Exhibit 10.27

 

CUSIP Number 86770DAA6

 

$250,000,000 REVOLVING CREDIT FACILITY

 

$175,000,000 TERM LOAN FACILITY

 

SECOND AMENDED AND RESTATED CREDIT AGREEMENT

 

by and among

 

SUNRISE COAL, LLC

 

and

 

THE GUARANTORS PARTY HERETO

 

and

 

THE LENDERS PARTY HERETO

 

and

 

PNC BANK, NATIONAL ASSOCIATION, as Administrative Agent

 

and

 

THE HUNTINGTON NATIONAL BANK and BRANCH BANKING AND TRUST COMPANY, as
Co-Syndication Agents

 

and

 

REGIONS Bank and umb Bank, n.a., as Co-Documentation Agents

 

and

 

THE HUNTINGTON NATIONAL BANK and BRANCH BANKING AND TRUST COMPANY, as Joint Lead
Arrangers

 

and

 

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

 

Dated as of August 29, 2014

 

 

 

 

TABLE OF CONTENTS

 

1.   CERTAIN DEFINITIONS 1   1.1 Certain Definitions 1   1.2 Construction 29  
1.3 Accounting Principles; Changes in GAAP 29         2.   REVOLVING CREDIT AND
SWING LOAN FACILITIES 29   2.1 Revolving Credit Commitments 29     2.1.1
Revolving Credit Loans 29     2.1.2 Swing Loan Commitment 30   2.2 Nature of
Lenders' Obligations with Respect to Revolving Credit Loans 30   2.3 Commitment
Fees 30   2.4 Reduction or Termination of Revolving Credit Commitments 30   2.5
Revolving Credit Loan Requests; Swing Loan Requests 31     2.5.1 Revolving
Credit Loan Requests 31     2.5.2 Swing Loan Requests 31   2.6 Making Revolving
Credit Loans and Swing Loans; Presumptions by the Administrative Agent;
Repayment of Revolving Credit Loans; Borrowings to Repay Swing Loans 31    
2.6.1 Making Revolving Credit Loans 31     2.6.2 Presumptions by the
Administrative Agent 31     2.6.3 Making Swing Loans 32     2.6.4 Repayment of
Revolving Credit Loans 32     2.6.5 Borrowings to Repay Swing Loans 32     2.6.6
Swing Loans Under Cash Management Agreements 32   2.7 Notes 32   2.8 Use of
Proceeds 32   2.9 Letter of Credit Subfacility 33     2.9.1 Issuance of Letters
of Credit 33     2.9.2 Letter of Credit Fees 34     2.9.3 Disbursements,
Reimbursement 34     2.9.4 Repayment of Participation Advances 35     2.9.5
Documentation 36     2.9.6 Determinations to Honor Drawing Requests 36     2.9.7
Nature of Participation and Reimbursement Obligations 36     2.9.8 Indemnity 37
    2.9.9 Liability for Acts and Omissions 38     2.9.10 Issuing Lender
Reporting Requirements 38   2.10 Defaulting Lenders 39   2.11 Increase in
Revolving Credit Commitments and Term Loans 40           3.   TERM LOANS 42  
3.1 Term Loan Commitments 42   3.2 Nature of Lenders' Obligations with Respect
to Term Loans; Repayment Terms 42   3.3 Incremental Term Loans 43

 

i

 

 

4.   INTEREST RATES 43   4.1 Interest Rate Options 43     4.1.1 Revolving Credit
Interest Rate Options; Swing Line Interest Rate 43     4.1.2 Term Loan Interest
Rate Options 43   4.2 Rate Quotations 44   4.3 Interest Periods 44     4.3.1
Amount of Borrowing Tranche 44     4.3.2 Renewals 44   4.4 Interest After
Default 44     4.4.1 Letter of Credit Fees, Interest Rate 44     4.4.2 Other
Obligations 44     4.4.3 Acknowledgment 44   4.5 LIBOR Rate Unascertainable;
Illegality; Increased Costs; Deposits       Not Available 44     4.5.1
Unascertainable 44     4.5.2 Illegality; Increased Costs; Deposits Not Available
45     4.5.3 Administrative Agent's and Lender's Rights 45   4.6 Selection of
Interest Rate Options 45           5.   PAYMENTS 46   5.1 Payments 46   5.2 Pro
Rata Treatment of Lenders 46   5.3 Sharing of Payments by Lenders 46   5.4
Presumptions by Administrative Agent 47   5.5 Interest Payment Dates 47   5.6
Voluntary Prepayments 47     5.6.1 Right to Prepay 47     5.6.2 Replacement of a
Lender 48     5.6.3 Designation of a Different Lending Office 48   5.7 Mandatory
Prepayments 49     5.7.1 Sale of Assets 49     5.7.2 Excess Cash Flow 49    
5.7.3 Savoy Distributions 49     5.7.4 Sale of Savoy 49     5.7.5 Application
Among Interest Rate Options 49   5.8 Increased Costs 49     5.8.1 Increased
Costs Generally 49     5.8.2 Capital Requirements 50     5.8.3 Certificates for
Reimbursement; Repayment of Outstanding Loans; Borrowing of New Loans 50    
5.8.4 Delay in Requests 50   5.9 Taxes 50     5.9.1 Issuing Lender 50     5.9.2
Payments Free of Taxes 50     5.9.3 Payment of Other Taxes by the Loan Parties
51     5.9.4 Indemnification by the Loan Parties 51     5.9.5 Indemnification by
the Lenders 51

 

ii

 

 

    5.9.6 Evidence of Payments 51     5.9.7 Status of Lenders 51     5.9.8
Treatment of Certain Refunds 53     5.9.9 Survival 53   5.10 Indemnity 54   5.11
Settlement Date Procedures 54         6.   REPRESENTATIONS AND WARRANTIES 54  
6.1 Representations and Warranties. 54     6.1.1 Organization and Qualification;
Power and Authority; Compliance With Laws; Title to Properties; Event of Default
55     6.1.2 Subsidiaries and Owners; Investment Companies 55     6.1.3 Validity
and Binding Effect 55     6.1.4 No Conflict; Material Agreements; Consents 55  
  6.1.5 Litigation 56     6.1.6 Financial Statements 56     6.1.7 Margin Stock
56     6.1.8 Full Disclosure 56     6.1.9 Taxes 57     6.1.10 Patents,
Trademarks, Copyrights, Licenses, Etc. 57     6.1.11 Liens in the Collateral 57
    6.1.12 Insurance 57     6.1.13 ERISA Compliance 57     6.1.14 Environmental
Matters 58     6.1.15 Solvency 59     6.1.16 Employment Matters 59     6.1.17
Title to Properties 59     6.1.18 Coal Act; Black Lung Act 59     6.1.19 Bonding
Capacity 60     6.1.20 Permit Blockage 60     6.1.21 Mining Property 60    
6.1.22 Anti-Terrorism Laws 60   6.2 Updates to Schedules 60           7.  
CONDITIONS OF LENDING AND ISSUANCE OF LETTERS OF CREDIT 60   7.1 First Loans and
Letters of Credit 61     7.1.1 Deliveries 61     7.1.2 Payment of Fees 63   7.2
Each Loan or Letter of Credit 63         8.   COVENANTS 63     8.1 Affirmative
Covenants 63     8.1.1 Preservation of Existence, Etc. 63     8.1.2 Payment of
Liabilities, Including Taxes, Etc. 63     8.1.3 Maintenance of Insurance 64    
8.1.4 Maintenance of Properties and Leases 64     8.1.5 Visitation Rights 64

 

iii

 

 

    8.1.6 Keeping of Records and Books of Account 64     8.1.7 Compliance with
Laws; Use of Proceeds 64     8.1.8 Further Assurances 64     8.1.9
Anti-Terrorism Laws 65     8.1.10 Keepwell 65     8.1.11 Collateral and
Additional Collateral; Execution and Delivery of Additional and Ancillary
Security Documents 65     8.1.12 Maintenance of Coal Supply Agreements and
Material Contracts 66     8.1.13 Maintenance of Licenses, Etc. 66     8.1.14
Maintenance of Permits 66     8.1.15 Required Interest Rate Hedge 66   8.2
Negative Covenants 66     8.2.1 Indebtedness 66     8.2.2 Liens 67     8.2.3
Guaranties 67     8.2.4 Loans and Investments 68     8.2.5 Dividends and Related
Distributions; Hallador Subordinated Debt Payments 68     8.2.6 Liquidations,
Mergers, Consolidations, Acquisitions 69     8.2.7 Dispositions of Assets or
Subsidiaries 70     8.2.8 Affiliate Transactions 70     8.2.9 Subsidiaries,
Partnerships and Joint Ventures 71     8.2.10 Continuation of or Change in
Business 71     8.2.11 Fiscal Year 71     8.2.12 Issuance of Stock 71     8.2.13
Changes in Organizational Documents 71     8.2.14 [Intentionally Omitted] 71    
8.2.15 Minimum Fixed Charge Coverage Ratio 71     8.2.16 Maximum Leverage Ratio
71   8.3 Reporting Requirements 71     8.3.1 Quarterly Financial Statements 72  
  8.3.2 Annual Financial Statements 72     8.3.3 Certificates of the Borrower
and Hallador 72     8.3.4 Notices 72           9.   DEFAULT 73   9.1 Events of
Default 73     9.1.1 Payments Under Loan Documents 73     9.1.2 Breach of
Warranty 73     9.1.3 Anti-Terrorism Laws 73     9.1.4 Breach of Negative
Covenants or Visitation Rights 73     9.1.5 Breach of Other Covenants 74    
9.1.6 Defaults in Other Agreements or Indebtedness 74     9.1.7 Final Judgments
or Orders 74     9.1.8 Loan Document Unenforceable 74     9.1.9 Uninsured
Losses; Proceedings Against Assets 74     9.1.10 Events Relating to Plans and
Benefit Arrangements 74

 

iv

 

 

    9.1.11 Change of Control 74     9.1.12 Relief Proceedings 74   9.2
Consequences of Event of Default 75     9.2.1 Events of Default Other Than
Bankruptcy, Insolvency or Reorganization Proceedings 75     9.2.2 Bankruptcy,
Insolvency or Reorganization Proceedings 75     9.2.3 Set-off 75     9.2.4
Application of Proceeds 75           10.   THE ADMINISTRATIVE AGENT 76   10.1
Appointment and Authority 76   10.2 Rights as a Lender 76   10.3 Exculpatory
Provisions 76   10.4 Reliance by Administrative Agent 77   10.5 Delegation of
Duties 78   10.6 Resignation of Administrative Agent 78   10.7 Non-Reliance on
Administrative Agent and Other Lenders 79   10.8 No Other Duties, etc. 79   10.9
Administrative Agent's Fee 79   10.10 Authorization to Release Collateral and
Guarantors 79   10.11 No Reliance on Administrative Agent's Customer
Identification Program 79           11.   MISCELLANEOUS 79   11.1 Modifications,
Amendments or Waivers 79     11.1.1 Increase of Commitment 79     11.1.2
Extension of Payment; Reduction of Principal Interest or Fees; Modification of
Terms of Payment 79     11.1.3 Release of Collateral or Guarantor 80     11.1.4
Miscellaneous 80   11.2 No Implied Waivers; Cumulative Remedies 80   11.3
Expenses; Indemnity; Damage Waiver 80     11.3.1 Costs and Expenses 80    
11.3.2 Indemnification by the Borrower 81     11.3.3 Reimbursement by Lenders 81
    11.3.4 Waiver of Consequential Damages, Etc. 81     11.3.5 Payments 82  
11.4 Holidays 82   11.5 Notices; Effectiveness; Electronic Communication 82    
11.5.1 Notices Generally 82     11.5.2 Electronic Communications 82     11.5.3
Change of Address, Etc. 82   11.6 Severability 82   11.7 Duration; Survival 83  
11.8 Successors and Assigns 83     11.8.1 Successors and Assigns Generally 83  
  11.8.2 Assignments by Lenders 83     11.8.3 Register 84

 

v

 

 

    11.8.4 Participations 85     11.8.5 Certain Pledges; Successors and Assigns
Generally 86   11.9 Confidentiality 86     11.9.1 General 86     11.9.2 Sharing
Information With Affiliates of the Lenders 86   11.10 Counterparts; Integration;
Effectiveness 86     11.10.1 Counterparts; Integration; Effectiveness 86   11.11
CHOICE OF LAW; SUBMISSION TO JURISDICTION; WAIVER OF VENUE; SERVICE OF PROCESS;
WAIVER OF JURY TRIAL 87     11.11.1 Governing Law 87     11.11.2 SUBMISSION TO
JURISDICTION 87     11.11.3 WAIVER OF VENUE 87     11.11.4 SERVICE OF PROCESS 87
    11.11.5 WAIVER OF JURY TRIAL 88   11.12 USA Patriot Act Notice 88   11.13
Amendment and Restatement 88

 

LIST OF SCHEDULES AND EXHIBITS

 

SCHEDULES

 

SCHEDULE 1.1(A) - PRICING GRID SCHEDULE 1.1(B) - COMMITMENTS OF LENDERS AND
ADDRESSES FOR NOTICES SCHEDULE 1.1(P) - PERMITTED LIENS SCHEDULE 1.1(R) - REAL
PROPERTY SCHEDULE 2.9 - EXISTING LETTERS OF CREDIT SCHEDULE 6.1.1 -
QUALIFICATIONS TO DO BUSINESS SCHEDULE 6.1.2 - SUBSIDIARIES SCHEDULE 6.1.4 - NO
CONFLICT; MATERIAL AGREEMENTS; CONSENTS SCHEDULE 6.1.14 - ENVIRONMENTAL
DISCLOSURES SCHEDULE 7.1.1 - OPINION OF COUNSEL SCHEDULE 7.1.1(xvi)- OTHER REAL
PROPERTY - TITLE INSURANCE REQUIRED SCHEDULE 8.1.3 - INSURANCE REQUIREMENTS
RELATING TO COLLATERAL SCHEDULE 8.2.1 - EXISTING INDEBTEDNESS       EXHIBITS    
      EXHIBIT 1.1(A) - ASSIGNMENT AND ASSUMPTION AGREEMENT EXHIBIT 1.1(C) -
COLLATERAL ASSIGNMENT EXHIBIT 1.1(G)(1) - GUARANTOR JOINDER EXHIBIT 1.1(G)(2) -
GUARANTY AGREEMENT EXHIBIT 1.1(H) - HALLADOR SUBORDINATION AGREEMENT EXHIBIT
1.1(I)(1) - INDEMNITY EXHIBIT 1.1(I)(2) - INTERCOMPANY SUBORDINATION AGREEMENT
EXHIBIT 1.1(M) - MORTGAGE EXHIBIT 1.1(N)(1) - REVOLVING CREDIT NOTE EXHIBIT
1.1(N)(2) - SWING LOAN NOTE EXHIBIT 1.1(N)(3) - TERM NOTE EXHIBIT 1.1(P) -
PLEDGE AGREEMENT EXHIBIT 1.1(S) - SECURITY AGREEMENT EXHIBIT 2.5.1 - LOAN
REQUEST

 

vi

 

 

EXHIBIT 2.5.2 - SWING LOAN REQUEST EXHIBIT 2.11 - NEW LENDER JOINDER EXHIBIT
5.9.7(A) - U.S. TAX COMPLIANCE CERTIFICATE (For Foreign Lenders That Are Not
Partnerships For U.S. Federal Income Tax Purposes) EXHIBIT 5.9.7(B) - U.S. TAX
COMPLIANCE CERTIFICATE (For Foreign Participants That Are Not Partnerships For
U.S. Federal Income Tax Purposes) EXHIBIT 5.9.7(C) - U.S. TAX COMPLIANCE
CERTIFICATE (For Foreign Participants That Are Partnerships For U.S. Federal
Income Tax Purposes) EXHIBIT 5.9.7(D) - U.S. TAX COMPLIANCE CERTIFICATE (For
Foreign Lenders That Are Partnerships For U.S. Federal Income Tax Purposes)
EXHIBIT 8.3.3 - QUARTERLY COMPLIANCE CERTIFICATE

 

vii

 

 

 

SECOND AMENDED AND RESTATED CREDIT AGREEMENT

 

THIS SECOND AMENDED AND RESTATED CREDIT AGREEMENT (as hereafter amended, the
"Agreement") is dated as of August 29, 2014 and is made by and among SUNRISE
COAL, LLC, an Indiana limited liability company (the "Borrower"), each of THE
GUARANTORS (as hereinafter defined), the LENDERS (as hereinafter defined), and
PNC BANK, NATIONAL ASSOCIATION, in its capacity as administrative agent for the
Lenders under this Agreement (hereinafter referred to in such capacity as the
"Administrative Agent").

 

The Borrower has requested the Lenders to provide (i) a revolving credit
facility to the Borrower in an aggregate principal amount not to exceed
$250,000,000 (subject to an increase pursuant to Section 2.11 [Increase in
Revolving Credit Commitments and Term Loans]) and (ii) a term loan facility to
the Borrower in an aggregate principal amount not to exceed $175,000,000
(subject to an increase pursuant to Section 2.11 [Increase in Revolving Credit
Commitments and Term Loans]). In consideration of their mutual covenants and
agreements hereinafter set forth and intending to be legally bound hereby, the
parties hereto covenant and agree as follows:

 

1.          CERTAIN DEFINITIONS

 

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

 

2012 Credit Agreement shall mean that certain Credit Agreement by and among the
Borrower, certain guarantors party thereto, certain lenders party thereto and
PNC, as administrative agent, dated as of October 18, 2012, as amended.

 

Acquisition Documents shall have the meaning specified in Section 7.1.1(xix).

 

Administrative Agent shall mean PNC Bank, National Association, and its
successors and assigns.

 

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

 

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

 

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

 

1

 

 

Ancillary Security Documents shall mean all documents, instruments,
environmental reports, agreements, endorsements, policies and certificates
requested by the Administrative Agent and customarily delivered by any property
owner in connection with a mortgage financing. Without limiting the generality
of the foregoing, examples of Ancillary Security Documents would include
insurance policies (other than title insurance) or certificates regarding any
collateral, lien searches, estoppel letters, flood insurance certifications,
environmental audits which shall meet the Administrative Agent's minimum
requirements for phase I environmental assessments or phase II environmental
assessments, as applicable, opinions of counsel and the like.

 

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

 

Applicable Commitment Fee Rate shall mean the percentage rate per annum based on
the Leverage Ratio as of the most recent fiscal quarter ended according to the
pricing grid on Schedule 1.1(A) below the heading "Commitment Fee."

 

Applicable Letter of Credit Fee Rate shall mean the percentage rate per annum
based on the Leverage Ratio as of the most recent fiscal quarter ended according
to the pricing grid on Schedule 1.1(A) below the heading "Letter of Credit Fee."

 

Applicable Margin shall mean, as applicable:

 

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

 

(B)         the percentage spread to be added to the Base Rate applicable to
Term Loans under the Base Rate Option based on the Leverage Ratio as of the most
recent fiscal quarter ended according to the pricing grid on Schedule 1.1(A)
below the heading "Term Loan Base Rate Spread",

 

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

 

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

 

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

 

2

 

 

Assignment and Assumption means an assignment and assumption entered into by a
Lender and an assignee permitted under Section 11.8 [Successors and Assigns], in
substantially the form of Exhibit 1.1(A).

 

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

 

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

 

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

 

Base Rate Option shall mean the option of the Borrower to have Loans bear
interest at the rate and under the terms set forth in either Section 4.1.1(i)
[Revolving Credit Base Rate Option] or Section 4.1.2(i) [Term Loan Base Rate
Options], as applicable.

 

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

 

Borrower shall mean Sunrise Coal, LLC, a limited liability company organized and
existing under the laws of the State of Indiana.

 

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

 

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

 

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

 

3

 

 

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

 

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

 

CFTC shall mean the Commodity Futures Trading Commission.

 

Change in Law shall mean the occurrence, after the date of this Agreement, of
any of the following: (i) the adoption or taking effect of any Law, (ii) any
change in any Law or in the administration, interpretation, implementation or
application thereof by any Official Body or (iii) the making or issuance of any
request, rule, guideline or directive (whether or not having the force of Law)
by any Official Body; provided that notwithstanding anything herein to the
contrary, (x) the Dodd-Frank Wall Street Reform and Consumer Protection Act and
all requests, rules, regulations, guidelines, interpretations or directives
thereunder or issued in connection therewith (whether or not having the force of
Law) and (y) all requests, rules, regulations, guidelines, interpretations or
directives promulgated by the Bank for International Settlements, the Basel
Committee on Banking Supervision (or any successor or similar authority) or the
United States or foreign regulatory authorities (whether or not having the force
of Law), in each case pursuant to Basel III, shall in each case be deemed to be
a Change in Law regardless of the date enacted, adopted, issued, promulgated or
implemented.

 

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

 

Closing Date shall mean the Business Day on which the first Loan shall be made,
which shall be August 29, 2014.

 

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

 

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

 

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

 

Collateral Assignment shall mean the Collateral Assignment in the form of
Exhibit 1.1(C).

 

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

 

4

 

 

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

 

Commitment Fee shall have the meaning specified in Section 2.3 [Commitment
Fees].

 

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

 

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

 

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

 

Consolidated EBIT for any period of determination shall mean (i) the sum of net
income (excluding the effect of non-cash compensation expenses related to common
stock and other equity securities issued to employees), non-cash charges to net
income (other than depreciation and amortization), interest expense, income tax
expense, plus (ii) certain costs and fees incurred in connection with the
Transaction in an amount not to exceed $10,000,000, minus (iii) non-cash credits
to net income, in each case of the Borrower and its Subsidiaries for such period
determined and consolidated in accordance with GAAP.

 

Consolidated EBITDA for any period of determination shall mean (i) the sum of
net income (excluding the effect of non-cash compensation expenses related to
common stock and other equity securities issued to employees), depreciation,
depletion, amortization, other non-cash charges to net income, interest expense,
income tax expense, and the Prosperity Mine Add Back, plus (ii) certain costs
and fees incurred in connection with the Transaction in an amount not to exceed
$10,000,000, minus (iii) non-cash credits to net income, in each case of the
Borrower and its Subsidiaries for such period determined and consolidated in
accordance with GAAP.

 

Consolidated Funded Debt shall mean, without duplication, total Indebtedness for
Borrowed Money of the Loan Parties (other than Hallador) and their Subsidiaries,
determined and consolidated in accordance with GAAP.

 

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

 

5

 

 

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

 

Daily LIBOR Rate shall mean, for any day, the rate per annum determined by the
Administrative Agent by dividing (x) the Published Rate by (y) a number equal to
1.00 minus the LIBOR Reserve Percentage on such day.

 

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

 

6

 

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

7

 

 

Environmentally Sensitive Area shall mean (i) any wetland as defined by
applicable Environmental Laws; (ii) any area designated as a coastal zone
pursuant to applicable Laws, including Environmental Laws; (iii) any area of
historic or archeological significance or scenic area as defined or designated
by applicable Laws, including Environmental Laws; (iv) habitats of endangered
species or threatened species as designated by applicable Laws, including
Environmental Laws or (v) a floodplain or other flood hazard area as defined
pursuant to any applicable Laws.

 

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

 

ERISA Affiliate shall mean, at any time, any trade or business (whether or not
incorporated) under common control with the Borrower and are treated as a single
employer under Section 414 of the Code.

 

ERISA Event means (a) a reportable event (under Section 4043 of ERISA and
regulations thereunder) with respect to a Plan; (b) a withdrawal by Borrower or
any ERISA Affiliate from a Plan subject to Section 4063 of ERISA during a plan
year in which it was a substantial employer (as defined in Section 4001(a)(2) of
ERISA) or a cessation of operations that is treated as such a withdrawal under
Section 4062(e) of ERISA; (c) a complete or partial withdrawal by Borrower or
any ERISA Affiliate from a Multiemployer Plan or notification that a
Multiemployer Plan is in reorganization; (d) the filing of a notice of intent to
terminate, the treatment of a Plan amendment as a termination under Sections
4041 or 4041A of ERISA, or the commencement of proceedings by the PBGC to
terminate a Plan; (e) an event or condition which constitutes grounds under
Section 4042 of ERISA for the termination of, or the appointment of a trustee to
administer, any Plan; or (f) the imposition of any liability under Title IV of
ERISA, other than for PBGC premiums due but not delinquent under Section 4007 of
ERISA, upon Borrower or any ERISA Affiliate.

 

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

 

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

 

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

 

Excess Cash Flow shall be computed as of the close of each fiscal year by taking
the difference between Consolidated EBIT of the Loan Parties for such fiscal
year and Fixed Charges for such fiscal year. All determinations of Excess Cash
Flow shall be based on the immediately preceding fiscal year and shall be made
following the delivery by the Borrower to the Administrative Agent of the
Borrower's audited financial statements for such preceding year.

 

8

 

 

 

Excluded Collateral shall mean the following:

 

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

 

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

 

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

 

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

 

9

 

 

Excluded Taxes shall mean any of the following Taxes imposed on or with respect
to a Recipient or required to be withheld or deducted from a payment to a
Recipient, (i) Taxes imposed on or measured by net income (however denominated),
franchise Taxes, and branch profits Taxes, in each case, (a) imposed as a result
of such Recipient being organized under the laws of, or having its principal
office or, in the case of any Lender, its applicable lending office located in,
the jurisdiction imposing such Tax (or any political subdivision thereof) or (b)
that are Other Connection Taxes, (ii) in the case of a Lender, U.S. federal
withholding Taxes imposed on amounts payable to or for the account of such
Lender with respect to an applicable interest in a Loan or Commitment pursuant
to a law in effect on the date on which (a) such Lender acquires such interest
in such Loan or Commitment (other than pursuant to an assignment request by the
Borrower under Section 5.6.2 [Replacement of a Lender]) or (b) such Lender
changes its lending office, except in each case to the extent that, pursuant to
Section 5.9.7 [Status of Lenders], amounts with respect to such Taxes were
payable either to such Lender's assignor immediately before such Lender became a
party hereto or to such Lender immediately before it changed its lending office,
(iii) Taxes attributable to such Recipient's failure to comply with Section
5.9.7 [Status of Lenders], and (iv) any U.S. federal withholding Taxes imposed
under FATCA (except to the extent imposed due to the failure of the Borrower to
provide documentation or information to the IRS).

 

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

 

Expiration Date shall mean August 29, 2019.

 

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

 

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

 

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

 

10

 

 

Federal Funds Open Rate for any day shall mean the rate per annum (based on a
year of 360 days and actual days elapsed) which is the daily federal funds open
rate as quoted by ICAP North America, Inc. (or any successor) as set forth on
the Bloomberg Screen BTMM for that day opposite the caption "OPEN" (or on such
other substitute Bloomberg Screen that displays such rate), or as set forth on
such other recognized electronic source used for the purpose of displaying such
rate as selected by the Administrative Agent (for the purpose of this
definition, an "Alternate Source") (or if such rate for such day does not appear
on the Bloomberg Screen BTMM (or any substitute screen) or on any Alternate
Source, or if there shall at any time, for any reason, no longer exist a
Bloomberg Screen BTMM (or any substitute screen) or any Alternate Source, a
comparable replacement rate determined by the Administrative Agent at such time
(which determination shall be conclusive absent manifest error); provided
however, that if such day is not a Business Day, the Federal Funds Open Rate for
such day shall be the "open" rate on the immediately preceding Business Day. If
and when the Federal Funds Open Rate changes, the rate of interest with respect
to any advance to which the Federal Funds Open Rate applies will change
automatically without notice to the Borrower, effective on the date of any such
change.

 

Fixed Charge Coverage Ratio shall mean the ratio of (i) Consolidated EBIT to
(ii) Fixed Charges.

 

Fixed Charges shall mean for any period of determination the sum of interest
expense, income taxes due and payable and scheduled principal installments on
Indebtedness (as adjusted for prepayments), in each case of the Borrower and its
Subsidiaries for such period determined and consolidated in accordance with
GAAP.

 

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

 

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

 

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

 

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

 

11

 

 

Guarantor shall mean each of the parties to this Agreement which is designated
as a "Guarantor" on the signature page hereof and each other Person which joins
this Agreement as a Guarantor after the date hereof.

 

Guarantor Joinder shall mean a joinder by a Person as a Guarantor under the Loan
Documents in the form of Exhibit 1.1(G)(1).

 

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

 

Guaranty Agreement shall mean the Continuing Agreement of Guaranty and
Suretyship in substantially the form of Exhibit 1.1(G)(2) executed and delivered
by each of the Guarantors.

 

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

 

Hallador Subordinated Debt shall mean Indebtedness as of the Closing Date of the
Borrower to Hallador which is subordinated pursuant to the Hallador
Subordination Agreement.

 

Hallador Subordination Agreement shall mean the Hallador Subordination Agreement
and Assignment of Note in substantially the form of Exhibit 1.1(H) executed by
each of Hallador and the Administrative Agent.

 

Hedge Liabilities shall mean the Interest Rate Hedge Liabilities.

 

Increasing Lender shall have the meaning assigned to that term in Section 2.11
[Increase in Commitments].

 

Incremental Loan shall have the meaning assigned to that term in Section 2.11
[Increase in Commitments].

 

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

 

12

 

 

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

 

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

 

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

 

Indemnity shall mean the Indemnity Agreement in the form of Exhibit 1.1(I)(1)
relating to possible environmental liabilities associated with any of the owned
or leased real property of the Loan Parties (other than Hallador) or their
Subsidiaries.

 

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

 

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

 

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

 

Intercompany Subordination Agreement shall mean a Subordination Agreement among
the Loan Parties in the form attached hereto as Exhibit 1.1(I)(2).

 

13

 

 

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

 

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

 

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

 

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

 

IRS shall mean the United States Internal Revenue Service.

 

ISP98 shall have the meaning specified in Section 11.11.1 [Governing Law].

 

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

 

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

 

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

 

14

 

 

Lender Provided Interest Rate Hedge shall mean an Interest Rate Hedge which is
provided by any Lender or its Affiliate and with respect to which such Lender
confirms to Administrative Agent in writing prior to the execution thereof that
it: (a) is documented in a standard International Swaps and Derivatives
Association Master Agreement or another reasonable and customary manner, (b)
provides for the method of calculating the reimbursable amount of the provider's
credit exposure in a reasonable and customary manner, and (c) is entered into
for hedging (rather than speculative) purposes. The liabilities owing to the
provider of any Lender Provided Interest Rate Hedge (the "Interest Rate Hedge
Liabilities") by any Loan Party that is party to such Lender Provided Interest
Rate Hedge shall, for purposes of this Agreement and all other Loan Documents be
"Obligations" of such Person and of each other Loan Party, be guaranteed
obligations under any Guaranty Agreement and secured obligations under any other
Loan Document, as applicable, and otherwise treated as Obligations for purposes
of the other Loan Documents, except to the extent constituting Excluded Hedge
Liabilities of such Person. The Liens securing the Hedge Liabilities shall be
pari passu with the Liens securing all other Obligations under this Agreement
and the other Loan Documents, subject to the express provisions of Section 9.2.4
[Application of Proceeds].

 

Lenders shall mean the financial institutions named on Schedule 1.1(B) and their
respective successors and assigns as permitted hereunder, each of which is
referred to herein as a Lender. For the purpose of any Loan Document which
provides for the granting of a security interest or other Lien to the Lenders or
to the Administrative Agent for the benefit of the Lenders as security for the
Obligations, "Lenders" shall include any Affiliate of a Lender to which such
Obligation is owed.

 

Lessor Consents shall have the meaning specified in Section 7.1.1(viii)
[Deliveries].

 

Letter of Credit shall have the meaning specified in Section 2.9.1 [Issuance of
Letters of Credit].

 

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

 

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

 

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

 

Letter of Credit Sublimit shall have the meaning specified in Section 2.9.1
[Issuance of Letters of Credit].

 

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

 

15

 

 

LIBOR Rate shall mean, with respect to the Loans comprising any Borrowing
Tranche to which the LIBOR Rate Option applies for any Interest Period, the
interest rate per annum determined by the Administrative Agent by dividing (the
resulting quotient rounded upwards, if necessary, to the nearest 1/100th of 1%
per annum) (i) the rate which appears on the Bloomberg Page BBAM1 (or on such
other substitute Bloomberg page that displays rates at which US dollar deposits
are offered by leading banks in the London interbank deposit market), or the
rate which is quoted by another source selected by the Administrative Agent
which has been approved by the British Bankers' Association as an authorized
information vendor for the purpose of displaying rates at which US dollar
deposits are offered by leading banks in the London interbank deposit market (a
"LIBOR Alternate Source"), at approximately 11:00 a.m., London time, two (2)
Business Days prior to the commencement of such Interest Period as the London
interbank offered rate for U.S. Dollars for an amount comparable to such
Borrowing Tranche and having a borrowing date and a maturity comparable to such
Interest Period (or if there shall at any time, for any reason, no longer exist
a Bloomberg Page BBAM1 (or any substitute page) or any LIBOR Alternate Source, a
comparable replacement rate determined by the Administrative Agent at such time
(which determination shall be conclusive absent manifest error)), by (ii) a
number equal to 1.00 minus the LIBOR Reserve Percentage. LIBOR may also be
expressed by the following formula:

 

Average of London interbank offered rates quoted
by Bloomberg or appropriate successor as shown on

LIBOR = Bloomberg Page BBAM1   1.00 - LIBOR Reserve Percentage

 

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

 

LIBOR Rate Option shall mean the option of the Borrower to have Loans bear
interest at the rate and under the terms set forth in Section 4.1.1(ii)
[Revolving Credit LIBOR Rate Option] or Section 4.1.2(ii) [Term Loan LIBOR Rate
Option], as applicable.

 

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

 

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

 

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

 

16

 

 

Loan Parties shall mean the Borrower and the Guarantors.

 

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

 

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

 

Material Adverse Change shall mean any set of circumstances or events which (a)
has or could reasonably be expected to have any material adverse effect
whatsoever upon the validity or enforceability of this Agreement or any other
Loan Document, (b) is or could reasonably be expected to be material and adverse
to the business, properties, assets, financial condition, results of operations
of the Loan Parties taken as a whole, (c) impairs materially or could reasonably
be expected to impair materially the ability of the Loan Parties taken as a
whole to duly and punctually pay or perform its Indebtedness, or (d) impairs
materially or could reasonably be expected to impair materially the ability of
the Administrative Agent or any of the Lenders, to the extent permitted, to
enforce their legal remedies pursuant to this Agreement or any other Loan
Document.

 

Maturity Date shall mean August 29, 2019.

 

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

 

Mortgage or Mortgages shall mean each Mortgage in substantially the form of
Exhibit 1.1(M) executed and delivered by the Loan Parties (other than Hallador)
to the Administrative Agent for the benefit of the Lenders with respect to the
Real Property that is owned by any of the Loan Parties (other than Hallador), or
with respect to the Real Property that is leased by any of the Loan Parties
(other than Hallador) and that includes surface rights and significant
facilities of any of the Loan Parties (other than Hallador), but not including
any leased office space.

 

Multiemployer Plan shall mean any employee benefit plan which is a
"multiemployer plan" within the meaning of Section 4001(a)(3) of ERISA and to
which the Borrower or any member of the ERISA Group is then making or accruing
an obligation to make contributions or, within the preceding five Plan years,
has made or had an obligation to make such contributions.

 

Net Cash Equity Infusion from Savoy shall mean any and all cash dividends,
distributions, or other payments from Savoy to Hallador or any Loan Party except
for such distributions paid with respect to tax liabilities that have accrued
due to such party’s ownership of Savoy.

 

17

 

 

New Lender shall have the meaning assigned to that term in Section 2.11
[Increase in Revolving Credit Commitments].

 

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

 

Notes shall mean, collectively, and Note shall mean separately, the promissory
notes in the form of Exhibit 1.1(N)(1) evidencing the Revolving Credit Loans, in
the form of Exhibit 1.1(N)(2) evidencing the Swing Loan, and in the form of
Exhibit 1.1(N)(3) evidencing the Term Loans.

 

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

 

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

 

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

 

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

 

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

 

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

 

18

 

 

Other Taxes shall mean all present or future stamp, court or documentary,
intangible, recording, filing or similar Taxes that arise from any payment made
under, from the execution, delivery, performance, enforcement or registration
of, from the receipt or perfection of a security interest under, or otherwise
with respect to, any Loan Document, except any such Taxes that are Other
Connection Taxes imposed with respect to an assignment (other than an assignment
made pursuant to Section 5.6.2 [Replacement of a Lender]).

 

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

 

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

 

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

 

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

 

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

 

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

 

Permitted Acquisition shall have the meaning assigned to that term in Section
8.2.6 [Liquidations, Mergers, Consolidations, Acquisitions].

 

Permitted Investments shall mean:

 

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

 

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

 

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

 

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

 

19

 

 

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

 

(vi)        Permitted Acquisitions.

 

Permitted Liens shall mean:

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(viii)      Any Lien existing on the date of this Agreement and described on
Schedule 1.1(P), provided that the principal amount secured thereby is not
hereafter increased, and no additional assets become subject to such Lien;

 

(ix)         Purchase Money Security Interests; provided that the aggregate
amount of loans and deferred payments secured by such Purchase Money Security
Interests shall not exceed $5,000,000 (excluding for the purpose of this
computation any loans or deferred payments secured by Liens described on
Schedule 1.1(P));

 

20

 

 

(x)        The following, (A) if the validity or amount thereof is being
contested in good faith by appropriate and lawful proceedings diligently
conducted so long as levy and execution thereon either has not commenced or have
been stayed and continue to be stayed or (B) if a final judgment is entered and
such judgment is discharged within thirty (30) days of entry, and in either case
they do not in the aggregate, materially impair the ability of any Loan Party to
perform its Obligations hereunder or under the other Loan Documents:

 

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

 

(2)         Defects of title to, real or personal property;

 

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

 

(4)         Liens resulting from final judgments or orders described in Section
9.1.7 [Final Judgments or Orders];

 

(xi)       Judgment Liens not constituting an Event of Default;

 

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

 

(xiii)       Liens existing on any property prior to the acquisition thereof by
a Loan Party or any Subsidiary thereof including pursuant to a Permitted
Acquisition; provided that (1) such Lien is not created in contemplation of or
in connection with such acquisition or such Permitted Acquisition, as
applicable, (2) such Lien shall not apply to any other property of the Loan
Parties or any Subsidiary thereof and (3) such Lien secures only Indebtedness
permitted under Sections 8.2.1(xiii) and 8.2.1(xiv) on the date of such
acquisition or Permitted Acquisition, as the case may be; and

 

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

 

Permitted Tax Distributions shall mean any cash distributions made to any equity
owners of Borrower, pursuant to Section 7.1 of the Sunrise Coal, LLC Amended and
Restated Operating Agreement dated July 31, 2006.

 

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

 

21

 

 

Plan shall mean at any time an employee pension benefit plan (including a
Multiple Employer Plan, but not a Multiemployer Plan) which is covered by Title
IV of ERISA or is subject to the minimum funding standards under Section 412 of
the Code and either (i) is maintained by any member of the ERISA Group for
employees of any member of the ERISA Group or (ii) has at any time within the
preceding five years been maintained by any entity which was at such time a
member of the ERISA Group for employees of any entity which was at such time a
member of the ERISA Group.

 

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

 

PNC Bank shall mean PNC Bank, National Association, its successors and assigns.

 

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

 

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

 

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

 

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

 

Pro Forma Basis and Pro Forma Compliance means, for purposes of calculating
compliance with the financial covenant set forth in ‎ Section 8.2.16 [Maximum
Leverage Ratio] in respect of a Permitted Acquisition or 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 (together
with a Permitted Acquisition, 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
a Permitted Acquisition, the Person or property so acquired shall be included,
(b) any retirement of Indebtedness and (c) any incurrence or assumption of
Indebtedness by any Loan Party in connection therewith (and if such Indebtedness
has a floating or formula rate, such Indebtedness 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
Indebtedness as at the relevant date of determination).

 

22

 

 

Prosperity Mine Add Back shall mean, as of the Closing Date, an amount equal to
$26,028,760.00 (the “Initial Addback Amount”). The Initial Addback Amount shall
be reduced by an amount that is 1/365 of the Initial Addback Amount for each day
after the Closing Date, for a period of one year after the Closing Date.

 

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

 

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

 

Qualified ECP Loan Party shall mean each Loan Party that on the Eligibility Date
is (a) a corporation, partnership, proprietorship, organization, trust, or other
entity other than a “commodity pool” as defined in Section 1a(10) of the CEA and
CFTC regulations thereunder that has total assets exceeding $10,000,000, or (b)
an Eligible Contract Participant that can cause another person to qualify as an
Eligible Contract Participant on the Eligibility Date under Section
1a(18)(A)(v)(II) of the CEA by entering into or otherwise providing a “letter of
credit or keepwell, support, or other agreement” for purposes of Section
1a(18)(A)(v)(II) of the CEA.

 

Ratable Share shall mean:

 

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

 

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

 

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

 

23

 

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

24

 

 

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

 

Required Interest Rate Hedge shall have the meaning ascribed to such term in
Section 8.1.15 [Required Interest Rate Hedge] herein.

 

Required Lenders shall mean

 

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

 

(B)         If there exist three (3) or more Lenders, any group of Lenders
(excluding any Defaulting Lender) if the sum of the Loans (excluding the Swing
Loans), Reimbursement Obligations and Letter of Credit Borrowings of such
Lenders (excluding any Defaulting Lender) then outstanding aggregates greater
than 50% of the total principal amount of all of the Loans (excluding the Swing
Loans), Reimbursement Obligations and Letter of Credit Borrowings of all of the
Lenders (excluding any Defaulting Lender) then outstanding.

 

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

 

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

 

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

 

Revolving Credit Commitment shall mean, as to any Lender at any time, the amount
initially set forth opposite its name on Schedule 1.1(B) in the column labeled
"Amount of Commitment for Revolving Credit Loans," as such Commitment is
thereafter assigned or modified, including any amounts by which such Lender
agrees to increase its Commitment pursuant to Section 2.11 [Increase in
Revolving Credit Commitments] and Revolving Credit Commitments shall mean the
aggregate Revolving Credit Commitments of all of the Lenders.

 

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

 

25

 

 

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

 

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

 

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

 

Savoy shall mean Savoy Energy, L.P.

 

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

 

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

 

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

 

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

 

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

 

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

 

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Stock Purchase Agreement shall mean that certain Stock Purchase Agreement dated
as of June 30, 2014, by and among Borrower, Vectren Utility Services, Inc., and
Vectren pursuant to which Borrower is acquiring 100% of the stock of Vectren.

 

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

 

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

 

Swap shall mean any "swap" as defined in Section 1a(47) of the CEA and
regulations thereunder, other than (a) a swap entered into, or subject to the
rules of, a board of trade designated as a contract market under Section 5 of
the CEA, or (b) a commodity option entered into pursuant to CFTC Regulation
32.3(a).

 

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

 

Swing Loan Commitment shall mean PNC Bank's commitment to make Swing Loans to
the Borrower pursuant to Section 2.1.2 [Swing Loan Commitment] hereof in an
aggregate principal amount up to $20,000,000.

 

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

 

Swing Loan Note shall mean the Swing Loan Note of the Borrower in the form of
Exhibit 1.1(N)(2) evidencing the Swing Loans, together with all amendments,
extensions, renewals, replacements, refinancings or refundings thereof in whole
or in part.

 

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

 

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

 

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

 

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

 

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Term Loan Commitment shall mean, as to any Lender at any time, the amount
initially set forth opposite its name on Schedule 1.1(B) in the column labeled
"Amount of Commitment for Term Loans," as such Commitment is thereafter assigned
or modified and Term Loan Commitments shall mean the aggregate Term Loan
Commitments of all of the Lenders.

 

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

 

Transaction shall mean the acquisition of 100% of the stock of Vectren pursuant
to the terms and conditions contained in the Stock Purchase Agreement and the
other Acquisition Documents.

 

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

 

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

 

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

 

U.S. Person shall mean any Person that is a "United States Person" as defined in
Section 7701(a)(30) of the Code.

 

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

 

Vectren shall mean Vectren Fuels, Inc., an Indiana corporation.

 

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

 

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

 

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

 

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

 

2.       REVOLVING CREDIT AND SWING LOAN FACILITIES

 

2.1       Revolving Credit Commitments.

 

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

 

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

 

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

 

2.3      Commitment Fees. Accruing from the date hereof until the Expiration
Date, the Borrower agrees to pay to the Administrative Agent for the account of
each Lender according to its Ratable Share, a nonrefundable commitment fee (the
"Commitment Fee") equal to the Applicable Commitment Fee Rate (computed on the
basis of a year of 365 or 366 days, as the case may be, and actual days elapsed)
times the average daily difference between the amount of (i) the Revolving
Credit Commitments and (ii) the Revolving Facility Usage (provided however, that
solely in connection with determining the share of each Lender in the Commitment
Fee, the Revolving Facility Usage with respect to the portion of the Commitment
Fee allocated to PNC shall include the full amount of the outstanding Swing
Loans, and with respect to the portion of the Commitment Fee allocated by the
Administrative Agent to all of the Lenders other than PNC, such portion of the
Commitment Fee shall be calculated (according to each such Lender's Ratable
Share) as if the Revolving Facility Usage excludes the outstanding Swing Loans);
provided, further, that any Commitment Fee accrued with respect to the Revolving
Credit Commitment of a Defaulting Lender during the period prior to the time
such Lender became a Defaulting Lender and unpaid at such time shall not be
payable by the Borrower so long as such Lender shall be a Defaulting Lender
except to the extent that such Commitment Fee shall otherwise have been due and
payable by the Borrower prior to such time; and provided further that no
Commitment Fee shall accrue with respect to the Revolving Credit Commitment of a
Defaulting Lender so long as such Lender shall be a Defaulting Lender. Subject
to the proviso in the directly preceding sentence, all Commitment Fees shall be
payable in arrears on each Payment Date.

 

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

 

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2.5      Revolving Credit Loan Requests; Swing Loan Requests.

 

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

 

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

 

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

 

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

 

2.6.2      Presumptions by the Administrative Agent. Unless the Administrative
Agent shall have received notice from a Lender prior to the proposed date of any
Loan that such Lender will not make available to the Administrative Agent such
Lender's share of such Loan, the Administrative Agent may assume that such
Lender has made such share available on such date in accordance with Section
2.6.1 [Making Revolving Credit Loans] and may, in reliance upon such assumption,
make available to the Borrower a corresponding amount. In such event, if a
Lender has not in fact made its share of the applicable Loan available to the
Administrative Agent, then the applicable Lender and the Borrower severally
agree to pay to the Administrative Agent forthwith on demand such corresponding
amount with interest thereon, for each day from and including the date such
amount is made available to the Borrower to but excluding the date of payment to
the Administrative Agent, at (i) in the case of a payment to be made by such
Lender, the greater of the Federal Funds Effective Rate and a rate determined by
the Administrative Agent in accordance with banking industry rules on interbank
compensation and (ii) in the case of a payment to be made by the Borrower, the
interest rate applicable to Loans under the Base Rate Option. If such Lender
pays its share of the applicable Loan to the Administrative Agent, then the
amount so paid shall constitute such Lender's Loan. Any payment by the Borrower
shall be without prejudice to any claim the Borrower may have against a Lender
that shall have failed to make such payment to the Administrative Agent.

 

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

 

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

 

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

 

2.6.6      Swing Loans Under Cash Management Agreements. In addition to making
Swing Loans pursuant to the foregoing provisions of Section 2.6.3 [Making Swing
Loans], without the requirement for a specific request from the Borrower
pursuant to Section 2.5.2 [Swing Loan Requests], PNC Bank may make Swing Loans
to the Borrower in accordance with the provisions of the agreements between the
Borrower and PNC Bank relating to the Borrower's deposit, sweep and other
accounts at PNC Bank and related arrangements and agreements regarding the
management and investment of the Borrower's cash assets as in effect from time
to time (the "Cash Management Agreements") to the extent of the daily aggregate
net negative balance in the Borrower's accounts which are subject to the
provisions of the Cash Management Agreements. Swing Loans made pursuant to this
Section 2.6.6 in accordance with the provisions of the Cash Management
Agreements shall (i) be subject to the limitations as to aggregate amount set
forth in Section 2.1.2 [Swing Loan Commitment], (ii) not be subject to the
limitations as to individual amount set forth in Section 2.5.2 [Swing Loan
Requests], (iii) be payable by the Borrower, both as to principal and interest,
at the rates and times set forth in the Cash Management Agreements (but in no
event later than the Expiration Date), (iv) not be made at any time after PNC
Bank has received written notice of the occurrence of an Event of Default and so
long as such Event of Default shall continue to exist, or, unless consented to
by the Required Lenders, a Potential Default and so long as such shall continue
to exist, (v) if not repaid by the Borrower in accordance with the provisions of
the Cash Management Agreements, be subject to each Lender's obligation pursuant
to Section 2.6.5 [Borrowings to Repay Swing Loans], and (vi) except as provided
in the foregoing subsections (i) through (v), be subject to all of the terms and
conditions of this Section 2.6.6.

 

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

 

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

 

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2.9       Letter of Credit Subfacility.

 

2.9.1      Issuance of Letters of Credit. On the Closing Date, the outstanding
letters of credit previously issued by any Lender under the 2012 Credit
Agreement that are set forth on Schedule 2.9 (the "Existing Letters of Credit")
will automatically, without any action on the part of any Person, be deemed to
be Letters of Credit issued hereunder for the account of the Borrower for all
purposes of this Agreement and the other Loan Documents. Borrower may at any
time prior to the Expiration Date request the issuance of a standby or trade
letter of credit (each a "Letter of Credit") on behalf of itself or another Loan
Party (other than Hallador), or the amendment or extension of an existing Letter
of Credit, by delivering or having such other Loan Party deliver to the Issuing
Lender (with a copy to the Administrative Agent) a completed application and
agreement for letters of credit, or request for such amendment or extension, as
applicable, in such form as the Issuing Lender may specify from time to time by
no later than 10:00 a.m. at least five (5) Business Days, or such shorter period
as may be agreed to by the Issuing Lender, in advance of the proposed date of
issuance. Promptly after receipt of any letter of credit application, the
Issuing Lender shall confirm with the Administrative Agent (by telephone or in
writing) that the Administrative Agent has received a copy of such Letter of
Credit application and if not, such Issuing Lender will provide Administrative
Agent with a copy thereof.

 

Unless the Issuing Lender has received notice from any Lender, Administrative
Agent or any Loan Party (other than Hallador), at least one day prior to the
requested date of issuance, amendment or extension of the applicable Letter of
Credit, that one or more applicable conditions in Section 7 [Conditions of
Lending and Issuance of Letters of Credit] is not satisfied, then, subject to
the terms and conditions hereof and in reliance on the agreements of the other
Lenders set forth in this Section 2.9, the Issuing Lender or any of the Issuing
Lender's Affiliates will issue a Letter of Credit or agree to such amendment or
extension, provided that each Letter of Credit shall (A) have a maximum maturity
of twelve (12) months from the date of issuance, and (B) in no event expire
later than the Expiration Date and provided further that in no event shall (i)
the Letter of Credit Obligations exceed, at any one time, $35,000,000 (the
"Letter of Credit Sublimit") or (ii) the Revolving Facility Usage exceed, at any
one time, the Revolving Credit Commitments. Each request by the Borrower for the
issuance, amendment or extension of a Letter of Credit shall be deemed to be a
representation by the Borrower that it shall be in compliance with the preceding
sentence and with Section 7 [Conditions of Lending and Issuance of Letters of
Credit] after giving effect to the requested issuance, amendment or extension of
such Letter of Credit. Promptly after its delivery of any Letter of Credit or
any amendment to a Letter of Credit to the beneficiary thereof, the applicable
Issuing Lender will also deliver to Borrower and Administrative Agent a true and
complete copy of such Letter of Credit or amendment.

 

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

 

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

 

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

 

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

 

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

 

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2.9.3.3           With respect to any unreimbursed drawing that is not converted
into Revolving Credit Loans under the Base Rate Option to the Borrower in whole
or in part as contemplated by Section 2.9.3.1, because of the Borrower's failure
to satisfy the conditions set forth in Section 7.2 [Each Loan or Letter of
Credit] other than any notice requirements, or for any other reason, the
Borrower shall be deemed to have incurred from the Issuing Lender a borrowing
(each a "Letter of Credit Borrowing") in the amount of such drawing. Such Letter
of Credit Borrowing shall be due and payable on demand (together with interest)
and shall bear interest at the rate per annum applicable to the Revolving Credit
Loans under the Base Rate Option. Each Lender's payment to the Administrative
Agent for the account of the Issuing Lender pursuant to Section 2.9.3
[Disbursements, Reimbursement] shall be deemed to be a payment in respect of its
participation in such Letter of Credit Borrowing (each a "Participation
Advance") from such Lender in satisfaction of its participation obligation under
this Section 2.9.3.

 

2.9.4       Repayment of Participation Advances.

 

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

 

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

 

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

 

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

 

2.9.7      Nature of Participation and Reimbursement Obligations. Each Lender's
obligation in accordance with this Agreement to make the Revolving Credit Loans
or Participation Advances, as contemplated by Section 2.9.3 [Disbursements,
Reimbursement], as a result of a drawing under a Letter of Credit, and the
Obligations of the Borrower to reimburse the Issuing Lender upon a draw under a
Letter of Credit, shall be absolute, unconditional and irrevocable, and shall be
performed strictly in accordance with the terms of this Section 2.9 under all
circumstances, including the following circumstances:

 

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

 

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

 

(iii)        any lack of validity or enforceability of any Letter of Credit;

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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(iv)        so long as such Lender is a Defaulting Lender, PNC Bank shall not be
required to fund any Swing Loans and the Issuing Lender shall not be required to
issue, amend or increase any Letter of Credit, unless the Issuing Lender is
satisfied that the related exposure and the Defaulting Lender's then outstanding
Letter of Credit Obligations will be 100% covered by the Revolving Credit
Commitments of the non-Defaulting Lenders and/or cash collateral will be
provided by the Borrower in accordance with Section 2.10(iii), and participating
interests in any newly made Swing Loan or any newly issued or increased Letter
of Credit shall be allocated among non-Defaulting Lenders in a manner consistent
with Section 2.10(iii)(a) (and such Defaulting Lender shall not participate
therein).

 

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

 

In the event that the Administrative Agent, the Borrower, PNC Bank and the
Issuing Lender agree in writing that a Defaulting Lender has adequately remedied
all matters that caused such Lender to be a Defaulting Lender, then the
Administrative Agent will so notify the parties hereto, and the Ratable Share of
the Swing Loans and Letter of Credit Obligations of the Lenders shall be
readjusted to reflect the inclusion of such Lender's Commitment, and on such
date such Lender shall purchase at par such of the Loans of the other Lenders
(other than Swing Loans) as the Administrative Agent shall determine may be
necessary in order for such Lender to hold such Loans in accordance with its
Ratable Share.

 

2.11     Increase in Revolving Credit Commitments and Term Loans.

 

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

 

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

 

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

 

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

 

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(d)         Aggregate Commitments. The increase in the Commitments shall not be
more than $50,000,000 in the aggregate, and after giving effect to such
increase, the total Commitments shall not exceed $475,000,000.

 

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

 

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

 

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

 

(h)          Notes. The Borrower shall execute and deliver (1) to each
Increasing Lender a replacement revolving credit Note and/or term Note
reflecting the new amount of such Increasing Lender's Commitment after giving
effect to the increase (and the prior Note issued to such Increasing Lender
shall be deemed to be terminated and returned to the Borrower as soon as
possible) and (2) to each New Lender a revolving credit Note and/or term Note
reflecting the amount of such New Lender's Commitments.

 

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

 

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

 

(k)          New Lenders—Joinder. Each New Lender shall execute a lender joinder
in substantially the form of Exhibit 2.11 pursuant to which such New Lender
shall join and become a party to this Agreement and the other Loan Documents
with a Commitment in the amount set forth in such lender joinder.

 

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(l)          Amendment. Incremental Term Loans shall be effected by an amendment
to this Agreement setting forth the terms of the Incremental Term Loans executed
by (x) the Administrative Agent, (y) each Lender or New Lender agreeing to
provide any portion of such Incremental Term Loan and (z) the Loan Parties, and
reaffirmations of the Loan Documents executed by the Loan Parties, in each case
in form and substance reasonably satisfactory to the Administrative Agent. Such
amendment may, without the consent of any other Lenders, effect such amendments
to this Agreement and the other Loan Documents as may be necessary or
appropriate, in the reasonable opinion of the Administrative Agent and the
Borrower, to effect the provisions of this Section 2.11.

 

(ii)        Treatment of Outstanding Loans and Letters of Credit.

 

(a)          Repayment of Outstanding Loans; Borrowing of New Loans. On the
effective date of such increase, the Borrower shall repay all Revolving Credit
Loans then outstanding, subject to the Borrower's indemnity obligations under
Section 5.10 [Indemnity]; provided that it may borrow new Revolving Credit Loans
with a Borrowing Date on such date. Each of the Lenders shall participate in any
new Revolving Credit Loans made on or after such date in accordance with their
respective Ratable Shares after giving effect to the increase in Revolving
Credit Commitments contemplated by this Section 2.11.

 

(b)          Outstanding Letters of Credit. Repayment of Outstanding Loans;
Borrowing of New Loans. On the effective date of such increase, each Increasing
Lender and each New Lender (i) will be deemed to have purchased a participation
in each then outstanding Letter of Credit equal to its Ratable Share of such
Letter of Credit and the participation of each other Lender in such Letter of
Credit shall be adjusted accordingly and (ii) will acquire its Ratable Share of
all outstanding Participation Advances.

 

3.          TERM LOANS

 

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

 

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

 

Fiscal Quarters Ending   Amount Equal to the Applicable Percentage Set Forth
Below of the Initial Term Loan       September 30, 2014 through June 30, 2015  
2.5%       September 30, 2015 through June 30, 2017   3.75%       September 30,
2017 through June 30, 2019   5.00%       Maturity Date   Any and all outstanding
principal and interest

 

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3.3       Incremental Term Loans. In the event that the Borrower exercises its
option to increase the Term Loans or incur Incremental Term Loans pursuant to
Section 2.11 [Increase in Commitments], the repayment amounts shall be increased
to reflect the repayment of any new Term Loans or Incremental Term Loans.

 

4.          INTEREST RATES

 

4.1       Interest Rate Options. The Borrower shall pay interest in respect of
the outstanding unpaid principal amount of the Loans as selected by it from the
Base Rate Option or LIBOR Rate Option set forth below applicable to the Loans,
it being understood that, subject to the provisions of this Agreement, the
Borrower may select different Interest Rate Options and different Interest
Periods to apply simultaneously to the Loans comprising different Borrowing
Tranches and may convert to or renew one or more Interest Rate Options with
respect to all or any portion of the Loans comprising any Borrowing Tranche;
provided that there shall not be at any one time outstanding more than five (5)
Borrowing Tranches in the aggregate among all of the Loans and provided further
that if an Event of Default or Potential Default exists and is continuing, the
Borrower may not request, convert to, or renew the LIBOR Rate Option for any
Loans and the Required Lenders may demand that all existing Borrowing Tranches
bearing interest under the LIBOR Rate Option shall be converted immediately to
the Base Rate Option, subject to the obligation of the Borrower to pay any
indemnity under Section 5.10 [Indemnity] in connection with such conversion. If
at any time the designated rate applicable to any Loan made by any Lender
exceeds such Lender's highest lawful rate, the rate of interest on such Lender's
Loan shall be limited to such Lender's highest lawful rate.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

4.3       Interest Periods. At any time when the Borrower shall select, convert
to or renew a LIBOR Rate Option, the Borrower shall notify the Administrative
Agent thereof at least three (3) Business Days prior to the effective date of
such LIBOR Rate Option by delivering a Loan Request. The notice shall specify an
Interest Period during which such Interest Rate Option shall apply.
Notwithstanding the preceding sentence, the following provisions shall apply to
any selection of, renewal of, or conversion to a LIBOR Rate Option:

 

4.3.1      Amount of Borrowing Tranche. Each Borrowing Tranche of Loans under
the LIBOR Rate Option shall be in integral multiples of $500,000 and not less
than $1,000,000; and

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(i)          adequate and reasonable means do not exist for ascertaining such
LIBOR Rate, or

 

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

 

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

 

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

 

(i)         the making, maintenance or funding of any Loan to which a LIBOR Rate
Option applies has been made impracticable or unlawful by compliance by such
Lender in good faith with any Law or any interpretation or application thereof
by any Official Body or with any request or directive of any such Official Body
(whether or not having the force of Law), or

 

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

 

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

 

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

 

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

 

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

 

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5.          PAYMENTS

 

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

 

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

 

5.3       Sharing of Payments by Lenders. If any Lender shall, by exercising any
right of setoff, counterclaim or banker's lien, by receipt of voluntary payment,
by realization upon security, or by any other non-pro rata source, obtain
payment in respect of any principal of or interest on any of its Loans or other
obligations hereunder resulting in such Lender's receiving payment of a
proportion of the aggregate amount of its Loans and accrued interest thereon or
other such obligations greater than the pro rata share of the amount such Lender
is entitled thereto, then the Lender receiving such greater proportion shall (a)
notify the Administrative Agent of such fact, and (b) purchase (for cash at face
value) participations in the Loans and such other obligations of the other
Lenders, or make such other adjustments as shall be equitable, so that the
benefit of all such payments shall be shared by the Lenders ratably in
accordance with the aggregate amount of principal of and accrued interest on
their respective Loans and other amounts owing them, provided that:

 

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

 

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

 

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

 

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

 

5.5       Interest Payment Dates. Interest on Loans to which the Base Rate
Option applies shall be due and payable in arrears on each Payment Date.
Interest on Loans to which the LIBOR Rate Option applies shall be due and
payable on the last day of each Interest Period for those Loans and, if such
Interest Period is longer than three (3) Months, also on the 90th day of such
Interest Period. Interest on mandatory prepayments of principal under Section
5.7 [Mandatory Prepayments] shall be due on the date such mandatory prepayment
is due. Interest on the principal amount of each Loan or other monetary
Obligation shall be due and payable on demand after such principal amount or
other monetary Obligation becomes due and payable (whether on the stated
Expiration Date, Maturity Date, upon acceleration or otherwise).

 

5.6       Voluntary Prepayments.

 

5.6.1      Right to Prepay. The Borrower shall have the right at its option from
time to time to prepay the Loans in whole or part without premium or penalty
(except as provided in Section 5.6.2 [Replacement of a Lender] below, in Section
5.8 [Increased Costs] and Section 5.10 [Indemnity]). Whenever the Borrower
desires to prepay any part of the Loans, it shall provide a prepayment notice to
the Administrative Agent by 1:00 p.m. at least one (1) Business Day prior to the
date of prepayment of the Revolving Credit Loans or Term Loans or no later than
1:00 p.m., Pittsburgh time, on the date of prepayment of Swing Loans, setting
forth the following information:

 

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

 

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

 

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

 

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

 

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

 

47

 

 

5.6.2      Replacement of a Lender. In the event any Lender (i) gives notice
under Section 4.5 [LIBOR Rate Unascertainable, Etc.], (ii) requests compensation
under Section 5.8 [Increased Costs], or requires the Borrower to pay any
Indemnified Taxes or additional amount to any Lender or any Official Body for
the account of any Lender pursuant to Section 5.9 [Taxes], (iii) is a Defaulting
Lender, (iv) becomes subject to the control of an Official Body (other than
normal and customary supervision), or (v) is a Non-Consenting Lender referred to
in Section 11.1 [Modifications, Amendments or Waivers] then in any such event
the Borrower may, at its sole expense, upon notice to such Lender and the
Administrative Agent, require such Lender to assign and delegate, without
recourse (in accordance with and subject to the restrictions contained in, and
consents required by, Section 11.8 [Successors and Assigns]), all of its
interests, rights (other than existing rights to payment pursuant to Sections
5.8 [Increased Costs] or 5.9 [Taxes]) and obligations under this Agreement and
the related Loan Documents to an assignee that shall assume such obligations
(which assignee may be another Lender, if a Lender accepts such assignment),
provided that:

 

(i)          the Borrower shall have paid to the Administrative Agent the
assignment fee specified in Section 11.8 [Successors and Assigns];

 

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

 

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

 

(iv)        such assignment does not conflict with applicable Law.

 

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

 

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

 

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5.7        Mandatory Prepayments.

 

5.7.1      Sale of Assets. Within five (5) Business Days of any sale of assets
authorized by Section 8.2.7(v) [Dispositions of Assets or Subsidiaries] with net
proceeds (as estimated in good faith by the Borrower net of (i) all Taxes
payable by the Loan Parties in cash in respect of sale of assets; (ii)
reasonable and customary costs and expenses actually incurred in connection with
the disposition, including legal fees and sales commissions; (iii) amounts
applied to repayment of Indebtedness secured by a Permitted Lien on the assets
sold which is senior to the Lenders' Prior Security Interest; (iv) transfer or
similar taxes; and (v) as applicable, reserves for indemnities, until such
reserves are no longer needed) greater than $10,000,000 in any single
transaction or series of transactions, the Borrower shall make a mandatory
prepayment of principal equal to the net proceeds of such sale (as estimated in
good faith by the Borrower net of (i) all Taxes payable by the Loan Parties in
cash in respect of sale of assets; (ii) reasonable and customary costs and
expenses actually incurred in connection with the disposition, including legal
fees and sales commissions; (iii) amounts applied to repayment of Indebtedness
secured by a Permitted Lien on the assets sold which is senior to the Lenders'
Prior Security Interest; (iv) transfer or similar taxes; and (v) as applicable,
reserves for indemnities, until such reserves are no longer needed), together
with accrued interest on such principal amount.

 

5.7.2      Excess Cash Flow. Commencing with the 2015 fiscal year and at such
times as when the Leverage Ratio as determined as of the end of the most recent
fiscal quarter is greater than or equal to 2.0 to 1.0, the Borrower shall make a
mandatory prepayment of principal equal to 50% of Excess Cash Flow for the
immediately preceding fiscal year together with accrued interest on such
principal amount within ten (10) days of delivery of the Borrower's audited
annual financial statements for the preceding fiscal year.

 

5.7.3      Savoy Distributions. At any time when the Leverage Ratio as
determined as of the end of the most recent fiscal quarter is greater than or
equal to 2.0 to 1.0, the Borrower shall make a mandatory prepayment of principal
equal to 100% of the Net Cash Equity Infusion from Savoy within ten (10) days of
the receipt of such cash distributions and/or dividends.

 

5.7.4      Sale of Savoy. The Borrower shall make a mandatory prepayment of
principal equal to 100% of the after tax net cash proceeds received by any Loan
Party and/or Hallador in connection with the sale of such party’s interest in
Savoy within 10 days of the receipt of such proceeds.

 

5.7.5      Application Among Interest Rate Options. All prepayments required
pursuant to this Section 5.7 shall first be applied to the Term Loans in inverse
order to the scheduled principal payments and then to the Revolving Credit
Loans. After giving effect to the first sentence of this Section 5.7.5, all such
prepayments shall next be applied among the Interest Rate Options to the
principal amount of the Loans subject to the Base Rate Option, then to Loans
subject to a LIBOR Rate Option. In accordance with Section 5.10 [Indemnity], the
Borrower shall indemnify the Lenders for any loss or expense, incurred with
respect to any such prepayments applied against Loans subject to a LIBOR Rate
Option on any day other than the last day of the applicable Interest Period.

 

5.8       Increased Costs.

 

5.8.1     Increased Costs Generally. If any Change in Law shall:

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

5.9      Taxes.

 

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

 

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

 

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

 

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

 

5.9.5      Indemnification by the Lenders. Each Lender shall severally indemnify
the Administrative Agent, within ten (10) days after demand therefor, for (i)
any Indemnified Taxes attributable to such Lender (but only to the extent that
any Loan Party has not already indemnified the Administrative Agent for such
Indemnified Taxes and without limiting the obligation of any of the Loan Parties
to do so), (ii) any Taxes attributable to such Lender's failure to comply with
the provisions of Section 11.8.4 [Participations] relating to the maintenance of
a Participant Register, and (iii) any Excluded Taxes attributable to such
Lender, in each case, that are payable or paid by the Administrative Agent in
connection with any Loan Document, and any reasonable expenses arising therefrom
or with respect thereto, whether or not such Taxes were correctly or legally
imposed or asserted by the relevant Official Body. A certificate as to the
amount of such payment or liability delivered to any Lender by the
Administrative Agent shall be conclusive absent manifest error. Each Lender
hereby authorizes the Administrative Agent to set off and apply any and all
amounts at any time owing to such Lender under any Loan Document or otherwise
payable by the Administrative Agent to the Lender from any other source against
any amount due to the Administrative Agent under this Section 5.9.5.

 

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

 

5.9.7      Status of Lenders.

 

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

 

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

 

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

 

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

 

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

 

(B)         executed originals of IRS Form W-8ECI;

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(ii)         attempt by the Borrower to revoke (expressly, by later inconsistent
notices or otherwise) in whole or part any Loan Requests under Section 2.5
[Revolving Credit Loan Requests; Swing Loan Requests] or Section 4.3 [Interest
Periods] or notice relating to prepayments under Section 5.6 [Voluntary
Prepayments], or

 

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

 

If any Lender sustains or incurs any such loss or expense, it shall from time to
time notify the Borrower of the amount determined in good faith by such Lender
(which determination may include such assumptions, allocations of costs and
expenses and averaging or attribution methods as such Lender shall deem
reasonable) to be necessary to indemnify such Lender for such loss or expense.
Such notice shall set forth in reasonable detail the basis for such
determination. Such amount shall be due and payable by the Borrower to such
Lender ten (10) Business Days after such notice is given.

 

5.11     Settlement Date Procedures. In order to minimize the transfer of funds
between the Lenders and the Administrative Agent, the Borrower may borrow, repay
and reborrow Swing Loans and PNC Bank may make Swing Loans as provided in
Section 2.1.2 [Swing Loan Commitments] hereof during the period between
Settlement Dates. The Administrative Agent shall notify each Lender of its
Ratable Share of the total of the Revolving Credit Loans and the Swing Loans
(each a "Required Share"). On such Settlement Date, each Lender shall pay to the
Administrative Agent the amount equal to the difference between its Required
Share and its Revolving Credit Loans, and the Administrative Agent shall pay to
each Lender its Ratable Share of all payments made by the Borrower to the
Administrative Agent with respect to the Revolving Credit Loans. The
Administrative Agent shall also effect settlement in accordance with the
foregoing sentence on the proposed Borrowing Dates for Revolving Credit Loans
and on any mandatory prepayment date as provided for herein and may at its
option effect settlement on any other Business Day. These settlement procedures
are established solely as a matter of administrative convenience, and nothing
contained in this Section 5.11 shall relieve the Lenders of their obligations to
fund Revolving Credit Loans on dates other than a Settlement Date pursuant to
Section 2.1.2 [Swing Loan Commitment]. The Administrative Agent may at any time
at its option for any reason whatsoever require each Lender to pay immediately
to the Administrative Agent such Lender's Ratable Share of the outstanding
Revolving Credit Loans and each Lender may at any time require the
Administrative Agent to pay immediately to such Lender its Ratable Share of all
payments made by the Borrower to the Administrative Agent with respect to the
Revolving Credit Loans.

 

6.          REPRESENTATIONS AND WARRANTIES

 

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

 

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

 

6.1.2      Subsidiaries and Owners; Investment Companies. Schedule 6.1.2 states
(i) the name of each of the Borrower's Subsidiaries, its jurisdiction of
organization and the amount, percentage and type of equity interests in such
Subsidiary (the "Subsidiary Equity Interests"), (ii) the name of each holder of
an equity interest in the Borrower, the amount, percentage and type of such
equity interest (the "Borrower Equity Interests"), and (iii) any options,
warrants or other rights outstanding to purchase any such equity interests
referred to in clause (i) or (ii) (collectively the "Equity Interests"). The
Borrower and each Subsidiary of the Borrower has good and marketable title to
all of the Subsidiary Equity Interests it purports to own, free and clear in
each case of any Lien and all such Subsidiary Equity Interests have been validly
issued, fully paid and nonassessable. None of the Loan Parties (other than
Hallador) or Subsidiaries of such Loan Party is an "investment company"
registered or required to be registered under the Investment Company Act of 1940
or under the "control" of an "investment company" as such terms are defined in
the Investment Company Act of 1940 and shall not become such an "investment
company" or under such "control." None of the Loan Parties (other than Hallador)
is a "holding company" or any "affiliate" of a "holding company" or of a
"subsidiary company" of a "holding company" within the meaning of the Public
Utility Holding Company Act of 2005, as amended. None of the Loan Parties (other
than Hallador) is subject to any other federal or state statute or regulation
limiting its ability to incur Indebtedness for borrowed money.

 

6.1.3      Validity and Binding Effect. This Agreement and each of the other
Loan Documents (i) has been duly and validly executed and delivered by each Loan
Party (other than Hallador), and (ii) constitutes, or will constitute, legal,
valid and binding obligations of each such Loan Party which is or will be a
party thereto, enforceable against such Loan Party in accordance with its terms,
except as the same may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws in effect from time to time relating
to or affecting the enforcement of creditors' rights generally and by general
principles of equity.

 

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

 

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

 

6.1.6     Financial Statements.

 

(i)          Historical Statements. The Borrower has delivered to the
Administrative Agent copies of its production reports, balance sheet, income
statement and cash flow statement for and as of the end of the fiscal year ended
December 31, 2013. In addition, the Borrower has delivered to the Administrative
Agent copies of its interim production reports, income statement, balance sheet
and cash flow statement for the fiscal year to date and as of the end of the
fiscal quarter ended [June 30, 2014] (all such annual and interim statements
being collectively referred to as the "Statements"). The Statements were
compiled from the books and records maintained by the Borrower's management, are
correct and complete and fairly represent the financial condition of the
Borrower and its Subsidiaries as of the respective dates thereof and the results
of operations for the fiscal periods then ended and have been prepared in
accordance with GAAP consistently applied, subject (in the case of the interim
statements) to normal year-end audit adjustments.

 

(ii)         Accuracy of Financial Statements. Neither the Borrower nor any
Subsidiary of the Borrower has any liabilities, contingent or otherwise, or
forward or long-term commitments that are not disclosed in the Statements or in
the notes thereto, and except as disclosed therein there are no unrealized or
anticipated losses from any commitments of the Borrower or any Subsidiary of the
Borrower which may cause a Material Adverse Change. Since December 31, 2013, no
Material Adverse Change has occurred.

 

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

 

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

 

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

 

6.1.10    Patents, Trademarks, Copyrights, Licenses, Etc. No Loan Party (other
than Hallador) and no Subsidiary of each such Loan Party owns or possesses any
material patents, trademarks, service marks, trade names, or copyrights. Each
Loan Party (other than Hallador) owns or possesses all the material licenses,
registrations, franchises, permits and rights necessary to own and operate its
properties and to carry on its business as presently conducted and planned to be
conducted by such Loan Party or Subsidiary, without known possible, alleged or
actual conflict with the rights of others.

 

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

 

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

 

6.1.13    ERISA Compliance.(i) (i) Each Plan is in compliance in all material
respects with the applicable provisions of ERISA, the Code and other federal or
state Laws. To the best knowledge of Borrower, each Plan that is intended to
qualify under Section 401(a) of the Code has received a favorable determination
or opinion letter from the IRS or an application for such a letter will be
submitted or is currently being processed by the IRS with respect thereto, and
nothing has occurred which would prevent, or cause the loss of, such
qualification. Borrower and each ERISA Affiliate have made all required
contributions to each Plan subject to Section 412 of the Code, and no
application for a funding waiver or an extension of any amortization period
pursuant to Section 412 of the Code has been made with respect to any Plan.

 

(ii)         No ERISA Event has occurred or is reasonably expected to occur; (a)
no Plan has any unfunded pension liability (i.e. excess of benefit liabilities
over the current value of that Plan's assets, determined in accordance with the
assumptions used for funding the Plan for the applicable plan year); (b) neither
Borrower nor any ERISA Affiliate has incurred, or reasonably expects to incur,
any liability under Title IV of ERISA with respect to any Plan (other than
premiums due and not delinquent under Section 4007 of ERISA); (c) neither
Borrower nor any ERISA Affiliate has incurred, or reasonably expects to incur,
any liability (and no event has occurred which, with the giving of notice under
Section 4219 of ERISA, would result in such liability) under Sections 4201 or
4243 of ERISA with respect to a Multiemployer Plan; and (d) neither Borrower nor
any ERISA Affiliate has engaged in a transaction that could be subject to
Sections 4069 or 4212(c) of ERISA.

 

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6.1.14    Environmental Matters. Except for those items described on
Schedule 6.1.14, none of which items, individually or collectively, could be
reasonably expected to result in a Material Adverse Change:

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

6.1.17    Title to Properties. A Lien on all Real Property owned by each Loan
Party (other than Hallador) has been granted to the Administrative Agent for the
benefit of the Lenders pursuant to a Mortgage and other appropriate Security
Documents, except for Real Property acquired by a Loan Party (other than
Hallador) in which a Mortgage and other appropriate Security Documents will be
executed and delivered by such Loan Party in favor of the Administrative Agent
for the benefit of the Secured Parties within the time frames provided in
Section 8.1.11 [Collateral and Additional Collateral; Execution and Delivery of
Additional Security Documents] or Section 8.2.9 [Subsidiaries, Partnerships and
Joint Ventures], as applicable. Each Loan Party (other than Hallador) and each
Subsidiary of such Loan Party has good and sufficient title to or valid
leasehold interest in all material properties, assets and other rights that are
reflected as owned or leased on its most recent audited balance sheet, free and
clear of all Liens except Permitted Liens, and subject to the terms and
conditions of the applicable leases. All leases of property are in full force
and effect, except for those leases of property where such failure would not
result in a Material Adverse Change.

 

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

 

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

 

6.1.20    Permit Blockage. No Loan Party (other than Hallador) has been barred
for a period in excess of fourteen (14) consecutive days from receiving surface
mining or underground mining permits pursuant to the permit block provisions of
the Surface Mining Control and Reclamation Act, 30 U.S.C. §§ 1201 et seq., and
the regulations promulgated thereto, or any corresponding state laws or
regulations.

 

6.1.21    Mining Property. The Borrower owns or has an interest in all Real
Property (whether owned or leased) as necessary for the mining operations and
related operations and activities of the Borrower as currently conducted.
Neither Borrower nor any of its Affiliates will directly or indirectly enter
into any transaction with Hallador or any of its Affiliates (other than the Loan
Parties) with respect to any Real Property (whether owned or leased) which is
used or useful in the mining operations and related operations and activities of
the Borrower, except as may be entered into after the Closing Date and for
transactions that are consistent with the Borrower’s ordinary course of business
and that are undertaken upon fair and reasonable terms fully disclosed to the
Administrative Agent and no less favorable than would be obtained in a
comparable arms-length transaction with a non-Affiliate.

 

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

 

6.2           Updates to Schedules. Should any of the information or disclosures
provided on any of the Schedules attached hereto become outdated or incorrect in
any material respect, the Borrower shall promptly provide the Administrative
Agent in writing with such revisions or updates to such Schedule as may be
necessary or appropriate to update or correct same; provided, however, that (i)
Schedules 1.1(R), 6.1.1, and 6.1.2 shall not be deemed to have been amended,
modified or superseded by any such correction or update, nor shall any breach of
warranty or representation resulting from the inaccuracy or incompleteness of
any such Schedule be deemed to have been cured thereby, unless and until the
Administrative Agent, in its sole and absolute discretion, shall have accepted
in writing such revisions or updates to such Schedules and (ii) all remaining
Schedules shall not be deemed to have been amended, modified or superseded by
any such correction or update, nor shall any breach of warranty or
representation resulting from the inaccuracy or incompleteness of any such
Schedule be deemed to have been cured thereby, unless and until the Required
Lenders, in their sole and absolute discretion, shall have accepted in writing
such revisions or updates to such Schedule.

 

7.          CONDITIONS OF LENDING AND ISSUANCE OF LETTERS OF CREDIT

 

The obligation of each Lender to make Loans and of the Issuing Lender to issue
Letters of Credit hereunder is subject to the performance by each of the Loan
Parties of its Obligations to be performed hereunder at or prior to the making
of any such Loans or issuance of such Letters of Credit and to the satisfaction
of the following further conditions:

 

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7.1        First Loans and Letters of Credit.

 

7.1.1     Deliveries. On the Closing Date, the Administrative Agent shall have
received each of the following in form and substance satisfactory to the
Administrative Agent: A certificate of each of the Loan Parties signed by an
Authorized Officer, dated the Closing Date stating that such Loan Party is in
compliance with each of its respective representations, warranties, covenants
and conditions hereunder, or in the case of Hallador, under this Agreement and
the Guaranty, and no Event of Default or Potential Default exists and no
Material Adverse Change has occurred and no material litigation exists since
December 31, 2013.

 

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

 

(iii)        This Agreement and each of the other Loan Documents signed by an
Authorized Officer and all appropriate financing statements and appropriate
stock powers and certificates evidencing the pledged Collateral.

 

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

 

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

 

(vi)        A duly completed closing date compliance certificate dated as of the
Closing Date and giving Pro Forma Effect to the Transaction, signed by an
Authorized Officer of Borrower which includes satisfactory evidence that (1) the
Leverage Ratio does not exceed 3.00 to 1.00 and (2) the aggregate amount of
unrestricted cash on hand of the Borrower plus Availability is at least
$30,000,000.

 

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

 

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

 

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(ix)       (xiii) To permit the refinancing by the Lenders of the loans
outstanding under the 2012 Credit Agreement, (1) the Borrower shall request
Loans in an amount sufficient to refinance the loans under the 2012 Credit
Agreement by delivering to the Administrative Agent an appropriately completed
irrevocable Loan Request not later than 11:00 a.m., on the first Borrowing Date
(which shall be the Closing Date) pursuant to which Loans (to which the Base
Rate Option applies) are requested; and (2) contemporaneously with the execution
and effectiveness of this Agreement and utilizing a portion of the proceeds of
the Loans, the Borrower shall pay in full all amounts outstanding under the 2012
Credit Agreement, including all unpaid principal, interest, breakage fees and
all other fees and charges thereunder in order to accomplish the amendment and
restatement thereof as of the Closing Date. Each Lender that was a bank under
the 2012 Credit Agreement, by execution of this Agreement, waives all notice of
prepayment of loans and all notice of termination of the commitments under the
2012 Credit Agreement, and consents to such termination and prepayment. In the
event that the Borrower submits a Loan Request hereunder, then the Borrower
agrees to indemnify the Lenders for any and all liabilities, losses, or expenses
arising therefrom in accordance with the standards set forth in Section 5.10
[Indemnity], regardless of whether this Agreement has become effective.

 

(x)         A Lien search in acceptable scope and with acceptable results.

 

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

 

(xii)       Evidence that all of Required Mining Permits are in full force and
effect in accordance with their terms.

 

(xiii)      Audited financial statements of Hallador for the fiscal year ended
December 31, 2013, prepared in accordance with GAAP and consolidating schedules
for the balance sheet, statement of income, retained earnings and cash flow of
the Borrower certified (subject to normal year-end audit adjustments and without
footnotes) by the Chief Executive Officer, President or Chief Financial Officer
of the Borrower as having been prepared in accordance with GAAP, all as more
fully described in Section 8.3.2 [Annual Financial Statements].

 

(xiv)      Receipt of Target's audited consolidated financial statements as well
as its consolidating financial statements, prepared in accordance with GAAP, for
the 2011 through 2013 fiscal years ended, as well as any applicable interim
financial statements;

 

(xv)       The projected pro-forma financial projections (including balance
sheets and statements of operations and cash flows) of the Borrower and the
Target for each fiscal year from 2014 through 2019, which shall be satisfactory
to the Administrative Agent (including all assumptions).

 

(xvi)      Receipt of title insurance and/or title insurance endorsements with
respect to (1) all Real Property for which a title insurance policy has
previously been issued in favor of the Administrative Agent and (2) all other
Real Property that the Administrative Agent requires to be covered by a title
insurance policy, each in form and substance satisfactory to the Administrative
Agent, as described on Schedule 7.1.1(xvi).

 

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

 

(xviii)    The Chief Executive Officer President or Chief Financial Officer of
each Loan Party, acting in their capacities as such officers, shall have
delivered a certificate in form and substance satisfactory to the Administrative
Agent as to the capital adequacy and solvency of each Loan Party after giving
effect to the transactions contemplated hereby.

 

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(xix)      A certified copy of the Stock Purchase Agreement and any related
acquisition document (collectively, the "Acquisition Documents"), each in form
and substance satisfactory to the Administrative Agent (including all
amendments, supplements, schedules and exhibits thereto.

 

(xx)       Consummation of the Transaction on terms and conditions as set forth
in the Acquisition Documents, without material waiver, amendment or post closing
conditions thereto unless consented to by the Administrative Agent.

 

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

 

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

 

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

 

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

 

8.          COVENANTS

 

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

 

8.1       Affirmative Covenants.

 

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

 

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

 

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

 

8.1.4      Maintenance of Properties and Leases. Each Loan Party shall, and each
Loan Party (other than Hallador) shall cause each of its Subsidiaries to,
maintain in good repair, working order and condition (ordinary wear and tear
excepted) in accordance with the general practice of other businesses of similar
character and size, all of those properties useful or necessary to its business,
and from time to time, such Loan Party will make or cause to be made all
appropriate repairs, renewals or replacements thereof.

 

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

 

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

 

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

 

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

 

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

 

8.1.10    Keepwell. Each Qualified ECP Loan Party jointly and severally
(together with each other Qualified ECP Loan Party) hereby absolutely
unconditionally and irrevocably (a) guarantees the prompt payment and
performance of all Swap Obligations owing by each Non-Qualifying Party (it being
understood and agreed that this guarantee is a guaranty of payment and not of
collection), and (b) undertakes to provide such funds or other support as may be
needed from time to time by any Non-Qualifying Party to honor all of such Non
Qualifying Party's obligations under this Agreement or any other Loan Document
in respect of Swap Obligations (provided, however, that each Qualified ECP Loan
Party shall only be liable under this Section 8.1.10 for the maximum amount of
such liability that can be hereby incurred without rendering its obligations
under this Section 8.1.10, or otherwise under this Agreement or any other Loan
Document, voidable under applicable law, including applicable law relating to
fraudulent conveyance or fraudulent transfer, and not for any greater amount).
The obligations of each Qualified ECP Loan Party under this Section 8.1.10 shall
remain in full force and effect until payment in full of the Obligations and
termination of this Agreement and the other Loan Documents. Each Qualified ECP
Loan Party intends that this Section 8.1.10 constitute, and this Section 8.1.10
shall be deemed to constitute, a guarantee of the obligations of, and a
"keepwell, support, or other agreement" for the benefit of each other Loan Party
for all purposes of Section 1a(18(A)(v)(II) of the CEA.

 

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

 

(i)          Pursuant to the Loan Documents, the Loan Parties shall grant, or
cause to be granted, to the Administrative Agent, for the benefit of the
Lenders, a first priority security interest in and lien on, subject only to
Permitted Liens (A) all Collateral, including (i) all capital stock and equity
interests owned by the Loan Parties (other than Hallador), but only up to 65% of
the capital stock or equity interests of any Foreign Subsidiaries, (ii)
Hallador's equity interest in the Borrower, and (iii) all of the other assets of
the Loan Parties (other than Hallador) including all accounts, inventory,
as-extracted collateral, fixtures, equipment, investment property, instruments,
chattel paper, general intangibles, coal reserves, methane gas reserves, coal
bed methane reserves, mineral rights, owned and leased Real Property, leasehold
interests, patents and trademarks of each such Loan Parties and (B) all other
assets of the Loan Parties (other than Hallador), whether owned on the Closing
Date or subsequently acquired;

 

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(ii)         Without limiting the generality of the foregoing, each applicable
Loan Party (other than Hallador) which owns or leases any real property shall
promptly, but in any event within six months of acquiring or leasing such real
property, (a) execute and deliver any and all (1) Mortgages substantially in the
form of Exhibit 1.1(M) hereof, and (2) other Security Documents and Ancillary
Security Documents reasonably requested by the Agent to grant a first priority
Lien (subject only to Permitted Liens), (b) with respect to any Real Property on
which any Loan Party obtains title insurance, provide the Administrative Agent
with notice that it is receiving such title insurance, and, at the
Administrative Agent’s request, have such title insurer provide the Lenders with
a lender’s title insurance policy in an equivalent amount on such Real Property,
and (c) with respect to any leased Real Property, any Lessor Consents that the
Administrative Agent reasonably requests, in such Loan Party's interest in such
real property (other than Excluded Collateral), in favor of the Administrative
Agent, for the ratable benefit of the Lenders, as security for the Obligations.
In furtherance of the foregoing, the Loan Parties shall diligently cooperate
with and assist, at their own expense, the Administrative Agent in procuring any
and all Mortgages, Security Documents, Ancillary Security Documents and Lessor
Consents. Each Loan Party (other than Hallador) hereby appoints any officer or
agent of the Administrative Agent as its true and lawful attorney, for it and in
its name, place and stead, to make, execute, deliver, and cause to be recorded
or filed any or all such Mortgages, deeds of trust, assignments, pledges,
security interests, financing statements and additional documents and agreements
relating thereto, granting unto said attorney full power to do any and all
things said attorney may consider reasonably necessary or appropriate to be done
with respect to the Mortgages as fully and effectively as such Loan Party might
or could do, and hereby ratifying and confirming all its said attorney shall
lawfully do or cause to be done by virtue hereof. This power of attorney is
coupled with an interest and shall be irrevocable for the terms of this
Agreement and all transactions hereunder. All reasonable out-of-pocket costs and
expenses incurred by the Administrative Agent in connection with the exercise of
the rights under this Section 8.1.11(ii) shall be paid by the Loan Parties on
demand of the Administrative Agent. The Loan Parties, the Lenders and the
Administrative Agent agree that without any further action on the part of any of
them, upon execution and/or delivery, the Mortgages, other Security Documents,
the Ancillary Security Documents and Lessor Consents shall become Loan Documents
and the assets that are subject to the Mortgages and the other Security
Documents shall become collateral for the Obligations.

 

8.1.12    Maintenance of Coal Supply Agreements and Material Contracts. Each
Loan Party shall maintain and materially comply with the terms and conditions of
all coal supply agreements and material agreement or contract, including, but
not limited to the Acquisition Documents, the nonperformance of which would
reasonably be expected to result in a Material Adverse Change.

 

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

 

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

 

8.1.15    Required Interest Rate Hedge. The Borrower shall have in place one or
more interest rate Swaps with a Lender or financial institution reasonably
acceptable to the Administrative Agent in an amount equal to at least fifty
percent (50%) of the outstanding Term Loans at any given time, and with such
other terms and conditions as shall be reasonably acceptable to the
Administrative Agent (the "Required Interest Rate Hedge"), it being acknowledged
and agreed that the existing Swaps are on terms and conditions acceptable to the
Administrative Agent. Documentation for the Required Interest Rate Hedge shall
be in a standard International Swap Dealer Association Agreement (with
appropriate modifications), shall provide for the method of calculating the
reimbursable amount of the provider's credit exposure in a reasonable and
customary manner, shall be reasonably satisfactory to the Administrative Agent
and, unless such Required Interest Rate Hedge is a Lender Provided Interest Rate
Hedge, shall not require that any collateral be provided as security for such
agreement.

 

8.2      Negative Covenants.

 

8.2.1      Indebtedness. Each of the Loan Parties (other than Hallador) shall
not, and shall not permit any of its Subsidiaries to, at any time create, incur,
assume or suffer to exist any Indebtedness, except:

 

(i)          Indebtedness under the Loan Documents;

 

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

 

(iii)        Capitalized and operating leases;

 

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

 

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(v)         Indebtedness of a Loan Party (other than Hallador) to another Loan
Party which is subordinated pursuant to the Intercompany Subordination
Agreement, and Hallador Subordinated Debt; and

 

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

 

(vii)       Guaranties permitted under Section 8.2.3 [Guaranties];

 

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

 

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

 

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

 

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

 

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

 

(xiii)       [intentionally omitted]

 

(xiv)      Indebtedness incurred and/or assumed in connection with a Permitted
Acquisition (other than the Transaction) in an amount not to exceed $5,000,000
for each such Permitted Acquisition and $15,000,000 in the aggregate for all
such Permitted Acquisitions;

 

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

 

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

 

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

 

8.2.3      Guaranties. Each of the Loan Parties (other than Hallador) shall not,
and shall not permit any of its Subsidiaries to, at any time, directly or
indirectly, become or be liable in respect of any Guaranty, or assume,
guarantee, become surety for, endorse or otherwise agree, become or remain
directly or contingently liable upon or with respect to any obligation or
liability of any other Person, except for Guaranties of Indebtedness of the Loan
Parties permitted hereunder.

 

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

 

(i)          trade credit extended on usual and customary terms in the ordinary
course of business;

 

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

 

(iii)        Permitted Investments

 

(iv)        loans, advances and investments in other Loan Parties (other than
Hallador);

 

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

 

(vi)        investments not to exceed $5,000,000 at any time outstanding,
consisting of promissory notes and other noncash consideration received in
connection with the disposition of property otherwise permitted under this
Agreement;

 

(vii)       advances of payroll payments to employees in the ordinary course of
business; and

 

(viii)      other investments made after the date of this Agreement in an
aggregate amount not to exceed $2,500,000.

 

8.2.5      Dividends and Related Distributions; Hallador Subordinated Debt
Payments.  Each of the Loan Parties (other than Hallador) shall not, and shall
not permit any of its Subsidiaries to, make or pay, or agree to become or remain
liable to make or pay, any dividend or other distribution of any nature (whether
in cash, property, securities or otherwise) on account of or in respect of its
shares of capital stock, partnership interests or limited liability company
interests on account of the purchase, redemption, retirement or acquisition of
its shares of capital stock (or warrants, options or rights therefor),
partnership interests or limited liability company interests, except (i)
dividends or other distributions payable to another Loan Party (other than
Hallador), (ii) Permitted Tax Distributions; provided that the Loan Parties
provide the Administrative Agent with reasonable information setting forth the
amount of each such Permitted Tax Distribution, (iii) other dividends or
distributions to the owners of the Borrower in the amount of up to $3,100,000
payable in each fiscal year, provided, that prior to and immediately after
making such dividends or distributions, the Borrower shall certify: (a) that it
shall be in Pro Forma Compliance with the covenant contained in Section 8.2.16
[Maximum Leverage Ratio] by delivering at least five (5) Business Days prior to
such dividend or distribution a calculation evidencing such compliance, except
that for the sole purpose of measuring such Pro Forma Compliance, the maximum
ratio set forth in Section 8.2.16 [Maximum Leverage Ratio] shall be deemed to be
reduced by 0.25, (b) that the amount of Availability shall not be less than
$30,000,000 and (c) there shall exist no Event of Default. The Borrower shall
not make or pay any principal payments with respect to the Hallador Subordinated
Debt, except principal payments in an amount not to exceed $2,500,000 per
calendar year, provided, that prior to and immediately after making any such
principal payment, the Borrower shall certify: (a) that it shall be in Pro Forma
Compliance with the covenant contained in Section 8.2.16 [Maximum Leverage
Ratio] by delivering at least five (5) Business Days prior to such payment of
principal a calculation evidencing such compliance, except that for the sole
purpose of measuring such Pro Forma Compliance, the maximum ratio set forth in
Section 8.2.16 [Maximum Leverage Ratio] shall be deemed to be reduced by 0.25,
(b) that the amount of Availability shall not be less than $30,000,000 and (c)
there shall exist no Event of Default.

 

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8.2.6     Liquidations, Mergers, Consolidations, Acquisitions. Each of the Loan
Parties shall not, and each Loan Party (other than Hallador) shall not permit
any of its Subsidiaries to, dissolve, liquidate or wind-up its affairs, or
become a party to any merger or consolidation, or acquire by purchase, lease or
otherwise all or substantially all of the assets or capital stock of any other
Person; provided that:

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(viii)      the Borrower shall demonstrate that immediately after giving effect
to such Permitted Acquisition that the amount of Availability shall not be less
than $30,000,000; and

 

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

 

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

 

(i)          transactions involving the sale of inventory in the ordinary course
of business;

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

8.2.14    [Intentionally Omitted].

 

8.2.15    Minimum Fixed Charge Coverage Ratio. The Loan Parties (other than
Hallador) shall not permit the Fixed Charge Coverage Ratio, calculated as of the
end of each fiscal quarter for the four fiscal quarters then ended, to be less
than 1.25 to 1.0.

 

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

 

Fiscal Periods Ending   Ratio      

September 30, 2014 through March 31, 2015 

  3.25 to 1.00      

June 30, 2015 through September 30, 2015 

  3.00 to 1.00      

December 31, 2015 and equal fiscal quarter thereafter 

  2.75 to 1.00

 

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

 

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8.3.1      Quarterly Financial Statements. As soon as available and in any event
within forty-five (45) calendar days after the end of each fiscal quarter in
each fiscal year, financial statements of Borrower, consisting of a consolidated
balance sheet as of the end of such fiscal quarter and related consolidated
statements of income, retained earnings and cash flows for the fiscal quarter
then ended and the fiscal year through that date, all in reasonable detail and
certified (subject to normal year-end audit adjustments and without footnotes)
by the Chief Executive Officer, President or Chief Financial Officer of Borrower
as having been prepared in accordance with GAAP, consistently applied, and
including comments on any positive or negative variations from the Borrower's
annual budget.

 

8.3.2      Annual Financial Statements. Commencing with the fiscal year ending
as of December 31, 2012, as soon as available and in any event within one
hundred twenty (120) calendar days after the end of each such fiscal year of
Hallador, (i) audited financial statements of Hallador consisting of a
consolidated balance sheet as of the end of such fiscal year, and related
consolidated statements of income, retained earnings and cash flows for the
fiscal year then ended, certified by independent certified public accountants
satisfactory to the Administrative Agent and (ii) consolidating schedules for
the balance sheet, statement of income, retained earnings and cash flow of
Borrower that have been certified (subject to normal year-end audit adjustments
and without footnotes) by the Chief Executive Officer, President or Chief
Financial Officer of Borrower as having been prepared in accordance with GAAP,
all in reasonable detail and setting forth in comparative form the financial
statements as of the end of and for the preceding fiscal year. The certificate
or report of accountants shall be free of qualifications (other than any
consistency qualification that may result from a change in the method used to
prepare the financial statements as to which such accountants concur) and shall
not indicate the occurrence or existence of any event, condition or contingency
which would materially impair the prospect of payment or performance of any
covenant, agreement or duty of any Loan Party under any of the Loan Documents.
The Loan Parties shall deliver with such financial statements and certification
by their accountants a letter of such accountants to the Administrative Agent
and the Lenders substantially to the effect that, based upon their ordinary and
customary examination of the affairs of the Loan Parties, performed in
connection with the preparation of such consolidated financial statements, and
in accordance with GAAP, they are not aware of the existence of any condition or
event which constitutes an Event of Default or Potential Default or, if they are
aware of such condition or event, stating the nature thereof.

 

8.3.3      Certificates of the Borrower and Hallador. Concurrently with the
quarterly and annual financial statements of Borrower and Hallador, as
applicable furnished to the Administrative Agent and to the Lenders pursuant to
Sections 8.3.1 [Quarterly Financial Statements] and 8.3.2 [Annual Financial
Statements], a certificate (each a "Compliance Certificate") of Hallador signed
by the Chief Executive Officer, President or Chief Financial Officer of Hallador
and of Borrower signed by the President or Chief Financial Officer of Borrower,
each in the form of Exhibit 8.3.3.

 

8.3.4      Notices.

 

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

 

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

 

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

 

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

 

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

 

8.3.4.6           Acquisition Documents. Immediately upon the receipt thereof,
notice of any claims made or defaults under any of the Acquisition Documents, in
writing setting forth the details thereof and the action which the Borrower
proposes to take with respect thereto.

 

8.3.4.7           Other Reports.  Promptly upon their becoming available to the
Borrower:

 

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

 

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

 

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

 

9.          DEFAULT

 

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

 

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

 

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

 

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

 

9.1.4      Breach of Negative Covenants or Visitation Rights. Any of the Loan
Parties shall default in the observance or performance of any covenant contained
in Section 8.1.5 [Visitation Rights] or Section 8.2 [Negative Covenants];

 

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

 

9.1.6      Defaults in Other Agreements or Indebtedness. A default or event of
default shall occur at any time under the terms of any other agreement involving
borrowed money or the extension of credit or any other Indebtedness under which
any Loan Party or Subsidiary of any Loan Party may be obligated as a borrower or
guarantor in excess of $10,000,000 in the aggregate, and such breach, default or
event of default consists of the failure to pay (beyond any period of grace
permitted with respect thereto, whether waived or not) any Indebtedness when due
(whether at stated maturity, by acceleration or otherwise) or if such breach or
default permits or causes the acceleration of any Indebtedness (whether or not
such right shall have been waived) or the termination of any commitment to lend;

 

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

 

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

 

9.1.9      Uninsured Losses; Proceedings Against Assets. There shall occur any
material uninsured damage to or loss, theft or destruction of any of the
Collateral in excess of $3,500,000 or the Collateral or any other of the Loan
Parties' or any of their Subsidiaries' assets are attached, seized, levied upon
or subjected to a writ or distress warrant; or such come within the possession
of any receiver, trustee, custodian or assignee for the benefit of creditors and
the same is not cured within thirty (30) days thereafter;

 

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

 

9.1.11    Change of Control. (i) Any person or group of persons (within the
meaning of Sections 13(d) or 14(a) of the Securities Exchange Act of 1934, as
amended), other than Hallador, shall have acquired beneficial ownership of
(within the meaning of Rule 13d-3 promulgated by the Securities and Exchange
Commission under said Act) 25% or more of the voting capital stock or equity
interests of the Borrower; or (ii) within a period of twelve (12) consecutive
calendar months, individuals who were managers of the Borrower on the first day
of such period shall cease to constitute a majority of the managers of the
Borrower.

 

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

 

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9.2      Consequences of Event of Default.

 

9.2.1      Events of Default Other Than Bankruptcy, Insolvency or Reorganization
Proceedings. If an Event of Default specified under Sections 9.1.1 through
9.1.11 shall occur and be continuing, the Lenders and the Administrative Agent
shall be under no further obligation to make Loans and the Issuing Lender shall
be under no obligation to issue Letters of Credit and the Administrative Agent
may, and upon the request of the Required Lenders, shall (i) by written notice
to the Borrower, declare the unpaid principal amount of the Notes then
outstanding and all interest accrued thereon, any unpaid fees and all other
Indebtedness of the Borrower to the Lenders hereunder and thereunder to be
forthwith due and payable, and the same shall thereupon become and be
immediately due and payable to the Administrative Agent for the benefit of each
Lender without presentment, demand, protest or any other notice of any kind, all
of which are hereby expressly waived, and (ii) require the Borrower to, and the
Borrower shall thereupon, deposit in a non-interest-bearing account with the
Administrative Agent, as cash collateral for its Obligations under the Loan
Documents, an amount equal to the maximum amount currently or at any time
thereafter available to be drawn on all outstanding Letters of Credit, and the
Borrower hereby pledges to the Administrative Agent and the Lenders, and grants
to the Administrative Agent and the Lenders a security interest in, all such
cash as security for such Obligations; and

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(v)         Fifth, to the Administrative Agent for the account of the Issuing
Lender, to cash collateralize any undrawn amounts under outstanding Letters of
Credit; and

 

(vi)        Last, the balance, if any, to the Loan Parties or as required by
Law.

 

Notwithstanding anything to the contrary in this Section 9.2.4, no Swap
Obligations of any Non-Qualifying Party shall be paid with amounts received from
such Non-Qualifying Party under its Guaranty Agreement (including sums received
as a result of the exercise of remedies with respect to such Guaranty Agreement)
or from the proceeds of such Non-Qualifying Party's Collateral if such Swap
Obligations would constitute Excluded Hedge Liabilities; provided, however, that
to the extent possible, appropriate adjustments shall be made by the
Administrative Agent with respect to the allocation of payments and/or the
proceeds of Collateral from other Loan Parties that are Eligible Contract
Participants with respect to such Swap Obligations to preserve the ratable
payment of the Obligations among the Lenders as contemplated by Section
9.2.4(iv) after taking into account payments made by, or proceeds received from,
any Non-Qualifying Party in respect of the Obligations.

 

10.         THE ADMINISTRATIVE AGENT

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

10.11   No Reliance on Administrative Agent's Customer Identification
Program. Each Lender acknowledges and agrees that neither such Lender, nor any
of its Affiliates, participants or assignees, may rely on the Administrative
Agent to carry out such Lender's, Affiliate's, participant's or assignee's
customer identification program, or other obligations required or imposed under
or pursuant to the USA Patriot Act or the regulations thereunder, including the
regulations contained in 31 CFR 103.121 (as hereafter amended or replaced, the
"CIP Regulations"), or any other Anti-Terrorism Law, including any programs
involving any of the following items relating to or in connection with any of
the Loan Parties, their Affiliates or their agents, the Loan Documents or the
transactions hereunder or contemplated hereby: (i) any identity verification
procedures, (ii) any recordkeeping, (iii) comparisons with government lists,
(iv) customer notices or (v) other procedures required under the CIP Regulations
or such other Laws.

 

11.         MISCELLANEOUS

 

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

 

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

 

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

 

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

 

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

 

provided that no agreement, waiver or consent which would modify the interests,
rights or obligations of the Administrative Agent, the Issuing Lender or PNC
Bank in its capacity as the Swing Loan lender may be made without the written
consent of the Administrative Agent, the Issuing Lender or PNC Bank, as
applicable, and provided, further that, if in connection with any proposed
waiver, amendment or modification referred to in Sections 11.1.1 through 11.1.4
above, the consent of the Required Lenders is obtained but the consent of one or
more of such other Lenders whose consent is required is not obtained (each a
"Non-Consenting Lender"), then the Borrower shall have the right to replace any
such Non-Consenting Lender with one or more replacement Lenders pursuant to
Section 5.6.2 [Replacement of a Lender]. Notwithstanding anything to the
contrary herein, no Defaulting Lender shall have any right to approve or
disapprove any amendment, waiver or consent hereunder (and any amendment, waiver
or consent which by its terms requires the consent of all Lenders or each
affected Lender may be effected with the consent of the applicable Lenders other
than Defaulting Lenders), except that (x) the Commitment of any Defaulting
Lender may not be increased or extended without the consent of such Lender, and
(y) any waiver, amendment or modification requiring the consent of all Lenders
or each affected Lender that by its terms affects any Defaulting Lender
disproportionately adversely relative to other affected Lenders shall require
the consent of such Defaulting Lender.

 

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

 

11.3     Expenses; Indemnity; Damage Waiver.

 

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

 

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

 

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

 

11.3.4    Waiver of Consequential Damages, Etc. To the fullest extent permitted
by applicable Law, the Borrower shall not assert, and hereby waives, any claim
against any Indemnitee, on any theory of liability, for special, indirect,
consequential or punitive damages (as opposed to direct or actual damages)
arising out of, in connection with, or as a result of, this Agreement, any other
Loan Document or any agreement or instrument contemplated hereby, the
transactions contemplated hereby or thereby, any Loan or Letter of Credit or the
use of the proceeds thereof. No Indemnitee referred to in Section 11.3.2
[Indemnification by Borrower] shall be liable for any damages arising from the
use by unintended recipients of any information or other materials distributed
by it through telecommunications, electronic or other information transmission
systems in connection with this Agreement or the other Loan Documents or the
transactions contemplated hereby or thereby.

 

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

 

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

 

11.5     Notices; Effectiveness; Electronic Communication.

 

11.5.1    Notices Generally. Except in the case of notices and other
communications expressly permitted to be given by telephone (and except as
provided in Section 11.5.2 [Electronic Communications]), all notices and other
communications provided for herein shall be in writing and shall be delivered by
hand or overnight courier service, mailed by certified or registered mail or
sent by telecopier (i) if to a Lender, to it at its address set forth in its
administrative questionnaire, or (ii) if to any other Person, to it at its
address set forth on Schedule 1.1(B).

 

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

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

 

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

 

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

 

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

 

11.8     Successors and Assigns.

 

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

 

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

 

(i)          Minimum Amounts.

 

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

 

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

 

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

 

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

 

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

 

(B)         the consent of the Issuing Lender (such consent not to be
unreasonably withheld or delayed) shall be required for any assignment that
increases the obligation of the assignee to participate in exposure under one or
more Letters of Credit (whether or not then outstanding).

 

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

 

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

 

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

 

Subject to acceptance and recording thereof by the Administrative Agent pursuant
to Section 11.8.3 [Register], from and after the effective date specified in
each Assignment and Assumption Agreement, the assignee thereunder shall be a
party to this Agreement and, to the extent of the interest assigned by such
Assignment and Assumption Agreement, have the rights and obligations of a Lender
under this Agreement, and the assigning Lender thereunder shall, to the extent
of the interest assigned by such Assignment and Assumption Agreement, be
released from its obligations under this Agreement (and, in the case of an
Assignment and Assumption Agreement covering all of the assigning Lender's
rights and obligations under this Agreement, such Lender shall cease to be a
party hereto) but shall continue to be entitled to the benefits of Sections 4.5
[LIBOR Rate Unascertainable; Illegality; Increased Costs; Deposits Not
Available], 5.8 [Increased Costs], and 11.3 [Expenses, Indemnity; Damage Waiver]
with respect to facts and circumstances occurring prior to the effective date of
such assignment. Any assignment or transfer by a Lender of rights or obligations
under this Agreement that does not comply with this Section 11.8.2 shall be
treated for purposes of this Agreement as a sale by such Lender of a
participation in such rights and obligations in accordance with Section 11.8.4
[Participations].

 

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

 

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

 

Any agreement or instrument pursuant to which a Lender sells such a
participation shall provide that such Lender shall retain the sole right to
enforce this Agreement and to approve any amendment, modification or waiver of
any provision of this Agreement; provided that such agreement or instrument may
provide that such Lender will not, without the consent of the Participant, agree
(other than as is already provided for herein) to any amendment, modification or
waiver with respect to Sections 11.1.1 [Increase of Commitment], 11.1.2
[Extension of Payment, Etc.], or 11.1.3 [Release of Collateral or Guarantor])
that affects such Participant. The Borrower agrees that each Participant shall
be entitled to the benefits of Sections 4.5 [Libor Rate Unascertainable, Etc.],
5.8 [Increased Costs], 5.10 [Indemnity] and 5.9 [Taxes] (subject to the
requirements and limitations therein, including the requirements under Section
5.9.7 [Status of Lenders] (it being understood that the documentation required
under Section 5.9.7 [Status of Lenders] shall be delivered to the participating
Lender)) to the same extent as if it were a Lender and had acquired its interest
by assignment pursuant to Section 11.8.2 [Assignments by Lenders]; provided that
such Participant (A) agrees to be subject to the provisions of Section 5.6.2
[Replacement of a Lender] and Section 5.6.3 [Designation of a Different Lending
Office] as if it were an assignee under Section 11.8.2 [Assignments by Lenders];
and (B) shall not be entitled to receive any greater payment under Sections 5.8
[Increased Costs] or 5.9 [Taxes], with respect to any participation, than its
participating Lender would have been entitled to receive, except to the extent
such entitlement to receive a greater payment results from a Change in Law that
occurs after the Participant acquired the applicable participation. Each Lender
that sells a participation agrees, at the Borrower's request and expense, to use
reasonable efforts to cooperate with the Borrower to effectuate the provisions
of Section 5.6.2 [Replacement of a Lender] and Section 5.6.3 [Designation of
Different Lending Office] with respect to any Participant. To the extent
permitted by law, each Participant also shall be entitled to the benefits of
Section 9.2.3 [Set-off] as though it were a Lender; provided that such
Participant agrees to be subject to Section 5.3 [Sharing of Payments by Lenders]
as though it were a Lender. Each Lender that sells a participation shall, acting
solely for this purpose as an agent of the Borrower, maintain a register on
which it enters the name and address of each Participant and the principal
amounts (and stated interest) of each Participant's interest in the Loans or
other obligations under the Loan Documents (the "Participant Register");
provided that no Lender shall have any obligation to disclose all or any portion
of the Participant Register (including the identity of any Participant or any
information relating to a Participant's interest in any commitments, loans,
letters of credit or its other obligations under any Loan Document) to any
Person except to the extent that such disclosure is necessary to establish that
such commitment, loan, letter of credit or other obligation is in registered
form under Section 5f.103-1(c) of the United States Treasury Regulations. The
entries in the Participant Register shall be conclusive absent manifest error,
and such Lender shall treat each Person whose name is recorded in the
Participant Register as the owner of such participation for all purposes of this
Agreement notwithstanding any notice to the contrary. For the avoidance of
doubt, the Administrative Agent (in its capacity as Administrative Agent) shall
have no responsibility for maintaining a Participant Register.

 

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

 

11.9     Confidentiality.

 

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

 

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

 

11.10   Counterparts; Integration; Effectiveness.

 

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

 

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

 

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

 

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

 

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

 

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

 

87

 

 

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

 

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

 

11.13   Amendment and Restatement. This Agreement amends and restates in its
entirety the 2012 Credit Agreement; and the Loan Parties confirm that the 2012
Credit Agreement, the other Loan Documents and the Collateral for the
Obligations thereunder (as all such capitalized terms are defined in the 2012
Credit Agreement) have at all times, since the date of the execution and
delivery of such documents, remained in full force and effect and continued to
secure such obligations which are continued as the Obligations hereunder as
amended hereby; and all such Collateral (as defined in the 2012 Credit
Agreement) shall continue to secure the Obligations hereunder. The Loans
hereunder are a continuation of the Loans under (and as such terms are defined
in) the 2012 Credit Agreement. The Loan Parties, the Administrative Agent and
the Lenders acknowledge and agree that the amendment and restatement of the 2012
Credit Agreement by this Agreement is not intended to constitute, nor does it
constitute, a novation, interruption, suspension of continuity, satisfaction,
discharge or termination of the obligations, loans, liabilities, or indebtedness
under the 2012 Credit Agreement and the other Loan Documents (as such term is
defined therein) thereunder or the collateral security therefor and this
Agreement and the other Loan Documents are entitled to all rights and benefits
originally pertaining to the 2012 Credit Agreement and the other Loan Documents
(as such term is defined therein).

 

[SIGNATURE PAGE FOLLOWS]

 

88

 

 

[SIGNATURE PAGE TO Second AMENDED AND RESTATED CREDIT AGREEMENT]

 

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

 

  BORROWER:       SUNRISE COAL, LLC       By: /s/ Brent K. Bilsland      
Name:  Brent K. Bilsland       Title:     President       GUARANTORS:      
HALLADOR ENERGY COMPANY         By: /s/ Brent K. Bilsland       Name:  Brent K.
Bilsland       Title:    President       INFINITY FARMS, LLC       By: /s/ Brent
K. Bilsland         Name:  Brent K. Bilsland       Title:    President

 

89

 

 

[SIGNATURE PAGE TO Second AMENDED AND RESTATED CREDIT AGREEMENT]

 

  SFI COAL SALES, LLC       By: /s/ Brent K. Bilsland       Name:  Brent K.
Bilsland       Title:     President       PROSPERITY MINE, LLC       By: /s/
Brent K. Bilsland       Name:  Brent K. Bilsland       Title:    President      
OAKTOWN FUELS MINE NO. 1, LLC       By: /s/ Brent K. Bilsland       Name:  Brent
K. Bilsland       Title:    President       OAKTOWN FUELS MINE NO. 2, LLC      
By: /s/ Brent K. Bilsland       Name:  Brent K. Bilsland       Title:  President

 

90

 

 

[SIGNATURE PAGE TO Second AMENDED AND RESTATED CREDIT AGREEMENT]

 

  SYCAMORE COAL, INC.       By: /s/ Brent K. Bilsland       Name:  Brent K.
Bilsland       Title:  President

 

91

 

 

[SIGNATURE PAGE TO SEcond AMENDED AND RESTATED CREDIT AGREEMENT]

 

  PNC BANK, NATIONAL ASSOCIATION, individually and as Administrative Agent      
By: /s/ James O’Brien   Name:  James O'Brien   Title:    Assistant Vice
President

 

92

 

 

[SIGNATURE PAGE TO SEcond AMENDED AND RESTATED CREDIT AGREEMENT]

 

  THE HUNTINGTON NATIONAL BANK       By: /s/ Joshua D. Elsea       Name: Joshua
D. Elsea       Title:   Vice President

 

93

 

 

[SIGNATURE PAGE TO SEcond AMENDED AND RESTATED CREDIT AGREEMENT]

 

  BRANCH BANKING AND TRUST COMPANY         By: /s/ Troy Weaver         Name:
Troy Weaver       Title: Senior Vice President

 

94

 

 

[SIGNATURE PAGE TO SEcond AMENDED AND RESTATED CREDIT AGREEMENT]

 

  REGIONS BANK       By: /s/ Eric Harvey       Name: Eric Harvey      
Title:   Vice President

 

95

 

 

[SIGNATURE PAGE TO SEcond AMENDED AND RESTATED CREDIT AGREEMENT]

 

  UMB BANK, N.A.       By: /s/ John J. Mastro       Name:  John J. Mastro      
Title:    Senior Vice President

 

96

 

 

[SIGNATURE PAGE TO Second AMENDED AND RESTATED CREDIT AGREEMENT]

 

  KEYBANK, NATIONAL ASSOCIATION         By: /s/ Brian D. Smith     Brian D.
Smith, Senior Vice President

 

97

 

 

[SIGNATURE PAGE TO SEcond AMENDED AND RESTATED CREDIT AGREEMENT]

 

  OLD NATIONAL BANK         By: /s/ James D. Anderson         Name:  James D.
Anderson       Title:     Market President - Danville

 

98

 

 

[SIGNATURE PAGE TO SEcond AMENDED AND RESTATED CREDIT AGREEMENT]

 

  CITIZENS BANK OF PENNSYLVANIA       By: /s/ Philip R. Medsger      
Name:   Philip R. Medsger       Title:     Senior Vice President

99

 

 

[SIGNATURE PAGE TO SEcond AMENDED AND RESTATED CREDIT AGREEMENT]

 

  CAPITAL BANK, N.A.         By: /s/ Brian Reeves         Name:  Brian Reeves  
    Title:    Market President

 

100

 

 

[SIGNATURE PAGE TO SEcond AMENDED AND RESTATED CREDIT AGREEMENT]

 

  FIRST FINANCIAL, N.A.       By: /s/ Steve Holliday         Name:  Steve
Holliday       Title:     Chief Credit Officer

 

101

 

 

[SIGNATURE PAGE TO SEcond AMENDED AND RESTATED CREDIT AGREEMENT]

 

  TALMER BANK AND TRUST         By: /s/ Matthew P. Tuohey        
Name:   Matthew P. Tuohey       Title:    Managing Director

 

102

 

 

[SIGNATURE PAGE TO SEcond AMENDED AND RESTATED CREDIT AGREEMENT]

 

  FIRST MERCHANTS BANK, N.A.         By: /s/ Adam Treibk         Name:   Adam
Treibk       Title:     Vice President

 

103

 

 

[SIGNATURE PAGE TO SEcond AMENDED AND RESTATED CREDIT AGREEMENT]

 

  BOKF, NA dba Colorado State Bank and Trust         By: /s/ Matthew J. Mason  
      Name:   Matthew J. Mason       Title:     Senior Vice President

 

104

 

 

[SIGNATURE PAGE TO SEcond AMENDED AND RESTATED CREDIT AGREEMENT]

 

  FIRST COMMONWEALTH BANK       By: /s/ Stephen J. Orban         Name:   Stephen
J. Orban       Title:     Senior Vice President

 

105

 

 

[SIGNATURE PAGE TO SEcond AMENDED AND RESTATED CREDIT AGREEMENT]

 

  COMMUNITY BANKS OF COLORADO, A DIVISION OF NBH BANK, N.A.         By /s/ G. S.
Todd Berryman         Name: G. S. Todd Berryman         Title: Managing Director

 

106

 

 

[SIGNATURE PAGE TO SEcond AMENDED AND RESTATED CREDIT AGREEMENT]

 

  FIRSTMERIT BANK, N.A.         By /s/ Robert G. Morlan       Name:   Robert G.
Morlan       Title:     Senior Vice President

 

107

 

 

[SIGNATURE PAGE TO SEcond AMENDED AND RESTATED CREDIT AGREEMENT]

 

  IROQUOIS FEDERAL SAVINGS & LOAN ASSOCIATION         By: /s/ Thomas J.
Chamberlain         Name:   Thomas J. Chamberlain       Title:     Vice
President and Chief Lending Officer

 

108