of the Credit Agreement, all upon the terms,
and subject to the limitations, set forth herein.
 
NOW THEREFORE, in consideration of the foregoing recitals, mutual agreements
contained herein and for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Agents, the Required Lenders
and the Administrative Borrower (on behalf of itself and each of the other Loan
Parties) agree as follows:
 
1  Limited Consent.  Subject to the satisfaction of each of the conditions to
effectiveness set forth in Section 3 hereof, the Administrative Borrower (on
behalf of itself and each of the other Loan Parties), the Agents and the
Required Lenders hereby agree as follows:
 
1.1  Immediately upon the effectiveness of this Agreement, the Agents and the
Required Lenders hereby consent to the formation of one or more Insurance
Subsidiaries pursuant to Section 6.12 of the Credit Agreement and to the
issuance by any such Insurance Subsidiary of the Equity Interests therein to the
Administrative Borrower or to any of its direct or indirect Wholly-Owned
Subsidiaries.
 
1.2  The limited consent set forth in Section 1.1 above is  effective solely for
the purposes set forth herein and shall be limited precisely as written and
shall not be deemed to be a consent to any amendment, waiver or modification of
any term or condition of the Credit Agreement, Security Agreement or of any
other Loan Document, except as expressly provided in this Agreement, or
prejudice any right or rights that Administrative Agent or Lenders have or may
have in the future under or in connection with the Credit Agreement, the
Security Agreement or any other Loan Document.
 
2  Agreements and Amendments to Credit Agreement.  Subject to the satisfaction
of each of the conditions to effectiveness set forth in Section 3 hereof, the
Administrative Borrower (on behalf of itself and each of the other Loan
Parties), the Agents and the Required Lenders hereby agree as follows:
 
2.1  Immediately upon the effectiveness of this Agreement, the following
sections of the Credit Agreement are amended as follows:
 
2.1.1                      Section 1.01 (Defined Terms) of the Credit Agreement
is amended by adding the following additional defined terms:
 
“Insurance Business” shall mean the business of (i) issuing surety bonds,
reclamation bonds, performance bonds, workers’ compensation insurance policies,
fronting policies for all risk general liability, casualty and property
insurance and other similar obligations as a captive insurance/bonding company
to support and/or insure reclamation and workers’ compensation obligations and
all risk general liability, casualty and property risks customarily covered by
fronting policies, in each case incurred by the Companies in the ordinary course
of their businesses, and (ii) conducting all activities ancillary thereto,
including entering into reinsurance arrangements, receiving premiums,
establishing reserves for the payment of claims and for the return of unearned
premiums and investing funds in support of such reserves, all as may be required
or permitted by applicable insurance laws and regulations.
 
“Insurance Subsidiary” shall mean any direct or indirect Wholly-Owned Subsidiary
of the Administrative Borrower that is engaged solely in the Insurance Business.
 
2.1.2                      Section 5.04 (Insurance) of the Credit Agreement is
amended by adding a new clause (c) as follows:
 
“(c)           Notwithstanding any provision of this Section 5.04 to the
contrary, no Insurance Subsidiary shall be permitted to provide any insurance
coverage with respect to the Collateral without the prior written consent of
each of the Administrative Agent and the Collateral Agent (as determined in
their sole discretion) and the Required Lenders.  Subject to the provisions of
the preceding sentence, the Loan Parties shall not be deemed to have breached
any provision of this Section 5.04 solely as a result of maintaining insurance
coverages with any Insurance Subsidiary.”
 
2.1.3                      Section 5.11 (Additional Collateral; Additional
Guarantors) of the Credit Agreement is amended by inserting the following
provision as new clause (d):
 
“(d)           Notwithstanding any provision of this Section 5.11 to the
contrary, clauses (a), (b) and (c) above shall not apply to any Insurance
Subsidiary.”
 
2.1.4                      Section 6.01 (Indebtedness) of the Credit Agreement
is amended by (i) deleting the “and” at the end of existing clause (o) thereof,
(ii) deleting the “.” at the end of existing clause (p) thereof and substituting
“; and” in its place and (iii) inserting the following provision as new clause
(q):
 
“(q)           Indebtedness and other obligations incurred by any Insurance
Subsidiary in the ordinary course of its Insurance Business.”
 
2.1.5                      Section 6.02 (Liens) of the Credit Agreement is
amended by amending and restating clause (l) and (v) as follows:
 
“(l)           claims of insureds against properties of any Insurance Subsidiary
and Liens granted or incurred on properties of any Insurance Subsidiary in the
ordinary course of its Insurance Business.”
 
*                       *                         *
 
“(v)           other Liens (not of a type set forth in clauses (a) through (u)
above) incurred in the ordinary course of business of any Company with respect
to obligations (including without limitation, any Capitalized Lease Obligations
resulting from the conversion of operating leases existing on December 1, 2003,
but excluding any other Indebtedness) or securing any surety bonds, reclamation
bonds, performance bonds, workers’ compensation property, casualty or general
liability insurance policies and other similar obligations issued or incurred by
any Insurance Subsidiary in the ordinary course of its Insurance Business (but
excluding any other Indebtedness) that do not in the aggregate exceed at any one
time outstanding 5% of Consolidated Net Tangible Assets; provided that such
Liens permitted under this clause (v) do not attach to any Collateral;”
 
2.1.6                      Section 6.04 (Investments, Loans and Advances) of the
Credit Agreement is amended by amending and restating clauses (h) and (p) as
follows:
 
“(h)           Investments (other than as described in Section 6.04(e)) (i) by
any Borrower in any Guarantor that is a Subsidiary, (ii) by any Company in any
Borrower or any Guarantor that is a Subsidiary, (iii) by Holdings in any
Borrower, (iv) by a Guarantor in another Guarantor, (v) by any Loan Party in a
Company that is not a Loan Party (other than the Insurance Subsidiary);
provided, however, that the aggregate amount of all Investments permitted
pursuant to this clause (v) shall not exceed $25 million at any time; and (vi)
by any Loan Party in any Insurance Subsidiary; provided, however, that (A) the
aggregate amount of Investments permitted pursuant to this clause (vi) with
respect to the initial formation and capitalization of the Insurance
Subsidiaries shall not exceed $60 million and (B) during any Fiscal Year,
additional Investments from and after the initial formation and capitalization
of any Insurance Subsidiary shall not exceed the sum of $20 million plus the
cumulative unused amount, if any, otherwise permitted under clause (A) above or
this clause (B); provided, that any Investment in one or more of the Insurance
Subsidiaries shall not be permitted if, after giving effect to such Investment,
(x) the aggregate amount of all Investments permitted pursuant to this clause
(vi) would exceed $125 million at any time or (y) Excess Availability is less
than $30,000,000 after giving effect to such Investment;”
 
*                       *                         *
 
“(p)           Each Borrower and its Subsidiaries may make or acquire
Investments in connection with Permitted Acquisitions and each Insurance
Subsidiary may make or acquire Investments permitted by applicable insurance
laws and regulations;”
 
2.1.7                      Section 6.05 (Mergers, Consolidations, Sales of
Assets and Acquisitions) of the Credit Agreement is amended by amending and
restating the final paragraph thereof as follows:
 
“To the extent the Required Lenders waive the provisions of this Section 6.05
with respect to the sale of any Collateral, or, subject in each case to Section
11.02(b)(vii), any Collateral is sold, exchanged or otherwise disposed of as
permitted by this Section 6.05, such Collateral (unless sold, exchanged or
transferred to a Company) shall be sold, exchanged or otherwise disposed of free
and clear of the Liens created by the Security Documents, and the Administrative
Agent and the Collateral Agent shall take all actions deemed appropriate in
order to effect the foregoing.”
 
2.1.8                      Section 6.07 (Transactions with Affiliates) of the
Credit Agreement is amended by (i) deleting the “and” at the end of the existing
clause (d) thereof, (ii) deleting the “.” at the end of the existing clause (e)
thereof and substituting “; and” in its place and (iii) inserting the following
provision as new clause (f):
 
“(f)           any Company may pay insurance premiums to any Insurance
Subsidiary so long as the proceeds of such payments are either (i) used to pay
such Insurance Subsidiary’s franchise taxes, income taxes and other current
period operating expenses (including any reinsurance premiums), (ii) used or
invested by such Insurance Subsidiary to support loss reserves, or (iii)
retained by such Insurance Subsidiary as capital; provided, however, that any
such retained amount shall apply against the amounts permitted by Section
6.04(h)(vi).”
 
2.1.9                      Section 6.10 (Limitation on Certain Restrictions
on  Subsidiaries) of the Credit Agreement is amended by adding a new sentence at
the end of Section 6.10 as follows:
 
“Notwithstanding any provision of this Section 6.10 to the contrary, clauses (a)
and (b) above shall not apply to any Insurance Subsidiary.”
 
2.1.10                      Section 6.13 (Business) of the Credit Agreement is
amended by amending and restating clause (b) as follows:
 
“(b)           With respect to the Borrowers and their Subsidiaries, engage
(directly or indirectly) in any business other than those businesses in which
the Borrowers and their Subsidiaries are engaged on the Restatement Date,
whether in connection with a Permitted Acquisition or otherwise; provided that
this Section shall not preclude (i) a Permitted Acquisition of any entity
engaged in a Permitted Business or the formation of a Subsidiary of Holdings to
be engaged in a Permitted Business or (ii) any Insurance Subsidiary from
engaging in the Insurance Business.”
 
2.1.11                      Section 6.16 (Negative Pledges) is amended by adding
a new clause (c) as follows:
 
“(c)           Notwithstanding any provision of this Section 6.16 to the
contrary, clauses (a) and (b) above shall not apply to any assets (other than
Equity Interests) of any Insurance Subsidiary.”
 
2.2  The parties acknowledge and agree that the financial performance of each
Insurance Subsidiary shall be included in the calculations to determine
compliance with the financial covenants in Section 6.08 of the Credit Agreement.
 
3  Conditions to Effectiveness.  This Agreement shall be effective on the date
on which all of the following conditions precedent are satisfied:
 
3.1  This Agreement shall have been executed and delivered by the Administrative
Agent, the Collateral Agent, the Required Lenders and the Administrative
Borrower (on behalf of itself and each of the other Loan Parties).
 
3.2  The representations and warranties contained herein shall be true and
correct in all respects, and, after giving effect to this Agreement, no Event of
Default or Default shall exist on the date hereof.
 
4  Representations and Warranties.
 
4.1  The execution, delivery and performance by Administrative Borrower (on
behalf of itself and each of the other Loan Parties) of this Agreement has been
duly authorized by all necessary corporate action and this Agreement is a legal,
valid and binding obligation of the Administrative Borrower and each of the
other Loan Parties enforceable against the Administrative Borrower and each of
the other Loan Parties in accordance with its terms, except as the enforcement
thereof may be subject to (i) the effect of any applicable bankruptcy,
insolvency, reorganization, moratorium or similar law affecting creditors’
rights generally and (ii) general principles of equity (regardless of whether
such enforcement is sought in a proceeding in equity or at law);
 
4.2  Each of the representations and warranties contained in the Credit
Agreement is true and correct in all material respects on and as of the date
hereof as if made on the date hereof, except to the extent that such
representations and warranties expressly relate to an earlier date; and
 
4.3  Neither the execution, delivery and performance of this Agreement by the
Administrative Borrower (on behalf of itself and each of the other Loan Parties)
nor the consummation of the transactions contemplated hereby does or shall
result in a breach of, or violate (i) any provision of the Administrative
Borrower’s or any other Loan Party’s articles of incorporation or bylaws, (iii)
any law or regulation, or any order or decree of any court or government
instrumentality, applicable to the Administrative Borrower or the other Loan
Parties or binding upon any of their properties, or (iii) any indenture,
mortgage, deed of trust, lease, agreement or other instrument to which the
Administrative Borrower or any other Loan Party is a party or by which the
Administrative Borrower or any other Loan Party or any of their property is
bound, except in any such case to the extent such conflict or breach has been
waived by a written waiver document, a copy of which has been delivered to the
Agents on or before the date hereof.
 
5  Reference to and Effect upon the Credit Agreement.
 
5.1  Except as specifically set forth above, the Credit Agreement and the other
Loan Documents shall remain in full force and effect and are hereby ratified and
confirmed.
 
5.2  The execution, delivery and effectiveness of this Agreement shall not
operate as a waiver of any right, power or remedy of any Agent or any Lender
under the Credit Agreement or any other Loan Document, nor constitute amendment
of any provision of the Credit Agreement or any other Loan Document, except as
specifically set forth herein.  Upon the effectiveness of this Agreement, each
reference in the Credit Agreement to “this Agreement”, “hereunder”, “hereof”,
“herein” or words of similar import shall mean and be a reference to the Credit
Agreement as amended hereby.
 
5.3  The Administrative Borrower (on behalf of itself and each of the other Loan
Parties) acknowledges and agrees that the execution and delivery by Agents and
Required Lenders of this Agreement shall not be deemed (i) to create a course of
dealing or otherwise obligate Agents or Lenders to forbear, waive, consent or
execute similar amendments under the same or similar circumstances in the
future, or (ii) to amend, relinquish or impair any right of Agents or Lenders to
receive any indemnity or similar payment from any Person or entity as a result
of any matter arising from or relating to this Agreement.
 
5.4  The Administrative Borrower (on behalf of itself and each of the other Loan
Parties) affirms and acknowledges that this Agreement constitutes a Loan
Document under the Credit Agreement and any reference to the Loan Documents
under the Credit Agreement contained in any notice, request, certificate or
other document executed concurrently with or after the execution and delivery of
this Agreement shall be deemed to include this Agreement unless the context
shall otherwise specify.
 
6  Costs and Expenses.  As provided in Section 11.03 of the Credit Agreement,
Borrowers agree to reimburse Agents for all reasonable out-of-pocket expenses
incurred by the Administrative Agent and the Collateral Agent in connection with
the preparation, execution and delivery of this Agreement, including the fees,
charges and disbursements of Latham & Watkins, LLP, counsel for the
Administrative Agent and Hahn & Hessen, LLP, counsel to the Collateral Agent.
 
7  GOVERNING LAW.  THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS (AS OPPOSED TO CONFLICTS OF LAWS PROVISIONS)
OF THE STATE OF NEW YORK.
 
8  Headings.  Section headings in this Agreement are included herein for
convenience of reference only and shall not constitute a part of this Agreement
for any other purposes.
 
9  Counterparts.  This Agreement may be executed in any number of counterparts,
each of which when so executed shall be deemed an original, but all such
counterparts shall constitute one and the same instrument.    In the event that
any signature is delivered by facsimile transmission, such signature shall
create a valid and binding obligation of the party executing (or on whose behalf
the signature is executed) the same with the same force and effect as if such
facsimile signature page were an original thereof, and such party shall promptly
follow its facsimile signature page by mailing of a hard copy original.
 
[Signature Pages Follow]
 
 
 

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

 
 
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the date first written above.
 
ADMINISTRATIVE BORROWER

A. T. MASSEY COAL COMPANY, INC., individually and as agent for each of the other
Loan Parties

By:  /s/ Philip W.
Nichols                                                              
Name: Philip W. Nichols
Title: Treasurer

                            AGENTS

UBS AG, STAMFORD BRANCH, as the Administrative Agent

By:  /s/ David B.
Julie                                                              
Name: David B. Julie
Title: Associate Director

By:  /s/ Irja R.
Otsa                                                               
Name: Irja R. Otsa
Title: Associate Director

LENDERS

UBS LOAN FINANCE LLC,
as Swingline Lender

 
By:   /s/ David B.
Julie                                                             
Name: David B. Julie
Title: Associate Director

By:  /s/ Irja R.
Otsa                                                              
Name: Irja R. Otsa
Title: Associate Director

UBS LOAN FINANCE LLC,
as a Lender

By:  /s/ David B.
Julie                                                             
Name: David B. Julie
Title: Associate Director

By:  /s/ Irja R.
Otsa                                                                                                                             
Name: Irja R. Otsa
Title: Associate Director
 
                                THE CIT GROUP/BUSINESS CREDIT, INC., as the
Collateral Agent
 
By: /s/ Eddy L.
Milstein                                                             
    Name: Eddy L. Milstein
    Title: Vice President
 
GENERAL ELECTRIC CAPITAL CORPORATION, as a Lender

By:  /s/ Meenoo
Sameer                                                              
Name: Meenoo Sameer
Title: Duly Authorized Signatory
 
BANK OF AMERICA, N.A., as a Lender

By:  /s/ Lawrence P.
Garni                                                              
Name: Lawrence P. Garni
Title: Sr. Vice President
 
PNC BANK, NATIONAL ASSOCIATION, as a Lender

By:  /s/ Scott
O'Donnell                                                              
Name: Scott O'Donnell
Title: Credit Officer