$ 100,000,000




TERM
      CREDIT AGREEMENT




by
      and
      among




**JAMES
      RIVER COAL COMPANY** ,


**JAMES
      RIVER COAL SERVICE COMPANY** ,


**LEECO,
      INC** ,


**TRIAD
      MINING, INC.**


**TRIAD
      UNDERGROUND MINING, LLC** ,


**BLEDSOE
      COAL CORPORATION** ,


**JOHNS
      CREEK ELKHORN COAL CORPORATION** ,


**BELL
      COUNTY COAL CORPORATION** ,


**JAMES
      RIVER COAL SALES, INC.** ,


**BLEDSOE
      COAL LEASING COMPANY** ,


**BLUE
      DIAMOND COAL COMPANY** ,


and **MCCOY
      ELKHORN COAL CORPORATION**


as
      Borrowers,




the
      other
      Credit Parties hereto from time to time,




as
      Guarantors,




the
      LENDERS party hereto from time to time,




and




**MORGAN
      STANLEY SENIOR FUNDING, INC.** ,


as
      Administrative Agent, Sole Bookrunner and Lead Arranger




and




**MORGAN
      STANLEY & CO. INCORPORATED** ,


as
      Collateral Agent.




Dated
      as
      of February 26, 2007









TABLE
      OF
      CONTENTS


**Page**ARTICLE
                  IDEFINITIONS;
                  CERTAIN TERMS
              
              1SECTION
                  1.01
              
              Definitions
              
              1SECTION
                  1.02
              
              Terms
                  Generally
              
              32SECTION
                  1.03
              
              Accounting
                  and Other Terms
              
              32SECTION
                  1.04
              
              Time
                  References
              
              32ARTICLE
                  IITHE
                  FACILITY
              
              33SECTION
                  2.01
              
              Term
                  Loans
              
              33SECTION
                  2.02
              
              Use
                  of Proceeds
              
              34SECTION
                  2.03
              
              Promise
                  to Pay
              
              34SECTION
                  2.04
              
              Notes
              
              34SECTION
                  2.05
              
              Authorized
                  Officers and Administrative Agent
              
              35SECTION
                  2.06
              
              Joint
                  and Several Liability of the Credit Parties
              
              36SECTION
                  2.07
              
              Loan
                  Account and Accounting
              
              36SECTION
                  2.08
              
              Application
                  of Payments and Proceeds
              
              37ARTICLE
                  IIIPAYMENTS
                  AND OTHER COMPENSATION
              
              38SECTION
                  3.01
              
              Voluntary
                  Prepayments/Reductions of Commitments
              
              38SECTION
                  3.02
              
              Mandatory
                  Prepayments
              
              39SECTION
                  3.03
              
              Payments
              
              41SECTION
                  3.04
              
              Taxes
              
              42ARTICLE
                  IV
              
              INTEREST
              
              45SECTION
                  4.01
              
              Interest
                  on the Term Loan B Obligations and Other Obligations
              
              45SECTION
                  4.02
              
              Break
                  Funding Payments
              
              47SECTION
                  4.03
              
              Change
                  in Law; Illegality
              
              47SECTION
                  4.04
              
              Fees
              
              49ARTICLE
                  VCONDITIONS
                  TO LOANS
              
              49SECTION
                  5.01
              
              Conditions
                  Precedent to the Funding on the Closing Date
              
              49SECTION
                  5.02
              
              Conditions
                  Precedent to Issuances of Term Letters of Credit
              
              54ARTICLE
                  VIREPRESENTATIONS
                  AND WARRANTIES
              
              55SECTION
                  6.01
              
              Representations
                  and Warranties
              
              55ARTICLE
                  VIIREPORTING
                  COVENANTS
              
              65SECTION
                  7.01
              
              Financial
                  Statements
              
              65
  ii
  SECTION
                  7.02
              
              Other
                  Financial Information
              
              67SECTION
                  7.03
              
              Defaults,
                  Events of Default
              
              68SECTION
                  7.04
              
              Lawsuits
              
              68SECTION
                  7.05
              
              Insurance
              
              68SECTION
                  7.06
              
              Environmental
                  Notices
              
              68SECTION
                  7.07
              
              Labor
                  Matters
              
              69SECTION
                  7.08
              
              Other
                  Information
              
              69ARTICLE
                  VIIIAFFIRMATIVE
                  COVENANTS
              
              70SECTION
                  8.01
              
              Compliance
                  with Laws and Contractual Obligations
              
              70SECTION
                  8.02
              
              Payment
                  of Taxes and Claims
              
              70SECTION
                  8.03
              
              Conduct
                  of Business and Preservation of Corporate Existence
              
              70SECTION
                  8.04
              
              Inspection
                  of Property; Books and Records; Discussions
              
              70SECTION
                  8.05
              
              Maintenance
                  of Properties
              
              71SECTION
                  8.06
              
              Transactions
                  with Related Parties
              
              72SECTION
                  8.07
              
              Further
                  Assurances
              
              72SECTION
                  8.08
              
              Additional
                  Security; Additional Guaranties; Further Assurances
              
              72SECTION
                  8.09
              
              Powers;
                  Conduct of Business
              
              75SECTION
                  8.10
              
              Use
                  of Proceeds
              
              75SECTION
                  8.11
              
              Obtaining
                  of Permits, Etc
              
              75SECTION
                  8.12
              
              Environmental
              
              75SECTION
                  8.13
              
              Mining
              
              75SECTION
                  8.14
              
              Maintenance
                  of Insurance
              
              75SECTION
                  8.15
              
              Condemnation
              
              76SECTION
                  8.16
              
              Fiscal
                  Year
              
              76SECTION
                  8.17
              
              Payment
                  of Contractual Obligations
              
              76SECTION
                  8.18
              
              Change
                  in Collateral; Collateral Records
              
              76SECTION
                  8.19
              
              Cash
                  Management
              
              76SECTION
                  8.20
              
              Location
                  of Equipment
              
              77SECTION
                  8.21
              
              Post-Closing
                  Matters
              
              77SECTION
                  8.22
              
              Inventory
              
              77SECTION
                  8.23
              
              Pledged
                  Security Interests
              
              77ARTICLE
                  IXNEGATIVE
                  COVENANTS
              
              77SECTION
                  9.01
              
              Liens
              
              77SECTION
                  9.02
              
              Indebtedness
              
              77SECTION
                  9.03
              
              Consolidation,
                  Merger, Subsidiaries, Etc
              
              77SECTION
                  9.04
              
              Asset
                  Dispositions, Etc
              
              78SECTION
                  9.05
              
              Limitation
                  on Issuance of Equity Interests
              
              79SECTION
                  9.06
              
              Limitations
                  on Dividends and Distributions and Other Payment Restrictions Affecting
                  Subsidiaries
              
              79SECTION
                  9.07
              
              Investments
              
              79SECTION
                  9.08
              
              Sale
                  and Leaseback
              
              79
  iii
  SECTION
                  9.09
              
              Negative
                  Pledges
              
              80SECTION
                  9.10
              
              Change
                  in Nature of Business
              
              80SECTION
                  9.11
              
              Change
                  Name
              
              80SECTION
                  9.12
              
              Modifications
                  of Indebtedness, Organizational Documents and Certain Other
                  Agreements
              
              80SECTION
                  9.13
              
              Federal
                  Reserve Regulations
              
              81SECTION
                  9.14
              
              Investment
                  Company Act of 1940
              
              81SECTION
                  9.15
              
              Securities
                  Accounts; Deposit Accounts
              
              81SECTION
                  9.16
              
              Impairment
                  of Security Interests
              
              81SECTION
                  9.17
              
              Restricted
                  Payments
              
              81ARTICLE
                  XFINANCIAL
                  COVENANTS
              
              81SECTION
                  10.01
              
              Minimum
                  Consolidated EBITDA
              
              82SECTION
                  10.02
              
              Leverage
                  Ratio
              
              82SECTION
                  10.03
              
              Capital
                  Expenditures
              
              83ARTICLE
                  XIEVENTS
                  OF DEFAULT, RIGHTS AND REMEDIES
              
              83SECTION
                  11.01
              
              Events
                  of Default
              
              83SECTION
                  11.02
              
              Remedies
              
              86SECTION
                  11.03
              
              Waivers
                  by the Credit Parties
              
              87ARTICLE
                  XIIGUARANTY
                  OF OBLIGATIONS OF BORROWER
              
              87SECTION
                  12.01
              
              Guaranty
              
              87SECTION
                  12.02
              
              Nature
                  of Liability
              
              87SECTION
                  12.03
              
              Independent
                  Obligation
              
              88SECTION
                  12.04
              
              Demand
                  by the Administrative Agent or the Lenders
              
              89SECTION
                  12.05
              
              Enforcement
                  of Guaranty
              
              89SECTION
                  12.06
              
              Waiver
              
              89SECTION
                  12.07
              
              Benefit
                  of Guaranty
              
              90SECTION
                  12.08
              
              Modification
                  of Guaranteed Obligations, Etc
              
              90SECTION
                  12.09
              
              Reinstatement.
              
              91SECTION
                  12.10
              
              Waiver
                  of Subrogation, Etc
              
              91SECTION
                  12.11
              
              Election
                  of Remedies
              
              92SECTION
                  12.12
              
              Further
                  Assurances
              
              92SECTION
                  12.13
              
              Payments
                  Free and Clear of Taxes
              
              92SECTION
                  12.14
              
              Limitation
                  on Amount Guarantied; Contribution by Guarantors
              
              93ARTICLE
                  XIIITHE
                  AGENTS
              
              94SECTION
                  13.01
              
              Appointment
                  Powers and Immunities; Delegation of Duties; Liability of
                  Agents
              
              94SECTION
                  13.02
              
              Reliance
                  by Agents
              
              95SECTION
                  13.03
              
              Defaults
              
              95SECTION
                  13.04
              
              Rights
                  as a Lender
              
              95SECTION
                  13.05
              
              Costs
                  and Expenses; Indemnification
              
              96
  iv
  SECTION
                  13.06
              
              Non-Reliance
                  on Agents and Other Lenders
              
              97SECTION
                  13.07
              
              Failure
                  to Act
              
              97SECTION
                  13.08
              
              Resignation
                  of Agent
              
              97SECTION
                  13.09
              
              Collateral
                  Sub-Agents
              
              98SECTION
                  13.10
              
              Communications
                  by the Borrowers
              
              99SECTION
                  13.11
              
              Collateral
                  Matters
              
              99SECTION
                  13.12
              
              Restrictions
                  on Actions by the Agents and the Lenders; Sharing Payments
              
              100SECTION
                  13.13
              
              Several
                  Obligations; No Liability
              
              100ARTICLE
                  XIVMISCELLANEOUS
              
              101SECTION
                  14.01
              
              Notices,
                  Etc
              
              101SECTION
                  14.02
              
              Amendments,
                  Etc
              
              103SECTION
                  14.03
              
              Non-Consenting
                  Lenders
              
              104SECTION
                  14.04
              
              No
                  Waiver; Remedies, Etc
              
              104SECTION
                  14.05
              
              Expenses;
                  Taxes; Attorneys’ Fees
              
              104SECTION
                  14.06
              
              Right
                  of Set-Off, Sharing of Payments, Etc
              
              106SECTION
                  14.07
              
              Severability
              
              107SECTION
                  14.08
              
              Replacement
                  of Lenders
              
              107SECTION
                  14.09
              
              Complete
                  Agreement; Sale of Interest
              
              108SECTION
                  14.10
              
              Assignment;
                  Register
              
              108SECTION
                  14.11
              
              Administrative
                  Borrower
              
              110SECTION
                  14.12
              
              Counterparts
              
              111SECTION
                  14.13
              
              GOVERNING
                  LAW
              
              111SECTION
                  14.14
              
              CONSENT
                  TO JURISDICTION, SERVICE OF PROCESS AND VENUE
              
              111SECTION
                  14.15
              
              WAIVER
                  OF JURY TRIAL, ETC
              
              112SECTION
                  14.16
              
              Consent
              
              112SECTION
                  14.17
              
              Interpretation
              
              112SECTION
                  14.18
              
              Reinstatement;
                  Certain Payments
              
              112SECTION
                  14.19
              
              Indemnification
              
              113SECTION
                  14.20
              
              Records
              
              114SECTION
                  14.21
              
              Binding
                  Effect
              
              114SECTION
                  14.22
              
              Confidentiality
              
              114SECTION
                  14.23
              
              Lender
                  Advertising
              
              115SECTION
                  14.24
              
              Press
                  Releases
              
              115SECTION
                  14.25
              
              Common
                  Enterprise
              
              115SECTION
                  14.26
              
              USA
                  Patriot Act
              
              115


**SCHEDULES**





·
              Schedule
                  E-1—Existing Debt


·
              Schedule
                  M-1—Material Contracts


·
              Schedule
                  M-2—Mortgaged Property


·
              Schedule
                  P-1—Permitted Liens


·
              Schedule
                  P-2—Permitted Indebtedness


v
  ·
              Schedule
                  2.01(a)—Lender Commitments


·
              Schedule
                  5.01(g)—Third Party Consents


·
              Schedule
                  6.01(e)—Capitalization


·
              Schedule
                  6.01(f)—Litigation


·
              Schedule
                  6.01(i)—Employee Benefit
                  Plans


·
              Schedule
                  6.01(n)(i)—Real Estate Assets


·
              Schedule
                  6.01(n)(ii)—Mines


·
              Schedule
                  6.01(n)(iii)—Leases
 (a)
        Mining Leases,


(b)
      Prep
      Plant Leases, and


(c)
      All
      Other Leases


·
              Schedule
                  6.01(p) Environmental Matters


·
              Schedule
                  6.01(r)—Coal Supply
                  Agreements


·
              Schedule
                  6.01(t)—Insurance


·
              Schedule
                  6.01(v)—Cash Management System & Control
                  Agreements


·
              Schedule
                  6.01(w)—Intellectual Property


·
              Schedule
                  6.01(aa)—Collateral Locations


(1)
      Inventory Locations


(2)
      Equipment Locations


(3)
      Credit Party Locations & Information


(4)
      Mortgaged Property Owner & Filing Offices


·
              Schedule
                  6.01(bb)—Commercial Tort
                  Claims


·
              Schedule
                  8.21—Post Closing Matters





**EXHIBITS**




·
              Exhibit
                  A-1—Deposit Account of Administrative
                  Agent


·
              Exhibit
                  A-2—Form of Assignment and
                  Acceptance


·
              Exhibit
                  B-1—Form of Borrowing Request


·
              Exhibit
                  C-1—Form of Collateral Access
                  Agreement


·
              Exhibit
                  C-2—Form of Compliance
                  Certificate


·
              Exhibit
                  N-1—Form of Note


·
              Exhibit
                  N-2—Form of Notice of
                  Conversion/Continuation


·
              Exhibit
                  O-1—Form of Officer’s Certificate (Section
                  7.01(d))


·
              Exhibit
                  O-2—Form of Officer’s Certificate (Section
                  5.01(p)(ii))





**ANNEXES**




·
              Annex
                  A—Term Letter of Credit
                  Subfacility




vi




TERM
      CREDIT AGREEMENT




This
      Term
      Credit Agreement, dated as of February 26, 2007 (as it may be amended, restated,
      modified, supplemented or extended from time to time, including all exhibits
      and
      schedules thereto, or otherwise modified, the “ Agreement ”),
      by
      and among JAMES RIVER COAL COMPANY, a corporation organized under the laws
      of
      Virginia (“ JRCC ”),
      and
      certain of JRCC’s Subsidiaries identified on the title and signature pages
      hereof, as borrowers (such Subsidiaries, together with JRCC, are referred to
      hereinafter each individually as a “ Borrower ”,
      and
      collectively, jointly and severally, as the “ Borrowers ”),
      and
      the other credit parties hereto from time to time, as Guarantors (together,
      the
      Borrowers and Guarantors, the “ Credit
      Parties ”),
      the
      lenders party hereto from time to time (the “ Lenders ”),
      MORGAN STANLEY SENIOR FUNDING, INC., a corporation formed under the laws of
      Delaware, **** as
      administrative agent for the Lenders (in such capacity, together with its
      successors and assigns, if any, the “ Administrative
      Agent ”)
      and as
      sole-bookrunner and lead arranger (in such capacity, the “ Lead
      Arranger ”),
      and
      MORGAN STANLEY & CO. INCORPORATED, as collateral agent for the Lenders (in
      such capacity, together with its successors and assigns, if any, the
“ Collateral
      Agent ”.




RECITALS




WHEREAS,
      the Borrowers have requested that the Lenders make available to them the
      Commitments (as defined below), on the terms and conditions set forth herein,
      to, among other things, fund transaction costs, working capital requirements
      and
      other general corporate purposes of the Borrowers; and




WHEREAS,
      the Lenders are willing to make the loans to the Borrowers upon the terms and
      conditions set forth herein;




NOW
      THEREFORE, in consideration of the premises and the covenants and agreements
      contained herein and other good and valuable consideration the receipt and
      sufficiency of which are hereby acknowledged, the parties hereto hereby agree
      as
      follows:




ARTICLE
      I


DEFINITIONS;
      CERTAIN TERMS




SECTION
      1.01  Definitions . As
      used
      in this Agreement, the following terms shall have the respective meanings
      indicated below, such meanings to be applicable equally to both the singular
      and
      plural forms of such terms:




“ 2005
      Financial Statements ”
means
      the audited consolidated balance sheet of the JRCC for the Fiscal Year
      ended December 31, 2005 and the related consolidated statement of
      operations, shareholders’ equity and cash flows for the Fiscal Year then
      ended, together with management’s discussion and analysis and any management
      letters submitted by the auditors for JRCC.




“ 2006
      Financial Statements ”
means
      the unaudited consolidated balance sheet of JRCC for the Fiscal Year ended
      December 31, 2006 prepared on a basis consistent with and in accordance with
      GAAP, together with monthly unaudited financials for any Fiscal Month ended
      at
      least 30 days prior to the Closing Date.









“ Account ”
means
      those “ accounts ”
as
      that
      term is defined in the UCC.




“ Account
      Debtor ”
means
      an “ account
      debtor ”
as
      that
      term is defined in the UCC.




“ Action ”
has
      the
      meaning ascribed to such term in SECTION
      14.16 .




“ Administrative
      Agent ”
has
      the
      meaning ascribed to such term in the introductory paragraph hereto.




“ Administrative
      Agent’s Account ”
means
      the account identified on Exhibit A-1 and such other Deposit Account as the
      Administrative Agent may from time to time specify in writing to the
      Administrative Borrower and the Lenders.




“ Administrative
      Agent’s Office ”
means
      the office of the Administrative Agent located at 1585 Broadway, New York,
      New
      York, 10036, or such other office as may be designated pursuant to the
      provisions of SECTION
      14.01 .




“ Administrative
      Borrower ”
has
      the
      meaning ascribed to such term in SECTION
      14.11 .




“ Affiliate ”,
      as
      applied to any Person, means any other Person directly or indirectly
      controlling, controlled by, or under common control with, that Person. For
      the
      purposes of this definition, “control” (including, with correlative meanings,
      the terms “controlling”, “controlled by” and “under common control with”), as
      applied to any Person, means the possession, directly or indirectly, of the
      power to direct or cause the direction of the management and policies of such
      specified Person, whether through the ownership of voting Securities or by
      contract or otherwise.




“ Agent-Related
      Persons ”
means
      each of the Agents and its Affiliates, and the officers, directors, employees,
      counsel, agents, and attorneys-in-fact of such Agent and its
      Affiliates.




“ Agents ”
means,
      collectively, the Administrative Agent and the Collateral Agent.




“ Agent’s
      Fee Letter ”
means
      the fee letter dated January 30, 2007 between JRCC and the Administrative Agent
      together with the supplemental fee letter signed as of the Closing Date between
      the Borrowers and the Administrative Agent.




“ Agreement ”
means
      this Term Credit Agreement, together with all Exhibits and Schedules hereto,
      as
      such agreement may be amended, supplemented or otherwise modified from time
      to
      time.




“ Applicable
      Law ”
means,
      in respect of any Person, all provisions of constitutions, laws, statutes,
      rules, regulations, treaties, directives, guidelines and orders of Governmental
      Authorities applicable to such Person, including zoning ordinances, all
      Environmental Laws, and all orders, decisions, judgments and decrees of all
      courts and arbitrators in proceedings or actions to which the Person in question
      is a party or by which it is bound.




2




“ Applicable
      Margin ”
means,
      three percentage points (3%) in the case of Base Rate Loans and four percentage
      points (4%) in the case of LIBOR Rate Loans.




“ Applicable
      Payment Fee ”
means
      (a) on or prior to the 1 st anniversary of the Closing Date, two percentage points, (b) on or prior to
      the 2 nd anniversary of the Closing Date, one percentage point, and (c) after the
      second anniversary of the Closing Date zero percentage points, in each, case,
      times the amount of the Term Loan B Loans being paid for any reason other than
      (i) payments from Excess Cash Flow under SECTION
      3.02(d) ,
      (ii) payments from Net Casualty/Condemnation Proceeds under SECTION
      3.02(a) ,
      or
      (iii) payments from the Bell County Net Proceeds in excess of
      $12,000,000.




“ Applicable
      Reduction Fee ”
means
      (a) on or prior to the 1 st anniversary of the Closing Date, two percentage points, (b) on or prior to
      the 2 nd anniversary of the Closing Date, one percentage point, and (c) after the
      second anniversary of the Closing Date zero percentage points, in each case
      times the amount of the Term Letter of Credit Commitment being reduced for
      any
      reason other than (i) reductions due to mandatory payments from Excess Cash
      Flow under SECTION
      3.02(d) ,
      (ii) reductions due to mandatory payments from Net Casualty/Condemnation
      Proceeds under SECTION
      3.02(a) ,
      or
      (iii) reductions due to mandatory payments from the Bell County Net
      Proceeds in excess of $12,000,000.




“ Approved
      Fund ”
means
      any Fund 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.




“ Asset
      Disposition ”
has
      the
      meaning ascribed to such term in SECTION
      9.04 .




“ Assignment
      and Acceptance ”
means
      an Assignment and Acceptance substantially in the form of Exhibit A-2 attached
      hereto and made a part hereof (with blanks appropriately completed) delivered
      to
      the Administrative Agent in connection with an assignment of a Lender’s interest
      under this Agreement in accordance with SECTION
      14.10(b) .




“ Authorized
      Officer ”
means,
      with respect to any Credit Party, the chief executive officer, chief
      administrative officer, chief financial officer, vice president of financial
      compliance and reporting, treasurer, controller or chief accounting officer
      or
      other officer with similar responsibility designated by the Board of Directors
      or similar governing body of the Credit Party.




“ Availability ”
means
      at any time (a) the Maximum Term Letter of Credit Amount minus (b) Term Letters of Credit Usage, plus (c) the Maximum Term Loan B Amount minus the Term
      Loan B Obligations, each as outstanding on such date as Availability is being
      measured.




“ Availability
      Period ”
means
      the period from the Closing Date to the Maturity Date.




“ Backstop
      Letter of Credit ”
has
      the
      meaning ascribed to such term in Annex A .




3




“ Bankruptcy
      Code ”
means
      Title 11 of the United States Code (11 U.S.C. §§ 101 et  seq .),
      as
      amended from time to time, and any successor statute.




“ Base
      Rate ”
means
      the higher of (a) the Federal Funds Rate plus one half of one percent, and
      (b) the Prime Rate.




“ Base
      Rate Loans ”
means
      Term Loan B Loans that bear interest at an interest rate based on the Base
      Rate.




“ Bell
      County Assets ”
means
      the assets or stock of Bell County Coal Corporation, a Delaware
      corporation.




“ Bell
      County Disposition ”
means
      the asset or stock sale by one or more of the Borrower of the Bell County
      Assets.




“ Bell
      County Net Proceeds ”
means
      the Net Cash Proceeds received by any Credit Party from the sale of its Bell
      County Assets.




“ Benefit
      Plan ”
means
      an employee pension benefit plan to which any Borrower has contributed, or
      has
      been obligated to contribute within the last three years, excluding any
      Multiemployer Plan, which is subject to Title IV of ERISA or subject to the
      minimum funding standards under Section 412 of the Code.




“ Black
      Lung Act ”
means
      together, the Black Lung Benefits Revenue Act of 1977, as amended, and the
      Black
      Lung Benefits Reform Act of 1977, as amended.




“ Borrower ”
and
      “ Borrowers ”
have
      the meaning ascribed to such terms in the introductory paragraph
      hereto.




“ Borrowing
      Request ”
means
      a
      request and certification in substantially the form attached as Exhibit B-1 hereto,
      executed by a Senior Officer of the Administrative Borrower and delivered to
      the
      Administrative Agent from time to time after the Closing Date.




“ Business
      Day ”
means
      any day that is not a Saturday, a Sunday or a day on which commercial banks
      are
      required or permitted to be closed in the State of New York; provided  that when
      used in connection with a rate determination, borrowing or payment in respect
      of
      a LIBOR Rate Loan, the term “ Business
      Day ”
shall
      also exclude any day on which banks in London, England are not open for dealings
      in Dollar deposits in the London interbank market.




“ Capital
      Expenditures ”
means,
      with respect to any Person for any period, the sum of the aggregate of all
      expenditures by such Person and its Subsidiaries arising during such period
      that, in accordance with GAAP, are or should be included in the “property, plant
      and equipment” account on its consolidated balance sheet, including all
      applicable Capitalized Lease Obligations with respect to “property, plant and
      equipment”, paid or payable during such period, plus any other capital
      expenditures of such Person and its consolidated Subsidiaries that are set
      forth
      in a consolidated statement of cash flows of such person for such period
      prepared in accordance with GAAP, excluding in each case, (a) any such
      expenditures made for the repair, replacement or restoration of assets to the
      extent paid or reimbursed by any insurance policy or condemnation award to
      the
      extent such expenditures for reinvestment are permitted under the Loan
      Documents, and (b) any leasehold improvement expenditures to the extent
      paid or reimbursed by the applicable lessor, sublessor or
      sublessee.




4




“ Capitalized
      Lease ”
means,
      with respect to any Person, any lease of real or personal property by such
      Person as lessee which is required under GAAP to be capitalized on the balance
      sheet of such Person.




“ Capitalized
      Lease Obligations ”
means,
      with respect to any Person, obligations of such Person and its Subsidiaries
      as
      lessee under Capitalized Leases as determined in accordance with
      GAAP.




“ Cash
      Collateral ”
and
      “ Cash
      Collateral Account ”
have
      the meanings ascribed to such terms in Annex A .




“ Cash
      Equivalents ”
means
      (a) marketable direct obligations issued or unconditionally guaranteed by
      the United States government or issued by an agency thereof and backed by the
      full faith and credit of the United States, in each case maturing within
      one (1) year after the date of acquisition thereof; (b) marketable
      direct obligations issued by any state of the United States of America or any
      political subdivision of any such state or any public instrumentality thereof
      maturing within one (1) year after the date of acquisition thereof and, at
      the time of acquisition, having one of the two highest ratings obtainable from
      either S&P or Moody’s (or, if at any time neither S&P nor Moody’s shall
      be rating such obligations, then from such other nationally recognized rating
      services reasonably acceptable to the Administrative Agent) and not listed
      in
      Credit Watch published by S&P; (c) commercial paper, other than
      commercial paper issued by the Borrowers or any of their Subsidiaries, maturing
      no more than two hundred seventy (270) days after the date of acquisition
      thereof and, at the time of acquisition, having a rating of at least A-1 or
      P-1,
      respectively, from either S&P or Moody’s (or, if at any time neither S&P
      nor Moody’s shall be rating such obligations, then the comparable rating from
      such other nationally recognized rating services reasonably acceptable to the
      Administrative Agent); (d) domestic and Eurodollar certificates of deposit
      or time deposits or bankers’ acceptances maturing within one (1) year after the
      date of acquisition thereof issued by any commercial bank organized under the
      laws of the United States of America or any state thereof or the District of
      Columbia or Canada having combined capital and surplus of not less than
      $500,000,000 or by any Lender; and (e) shares of money market or mutual
      funds that are required to have a net asset value of $1.00 per share with assets
      in excess of $250,000,000 and that invest exclusively in assets satisfying
      the
      requirements of clauses (a) through (e) of this
      definition.




“ Cash
      Management Account ”
has
      the
      meaning ascribed to such term in SECTION
      5.01(u)(i) .




“ Cash
      Management Agreement ”
has
      the
      meaning ascribed to such term in SECTION
      5.01(u)(ii) .




“ Cash
      Management Bank ”
has
      the
      meaning ascribed to such term in SECTION
      5.01(u)(i) .




5




“ Casualty ”
means
      any casualty, loss, damage, destruction or other similar loss with respect
      to real or personal property or improvements.




“ Change
      of Control ”
means,
      at any time, (i) that any “ person ”
or
      “ group ”
(within
      the meaning of Sections 13(d) and 14(d) of the Exchange Act) shall own
      directly or indirectly, beneficially or of record, Equity Interests
      representing more than 50% of either the aggregate ordinary voting power or
      the
      aggregate equity value represented by the issued and outstanding Equity
      Interests in JRCC; (ii) JRCC shall cease to beneficially own and control
      100% on a fully diluted basis of the economic and voting interest in the Equity
      Interests of its Wholly-Owned Subsidiaries except as otherwise permitted
      hereunder; or (iii) the majority of the seats (other than vacant seats) on
      the board of directors of JRCC cease to be occupied by Persons who either
      (a) were members of the board of directors of JRCC on the Closing
      Date, or (b) were nominated for election by the board of directors
      of JRCC, a majority of whom were directors on the Closing Date or whose
      election or nomination for election was previously approved by a majority of
      such directors.




“ Closing
      Date ”
means
      the Business Day, on or before February 26, 2007, on which all of the conditions
      precedent set forth in SECTION
      5.01 have
      been satisfied (or waived in accordance with the terms of this
      Agreement).




“ Coal
      Act ”
means
      the Coal Industry Retiree Health Benefits Act of 1992, as amended.




“ Coal
      Handling Facility ”
means
      any coal handling facility, including all necessary electrical, water and
      plumbing lines and systems necessary to operate such coal handling facility,
      such as, but not limited to, all tipples, conveyor belts and systems, loading
      and coal washing facilities and railroad tracks and all other surface or
      subsurface machinery, equipment, fixtures, goods, inventory, facilities,
      supplies and other property of whatsoever kind or nature now or hereafter
      located on or under any of the property which are used or useful for the mining,
      gathering, extraction, loading, production, treatment, processing, storage
      or
      transportation of coal and other minerals, all coal storage and transportation
      facilities, administrative facilities and vehicle parking facilities related
      thereto and all leases in respect of the foregoing.




“ Coal
      Supply Agreements ”
means
      those contracts entered into by a Borrower or any Subsidiary of a Borrower
      for
      the sale, purchase, exchange, processing or handling of coal.




“ Code ”
means
      the Internal Revenue Code of 1986, as amended, and the regulations promulgated
      thereunder, in each case as in effect from time to time. References to sections
      of the Code shall be construed also to refer to any successor
      sections.




“ Collateral ”
means
      all current and future assets, properties and rights of each Credit Party,
      including all affiliate indebtedness, all Intellectual Property, all
      receivables, all leaseholds, all license and other contract rights; and all
      products and proceeds of any of the foregoing, including insurance policies
      and
      proceeds and shall include Mortgaged Property and all assets defined as
“Collateral” in, or otherwise subject to the Lien of, the Security Agreement or
      any Security Documents.




6




“ Collateral
      Access Agreement ”
means
      an agreement in the form set forth in Exhibit C-1 .




“ Collateral
      Agent ”
has
      the
      meaning ascribed to such term in the introductory paragraph hereto.




“ Collections ”
means
      all cash, checks, notes, instruments, and other items of payment (including
      insurance and condemnation proceeds, cash proceeds of sales and other voluntary
      or involuntary dispositions of property, rental proceeds, royalties, settlements
      and tax refunds).




“ Commitment ”
means,
      with respect to any Lender, the obligation of such Lender to make a Term Loan
      B
      Loan or Term Letter of Credit pursuant to the terms and conditions of this
      Agreement, and which shall not exceed the principal amount set forth opposite
      such Lender’s name on Schedule 2.01(a) under
      the heading “ Commitment ”,
      and
“ Commitments ”
means
      the aggregate principal amount of the Commitments of all the Lenders up to
      the
      Maximum Term Loan Amount.




“ Commitment
      Fee ”
shall
      mean a fee on the amount of the Term Letter of Credit Obligations payable on
      each Interest Payment Date in cash in an amount equal to four percentage points
      per annum times the amount of the Term Letter of Credit
      Obligations.




“ Compliance
      Certificate ”
has
      the
      meaning ascribed to such term in SECTION
      7.01(d) .




“ Condemnation ”
means
      any taking by a Governmental Authority of property or assets, or any part
      thereof or interest therein, for public or quasi-public use under the power
      of
      eminent domain, by reason of any public improvement or condemnation or in any
      other manner.




“ Consolidated
      EBITDA ”
means,
      with respect to any Person for any period, the consolidated Net Income of such
      Person for such period plus ,
      without
      duplication, the sum of the following amounts of such Person for such period
      to
      the extent deducted in the determination of consolidated Net Income of such
      Person for such period: (a) Net Interest Expense and all fees and charges
      in connection with the Agreement, the Revolving Credit Agreement and the Prior
      Credit Agreement, (b) provisions for federal, state, local, and foreign
      income, value added and similar Taxes, (c) depreciation expense,
      (d) amortization expense, (e) non-cash extraordinary, unusual or
      non-recurring losses (determined on an after tax basis), and (f) non-cash
      expenses from the granting of stock options and restricted stock grants minus ,
      the
      amount of non-cash extraordinary, unusual or non-recurring gains
      (determined on an after tax basis) of such Person for such period to the extent
      added in the determination of consolidated Net Income of such Person for such
      period. For the avoidance of doubt, the calculation of Consolidated EBITDA
      shall
      exclude any non-cash prepaid asset write-off related to KRP in the amount of
      six
      million Dollars ($6,000,000) for Fiscal Year 2007.




“ Consolidated
      Funded Indebtedness ”
means,
      with respect to any Person at any date, all Debt for Borrowed Money of such
      Person, determined on a consolidated basis in accordance with GAAP, including,
      in any event, but without duplication, with respect to the Credit Parties,
      the
      amount of the Term Loan Obligations, all loans and letters of credit under
      the
      Revolving Credit Agreement and the amount of their Capitalized Lease
      Obligations.




7




“ Contingent
      Obligation ”
means,
      with respect to any Person, any obligation of such Person guaranteeing or
      intended to guarantee any Indebtedness of any other Person in any manner,
      whether directly or indirectly, including, without limitation, (a) the
      direct or indirect guaranty, endorsement (other than for collection or deposit
      in the ordinary course of business), co-making, discounting with recourse or
      sale with recourse by such Person of the obligation of a primary obligor,
      (b) the obligation to make take-or-pay or similar payments, if required,
      regardless of nonperformance by any other party or parties to an agreement,
      or
      (c) any obligation of such Person, whether or not contingent, (i) to
      purchase any such primary obligation or any property constituting direct or
      indirect security therefor, (ii) to advance or supply funds (A) for
      the purchase or payment of any such primary obligation, or (B) to maintain
      working capital or equity capital of the primary obligor or otherwise to
      maintain the net worth or solvency of the primary obligor, (iii) to
      purchase property, assets, Securities or services primarily for the purpose
      of
      assuring the owner of any such primary obligation of the ability of the primary
      obligor to make payment of such primary obligation, or (iv) otherwise to
      assure or hold harmless the holder of such primary obligation against loss
      in
      respect thereof.




“ Control
      Agreement ”
means,
      with respect to a Securities Account or a Deposit Account, an agreement, in
      form
      and substance reasonably satisfactory to the Collateral Agent, which effectively
      gives “ control ”
(as
      defined in the UCC) to the Collateral Agent in such Securities Account and
      all
      investment property contained therein or such Deposit Account and all funds
      contained therein, as the case may be.




“ Conversion
      Amount ”
has
      the
      meaning ascribed to such term in Annex A .




“ Copyrights ”
means,
      with respect to the Credit Parties (i) all copyrights arising under the
      laws of the United States, any other country, or union of countries, or any
      political subdivision of any of the foregoing, whether registered or
      unregistered and whether published or unpublished, all registrations and
      recordings thereof, and all applications in connection therewith and rights
      corresponding thereto throughout the world, including all registrations,
      recordings and applications in the United States Copyright Office, and
      (ii) all other rights of any kind whatsoever accruing thereunder or
      pertaining thereto including rights to receivables and royalties from the
      exploitation thereof.




“ Credit
      Parties ”
means,
      collectively, the Borrowers and the Guarantors.




“ Debt
      for Borrowed Money ”
of
      any
      Person means, at any date of determination, without duplication, the sum of
      (a) all items that, in accordance with GAAP, would be classified as
      indebtedness on a consolidated balance sheet of such Person at such date,
      (b) all Obligations of such Person under acceptance, letter of credit or
      similar facilities at such date, whether or not drawn, and (c) the Term
      Loan Obligations; provided  that ,
      with
      respect to the Borrowers and their Subsidiaries, Debt for Borrowed Money shall
      exclude, to the extent otherwise included in the items in
      clause (a) or (b) above, (i) accounts payable and accrued
      liabilities in the ordinary course of business of the Borrowers and their
      Subsidiaries so long as no longer than 90 days past due, and (ii) notes,
      bills and checks presented in the ordinary course of business by such Person
      to
      banks for collection or deposit.




8




“ Default ”
means
      an event which, with the giving of notice or the lapse of time or both, would
      constitute an Event of Default.




“ Deposit
      Account ”
means
      a
“ deposit
      account ”
as
      that
      term is defined in Article 9 of the UCC.




“ Disposition ”
means
      any transaction, or series of related transactions, pursuant to which any Credit
      Party conveys, sells, leases or subleases, assigns, transfers or otherwise
      disposes of any part of its business, property or assets (whether now owned
      or
      hereafter acquired) to any other Person, in each case whether or not the
      consideration therefor consists of cash, Securities or other assets, excluding
      any sales of Inventory in the ordinary course of business.




“ Dollar ”,
      “ Dollars ”
and
      the
      symbol “ $ ”
each
      means lawful money of the United States of America.




“ Domestic
      Subsidiary ”
means
      any Subsidiary organized under the laws of the United States of America, any
      State thereof or the District of Columbia.




“ Eligible
      Assignee ”
means
      (a) a Lender; (b) an Affiliate of a Lender; (c) an Approved Fund; (d) a
      commercial bank having total assets in excess of $250,000,000; (e) a finance
      company, insurance company, or other financial institution or fund that is
      engaged in making, purchasing, or otherwise investing in commercial loans in
      the
      ordinary course of its business and having (together with its Affiliates) total
      assets in excess of $250,000,000; or (f) any other Person approved by the
      Administrative Agent and, if no Event of Default has occurred and is continuing,
      the Borrowers (such approval not to be unreasonably withheld, delayed or
      conditioned).




“ Environmental
      Actions ”
means
      any complaint, summons, citation, notice, directive, order, claim, litigation,
      investigation, judicial or administrative proceeding, judgment, letter or other
      communication from any Governmental Authority or other Person alleging
      violations of, or liability under, any Environmental Law or Releases of
      Hazardous Materials on, in, at, to, from or under (i) any assets,
      properties or businesses of the Borrowers or any of their Subsidiaries or any
      of
      their respective predecessors in interest, and (ii) any facilities which
      received Hazardous Materials generated by the Borrowers or any of their
      Subsidiaries or any of their respective predecessors in interest.




“ Environmental
      Laws ”
means
      any federal, state, local or foreign law or regulation relating to the
      protection of the environment or health and safety including the Comprehensive
      Environmental Response, Compensation, and Liability Act (42 U.S.C.
§ 9601, et  seq .),
      the
      Hazardous Materials Transportation Act (49 U.S.C. § 1801, et  seq .),
      the
      Resource Conservation and Recovery Act (42 U.S.C. § 6901, et  seq .),
      the
      Federal Clean Water Act (33 U.S.C. § 1251 et  seq .),
      the
      Clean Air Act (42 U.S.C. § 7401 et  seq .),
      and
      the Toxic Substances Control Act (15 U.S.C. § 2601 et  seq .)
      and
      any other law, including common law, relating to the environment (including,
      without limitation, laws relating to the storage, generation, use, handling,
      manufacture, processing, labeling, advertising, sale, display, transportation,
      treatment, reuse, recycling, release and disposal of Hazardous Materials),
      as
      such laws may be amended or otherwise modified from time to time, and any other
      present or future federal, state, provincial, local or foreign statute,
      ordinance, rule, regulation, order, judgment, decree, permit, license or other
      binding determination (including the common law) of any Governmental Authority
      imposing liability or establishing standards of conduct for protection of the
      environment.




9




“ Environmental
      Liabilities and Costs ”
means
      all liabilities, monetary obligations, Remedial Actions, losses, damages,
      punitive damages, consequential damages, treble damages, costs and expenses
      (including all reasonable fees, disbursements and expenses of counsel, experts
      and consultants and costs of investigations and feasibility studies), fines,
      penalties, sanctions and interest incurred as a result of any claim or demand
      by
      any Governmental Authority or any third party, and which relate to any
      environmental condition or a Release of Hazardous Materials from or onto
      (a) any property presently or formerly owned by the Borrowers or any of
      their Subsidiaries, or (b) any facility which received Hazardous Materials
      generated by the Borrowers or any of their Subsidiaries.




“ Environmental
      Lien ”
means
      any Lien in favor of any Governmental Authority for Environmental Liabilities
      and Costs or otherwise relating to any Environmental Law.




“ Equipment ”
means,
      with respect to any Person, all of such Person’s now owned or hereafter acquired
      right, title, and interest with respect to equipment (including, without
      limitation, “ equipment ”
as
      such
      term is defined in Article 9 of the UCC), machinery, machine tools, motors,
      furniture, furnishings, fixtures, vehicles, tools, parts, goods (other than
      consumer goods, farm products, or Inventory), wherever located, including all
      attachments, accessories, accessions, replacements, substitutions, additions,
      and improvements to any of the foregoing.




“ Equity
      Interests ”
means,
      with respect to any Person, shares of capital stock of (or other ownership
      or
      profit interests in) such Person, warrants, options or other rights for the
      purchase or other acquisition from such Person of shares of capital stock of
      (or
      other ownership or profit interests in) such Person, whether preferred or common
      and whether voting or nonvoting (or other ownership or profit interests in)
      such
      Person or warrants, rights or options for the purchase or other acquisition
      from
      such Person of such shares (or such other interests), and other ownership or
      profit interests in such Person (including, without limitation, partnership,
      member or trust units or interests therein), whether voting or nonvoting, and
      whether or not such shares, warrants, options, rights or other interests are
      authorized or otherwise existing on any date of determination.




“ ERISA ”
means
      the Employee Retirement Income Security Act of 1974, as amended, and the
      regulations promulgated thereunder, in each case as in effect from time to
      time.
      References to sections of ERISA shall be construed also to refer to any
      successor sections.




“ ERISA
      Affiliate ”
means,
      with respect to each Credit Party, any trade or business (whether or not
      incorporated) which is a member of a group of which such Credit Party is a
      member and which would be deemed to be a “ controlled
      group ”
within
      the meaning of Sections 414(b), (c), (m) and (o) of the Code.




10




“ ERISA
      Event ”
means
      (a) a Reportable Event with respect to any Benefit Plan, (b) the
      filing of a notice of intent to terminate a Benefit Plan in a distress
      termination (as described in Section 4041(c) of ERISA), (c) the
      institution by the Pension Benefit Guaranty Corporation of proceedings to
      terminate a Benefit Plan or Multiemployer Plan, (d) the appointment of a
      trustee to administer any Benefit Plan under Section 4042 of ERISA, or
      (e) any event requiring the Borrowers or any ERISA Affiliate to provide
      security to a Benefit Plan under Section 401(a)(29) of the
      Code.




“ Eurodollar
      Reserve Percentage ”
means,
      for any day, the percentage, expressed as a decimal and rounded upwards, if
      necessary, to the next higher 1/100 th of 1%,
      that is in effect for such day as prescribed by the Federal Reserve Board (or
      any successor) for determining the maximum reserve requirement (including any
      basic, supplemental or emergency reserves) in respect of Eurocurrency
      liabilities, as defined in Regulation D of such Board as in effect from time
      to
      time, or any similar category of liabilities for a member bank of the Federal
      Reserve System in The City of New York.




“ Event
      of Default ”
has
      the
      meaning ascribed to such term in SECTION
      11.01 .




“ Excess
      Cash Flow ”
means,
      for any Fiscal Year, (a) Consolidated EBITDA of the Borrowers during such
      Fiscal Year plus ,
      (b) in each case to the extent deducted in the determination of
      Consolidated EBITDA (in each case, without duplication) non-cash charges
      deducted in calculating consolidated pretax net income of the Borrowers for
      such
      Fiscal Year minus (c) the sum of the following, in each case to the extent added in the
      determination of Consolidated EBITDA, (i) Capital Expenditures of the
      Borrowers during such Fiscal Year to the extent such Capital Expenditures are
      paid in cash (and not financed), (ii) the aggregate amount of all
      repayments of principal of the Term Loan Obligations made in cash during such
      Fiscal Year other than repayments pursuant to SECTION
      3.02(a) and SECTION
      3.02(c) of this
      Agreement and the Revolving Loan Obligations, (iii) cash interest payments,
      all fees and charges paid in connection with this Agreement and principal
      amortization payments on Indebtedness during such Fiscal Year, and (iv) the
      aggregate amount of cash Taxes paid by the Borrowers and their Subsidiaries
      on a
      consolidated basis during such Fiscal Year.




“ Excluded
      Taxes ”
means,
      with respect to the Administrative Agent, the Collateral Agent, any Lender,
      or
      any other recipient of any payment to be made by or on account of any Obligation
      hereunder, taxes imposed on or measured by the overall net income (however
      denominated) of such recipient, franchise taxes (whether or not in lieu of
      net
      income taxes) and branch profits taxes, in each case imposed on such recipient,
      by a jurisdiction (or any political subdivision thereof) as a result of the
      recipient being organized or having its principal office or, in the case of
      any
      Lender, its applicable lending office in such jurisdiction.




“ Existing
      Debt ”
means
      Indebtedness of the Borrowers and their Subsidiaries listed on Schedule E-1 .




“ Extraordinary
      Receipts ”
means
      any cash received by any of the Credit Parties outside the ordinary course
      of
      business, which cash is not included in the calculation of Excess Cash Flow,
      including without limitation, returns on capital investments, insurance proceeds
      from key man life or other insurance, foreign, federal, state or local tax
      refunds, pension plan reversions, and judgments or settlements or other
      consideration received in connection with any claim or cause of action,
      indemnity and reimbursement payments and any release of funds from an escrow
      or
      similar arrangement, in each case, net of applicable taxes and expenses; provided  that Extraordinary Receipts shall not include (a) Net Cash Proceeds or Net
      Casualty/Condemnation Proceeds which are subject to SECTION
      3.02(a) and
      (b) Net Offering Proceeds and proceeds from the issuance or incurrence of
      Indebtedness.




11




“ Federal
      Funds Rate ”
means,
      for any period, a fluctuating interest rate equal for each day during such
      period to the weighted average of the rates on overnight Federal Funds
      transactions with members of the Federal Reserve System arranged by Federal
      Funds brokers, as published for such day (or, if such day is not a Business
      Day,
      for the next preceding Business Day) by the Federal Reserve Bank of New York,
      or, if such rate is not so published for any day which is a Business Day, the
      average of the quotations for such day on such transactions received by the
      Administrative Agent from three Federal Funds brokers of recognized standing
      selected by the Administrative Agent in the exercised of its
      discretion.




“ Federal
      Reserve Board ”
or
      the
“ Board ”
means
      the Board of the Federal Reserve System or any Governmental Authority succeeding
      to its functions.




“ Field
      Examination ”
has
      the
      meaning set forth in SECTION
      8.04(b) .




“ Fiscal
      Month ”
means
      each calendar month.




“ Fiscal
      Quarter ”
means
      the calendar quarter ending on each March 31, June 30, September 30 and December
      31 of any Fiscal Year.




“ Fiscal
      Year ”
means
      the fiscal year of the Borrowers ending on December 31.




“ Foreign
      Subsidiary ”
means
      a
      Subsidiary other than a Domestic Subsidiary.




“ Forfeiture
      Proceeding ”
means
      any action, proceeding or investigation affecting a Credit Party before any
      court, governmental department, commission, board, bureau, agency or
      instrumentality, domestic or foreign, or the receipt of notice by any such
      party
      that any of them is a suspect in or a target of any governmental inquiry or
      investigation which may result in an indictment of any of them or the seizure
      or
      forfeiture of any of their respective properties.




“ Fraudulent
      Transfer Laws ”
has
      the
      meaning ascribed to such term in SECTION
      12.14 .




“ Fund ”
means
      any Person that is (or will be) engaged in making, purchasing, holding or
      otherwise investing in commercial loans and similar extensions of
      credit.




“ Funding
      Date ”
means,
      with respect to any Term Loan B Loan, the date upon which the amount of such
      loan is advanced to the Borrowers and, with respect to any Term Letter of
      Credit, the date upon which such Term Letter of Credit is issued for the account
      of the Borrowers.




12




“ GAAP ”
means
      generally accepted accounting principles in effect from time to time in the
      United States, provided  that ,
      for the
      purpose of the financial amounts and the definitions used herein, “ GAAP ”
shall
      mean generally accepted accounting principles in effect on the date hereof
      and
      consistent with those used in the preparation of the 2005 Financial Statements,
      and provided  further that, if
      there occurs after the date of this Agreement any change in GAAP that affects
      in
      any material respect the calculation of any financial covenant contained in ARTICLE
      X ,
      the
      Administrative Agent and the Borrowers shall negotiate in good faith an
      amendment to such financial covenant and any other provision of this Agreement
      that relates to the calculation of such financial covenant with the intent
      of
      having the respective positions of the Lenders and the Borrowers after such
      change in GAAP conform as nearly as possible to their respective positions
      as of
      the date of this Agreement and, after the execution of any such amendment or
      consent by the Required Lenders in connection with any such change in GAAP,
      “ GAAP ”
shall
      mean generally accepted accounting principles in effect on the Closing Date
      of
      such amendment or consent. Until any such amendments have been agreed upon,
      the
      covenants in ARTICLE
      X shall be
      calculated as if no such change in GAAP has occurred.




“ GE ”
means
      General Electric Capital Corporation, a Delaware corporation.




“ Governing
      Documents ”
means
      (a) with respect to any corporation (i) the articles/certificate of
      incorporation (or the equivalent organizational documents) of such corporation,
      (ii) the by-laws (or the equivalent governing documents) of the corporation
      and (iii) any document setting forth the designation, amount and/or
      relative rights, limitations and preferences of any class or series of such
      corporation’s capital stock; (b) with respect to any general partnership,
      (i) the partnership agreement (or the equivalent organizational documents)
      of such partnership, and (ii) any document setting forth the designation,
      amount and/or relative rights, limitations and preferences of any of the
      partnership interests; (c) with respect to any limited partnership,
      (i) the partnership agreement (or the equivalent organizational documents)
      of such partnership, (ii) a certificate of limited partnership (or the
      equivalent organizational documents), and (iii) any document setting forth
      the designation, amount and/or relative rights, limitations and preferences
      of
      any of the partnership interests; (d) with respect to any limited liability
      company, (i) the certificate of limited liability (or equivalent filings)
      of such limited liability company, (ii) the operating agreement (or the
      equivalent organizational documents) of such limited liability company, and
      (iii) any document setting forth the designation, amount and/or relative
      rights, limitations and preferences of any of such company’s membership
      interests; and (e) with respect to any unlimited liability company,
      (i) the certificate of incorporation (or the equivalent organizational
      documents) of such unlimited liability company, (ii) the memorandum and
      articles of association (or the equivalent governing documents) of such
      unlimited liability company, and (iii) any document setting forth the
      designation, amount and/or relative rights, limitations and preferences of
      any
      class or series of such unlimited liability company’s capital stock; including,
      in each case, all agreements and other documents establishing voting limitations
      and rights, puts, calls, options and other arrangements among holders of Equity
      Interests in such corporation, partnership or company.




“ Governmental
      Authority ”
means
      any nation or government, any federal, state, provincial, city, town, municipal,
      county, local or other political subdivision thereof or thereto and any
      department, commission, board, bureau, instrumentality, agency or other entity
      exercising executive, legislative, judicial, taxing, regulatory or
      administrative powers or functions of or pertaining to government.




13




“ Grantor ”
has
      the
      meaning ascribed to such term in the Security Agreement.




“ Guaranteed
      Obligations ”
has
      the
      meaning ascribed to such term in SECTION
      12.01 .




“ Guarantors ”
means
      the guarantors signatory hereto, the Borrowers’ current Wholly Owned
      Subsidiaries and each of the Borrowers’ future Subsidiaries that is required to
      become a Guarantor hereunder from time to time.




“ Guaranty ”
means
      the guaranty of each of the Guarantors pursuant to ARTICLE
      XII .




“ Hazardous
      Materials ”
means
      (a) any element, compound or chemical that is regulated under any
      Environmental Law including any substance that is defined, listed or otherwise
      classified as a contaminant, pollutant, toxic pollutant, toxic or hazardous
      substance, extremely hazardous substance or chemical, hazardous waste, special
      waste, or solid waste under Environmental Laws; (b) petroleum and its
      refined products; (c) polychlorinated biphenyls; (d) any waste
      exhibiting a hazardous characteristic, including, but not limited to,
      corrosivity, ignitability, toxicity or reactivity as well as any radioactive
      or
      explosive materials; and (e) friable asbestos-containing
      materials.




“ Hedging
      Agreement ”
means
      any and all interest rate transactions, agreements or documents now existing
      or
      hereafter entered into by a Credit Party with a Hedging Agreement Provider
      for
      the purpose of hedging the Borrowers’ or the Guarantors’, as the case may be,
      exposure to fluctuations in interest rates.




“ Hedging
      Agreement Provider ”
means
      any Person that enters into a Hedging Agreement with a Credit Party to the
      extent such Person is an Agent or the Affiliate of an Agent.




“ Hedging
      Obligations ”
means
      obligations and liabilities entered into with any Hedging Agreement Provider,
      owing by any Credit Party under Hedging Agreements.




“ Highest
      Lawful Rate ”
has
      the
      meaning ascribed to such term in SECTION
      4.01(c) .




“ Indebtedness ”
means,
      without duplication, with respect to any Person (a) all indebtedness of
      such Person for borrowed money; (b) all obligations of such Person for the
      deferred purchase price of property or services (other than trade payables
      incurred in the ordinary course of business irrespective of when paid);
      (c) all obligations of such Person evidenced by bonds, debentures, notes or
      other similar instruments; (d) all obligations and liabilities of such
      Person created or arising under any conditional sales or other title retention
      agreement with respect to property used and/or acquired by such Person, even
      if
      the rights and remedies of the lessor, seller and/or lender thereunder are
      limited to repossession or sale of such property; (e) all Capitalized Lease
      Obligations of such Person; (f) all obligations and liabilities of such
      Person as an account party, in respect of letters of credit, bankers’
acceptances and similar facilities; (g) all the aggregate mark-to-market
      exposure of such Person under Hedging Agreements; (h) all Contingent
      Obligations; and (i) all obligations referred to in clauses (a) through (h) of
      this definition of another Person secured by (or for which the holder of such
      Indebtedness has an existing right, contingent or otherwise, to be secured
      by) a
      Lien upon property owned by such Person, even though such Person has not assumed
      or become liable for the payment of such Indebtedness, provided  that the
      amount of Indebtedness of others that constitutes Indebtedness solely by reason
      of this clause (i) shall
      not for purposes of this Agreement exceed the fair market value of the
      properties or assets subject to such Lien. The Indebtedness of any Person shall
      include the Indebtedness of any partnership of or joint venture in which such
      Person is a general partner or a joint venturer that is required to be
      consolidated under GAAP to the extent such Person would be liable therefor
      under
      Applicable Law or any agreement or instrument by virtue of such Person’s
      ownership interest in or other relationship with such entity, except to the
      extent the terms of such Indebtedness provide that such Person shall not be
      liable therefor.




14




“ Indemnified
      Matters ”
has
      the
      meaning ascribed to such term in SECTION
      14.19 .




“ Indemnitees ”
has
      the
      meaning ascribed to such term in SECTION
      14.19 .




“ Indenture ”
means
      that certain Indenture dated as of May 31, 2005 between James River Coal Company
      and U.S. Bank National Association, as Trustee for 9.375% Senior Notes due
      2012.




“ Indenture
      Reserve ”
means
      (without duplication) (a) $225,000 as of the Closing Date plus (b) the amount of (i) any Indebtedness outstanding under clause (c) or
      clause (i) of the definition of Permitted Indebtedness and (ii) any other
      Indebtedness (as that term is defined in the Indenture) that is permitted under
      Section 4.03(a)(10) of the Indenture.




“ Intellectual
      Property ”
means
      all (a) Trademarks; (b) Patents and other inventions and discoveries,
      whether patentable or not, and all patents, registrations, invention disclosures
      and applications therefor, including divisions, continuations,
      continuations-in-part and renewal applications, and including renewals,
      extensions and reissues; (c) Trade Secrets; (d) Copyrights published
      and unpublished works of authorship, whether copyrightable or not (including
      without limitation customer lists, software, databases and other compilations
      of
      information), copyrights therein and thereto, and registrations and applications
      therefor, and all renewals, extensions, restorations and reversions thereof;
      and
      (e) all domain names, other intellectual property and proprietary
      rights.




“ Intercreditor
      Agreement ”
means
      an intercreditor agreement between the Administrative Agent and the Revolving
      Loan Agent executed and delivered as of the Closing Date.




“ Interest
      Payment Date ”
means
      (a) with respect to (i) any Base Rate Loan, monthly in arrears on the
      last Business Day of each calendar month, commencing on the first such date
      to
      occur after the Closing Date and the Maturity Date; and (ii) any LIBOR Rate
      Loan, the last day of each LIBOR Period applicable to such Term Loan B
      Obligation; provided ,
      in the
      case of each LIBOR Period of longer than three months, “Interest Payment Date”
shall also include each date that is three months, or an integral multiple
      thereof, after the commencement of such LIBOR Period, (b) with respect to
      the amount of any Term Loan B Obligation prepaid, the date of such prepayment,
      and (c) with respect to all Term Loan Obligations, the Maturity
      Date.




15




“ Interest
      Rate ”
means
      interest at a rate equal to either (i) the Base Rate plus the Applicable
      Margin, or (ii) the LIBOR plus the Applicable Margin.




“ Interest
      Rate Determination Date ”
means,
      for each LIBOR Period, the second Business Day immediately preceding the first
      day of such LIBOR Period.




“ Inventory ”
means
      all Credit Parties’ now owned or hereafter acquired right, title, and interest
      with respect to all “ inventory ”
as
      defined in Article 9 of the UCC; provided  that “Inventory” shall not include coal, minerals or other Inventory that has not yet
      been extracted to the surface or otherwise is still underground.




“ Investment ”
means,
      with respect to any Person, (a) any purchase or other acquisition by that
      Person of Securities, or of a beneficial interest in Securities, issued by
      any
      other Person; (b) any purchase by that Person of all or substantially all
      of the assets of a business conducted by another Person; (c) any joint
      venture; and (d) any direct or indirect loan, advance (other than prepaid
      expenses, accounts receivable, advances and other loans to employees including,
      without limitation, employee forgivable loans and similar items made or incurred
      in the ordinary course of business) or capital contribution by that Person
      to
      any other Person, including all Indebtedness owing to such Person arising from
      a
      sale of any property or assets by such Person other than in the ordinary course
      of its business.




“ IRS ”
means
      the Internal Revenue Service or any successor federal tax Governmental
      Authority.




“ JRCC ”
has
      the
      meaning ascribed to such term in the introductory paragraph of this
      Agreement.




“ KRP ”
means
      Kentucky River Properties, LLC and its affiliates.




“ L/C
      Issuer ”
means
      Bank of New York, N.A., or one of its respective Affiliates or any other Person
      designated by the Administrative Agent and reasonably acceptable to the
      Administrative Borrower.




“ Lease ”
means
      any lease, tenancy, subtenancy, license, franchise, concession or other use
      or
      occupancy agreement, whether written or oral, and any and all extensions,
      renewals or other modifications thereof, including all oil, gas, coal and other
      minerals leases, surface leases or easements, subleases, licenses, concessions,
      operating rights or other agreements (written or verbal, now or hereafter in
      effect) which grant a possessory interest in and to, or the right to explore,
      use, lease, license, possess, produce, process, store or transport oil, gas,
      coal or other minerals from, operate from, or otherwise enjoy, any property
      or
      any interest therein, together with all amendments, modifications, extensions
      and renewals thereof (and “ landlord ”
means
      the landlord, sublandlord, lessor, sublessor, franchisor or other grantor of
      a
      right of use or occupancy under a Lease and any guarantor of its obligations
      thereunder; and “ tenant ”
means
      the tenant, subtenant, lessee, sublessee, licensee, franchisee, concessionaire
      or other occupant under a Lease and any guarantor of its obligations
      thereunder).




16




“ Leasehold
      Property ”
means
      any property or interest of any Credit Party held under any Lease of real
      property.




“ Lender ”
means
      a
      lender that has a Commitment and/or that has an outstanding Term Letter of
      Credit or Term Loan B Loan, including the lenders identified on the signature
      pages hereof, together with their respective successors and permitted assigns,
      collectively the “ Lenders ”.




“ Lender
      Expenses ”
has
      the
      meaning ascribed to such term in SECTION
      14.05 .




“ Lender-Related
      Persons ”
means,
      with respect to any Lender, such Lender, together with such Lender’s Affiliates,
      and the officers, directors, employees, counsel, advisors, agents, and
      attorneys-in-fact of such Lender and such Lender’s Affiliates.




“ Letter
      of Credit ”
has
      the
      meaning ascribed to such term in Annex A .




“ Letter
      of Credit Obligations ”
has
      the
      meaning ascribed to such term in Annex A .




“ Letter
      of Credit Usage ”
has
      the
      meaning ascribed to such term in Annex A .




“ Leverage
      Ratio ”
means,
      as of any date of determination (a) the amount of Senior Funded
      Indebtedness as of such date, divided by
      (b) the amount of Consolidated EBITDA of the Borrowers and their
      Subsidiaries for the twelve (12) month period most recently ended prior to
      that
      date; provided that, notwithstanding anything contained herein to the contrary,
      for purposes of calculating the Leverage Ratio for the fiscal quarter ending
      as
      of (i) June 30, 2007, the amount of Consolidated EBITDA required in clause
      (b)
      of this definition shall be determined by taking the amount of Consolidated
      EBITDA for the six months ended as of June 30, 2007 and multiplying that amount
      by two (i.e. 6 months Consolidated EBITDA times 2); and
      (ii) September 30, 2007, the amount of Consolidated EBITDA required in clause
      (b) of this definition shall be determined by taking the amount of Consolidated
      EBITDA for the nine months ended as of September 30, 2007, multiplying that
      amount by four and dividing the result by three (i.e. 9 months Consolidated
      EBITDA times 4/3).




“ LIBOR ”
means,
      with respect to each LIBOR Period in respect of any LIBOR Rate Loan, the rate
      per annum determined by the Administrative Agent to be the offered rate for
      deposits in Dollars for a period equal to the LIBOR Period for such LIBOR Period
      therefore appearing on the Dow Jones Markets Telerate Page 3750 as of
      11:00 a.m., London time, on the relevant Interest Rate Determination Date
      with respect to such LIBOR Period. If for any reason, such rate is not
      available, then the term “ LIBOR ”
shall
      mean, with respect to the LIBOR Period, the rate per annum (rounded upwards,
      if
      necessary, to the nearest 1/100 of 1%) appearing on Reuters Screen LIBO page
      (or
      any successor page) as the London interbank offered rate for deposits in Dollars
      as of approximately 11:00 a.m., London time, on the relevant Interest Rate
      Determination Date for a term comparable to the relevant LIBOR Period; provided  that ,
      if more
      than one rate is specified on such Reuters Screen LIBO page, the applicable
      rate
      shall be the arithmetic mean of all such rates (rounded upwards, if necessary,
      to the nearest 1/100 of 1%). If, for any reason, no such rate is provided for
      a
      term comparable to the relevant LIBOR Period, but shall be provided for a
      shorter and a longer term, then such rate shall be linearly interpolated by
      the
      Administrative Agent (which calculation shall be conclusive in the absence
      of
      manifest error). In the event that no such rate can be obtained by any of the
      above means, then the LIBOR Rate for the relevant LIBOR Period for the purposes
      of this definition shall mean the rate per annum at which, as determined by
      the
      Administrative Agent, Dollars in an amount comparable to the Term Loan B
      Obligations then requested are being offered to leading banks at approximately
      11:00 a.m., London time, on the relevant Interest Rate Determination Date for
      settlement in immediately available funds by leading banks in the London
      interbank market for a period equal to the relevant LIBOR Period.




17




“ LIBOR
      Period ”
means,
      with respect to any LIBOR Rate Loan, the period of one, two, three or six
      months, as specified by the Administrative Borrower in the applicable Borrowing
      Request or in a Notice of Conversion/Continuation and commencing on the date
      of
      the making of such LIBOR Rate Loan (or the continuation of a LIBOR Rate Loan
      or
      the conversion of a Base Rate Loan to a LIBOR Rate Loan) and ending one, two,
      three or six months thereafter; and provided  that the
      foregoing provisions are subject to the following:




(a)  if
      any
      LIBOR Period pertaining to a LIBOR Rate Loan would otherwise end on a day that
      is not a Business Day, such LIBOR Period shall be extended to the next
      succeeding Business Day unless the result of such extension would be to carry
      such LIBOR Period into another calendar month, in which event such LIBOR Period
      shall end on the immediately preceding Business Day;




(b)  any
      LIBOR
      Period pertaining to a LIBOR Rate Loan that begins on the last Business Day
      of a
      calendar month (or on a day for which there is no numerically corresponding
      day
      in the calendar month at the end of such LIBOR Period) shall end on the last
      Business Day of the relevant calendar month; and




(c)  any
      LIBOR
      Period in respect of any Term Loan B Obligation that would otherwise extend
      beyond the Maturity Date shall end on the Maturity Date.




“ LIBOR
      Rate ”
means
      a
      rate per annum (rounded upwards, if necessary, to the next higher
      1/100 th of 1%)
      determined by the Administrative Agent pursuant to the following formula:
      LIBOR/(1.00 - Eurodollar Reserve Percentage as of the Interest Rate
      Determination Date).




“ LIBOR
      Rate Loans ”
means
      Term Loan B Obligations which bear interest at a rate determined by reference
      to
      the LIBOR Rate.




“ Lien ”
means
      any lien, security interest or other encumbrance or charge of any kind, or
      any
      other type of preferential arrangement intended to have the effect of a lien
      or
      security interest, including, without limitation, the lien or retained security
      title of a conditional vendor and any easement, right of way or other
      encumbrance on title to real property.




“ Loan
      Account ”
has
      the
      meaning ascribed to such term in SECTION
      2.07 .




18


“ Loan
      Documents ”
means
      this Agreement, the Notes, the Security Documents, and all other agreements,
      instruments, and other documents executed and delivered by any Credit Party
      pursuant hereto or thereto or otherwise evidencing or securing any Term Loan
      B
      Obligation, in each case, excluding any Hedging Agreements.




“ Loan
      Exposure ”
means,
      with respect to any Lender, as of any date of determination (a) prior to
      the Closing Date, such Lender’s Commitment, and (b) after the Closing Date,
      such Lender’s Pro Rata Share of the Term Loan Obligations.




“ Material
      Adverse Effect ”
means
      a
      material adverse effect on (a) the business, operations, properties,
      assets, or condition (financial or otherwise) of the Credit Parties taken as
      a
      whole, (b) the ability of the Credit Parties to perform their obligations
      hereunder or under any of the other Loan Documents, or (c) the rights or
      remedies of the Administrative Agent, Collateral Agent or any Lender hereunder
      or under any other Loan Document.




“ Material
      Contract ”
means
      (a) each of those contracts, Leases, Mining Leases or other agreements
      listed on Schedule M-1 hereto
      and (b) any contract, Lease, Mining Lease, or other agreement (or any
      combination of any of the foregoing which are contractually related or
      cross-defaulted with each other or under any Loan Document) (i) pursuant to
      which any Credit Party is or may be obligated to pay or entitled to receive
      an
      amount equal to or greater than, (ii) the value of which, based on the
      reasonably estimated fair market value thereof or of the assets underlying
      the
      same, or (iii) in the case of any Mining Lease(s), the average production under
      which is reasonably expected to have a fair market value of (in each case under
      the foregoing clauses (i), (ii) and (iii)), $25,000,000 **** per
      annum
      or such lesser amount as may constitute 5% of the revenue of the Borrowers
      and
      their Subsidiaries for the twelve months ended on the financial statements
      most
      recently delivered under SECTION
      7.01(a) .




“ Maturity
      Date ”
means
      February 26, 2013, or such earlier date as the Obligations may become due and
      payable pursuant to the terms of this Agreement, whether by acceleration or
      otherwise.




“ Maximum
      Term Loan Amount ”
means
      $100,000,000.




“ Maximum
      Term Loan B Amount ”
means
      $40,000,000.




“ Maximum
      Term Letter of Credit Amount ”
means
      $60,000,000.




“ Mine ”
means
      any excavation or opening into the earth now and hereafter made from which
      coal
      or other minerals are or can be extracted on or from any of the properties
      owned
      or leased by a Borrower or any Subsidiary of a Borrower, together with all
      appurtenances, fixtures, structures, improvements and assets in connection
      therewith.




“ Mining
      Law ”
means
      all treaties, laws, rules, regulations, codes, ordinances, orders, decrees,
      judgments, injunctions, notices or binding agreements issued, promulgated or
      entered into by any Governmental Authority, relating in any way to mining
      operations and activities, including the Federal Coal Leasing Amendments Act,
      the Surface Mining Control and Reclamation Act, the Federal Coal Mine Health
      and
      Safety Act, the Black Lung Act and the Coal Act, in each case as
      amended.




19




“ Mining
      Lease ”
means
      a
      Lease, easement, right of access or other agreement pursuant to which a Borrower
      or any Subsidiary of a Borrower has rights with respect to coal reserves or
      the
      right to mine or extract coal or other minerals from the ground.




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




“ Morgan
      Stanley ”
means
      Morgan Stanley Senior Funding, Inc., a Delaware corporation.




“ Mortgage ”
means
      a
      mortgage, deed of trust and/or assessment and other similar security instrument
      with respect to Real Estate Assets executed and delivered by a Credit Party
      in
      favor of the Collateral Agent, in form and substance reasonably satisfactory
      to
      the Collateral Agent, as the same may be amended, modified and otherwise
      supplemented from time to time.




“ Mortgaged
      Property ”
means
      each parcel of real property and the improvements thereto as set forth as of
      the
      Closing Date on Schedule
      M-2 and any
      other such property which becomes subject to a Mortgage granted in connection
      with this Agreement.




“ Multiemployer
      Plan ”
means
      a
“ multiemployer
      plan ”
as
      defined in Section 4001(a)(3) of ERISA to which the Credit Parties or any
      of their ERISA Affiliates has contributed, or has been obligated to contribute,
      at any time during the preceding six years, or has liability.




“ Net
      Cash Proceeds ”
means
      all cash and Cash Equivalents received by a Credit Party or any Wholly-Owned
      Subsidiary from time to time in connection with a Disposition (whether as
      initial consideration or through the payment of deferred consideration) other
      than a Disposition permitted under SECTION
      9.04 ,
      after
      deducting therefrom only (a) the principal amount of any Indebtedness of
      such Credit Party secured by any Permitted Encumbrance on any asset that is
      the
      subject of the Disposition (other than Indebtedness assumed by the purchaser
      of
      such asset) which is required to be, and is, repaid in connection with such
      Disposition (other than Indebtedness under this Agreement), (b) reasonable
      fees and expenses related thereto reasonably incurred by such Credit Party
      in
      connection therewith, and (c) a provision for any Taxes to be paid or
      reasonably estimated to be payable, in connection with such Disposition (after
      taking into account any tax credits or deductions and any tax sharing
      arrangements).




“ Net
      Casualty/Condemnation Proceeds ”
means,
      with respect to any Casualty or Condemnation, the amount of any insurance
      proceeds or condemnation awards received by a Credit Party from time to time
      in
      connection with such Casualty or Condemnation, but excluding any proceeds or
      awards required to be paid to a creditor (other than the Lenders) which holds
      a
      first-priority Lien permitted pursuant to this Agreement on the property which
      is subject of such Casualty or Condemnation after deducting therefrom only
      (a) a reserve for any Taxes to be paid or estimated by the applicable
      Credit Party to be paid as a result of such Casualty or Condemnation, and
      (b) to the extent not excluded above, payments to retire Indebtedness where
      payment of such Indebtedness is required in connection with such Casualty or
      Condemnation.




20




“ Net
      Income ”
means,
      with respect to any Person for any period, the net income (loss) of such Person
      and its consolidated Subsidiaries for such period, determined on a consolidated
      basis in accordance with GAAP.




“ Net
      Interest Expense ”
means,
      with respect to any Person for any period, interest expense of such Person
      and
      its consolidated Subsidiaries for such period (after the elimination of
      intercompany items) determined on a consolidated basis in conformity with GAAP less the
      interest income for such period, determined on a consolidated basis in
      accordance with GAAP for such Person and its consolidated
      Subsidiaries.




“ Net
      Offering Proceeds ”
means
      an amount equal to the cash and Cash Equivalents raised in any initial or
      secondary public or private offering or sale of any equity security of any
      Credit Party minus any
      direct, reasonable costs, fees, taxes, commissions and underwriting discounts
      incurred and paid in connection therewith.




“ Non-Consenting
      Lender ”
has
      the
      meaning ascribed to such term in SECTION
      14.03(a) .




“ Non-U.S.
      Lender ”
has
      the
      meaning ascribed to such term in SECTION
      3.04(e)(i) .




“ Note ”
means
      a
      promissory note in substantially the form attached as Exhibit N-1 payable
      to a Lender pursuant to SECTION
      2.04 .




“ Notice
      of Conversion/Continuation ”
means
      a
      notice substantially in the form of Exhibit N-2 attached
      hereto and made a part hereof.




“ Notice
      of Default ”
has
      the
      meaning ascribed to such term in SECTION
      13.03 .




“ Obligations ”
means
      all Term Loan Obligations, Lender Expenses, advances, debts, liabilities, fees,
      interest, obligations, covenants and duties, owing by any Credit Party to the
      Administrative Agent, the Collateral Agent, any L/C Issuer, any Lender, any
      Affiliate of any Lender, any Hedging Agreement Provider or any Person entitled
      to indemnification pursuant to SECTION
      14.19 of this
      Agreement, of any kind or nature, present or future, whether or not evidenced
      by
      any note, guaranty or other instrument, whether or not for the payment of money,
      whether arising by reason of an extension of credit, loan, guaranty,
      indemnification, interest rate contract, foreign exchange contract or in any
      other manner, whether direct or indirect (including those acquired by
      assignment), absolute or contingent, due or to become due, but in all such
      circumstances only to the extent now existing or hereafter arising or however
      acquired, arising under or in connection with this Agreement, the Notes, any
      other Loan Document or any application or documentation of any L/C Issuer in
      connection with the issuance of a Term Letter of Credit. The term includes
      all
      interest (including any interest that, but for the provisions of the Bankruptcy
      Code, would have accrued), charges, expenses, fees, attorneys’ fees and
      disbursements, Lender Expenses and any other sum chargeable to the Credit
      Parties under this Agreement, the Notes, or any other Loan Document and all
      Hedging Obligations.




“ Officer’s
      Certificate ”
has
      the
      meaning ascribed to such term in SECTION
      7.01(d) .




21





“ Office
      Lease ”
means
      any space Lease solely for an office or any other administrative operations,
      but
      specifically excluding all Mining Leases and Prep Plant Leases.




“ Operating
      Lease ”
means,
      as applied to any Person, any lease (including leases that may be terminated
      by
      the lessee at any time) of any property (whether real, personal or mixed) that
      is not a Capitalized Lease other than any such lease under which that Person
      is
      the lessor.




“ Other
      Taxes ”
has
      the
      meaning ascribed to such term in SECTION
      3.04(b) .




“ Participant ”
has
      the
      meaning ascribed to such term in SECTION
      14.10(e) .




“ Patents ”
means
      all of the following in which any Person now holds or hereafter acquires any
      interest: (a) all letters patent of the United States or any other country,
      all registrations and recordings thereof, all applications for letters patent
      of
      the United States or any other country, including registrations, recordings
      and
      applications in the United States Patent and Trademark Office or in any similar
      office or agency of the United States, any State or Territory thereof, or any
      other country and all patentable inventions and improvements described and
      claimed in any of the foregoing, (b) all reissues, continuations,
      continuations-in-part, divisions, renewals, or extensions thereof and all
      amendments and supplements thereto and improvements thereon, (c) all patent
      licenses held by any Credit Party and (d) including in the case of each of
      (a), (b) and (c), all rights corresponding thereto in the United States and
      in every other country, including the right to make, use, lease, license, sell
      and otherwise transfer the technology or inventions disclosed therein, all
      income and proceeds thereof and all license royalties and proceeds of
      infringement suits.




“ Patriot
      Act ”
means
      the Uniting and Strengthening America by Providing Appropriate Tools Required
      to
      Intercept and Obstruct Terrorism Act of 2001, Title III of Pub. L. No. 107-56
      (signed into law October 26, 2001).




“ PBGC ”
has
      the
      meaning ascribed to such term in SECTION
      6.01(i) .




“ Permits ”
has
      the
      meaning ascribed to such term in SECTION
      6.01(l) .




“ Permitted
      Acquisition ”
means
      acquisitions satisfying all of the following conditions:




(a)  one
      or
      more acquisitions for a purchase price not exceeding $25,000,000 in the
      aggregate for all such acquisitions (including the amount of any Indebtedness
      assumed as part of any such acquisition), consummated by or through the
      Borrowers or any of their Subsidiaries (including any newly formed Subsidiary
      of
      a Borrower), of a Person engaged in substantially the same general line of
      business or businesses as those in which the Borrowers or any of their
      Subsidiaries is engaged or businesses reasonably related thereto;




(b)  such
      acquisition shall be consensual and shall have been approved by the board of
      directors (or similar governing body) of the Person whose Equity Interests
      or
      assets are proposed to be acquired and shall not have been preceded by an
      unsolicited tender offer for such Equity Interests by, or proxy contest
      initiated by, a Borrower or any Subsidiary of such Borrower;




22




(c)  the
      Administrative Borrower provides Agent with prior notice (which notice shall
      not
      be less than 10 days prior to the closing date of such acquisition) of such
      acquisition and a draft of the proposed acquisition agreement;




(d)  the
      Administrative Borrower delivers a pro forma compliance certificate, prepared
      on
      a pro forma basis after giving effect to the proposed acquisition or
      acquisitions, demonstrating compliance with this Agreement and that the Leverage
      Ratio immediately after giving effect to the acquisition or acquisitions is
      equal to or less than the Leverage Ratio for the Borrowers and their
      subsidiaries without the acquired entity, business or assets immediately prior
      thereto;




(e)  the
      aggregate amount of EBITDA for the last 12 consecutive month period of each
      such
      Person (or each such business or assets) being acquired is not less than $1
      as
      of the month most recently ended prior to the date of such
      Acquisition;




(f)  an
      Authorized Officer of the Administrative Borrower shall have delivered a
      certificate attesting to the Solvency of the Borrowers and their Subsidiaries
      taken as a whole, including the acquired entity, business or assets, after
      giving effect to the acquisition;




(g)  the
      Administrative Borrower shall deliver updated disclosure schedules to this
      Agreement and to each of the other Loan Documents, as applicable;




(h)  any
      Indebtedness or Liens assumed in connection with each such acquisition are
      otherwise permitted under SECTION
      9.02 or SECTION
      9.03 ,
      respectively; and




(i)  no
      Default or Event of Default shall exist immediately prior to or shall have
      occurred and be continuing or would result from the consummation of the proposed
      acquisition or acquisitions.




“ Permitted
      Encumbrances ”
      means:




(j)  Liens
      imposed by law for unpaid utilities and taxes, assessments or governmental
      charges or levies that are not yet due or are being contested in a Permitted
      Protest;




(k)  landlords’,
      carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s and other like
      Liens imposed by law, arising in the ordinary course of business and securing
      obligations that are not overdue or are being contested in a Permitted
      Protest;




(l)  deposits
      of cash made in the ordinary course of business in compliance with workers’
compensation, unemployment insurance and other social security or employment
      laws or regulations or similar legislation or to secure public, statutory or
      regulatory obligations;




(m)  deposits
      of cash to secure the performance of bids, trade contracts, utility services,
      government contracts, statutory or regulatory obligations, surety and appeal
      bonds, performance bonds and other obligations of a like nature, in each case
      in
      the ordinary course of business;




23




(n)  deposits
      of cash required under Leases that were entered into in the ordinary course
      of
      business and that are not prohibited hereunder;




(o)  easements,
      zoning restrictions, rights-of-way and similar encumbrances on real property
      imposed by law or arising in the ordinary course of business that do not secure
      any monetary obligations and which individually or in the aggregate do not
      have
      a Material Adverse Effect;




(p)  Liens
      existing on the Closing Date and listed on Schedule P-1 hereto
      and, if the Indebtedness secured by such Lien is refinanced pursuant to a
      Permitted Refinancing, any Lien securing the Permitted Refinancing of such
      Indebtedness, provided  that such
      Lien securing Indebtedness under a Permitted Refinancing does not extend to
      or
      cover any property or asset of any Credit Party not subject to the Lien on
      the
      Closing Date and listed on Schedule P-1 ;




(q)  Liens
      securing the Obligations and/or created by the Security Documents;




(r)  any
      interest or title of a lessor, sublessor, licensee or licensor under any
      operating lease or license agreement entered into in the ordinary course of
      business and which does not, individually or in the aggregate, have a Material
      Adverse Effect;




(s)  Liens
      securing Indebtedness described in clause
      (c) of
      the definition of “ Permitted
      Indebtedness ”;
      and




(t)  Liens
      in
      favor of the collateral agent under the Revolving Credit Agreement that are
      subject to the Intercreditor Agreement.




“ Permitted
      Indebtedness ”
      means:




(u)  the
      Indebtedness listed on Schedule P-2 and
      extensions, renewals and replacements thereof;




(v)  Indebtedness
      of the Credit Parties under this Agreement or other Loan Documents;




(w)  purchase
      money Indebtedness and Capitalized Lease Obligations incurred after the Closing
      Date to acquire equipment or real property in the ordinary course of business; provided  that (i) the aggregate amount of all such Indebtedness does not exceed five
      million Dollars ($5,000,000) at any time outstanding, (ii) the Indebtedness
      when incurred shall not be more than 90% of the lesser of the cost or fair
      market value of the acquired asset as of the time of acquisition of the asset
      financed, (iii) such Indebtedness is issued and any Liens securing such
      Indebtedness are created prior to or within 60 days after the acquisition of
      the
      asset financed, and (iv) no Lien securing such Indebtedness shall extend to
      or cover any property or asset other than the asset so financed;




24





(x)  intercompany
      Indebtedness owed to a Credit Party, which Indebtedness constitutes Pledged
      Debt;




(y)  Indebtedness
      under performance bonds, bid bonds, appeal bonds, surety bonds, completion
      guarantees and letter of credit obligations made in the ordinary course of
      business (i) in compliance with workers’ compensation, unemployment
      insurance and other social security or employment laws or regulations or similar
      legislation or to secure public, statutory or regulatory obligations or
      (ii) pursuant to any leases specifically permitted by this Agreement
      including Mining Leases entered into in the ordinary course of
      business;




(z)  Contingent
      Obligations with respect to endorsements of checks and other negotiable
      instruments for deposit or collection;




(aa)  Guarantees
      by a Credit Party of Indebtedness of another Credit Party if such Credit Party
      could have directly incurred such Indebtedness hereunder;




(bb)  to
      the
      extent constituting Contingent Obligations, indemnification obligations and
      other similar obligations of the Borrowers and their Subsidiaries in favor
      of
      directors, officers, employees, consultants or agents of the Borrowers or any
      of
      their Subsidiaries extended in the ordinary course of business or to the extent
      constituting accruals for payroll, vacation or bonus payments incurred in
      the ordinary course of business or pursuant to obligations under employment
      agreements;




(cc)  unsecured
      Indebtedness incurred in the ordinary course of business in an aggregate amount
      for all Credit Parties and its Subsidiaries taken as a whole not to exceed
      an
      amount equal to ten million Dollars ($10,000,000);




(dd)  any
      Operating Lease entered into in the ordinary course of business;
      and




(ee)  any
      Permitted Refinancing of any of the foregoing.




“ Permitted
      Investments ”
      means:




(a)  cash
      or
      Cash Equivalents in Securities Accounts or Deposit Accounts with respect to
      which a Control Agreement has been executed and delivered;




(b)  Investments
      in negotiable instruments for collection;




(c)  advances
      made in connection with purchases of goods or services in the ordinary course
      of
      business;




(d)  Investments
      (including obligations owing under Indebtedness) received in connection with
      the
      bankruptcy or reorganization of suppliers and customers and in settlement of
      delinquent obligations of, and other disputes with, customers and suppliers
      arising in the ordinary course of business;




(e)  Investments
      by a Credit Party in a Credit Party other than the Borrowers;




25




(f)  Investments
      existing on the date hereof in Persons which are Subsidiaries of such Credit
      Party on the Closing Date; and




(g)  Investments
      consisting of non-cash consideration received from the purchaser of assets
      in
      connection with a sale of such assets in an aggregate amount not to exceed
      one
      million Dollars ($1,000,000).




“ Permitted
      Protest ”
means
      the right of a Person to protest any Lien (other than any such Lien that secures
      all or any portion of the Obligations) or taxes, provided  that (a) a reserve with respect to such obligation is established, if required,
      by such Person in such amount as is required under GAAP, (b) any such
      protest is instituted promptly and prosecuted diligently and in good faith
      by
      such Person, and (c) if such Permitted Protest is for an amount in excess
      of five million Dollars ($5,000,000), the Administrative Agent shall have
      determined in the exercise of its reasonable discretion, that such Lien could
      not reasonably be or become senior to, or have or obtain priority over, any
      Lien
      in favor of the Collateral Agent in or to any portion of the
      Collateral.




“ Permitted
      Refinancing ”
means,
      with respect to any Person, any modification, refinancing, refunding, renewal
      or
      extension of any Indebtedness of such Person; provided  that (a) the principal amount (or accreted value, if applicable) thereof does
      not exceed the principal amount (or accreted value, if applicable) of the
      Indebtedness so modified, refinanced, refunded, renewed or extended at the
      time
      of such Permitted Refinancing except by the amount of any fees and expenses
      incurred in connection with such modification, refinancing, refunding, renewal
      or extension, (b) such modification, refinancing, refunding, renewal or
      extension has a final maturity date equal to or later than the final maturity
      date of the Indebtedness being modified, refinanced, refunded, renewed or
      extended and the weighted average life to maturity is no shorter than the
      Indebtedness being refinanced, refunded renewed or extended, and (c) if the
      Indebtedness being modified, refinanced, refunded, renewed or extended is
      subordinated in right of payment to the Obligations, such modification,
      refinancing, refunding, renewal or extension is subordinated in right of payment
      to the Obligations on subordination terms at least as favorable to the Lenders,
      taken as a whole, as those contained in the documentation governing the
      Indebtedness being modified, refinanced, refunded, renewed or extended, as
      determined by the board of directors of such Person.




“ Person ”
means
      any individual, corporation, limited liability company, partnership,
      association, joint-stock company, trust, unincorporated organization, joint
      venture or Governmental Authority.




“ Plan ”
means
      any “ employee
      benefit plan ”,
      as
      defined in Section 3(3) of ERISA.




“ Pledged
      Debt ”
shall
      have the meaning ascribed to such term in the Security Agreement.




“ Prep
      Plant Lease ”
means
      any Lease entered into by a Credit Party in respect of a preparation plant
      and/or a related property on which the preparation plant is situated or in
      respect of a Coal Handling Facility.




26




“ Prime
      Rate ”
means
      the “Prime Rate” quoted in The Wall Street Journal, Money Rates Section as the
      Prime Rate (currently defined as the base rate on corporate loans posted by
      at
      least 75% of the nation’s thirty (30) largest banks), as in effect from time to
      time, with any change in the Prime Rate becoming effective from and including
      the date upon which any such change is publicly announced as being effective.
      The Prime Rate is a reference rate and does not necessarily represent the lowest
      or best rate actually charged to any customer. Any Agent or any other Lender
      may
      make commercial loans or other loans at rates of interest at, above or below
      the
      Prime Rate.




“ Prior
      Credit Agreement ”
means
      that certain credit agreement among the JRCC, the lenders party thereto, PNC
      Bank, National Association as administrative agent and Morgan Stanley Senior
      Funding, Inc. as syndication agent, dated as of May 31, 2006.




“ Pro
      Rata Share ”
means,
      with respect to a Lender at any time, a fraction (expressed as a percentage),
      the numerator of which is the amount of such Lender’s Commitment at such time
      and the denominator of which is the sum of the amounts of all of the Lenders’
Commitments at such time, or if no Commitments are outstanding at such time,
      a
      fraction (expressed as a percentage), the numerator of which is the amount
      of
      Obligations (other than any Hedging Obligations) owed to such Lender at such
      time and the denominator of which is the aggregate amount of the Obligations
      (other than any Hedging Obligations) owed to all Lenders at such
      time.




“ Property ”
means
      any right or interest in or to property of any kind whatsoever, whether real,
      personal or mixed and whether tangible or intangible.




“ Real
      Estate Asset ”
means,
      at any time of determination, any interest in a real property (fee, leasehold
      or
      otherwise) then owned or held by any Borrower or any of its
      Subsidiaries.




“ Recipient ”
has
      the
      meaning ascribed to such term in SECTION
      14.22 .




“ Register ”
has
      the
      meaning ascribed to such term in SECTION
      14.10(d) .




“ Registered ”
means
      issued by, registered with, renewed by or the subject of a pending application
      before any Governmental Authority or Internet domain name
      registrar.




“ Registered
      Intellectual Property ”
means
      all Intellectual Property that has been Registered with, filed in or issued
      by,
      as the case may be, the United States Patent and Trademark Office or such other
      similar filing offices, domestic or foreign, as applicable.




“ Regulation T ”,
      “ Regulation U ”,
      and
“ Regulation X ”
mean,
      respectively, Regulations T, U, and X of the Federal Reserve Board or any
      successor, as the same may be amended or supplemented from time to
      time.




“ Related
      Party ”,
      as
      applied to any Person, means any other Person directly or indirectly
      controlling, controlled by, or under common control with, that Person. For
      the
      purposes of this definition, “control” (including, with correlative meanings,
      the terms “controlling”, “controlled by” and “under common control with”), as
      applied to any Person, means the possession, directly or indirectly, of the
      power to vote ten percent (10%) or more of the Securities having voting power
      for the election of directors of such specified Person or otherwise to direct
      or
      cause the direction of the management and policies of such specified Person,
      whether through the ownership of voting Securities or by contract or
      otherwise.




27




“ Release ”
means
      any spilling, leaking, pumping, pouring, emitting, emptying, discharging,
      injecting, escaping, leaching, seeping, migrating, dumping or disposing of
      any
      Hazardous Material (including the abandonment or discarding of barrels,
      containers and other closed receptacles containing any Hazardous Material)
      into
      the environment, including ambient air, soil, surface or ground water in
      violation of any Environmental Law.




“ Remedial
      Action ”
means
      all actions taken to (a) clean up, remove, remediate, contain, treat,
      monitor, assess, evaluate or in any other way address Hazardous Materials in
      the
      environment; (b) prevent or minimize a Release or threatened Release of
      Hazardous Materials so they do not migrate or endanger or threaten to endanger
      public health or welfare or the environment; (c) perform pre-remedial
      studies and investigations and post-remedial operation and maintenance
      activities; or (d) any other actions authorized by 42 U.S.C.
§ 9601.




“ Reportable
      Event ”
means
      any of the events described in Section 4043(c) of ERISA or the
      regulations thereunder other than a Reportable Event as to which the provision
      of 30 days’ notice to the Pension Benefit Guaranty Corporation is waived under
      applicable regulations.




“ Required
      Lenders ”
means
      the Lenders whose Pro Rata Shares equal more than 50% of the Term Loan
      Obligations.




“ Requirements
      of Law ”
means,
      as to any Person, the charter and by-laws or other organizational or Governing
      Documents of such Person, and any law, ordinance, rule, regulation, requirement,
      or determination of an arbitrator or a court or other Governmental Authority,
      in
      each case applicable to or binding upon such Person or any of its property
      or to
      which such Person or any of its property is subject, including, without
      limitation, Mining Laws, the Patriot Act, the Securities Act, the Securities
      Exchange Act, Regulations T, U and X, ERISA, the Internal Revenue Code, the
      Fair
      Labor Standards Act and any certificate of occupancy, zoning ordinance,
      building, environmental or land use requirement or Permit or environmental,
      labor, employment, occupational safety or health law, rule or
      regulation.




“ Restricted
      Payments ”
means,
      with respect to any Person (a) any dividend or other distribution, direct
      or indirect, on account of any shares of any Equity Interest of such Person
      now
      or hereafter outstanding, (b) any redemption, retirement, sinking fund or
      similar payment, purchase or other acquisition for value, direct or indirect,
      of
      any Equity Interest of such Person now or hereafter outstanding, (c) any
      payment or prepayment of principal of, premium, if any, or interest, fees or
      other charges on or with respect to, and any redemption, purchase, retirement,
      defeasance, sinking fund or similar payment and any claim for rescission with
      respect to any Indebtedness which is contractually subordinated to the
      Obligations, and (d) any payment made to redeem, purchase, repurchase or
      retire, or to obtain the surrender of, any outstanding warrants, options or
      other rights to acquire shares of any class of capital stock of, partnership
      interest of or other Equity Interest of, such Person now or hereafter
      outstanding.




28




“ Revolving
      Credit Agreement ”
means
      that certain credit agreement among the Borrowers, the Guarantors, GE as
      administrative agent, collateral agent and co-lead arranger and Morgan Stanley
      as co-lead arranger dated as of February 26, 2007.




“ Revolving
      Loan Agent ”
means
      GE in its capacities as administrative agent and collateral agent under the
      Revolving Credit Agreement and any successors thereto.




“ Revolving
      Availability ”
has
      the
      meaning ascribed to the term “Availability” in the Revolving Credit
      Agreement.




“ Revolver
      Priority Collateral ”
has
      the
      meaning ascribed to such term in the Intercreditor Agreement.




“ Sale
      and Leaseback ”
has
      the
      meaning ascribed to such term in SECTION
      9.08 .




“ SEC ”
means
      the Securities and Exchange Commission or any other similar or successor agency
      of the Federal government administering the Securities Act.




“ Securities ”
means
      any capital stock, shares, voting trust certificates, bonds, debentures, notes,
      loans or other evidences of indebtedness, secured or unsecured, convertible,
      subordinated or otherwise, or any certificates of interest, shares or
      participations in temporary or interim certificates for the purchase or
      acquisition of, or any right to subscribe to, purchase or acquire any of the
      foregoing, but shall not include the Obligations.




“ Securities
      Account ”
shall
      have the meaning provided in Section 8-501(a) of the UCC.




“ Securities
      Act ”
means
      the Securities Act of 1933, as amended, or any successor Federal statute, and
      the rules and regulations of the SEC thereunder, all as the same shall be in
      effect at the time.




“ Securities
      Exchange Act ”
means
      the Securities Exchange Act of 1934, as amended or any successor Federal
      statute, and the rules and regulations of the SEC thereunder, all as the same
      shall be in effect at the time.




“ Security
      Agreement ”
means
      the Pledge and Security Agreement, dated as of the date hereof, among the
      Borrowers, the Grantors identified therein and the Collateral Agent, as such
      agreement may be amended, supplemented or otherwise modified from time to time
      in accordance therewith and herewith.




“ Security
      Documents ”
means
      the Security Agreement, each Mortgage, the UCC financing statements, the Control
      Agreements, and any other documents granting or perfecting a Lien upon any
      portion of the Collateral as security for all or any part of the Obligations,
      including all Security Documents delivered after the Closing Date pursuant
      to SECTION
      8.08 or
      otherwise.




29




“ Senior
      Funded Indebtedness ”
means
      the Loans (including any outstanding Letter of Credit hereunder) and the amount
      of the Term Loan Obligations (as that term is defined in the Term Loan Agreement
      in effect as of the date hereof).




“ Senior
      Officer ”
means,
      with respect to any Credit Party, such Credit Party’s president, chief executive
      officer, chief administrative officer, chief operating officer, chief financial
      officer or chief accounting officer.




“ Solvent ”
or
      “ Solvency ”
of
      any
      person means (a) the fair value of the property of such person exceeds its
      total liabilities (including, without limitation, contingent liabilities),
      (b) the present fair saleable value of the assets of such person is not
      less than the amount that will be required to pay its probable liability on
      its
      existing debts as they become absolute and matured, (c) such person does
      not intend to incur debts or liabilities beyond its ability to pay, as such
      debts and liabilities mature, and (d) such person is not engaged, and is
      not about to engage, in business or a transaction for which its property would
      constitute an unreasonably small capital. The amount of contingent liabilities
      at any time shall be computed as the amount that, in the 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.




“ Subsidiary ”
means,
      with respect to any Person at any date, any corporation, limited or general
      partnership, limited liability company, trust, association or other entity
      (a) the accounts of which would be consolidated with those of such Person
      in such Person’s consolidated financial statements if such financial statements
      were prepared in accordance with GAAP, or (b) of which more than 50% of
      (i) the outstanding capital stock having (in the absence of contingencies)
      ordinary voting power to elect a majority of the board of directors of such
      corporation, (ii) the interest in the capital or profits of such
      partnership or limited liability company, or (iii) the beneficial interest
      in such trust or estate is, in respect to each of (i), (ii) and
      (iii) above, at the time of determination, owned or controlled directly or
      indirectly through one or more intermediaries, by such Person.




“ Taxes ”
has
      the
      meaning ascribed to such term in SECTION
      3.04(a) .




“ Term
      Letter of Credit ”
means
      a
      letter of credit issued under this Agreement by any L/C Issuer (or its designee)
      or a Person approved by the Administrative Agent; provided , that the
      aggregate face amount of all Term Letters of Credit shall not exceed the Maximum
      Term Letter of Credit Amount.




“ Term
      Letter of Credit Commitment ”
means
      the Maximum Term Letter of Credit Amount minus the sum
      of (a) the Term Letter of Credit Usage and (b) the aggregate of all
      Conversion Amounts.




“ Term
      Letter of Credit Conversion ”
has
      the
      meaning ascribed to such term in Annex A .




‘ Term
      Letter of Credit Obligations ”
means
      the Term Letter of Credit Commitment plus the amount of all outstanding Term
      Letters of Credit.




30




“ Term
      Letter of Credit Usage ”
means
      an amount equal to the face amount of all outstanding Term Letters of Credit
      plus the aggregate amount of any unpaid obligations in respect of Term Letters
      of Credit (including all amounts due to any L/C Issuer in connection
      therewith).




“ Term
      Loan B Loan ”
means
      any extension of credit, that is not a Term Letter of Credit, advanced by the
      Lenders to the Borrowers pursuant to this Agreement on the Closing Date and
      includes all Term Loan B Obligations.




“ Term
      Loan B Obligations ”
means
      any Term Loan B Loan advanced by the Lenders on the Closing Date, together
      with
      any Term Letter of Credit that has been converted into a Term Loan B Loan
      pursuant to Annex A hereof.




“ Term
      Loan Commitment ”
means,
      with respect to any Lender, the obligation of such Lender at such time to make
      a
      Term Loan B Loan pursuant to the terms and conditions of this
      Agreement.




“ Term
      Loan Obligations ”
means
      as of any date, the amount of Term Loan B Obligations plus the amount of Term
      Letter of Credit Usage as of such date.




“ Term
      Loan Priority Collateral ”
means
      all Collateral other than Revolver Priority Collateral.




“ Total
      Commitment ”
means
      the aggregate principal amount of the Commitments of all the Lenders (it being
      understood and agreed that the maximum aggregate principal amount of the
      Commitments shall not exceed the Maximum Term Loan Amount).




“ Trademarks ”
means
      all United States, state and foreign trademarks, trade names, corporate names,
      company names, business names, fictitious business names, internet domain names,
      trade dress, service marks, certification marks, collective marks, logos, all
      indicators of the source of goods or services, designs and general intangibles
      of a like nature, all registrations and applications for any of the foregoing
      including, but not limited to the registrations and applications referred to
      in SECTION
      6.01(w) (as such
      schedule may be amended or supplemented from time to time), but excluding in
      all
      cases all intent-to-use United States trademark applications for which an
      amendment to allege use or statement of use has not been filed under 15 U.S.C.
§
1051(c) or 15 U.S.C. § 1051(d), respectively, or if filed, has not been
      deemed in conformance with 15 U.S.C. § 1051(a) or examined and accepted,
      respectively, by the United States Patent and Trademark Office, all extensions
      or renewals of any of the foregoing, all of the goodwill of the business
      connected with the use of and symbolized by the foregoing, the right to sue
      for
      past, present and future infringement or dilution of any of the foregoing or
      for
      any injury to goodwill, and all proceeds of the foregoing, including licenses,
      royalties, income, payments, claims, damages, and proceeds of suit, which are
      owned or licensed by a Credit Party.




31





“ Trade
      Secrets ”
means
      all trade secrets and all other confidential or proprietary information and
      know-how including drawings, formulae, schematics, designs, plans, processes,
      supplier lists, business plans, business methods and prototypes now or hereafter
      owned or used in the business of such Credit Party throughout the world, whether
      or not such Trade Secret has been reduced to a writing or other tangible form,
      including all documents and things embodying, incorporating, or referring in
      any
      way to such Trade Secret, the right to sue for past, present and future
      infringement of any Trade Secret, and all proceeds of the foregoing, including
      licenses, royalties, income, payments, claims, damages, and proceeds of
      suit.




“ UCC ”
means
      the Uniform Commercial Code enacted in the State of New York, as amended from
      time to time; provided  that if by
      reason of mandatory provisions of law, the perfection, the effect of perfection
      or non-perfection or priority is governed by the Uniform Commercial Code as
      in
      effect in a jurisdiction other than New York, “ UCC ”
means
      the Uniform Commercial Code as in effect in such other jurisdiction for purposes
      of the provisions hereof relating to such perfection, effect of perfection
      or
      non-perfection or priority.




“ Wholly-Owned ”
means,
      when used to describe any Subsidiary of a Credit Party, that all of the capital
      stock (other than directors’ qualifying shares) of or other Equity Interests in
      such Subsidiary is owned directly or indirectly by one or more Credit Parties
      or
      by other Wholly-Owned Subsidiaries of a Credit Party.




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




SECTION
      1.03 Accounting
      and Other Terms .
      Unless
      otherwise expressly provided herein, each accounting term used herein shall
      have
      the meaning given to it under GAAP. All terms used in this Agreement which
      are
      defined in Article 8 or Article 9 of the UCC and which are not
      otherwise defined herein shall have the same meanings herein as set forth
      therein.




SECTION
      1.04 Time
      References .
      Unless
      otherwise indicated herein, all references to time of day refer to Eastern
      standard time or Eastern daylight saving time, as in effect in New York, New
      York on such day. For purposes of the computation of a period of time from
      a
      specified date to a later specified date, the word “from” means “from and
      including” and the words “to” and “until” each means “to but excluding”; provided , however ,
      that
      with respect to a computation of fees or interest payable to the Administrative
      Agent or the Lenders, such period shall in any event consist of at least one
      full day.




32




ARTICLE
      II


THE
      FACILITY




SECTION
      2.01 Term
      Loans.




(a)  Commitments . Subject
      to the terms and conditions of this Agreement, and during the term of this
      Agreement, each Lender agrees (severally, not jointly or jointly and severally)
      to make a Term Loan B Loan in the principal amount set forth opposite each
      such
      Lender’s name on Schedule 2.01(a) hereto
      to the Borrowers on the Closing Date, in accordance with this SECTION
      2.01 .
      The
      aggregate principal amount of the Term Loan B Loans to be advanced shall not
      exceed $40,000,000 on the Closing Date. The Borrowers agree to pay the
      Applicable Payment Fee on all amounts repaid or prepaid on the Term Loan B
      Obligations and no amounts repaid or prepaid may be reborrowed.




(b)  Term
      Letter of Credit Commitment .
      Subject
      to and in accordance with the terms and conditions contained in SECTION
      5.02 ,
      in Annex A and
      otherwise in this Agreement, the Borrowers shall have the right to request,
      and
      the Lenders agree to cause an L/C Issuer to issue, Term Letters of Credit from
      time to time during the Availability Period so long as the aggregate of all
      such
      Term Letters of Credit do not exceed the Term Letter of Credit Commitment.
      Each
      Lender agrees to incur, or purchase participations for, its Pro Rata Share
      of
      the Term Letter of Credit Obligations in respect of the Borrowers up to the
      principal amount set forth opposite each Lender’s name on Schedule 2.01(a) hereto, provided  that the
      aggregate amount of all Term Letters of Credit shall not exceed the Term Letter
      of Credit Commitment .
      All
      provisions of Annex A shall apply to the Term Letter of Credit Commitment,
      the Term Letters of Credit issued thereunder and the Term Letter of Credit
      Obligations.




(c)  Borrowing
      Request .
      The
      Administrative Borrower shall deliver to the Administrative Agent a Borrowing
      Request signed by the Administrative Borrower in substantially the form attached
      as Exhibit B-1 not
      later than 2:00 p.m. at least three (3) Business Days in advance of
      the Closing Date. Such Borrowing Request shall specify: (i) the aggregate
      principal amount of the proposed Term Loan B Loans; (ii) the proposed
      Closing Date, which must be a Business Day; and (iii) in the case of LIBOR
      Rate Loans, the LIBOR Period applicable to such Term Loan B Loan. The
      Borrowing Request given pursuant to this SECTION
      2.01(c) shall be
      irrevocable and binding on the Borrowers.




(d)  Making
      the Term Loan B Loans . (i) The
      Administrative Agent shall promptly notify each Lender of the amount of the
      borrowing requested by the Borrowers. Each Lender shall make an amount equal
      to
      its Pro Rata Share of the amount of such borrowing available to the
      Administrative Agent by wire transfer to the Administrative Agent’s Account in
      immediately available funds, not later than 1:00 p.m. on the Closing Date.
      Subject to the satisfaction of the conditions precedent set forth in Article V ,
      the
      Administrative Agent shall make the proceeds of such amounts received by it
      available to the Borrowers on the Closing Date.




33





(ii)  Except
      as
      otherwise provided in this SECTION
      2.01(d)(ii) ,
      all
      Term Loan B Loans under this Agreement shall be made by the Lenders
      simultaneously and proportionately to their Pro Rata Shares. The failure of
      any
      Lender to deposit the amount described in clause (i) above
      with the Administrative Agent on the Closing Date shall not relieve any other
      Lender of its obligations hereunder to make its Term Loan B Loan on the Closing
      Date. No Lender shall be responsible for any failure by any other Lender to
      perform its obligation to make a Term Loan B Loan hereunder nor shall the Loan
      Commitment of any Lender be increased or decreased as a result of any such
      failure, and each Lender shall be obligated to make the Term Loan B Loans
      required to be made by it by the terms of this Agreement regardless of the
      failure by any other Lender.




(e)  Repayment
      of Term Loan Obligations . The
      principal amount of, interest on and fees related to all outstanding Term Loan
      B
      Obligations shall be repaid in full on the Maturity Date. The Term Letter of
      Credit Commitment shall terminate on the Maturity Date and any outstanding
      Term
      Letters of Credit shall be terminated or secured in the manner provided in Annex A .
      Prior
      to the Maturity Date, interest, fees and principal shall be payable on the
      last
      business day of each calendar quarter, in arrears, in an amo unt
      equal
      to (i) the interest then due on the Term Loan B Obligations, (ii) the
      commitment fee then due on the Term Letters of Credit and Term Letter of Credit
      Obligations, and (iii) a principal payment equal to 1% times the then
      outstanding Term Loan B Obligations (including the aggregated amount of all
      Conversion Amounts); provided , that the
      final installment payable by the Borrowers on the Maturity Date in respect
      of
      the Term Loan Obligations shall be in an amount sufficient to repay the
      aggregate outstanding principal amount of all Term Loan Obligations then
      outstanding.




****SECTION
      2.02**** Use
      of
      Proceeds . Proceeds
      of the Term Loan B Loans and Letters of Credit issued under the Term Letter
      of
      Credit Commitment shall be utilized to:
      (a) refinance certain existing secured indebtedness and replace existing
      letters of credit, (b) pay fees and expenses associated with the Term Loan
      B Obligations and Term Letter of Credit Commitment and the Revolving Credit
      Agreement, and (c) provide for working capital and other general corporate
      purposes.




SECTION
      2.03 Promise
      to Pay .
      Each of
      the Borrowers, jointly and severally, agrees to pay (a) the principal
      amount of the Term Loan B Obligations in full on the Maturity Date or such
      earlier date as they may become due and payable, whether by operation of SECTION
      3.02 ,
      by
      acceleration or otherwise, (b) all fees and other amounts due under the
      Agent’s Fee Letter due on the Closing Date and from time to time after the
      Closing Date when due, (c) all Lender Expenses on demand, (d) all
      unpaid interest accrued, in accordance with the terms of this Agreement and
      any
      applicable Note or such earlier date as such amounts may become due and payable,
      whether by acceleration or otherwise, (e) all issuance charges and other
      amounts when due to each L/C Issuer in accordance with Annex A ,
      this
      Agreement, and other documentation between a Borrower and each such L/C Issuer,
      (e) all mandatory prepayments when due under this Agreement, and
      (f) all other Obligations when due under this Agreement.




34




SECTION
      2.04 Notes .




(a)  The
      Borrowers’ obligation to pay the principal of, and interest on, the Term Loan B
      Obligations made to the Borrowers by each Lender shall be set forth on the
      Register maintained by the Administrative Agent and, subject to the provisions
      of SECTION
      2.04(b) and (c) ,
      shall
      be evidenced by, at the request of the applicable Lender, a promissory note
      substantially in the form of Exhibit N-1 ,
      with
      blanks appropriately completed in conformity herewith (each, as the same may
      be
      amended, supplemented or otherwise modified from time to time, a “ Note ”).




(b)  The
      Note
      issued to each requesting Lender shall (i) be
      executed jointly by each of the Borrowers, (ii) be
      payable to such Lender or its registered assigns and be dated the Closing Date
      (or, in the case of any Note issued after the Closing Date, the date of issuance
      thereof), (iii) be
      in a stated principal amount equal to such Lender’s Commitment on the Closing
      Date or Term Loan B Loans on the date of the issuance thereof (if issued
      after the Closing Date) and be payable in the principal amount equal to the
      Term
      Loan B Obligations plus the Term Letter of Credit Usage evidenced thereby from
      time to time, (iv) mature
      on the Maturity Date, (v) bear
      interest as provided herein and (vi) be
      entitled to the benefits of this Agreement and the other Loan
      Documents.




(c)  Notwithstanding
      anything to the contrary contained above or elsewhere in this Agreement, Notes
      shall only be delivered to Lenders which at any time specifically request the
      delivery of such Notes. No failure of any Lender to request or obtain a Note
      evidencing its Term Loan Obligations to the Borrowers shall affect or in any
      manner impair the obligation of the Borrowers to pay the Term Loan Obligations
      (and all related Obligations) which would otherwise be evidenced thereby in
      accordance with the requirements of this Agreement, and shall not in any way
      affect the security or Guaranties therefor provided pursuant to the Loan
      Documents. At any time when any Lender requests the delivery of a Note to
      evidence any of its Term Loan Obligations, each Borrower shall promptly jointly
      execute and deliver to that Lender the requested Note in the appropriate amount
      or amounts to evidence such Term Loan Obligations.





SECTION
      2.05 Authorized
      Officers and Administrative Agent .




(a)  On
      the
      Closing Date and from time to time thereafter as necessary to reflect changes
      in
      the Authorized Officers, the Administrative Borrower shall deliver to the
      Administrative Agent a secretary’s certificate setting forth the names of the
      Senior Officers or other agents of the Administrative Borrower authorized to
      request Term Letters of Credit and containing a specimen signature of each
      such
      officer or agent. The Administrative Agent shall be entitled to rely
      conclusively on such officer’s or agent’s authority to request Term Letters of
      Credit until the Administrative Agent receives written notice to the contrary.
      In addition, the Administrative Agent shall be entitled to rely conclusively
      on
      any written notice sent to it by telecopy. The Administrative Agent shall have
      no duty to verify the authenticity of the signature appearing on, or any
      telecopy or facsimile of, any written Borrowing Request, or any other document,
      and, with respect to an oral request for a Term Letter of Credit, the
      Administrative Agent shall have no duty to verify the identity of any person
      representing himself or herself as one of the officers or agents authorized
      to
      make such request or otherwise to act on behalf of the Borrowers. Neither the
      Administrative Agent nor the Lenders shall incur any liability to the Borrowers,
      or any other Person in acting upon any telecopy or facsimile or telephonic
      notice referred to above which the Administrative Agent in good faith reasonably
      believes to have been given by a duly authorized Senior Officer, agent or other
      person authorized to borrow in the name of the Administrative Borrower on behalf
      of the Borrowers except in the case of gross negligence or willful misconduct
      by
      the Administrative Agent as determined in a final judgment by a court of
      competent jurisdiction.




35




(b)  Each
      Credit Party hereby designates the Administrative Borrower on its behalf for
      the
      purposes of issuing the Notices of Borrowing and Notices of
      Conversion/Continuation, giving instructions with respect to the disbursement
      of
      the proceeds of the Term Loan Obligations, selecting interest rate options,
      requesting Term Letters of Credit, giving and receiving all other notices and
      consents hereunder or under any of the other Loan Documents and taking all
      other
      actions (including in respect of compliance with covenants) on behalf of the
      Credit Parties under the Loan Documents. The Administrative Borrower hereby
      accepts such appointment. Each Agent and each Lender may regard any notice
      or
      other communication pursuant to any Loan Document from the Administrative
      Borrower as a notice or communication from all Credit Parties, and may give
      any
      notice or communication required or permitted to be given to the Administrative
      Borrower or to any other Credit Party hereunder to the Administrative Borrower
      on behalf of itself and all Credit Parties. Each Credit Party agrees that each
      notice, election, representation and warranty, covenant, agreement and
      undertaking made on its behalf by the Administrative Borrower shall be deemed
      for all purposes to have been made by such Credit Party and shall be binding
      upon and enforceable against such Credit Party to the same extent as if the
      same
      had been made directly by such Credit Party.




SECTION
      2.06 Joint
      and Several Liability of the Credit Parties .
      Each
      Credit Party is and shall be jointly and severally liable for the repayment
      of,
      and agrees to pay when due, all Term Loan Obligations, all interest, fees,
      Lender Expenses and all other Obligations.




SECTION
      2.07 Loan
      Account and Accounting .
      The
      Administrative Agent shall maintain a loan account (the “ Loan
      Account ”)
      on its
      books to record: all Term Loan Obligations, all payments made by Borrowers,
      and
      all other debits and credits as provided in this Agreement with respect to
      the
      Term Loan Obligations or any other Obligations. All entries in the Loan Account
      shall be made in accordance with the Administrative Agent’s customary accounting
      practices as in effect from time to time. The balance of the Term Loan B Loans
      in the Loan Account, as recorded on the Administrative Agent’s most recent
      printout or other written statement, shall, absent manifest error, be
      presumptive evidence of the amounts due and owing to the Administrative Agent
      and Lenders by each Borrower; provided  that any
      failure to so record or any error in so recording shall not limit or otherwise
      affect any Borrower’s duty to pay the Obligations. The Administrative Agent
      shall render to the Administrative Borrower a monthly accounting of transactions
      with respect to the Term Loan Obligations setting forth the balance of the
      Loan
      Account as to the Borrowers for the immediately preceding month. Unless the
      Administrative Borrower notifies the Administrative Agent in writing of any
      objection to any such accounting (specifically describing the basis for such
      objection), within thirty (30) days after the date thereof, each and every
      such
      accounting shall be presumptive evidence of all matters reflected therein.
      Only
      those items expressly objected to in such notice shall be deemed to be disputed
      by Borrowers. Notwithstanding any provision herein contained to the contrary,
      any Lender may elect (which election may be revoked) to dispense with the
      issuance of Notes to that Lender and may rely on the Loan Account as evidence
      of
      the amount of Obligations from time to time owing to it .




36





SECTION
      2.08 Application
      of Payments and Proceeds .




(a)  (i)
      So
      long as no Event of Default has occurred and is continuing, (A) all
      Revolver Priority Collateral and all payments consisting of proceeds of Revolver
      Priority Collateral shall be paid to the Revolving Loan Agent for application
      to
      the obligations under the Revolving Credit Agreement as specified therein;
      (B) voluntary prepayments permitted under this Agreement and under the
      Revolving Credit Agreement shall be applied as specified by the Administrative
      Borrower; and (C) mandatory prepayments shall be applied as set forth in SECTION
      3.02(e) .
      All
      payments and prepayments applied to a particular Term Loan B Obligation shall
      be
      applied ratably to the portion thereof held by each Lender as determined by
      its
      Pro Rata Share.




(ii)  As
      to any
      other payment, and as to all payments made when an Event of Default has occurred
      and is continuing or following the Maturity Date, each Borrower hereby
      irrevocably waives the right to direct the application of any and all payments
      received from or on behalf of such Borrower, and each Borrower hereby
      irrevocably agrees that the Administrative Agent shall have the continuing
      exclusive right to apply any and all such payments against the Obligations
      of
      Borrowers as the Administrative Agent may deem advisable notwithstanding any
      previous entry by the Administrative Agent in the Loan Account or any other
      books and records; provided  that all
      Revolver Priority Collateral and all payments consisting of Revolver Priority
      Collateral shall be paid to the Revolving Loan Agent for application to the
      obligations under the Revolving Credit Agreement as specified therein. In all
      circumstances, after acceleration or maturity of the Obligations, all payments
      and proceeds of Collateral paid to the Administrative Agent shall be applied
      to
      amounts then due and payable in the following order: (A) to the extent
      consisting of Revolver Priority Collateral or proceeds thereof, to the Revolving
      Loan Agent for application to the obligations under the Revolving Credit
      Agreement as specified therein; (B) to fees and expenses of the Agents
      reimbursable hereunder; (C) to interest on the Term Loan B Obligations and
      Commitment Fees on Term Letters of Credit; (D) to principal payments on the
      Term
      Loan Obligations, and for the provision of Cash Collateral for the Term Letter
      of Credit Usage in the manner described in Annex A ;
      and
      (E) to all other Obligations.




(b)  The
      Administrative Agent is authorized to, and at its sole election may, charge
      to
      the Loan Account on behalf of each of the Borrowers and cause to be paid all
      fees, expenses, charges, costs and other amounts owing or payable by Borrowers
      under this Agreement or any of the other Loan Documents if and to the extent
      Borrowers fail to pay promptly any such amounts as and when due, even if the
      amount of such charges would exceed Availability at such time. At the
      Administrative Agent’s option and to the extent permitted by law, any charges so
      made shall constitute part of the hereunder.




(c)  Notwithstanding
      any other provisions of this Agreement to the contrary, after the exercise
      of
      remedies by the Administrative Agent, the Collateral Agent or the Lenders (or
      after the Commitments shall automatically terminate and the Term Loan
      Obligations (with accrued interest thereon) and Obligations under the Loan
      Documents shall automatically become due and payable in accordance with the
      terms hereof), all proceeds of the Term Priority Collateral shall be paid over
      or delivered to the Administrative Agent for distribution as
      follows:




37




FIRST,
      to
      the payment of amounts due under this Agreement or the other Loan Documents
      as
      specified in the last sentence of SECTION
      2.08(a) ;




SECOND,
      to all other of the Borrowers’ Obligations under this Agreement and the other
      Loan Documents and other obligations to the Administrative Agent, the L/C Issuer
      or the Lenders which shall have become due and payable under the Loan Documents
      or the documents related to the issuance of Term Letters of Credit;
      and




THIRD,
      to
      the payment of the surplus, if any, to the Revolving Loan Agent for application
      to any Obligations (as such term is defined in the Revolving Credit Agreement)
      owed by the Borrowers pursuant to the Revolving Credit Agreement, or, if the
      Revolving Loan Agent confirms in writing that such Obligations (as such term
      is
      defined in the Revolving Credit Agreement) have been paid in full in cash,
      to
      the Administrative Borrower.




All
      payments received on account of Revolver Priority Collateral shall be paid
      over
      to the Revolving Loan Agent for application as specified in SECTION
      2.08(c) of the
      Revolving Credit Agreement.




In
      carrying out the foregoing, amounts received shall be applied equally and
      ratably in the numerical order provided until exhausted prior to the application
      to the next succeeding category.




ARTICLE
      III


PAYMENTS
      AND OTHER COMPENSATION




SECTION
      3.01  Voluntary
      Prepayments/Reductions of Commitments . (a)  Optional
      Prepayment of Term Loan B Obligations .
      So long
      as the Credit Parties, on a consolidated basis, have Revolver Availability
      of at
      least $20,000,000 (calculated on a pro forma basis after giving effect to the
      reduction contemplated under this SECTION
      3.01(a) and any
      concurrent reductions under SECTION
      3.01(b) and SECTION
      3.01(c) ),
      the
      Borrowers shall have the right, upon at least three (3) Business Days’
prior written notice by the Administrative Borrower to the Administrative Agent
      and on any Business Day, to voluntarily prepay all or any portion (in a minimum
      amount of five million Dollars ($5,000,000) or such lesser amount as may then
      remain outstanding or integral multiples of one million Dollars ($1,000,000)
      in
      excess thereof) of the Term Loan B Obligations upon payment of the Applicable
      Payment Fee pursuant to SECTION
      3.03(a) .
      Any
      prepayment of any Term Loan B Loans shall be accompanied by the payment of
      all
      accrued and unpaid interest with respect to the principal being prepaid through
      the date of prepayment and any Applicable Payment Fee pursuant to SECTION
      3.03(a) .
      Subject
      to SECTION
      2.08 ,
      any
      partial prepayment of any Term Loan B Obligations shall be applied to the
      remaining installments of the Term Loan B Obligations until all Term Loan B
      Obligations are repaid in full. All
      prepayments shall be permanent.




38


(b)  Optional
      Reduction of Term Letter of Credit Commitments. So long
      as the Credit Parties, on a consolidated basis, have Revolver Availability
      of at
      least twenty million Dollars ($20,000,000) (calculated on a pro forma basis
      after giving effect to the reduction contemplated under this SECTION
      3.01(b) (and any
      concurrent reduction under SECTION
      3.01(a) and SECTION
      3.01(c) ),
      the
      Borrowers shall have the right, upon at least five (5) Business Days’ prior
      written notice by the Administrative Borrower to the Administrative Agent and
      on
      any Business Day, to cancel the Term Letter of Credit Commitment in full or
      to
      reduce the amount thereof; provided , that the
      amount of the Term Letter of Credit Commitment shall at no time be less than
      the
      sum of the Term Letter of Credit Usage. Partial reductions of the Term Letter
      of
      Credit Commitment shall be in a minimum amount of five million Dollars
      ($5,000,000) or such lesser amount as may then remain outstanding or integral
      multiples of one million Dollars ($1,000,000) in excess thereof and shall reduce
      each Lender’s Term Letter of Credit Commitment on a pro rata basis based upon
      such Lender’s Pro Rata Share. All cancellations or reductions shall be
      permanent. Any such notice of reduction shall be accompanied by the payment
      of
      all fees (including the Commitment Fee due on the Term Letter of Credit
      Commitment being reduced) accrued through the date of such cancellation or
      reduction under this Agreement plus the amount of the Applicable Reduction
      Fee.




(c)  Reduction
      of Term Letter of Credit Usage .
      So long
      as the Credit Parties, on a consolidated basis, have Revolver Availability
      of at
      least $20,000,000 (calculated on a pro forma basis after giving effect to the
      reduction contemplated under this SECTION
      3.01(c) (and any
      concurrent reductions under SECTION
      3.01(a) and SECTION
      3.01(b) ),
      the
      Borrowers shall have the right, upon at least five (5) Business Days’ prior
      written notice by the Administrative Borrower to the Administrative Agent and
      on
      any Business Day, to terminate the Term Letter of Credit Usage in full or to
      reduce the amount thereof by providing Cash Collateral as specified in Annex A .
      Partial
      reductions of the Term Letter of Credit Usage shall be in a minimum amount
      of
      five million Dollars ($5,000,000) or such lesser amount as may then remain
      outstanding or integral multiples of one million Dollars ($1,000,000) in excess
      thereof and shall reduce each Lender’s Loan Exposure on a pro rata basis based
      upon such Lender’s Pro Rata Share. All cancellations or reductions shall be
      permanent. Any such notice of cancellation or reduction of the Term Letter
      of
      Credit Usage shall be accompanied by the payment of all fees (including the
      Commitment Fee due on the Term Letter of Credit Usage being reduced) accrued
      through the date of such cancellation or reduction plus payment of the
      Applicable Reduction Fee.




SECTION
      3.02  Mandatory
      Prepayments .




(a)  Prepayments
      from Asset Dispositions .
      Within
      three (3) Business Days after the receipt by a Credit Party or any Subsidiary
      of
      a Credit Party of any Net Cash Proceeds of Term Loan Priority Collateral, Net
      Casualty/Condemnation Proceeds of Term Loan Priority Collateral, or
      Extraordinary Receipts on account of Term Loan Priority Collateral (including,
      without limitation, Bell County Net Proceeds), the Borrowers shall prepay,
      together with the Applicable Prepayment Fee and the Applicable Reduction Fee,
      100% of such Net Cash Proceeds or Net Casualty/Condemnation Proceeds to be
      applied to prepay the Term Loan Obligations; provided , however ,
      that up
      to $12,000,000 of the Bell County Net Proceeds need not be applied to prepay
      the
      Term Loan Obligations but may be retained by the Borrowers for reinvestment
      in
      its business or for any lawful purpose not otherwise prohibited by this
      Agreement; and further  provided  that if the
      Administrative Borrower notifies the Administrative Agent in writing within
      such
      three (3) Business Day period following the receipt of such proceeds that it
      or
      the applicable Subsidiary has applied or intends to apply Net Cash Proceeds
      or
      Net Casualty/Condemnation Proceeds to acquire, construct, improve, upgrade,
      or
      invest in long term assets used or useful in the business of the Borrowers
      and
      their Subsidiaries, then the Borrowers or the applicable Subsidiary shall,
      so
      long as no Event of Default shall have occurred and be continuing, be permitted
      to use such proceeds (including Bell County Net Proceeds) as specified for
      a
      period of one hundred and eighty (180) days following the receipt thereof; provided  further that, if
      the Administrative Borrower notifies the Administrative Agent in writing within
      the 180 day period following the receipt of such proceeds that it or the
      applicable Subsidiary intends to apply such Net Cash Proceeds or Net
      Casualty/Condemnation Proceeds to acquire, construct, improve, upgrade, or
      invest in long term assets used or useful in the business of the Borrowers
      and
      their Subsidiaries, then the Borrowers or the applicable Subsidiary shall,
      so
      long as no Event of Default shall have occurred and be continuing, be permitted
      to use such proceeds as specified for a period of three hundred and sixty five
      (365) days following the receipt thereof; provided  further that,
      each Lender, to the extent of such Lender’s Pro Rata Share in Bell County Net
      Proceeds in excess of $12,000,000, shall have the right to refuse payment of
      any
      such proceeds tendered to such Lender; provided  further that, to
      the extent such proceeds have not been so invested as of the end of such period,
      all such Net Cash Proceeds, Net Casualty/Condemnation Proceeds, or Extraordinary
      Receipts, shall be tendered to the Administrative Agent within three (3)
      Business Days to prepay the Obligations.




39


(b)  Prepayments
      from Incurrence of Indebtedness .
      Promptly but in any event within three (3) Business Days upon the receipt by
      any
      Credit Party or any Subsidiary of a Credit Party of any cash proceeds from
      the
      incurrence of any Indebtedness (other than Permitted Indebtedness), the
      Borrowers shall prepay the Term Loan Obligations in an amount equal to 100%
      of
      the net cash proceeds from the incurrence of such Indebtedness, net of the
      reasonable costs and expenses reasonably incurred by such Credit Party in
      connection with such incurrence, together with payment of the Applicable Payment
      Fee and Applicable Reduction Fee on the amount being prepaid.




(c)  Cash
      Proceeds of Extraordinary Receipts .
      Promptly but in any event within three (3) Business Days following the receipt
      by any Credit Party or any Subsidiary of a Credit Party of any Extraordinary
      Receipt (other than Extraordinary Receipts on account of Revolver Priority
      Collateral), the Borrowers shall prepay, together with the Applicable Payment
      Fee and the Applicable Reduction Fee on the amount being prepaid, the Term
      Loan
      Obligations in an amount equal to 100% of such Extraordinary Receipt, net of
      any
      reasonable costs, fees and expenses incurred in collecting such Extraordinary
      Receipts and a reserve for Taxes expected to be paid in connection therewith; provided , however ,
      that
      with respect to any Extraordinary Receipts for tax refunds or indemnity
      payments, the repayment hereunder shall be equal to the amount by which any
      Excess Cash Flow repayment under SECTION
      3.02 (d) was
      reduced as a result of the event giving rise to such refund or
      reimbursement.




(d)  Mandatory
      Repayments from Excess Cash Flow .
      In
      addition to any other mandatory repayments pursuant to this SECTION
      3.02 ,
      no
      later than the 90 th day
      after the end of each Fiscal Year starting with the Fiscal Year ending on
      December 31, 2008, the Borrowers shall prepay the Term Loan Obligations in
      an amount equal to the 50% of Excess Cash Flow for such Fiscal Year so long
      as
      after giving effect thereto the Credit Parties have Revolver Availability of
      at
      least twenty million Dollars ($20,000,000).




40




(e)  Application
      of Proceeds .
      Payments under this SECTION
      3.02 shall be
      paid, in the case of Net Cash Proceeds of Revolver Priority Collateral, Net
      Casualty/Condemnation Proceeds of Revolver Priority Collateral, or Extraordinary
      Receipts from Revolver Priority Collateral (including, without limitation,
      Bell
      County Net Proceeds), to the Revolver Agent for application to the Revolving
      Loans and Obligations under the Revolving Credit Agreement without a permanent
      reduction in the Revolving Commitments unless an Event of Default is continuing.
      All other payments under this SECTION
      3.02 shall be
      paid to the Administrative Agent for application in accordance with this SECTION
      3.02(e) .
      Subject
      to SECTION
      2.08 ,
      all
      payments under this SECTION
      3.02 shall be
      applied to the Term Loan B Obligations until all of the Term Loan B Obligations
      are repaid in full on a pro rata basis according to each Lender’s Pro Rata Share
      and thereafter shall be applied to cash collateralize the Term Letter of Credit
      Obligations as set forth in Annex A .
      No
      amounts repaid on the Term Loan B Obligations or the Term Letter of Credit
      Obligations under this SECTION
      3.02 may be
      reborrowed. Unless an Event of Default is continuing the balance shall be
      distributed to the Borrowers.




SECTION
      3.03  Payments .




(a)  General
      Provisions .
      All
      payments to be made by a Credit Party shall be made without set-off,
      counterclaim or other defense. Except as otherwise expressly provided herein,
      all payments by a Credit Party shall be made to the Administrative Agent for
      the
      ratable account of the relevant Lender or Agent, as the case may be, at the
      Administrative Agent’s Office, and shall be made in immediately available funds,
      no later than 2:00 p.m. (New York City time), on the dates specified
      herein, as the case may be, to be reimbursed. The Administrative Agent will
      promptly distribute to the relevant Lender or Agent its Pro Rata Share or other
      applicable share as expressly provided herein, of each such payment in like
      funds as received. Any payment received by the Administrative Agent later than
      2:00 p.m. (New York City time) on any Business Day shall be deemed to have
      been received on the following Business Day and any applicable interest or
      fee
      shall continue to accrue until such following Business Day.




(b)  Sharing
      of Payments .
      Except
      as otherwise provided herein, if any Lender shall obtain any payment (whether
      voluntary, involuntary, through the exercise of any right of set-off, or
      otherwise) on account of any Obligation in excess of its ratable share of
      payments on account of similar obligations obtained by all the Lenders, such
      Lender shall (i) notify the Administrative Agent of such fact and
      (ii) forthwith purchase from the other Lenders such participations in such
      similar obligations held by them as shall be necessary to cause such purchasing
      Lender to share the excess payment ratably with each of them; provided , however ,
      that if
      all or any portion of such excess payment is thereafter recovered from such
      purchasing Lender, such purchase from each other Lender shall be rescinded
      and
      each such other Lender shall repay to the purchasing Lender the amount of the
      purchase made under this SECTION
      3.03(b) to the
      extent of such recovery together with an amount equal to such other Lender’s
      ratable share (according to the proportion of (A) the amount of such
      Lender’s required repayment to (B) the total amount so recovered from the
      purchasing Lender of any interest or other amount paid by the purchasing Lender
      in respect of the total amount so recovered). Each Credit Party agrees that
      any
      Lender so purchasing a participation from another Lender pursuant to this SECTION
      3.03(b) may, to
      the fullest extent permitted by law, exercise all of its rights (including
      the
      Lender’s right of set-off) with respect to such participation as fully as if
      such Lender were the direct creditor of such Credit Party in the amount of
      such
      participation.




41




(c)  Apportionment
      of Payments .
      Subject
      to the provisions of SECTION
      2.08 , SECTION
      3.02 and this SECTION
      3.03(c) ,
      all
      payments of principal and interest in respect of outstanding Term Loan
      Obligations, and all other payments in respect of any Obligations, shall be
      allocated among the Lenders in proportion to their respective Pro Rata Shares
      of
      such Obligations unless otherwise specified in this Agreement or in any other
      Loan Document.




(d)  Payments
      on Non-Business Days .
      Whenever any payment to be made by the Borrowers hereunder or under the Notes
      is
      stated to be due on a day which is not a Business Day, the payment shall instead
      be due on the next succeeding Business Day (unless such succeeding Business
      Day
      would be in the subsequent calendar month, in which case such payment shall
      be
      made on the immediately preceding Business Day).




SECTION
      3.04  Taxes .




(a)  Payment
      of Taxes .
      Except
      as set forth below, any and all payments by a Credit Party hereunder, under
      the
      Notes or under any other Loan Document shall be made free and clear of and
      without deduction for any and all present or future taxes, levies, imposts,
      deductions, charges or withholdings imposed by any Governmental Authority,
      excluding, in the case of each Agent and each Lender, respectively, taxes
      imposed by (i) the United States except United States federal gross income
      withholding taxes, or (ii) a Governmental Authority as a result of a
      connection or former connection (other than merely being a party to any Loan
      Documents, participating in the transactions contemplated therein, or enforcing
      rights thereunder) between such Agent or Lender and the jurisdiction imposing
      such tax, including any connection arising from such Agent or Lender being
      a
      citizen, domiciliary, or resident of such jurisdiction, being organized in
      such
      jurisdiction, or having a permanent establishment or fixed place of business
      therein (all such taxes, levies, imposts, deductions, charges and withholdings
      other than Excluded Taxes being hereinafter referred to as “ Taxes ”).
      If a
      Credit Party shall be required by law to withhold or deduct any Taxes from
      or in
      respect of any sum payable hereunder, under the Notes or under any other Loan
      Document to any Lender or Agent, (A) such sum payable shall be increased by
      an additional amount so that after making all required withholdings or
      deductions (including withholdings or deductions applicable to additional
      amounts payable under this SECTION
      3.04(a) )
      such
      Lender or Agent receives an amount equal to the sum it would have received
      had
      no such withholdings or deductions been made, (B) such Credit Party shall
      make such withholdings or deductions, and (C) such Credit Party shall pay
      the full amount withheld or deducted to the relevant taxation authority or
      other
      authority in accordance with Applicable Law. Notwithstanding the foregoing,
      a
      Credit Party shall not be required to pay any such additional amounts to any
      Agent or any Lender with respect to any Excluded Taxes.




42




(b)  Other
      Taxes .
      The
      Borrowers agree to pay any present or future stamp or documentary taxes or
      any
      other excise or property taxes, charges or similar levies which arise from
      and
      which relate directly to the execution, delivery or registration of, or
      otherwise with respect to, this Agreement, the Notes or any other Loan Document,
      including all such amounts related to the creation, perfection or maintenance
      of
      the interests of the Agents and the Lenders in the Collateral and all interest
      and penalties related thereto (“ Other
      Taxes ”).




(c)  Indemnification .
      The
      Borrowers will and hereby agree to indemnify each Lender and each Agent against,
      and reimburse each, within ten (10) days of a receipt of written demand
      therefor, for the full amount of all Taxes and Other Taxes (including any Taxes
      or Other Taxes imposed by any Governmental Authority on amounts payable to
      such
      Agent or Lender under this SECTION
      3.04(c) )
      incurred or paid by such Lender or such Agent (as the case may be), or any
      Affiliate of such Lender or Agent on or with respect to any payment by or on
      account of any Obligation, and any penalties, interest, and reasonable
      out-of-pocket expenses paid to third parties arising therefrom or with respect
      thereto. For the avoidance of doubt, the Borrowers shall not be required to
      indemnify a Lender or Agent pursuant to this SECTION
      3.04(c) with
      respect to any Excluded Taxes. A certificate as to any amount payable to any
      Person under this SECTION
      3.04 (c) submitted by such Person to the Administrative Borrower shall, absent manifest
      error, be final, conclusive and binding upon all parties hereto.




(d)  Receipts .
      Within
      thirty (30) days after a request from the Administrative Agent, each Credit
      Party will furnish to the Administrative Agent the original or a certified
      copy
      of a receipt, if available, or other reasonably available documentation
      reasonably satisfactory to the Administrative Agent evidencing payment of such
      Taxes or Other Taxes (including in respect of payments of additional amounts)
      required to be paid by such Credit Party pursuant to this SECTION
      3.04 .
      The
      Administrative Borrower will furnish to the Administrative Agent upon the
      Administrative Agent’s request an Officer’s Certificate stating that all Taxes
      and Other Taxes of which it is aware that are due have been paid and that no
      additional Taxes or Other Taxes of which it is aware are due.




(e)  Nonresident
      Certifications . (i) Each
      Lender that is not a United States Person (as defined in
      Section 7701(a)(30) of the Code) (a “ Non-U.S.
      Lender ”)
      shall
      deliver to the Administrative Borrower and the Administrative Agent on or prior
      to the Closing Date, or, in the case of a Lender that becomes a Lender pursuant
      to SECTION
      14.08 hereof,
      on or prior to the date on which such Lender becomes a Lender pursuant to SECTION
      14.08 ,
      a true
      and accurate IRS Form W-8BEN, W-8IMY (with the necessary attachments), W-8EXP,
      W-8ECI or any subsequent version thereof or successors thereto and such other
      documentation prescribed by Applicable Law executed in duplicate by a duly
      authorized officer of such Lender to the effect that such Lender is eligible
      as
      of such date to receive payments hereunder and under the Notes free and clear
      or
      at a reduced rate of United States federal withholding tax or, in the case
      of a
      Lender that becomes a Lender pursuant to SECTION
      14.08 ,
      that
      such Lender is subject to United States federal withholding tax at a rate not
      in
      excess of the rate to which the assignor was subject as a result of a change
      in
      law, as described in SECTION
      3.04(e) (ii)(B) .
      A
      Non-U.S. Lender shall not be required to deliver any form pursuant to this SECTION
      3.04(e) that it
      is not legally able to deliver.




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(ii)  Each
      Non-U.S. Lender further agrees to deliver to the Administrative Borrower and
      the
      Administrative Agent from time to time a true and accurate certificate
      executed in duplicate by a duly authorized officer of such Lender before or
      promptly upon the occurrence of any event requiring a change in the most recent
      certificate previously delivered by it to the Administrative Borrower and the
      Administrative Agent pursuant to this SECTION
      3.04(e) (including upon the expiration, obsolescence or invalidity of such form, upon
      the designation of a new lending office and at such other times as may be
      necessary in the determination of the Administrative Borrower and the
      Administrative Agent (each in the reasonable exercise of its discretion)).
      Each
      certificate required to be delivered pursuant to this SECTION
      3.04(e)(ii) shall
      certify as to one of the following:




(A)  that
      such
      Lender can receive payments hereunder and under the Notes free and clear or
      at a
      reduced rate of United States federal withholding tax (in which case the
      certificate shall be accompanied by two duly completed copies of IRS Form
      W-8BEN, W-8IMY (with the necessary attachments), W-8EXP or W-8ECI, as applicable
      (or any successor form);




(B)  that
      such
      Lender is no longer capable of receiving payments hereunder or under the Notes
      free and clear or at a reduced rate of United States federal withholding tax
      by
      reason of a change in law (including the Code or any applicable tax treaty)
      after the later of the Closing Date, or in the case of a Lender that becomes
      a
      Lender pursuant to SECTION
      14.08 hereof,
      after the date on which the Lender became a Lender pursuant to SECTION
      14.08 ;
      or




(C)  that
      such
      Lender is not capable of receiving payments hereunder free and clear or at
      a
      reduced rate of United States federal withholding tax other than by reason
      of a
      change in law (including the Code or applicable tax treaty) after the later
      of
      the Closing Date, or in the case of a Lender that becomes a Lender pursuant
      to SECTION
      14.08 hereof,
      after the date on which the Lender became a Lender pursuant to SECTION
      14.08 .




(f)  Resident
      Certifications .
      Each
      Lender that is a United States Person (as defined in Section 7701(a)(30) of
      the Code) and is not an “exempt recipient” (as such term is defined in
      Section 1.6049-4(c)(1)(ii) of the United States Treasury Regulations)
      shall deliver to the Administrative Borrower and the Administrative Agent on
      or
      prior to the Closing Date, or, in the case of a Lender that becomes a Lender
      pursuant to SECTION
      14.08 hereof,
      on or prior to the date on which such Lender becomes a Lender pursuant to SECTION
      14.08 hereof,
      two original copies of IRS Form W-9 (or any successor forms), properly completed
      and duly executed by such Lender, and such other documentation reasonably
      requested by the Administrative Borrower or the Administrative
      Agent.




44




(g)  Refunds
      and Tax Benefits .
      If a
      Lender or Agent becomes aware that it is entitled to claim a refund from a
      Governmental Authority in respect of Taxes or Other Taxes as to which it has
      been indemnified by the Borrowers or with respect to which a Credit Party has
      paid additional amounts pursuant to SECTION
      3.04(a) or (c) ,
      it
      shall make reasonable efforts to timely claim to such Governmental Authority
      for
      such refund at the Borrowers’ expense. If a Lender or Agent actually receives a
      payment of a refund (including pursuant to a claim for a refund made pursuant
      to
      the preceding sentence) in respect of any Tax or Other Tax as to which it has
      been indemnified by the Borrowers or with respect to which a Credit Party has
      paid additional amounts pursuant to SECTION
      3.04(a) or (c) ,
      it
      shall within 30 days from the date of such receipt pay over the amount of such
      refund to a Credit Party, net of all reasonable out-of-pocket expenses of such
      Lender or Agent and without interest (other than interest paid by the relevant
      Governmental Authority with respect to such refund); provided  that the
      Borrowers, upon the request of such Lender or Agent, agree to repay the amount
      paid over to a Credit Party (plus penalties, interest or other reasonable
      charges) to such Lender or Agent in the event such Lender or Agent is required
      to repay such refund to such Governmental Authority.




(h)  The
      Borrowers shall not be required to pay any amount to any Lender or Agent under SECTION
      3.04(a) or (c) in
      respect of any Taxes imposed by reason of such Lender’s or Agent’s failure for
      any reason other than as specified in SECTION
      3.04(e)(ii)(B) to
      comply with the provisions of SECTION
      3.04(e)(i) or
      because of any form or certificate provided by such Lender or Agent under SECTION
      3.04(c) ,
      other
      than because of a change in tax law specified in SECTION
      3.04 (e)(ii)(B) .




(i)  The
      Borrowers shall not be required to indemnify or to pay any additional amounts
      to
      the Lender or Agent with respect to Taxes pursuant to SECTION
      3.04(a) to the
      extent that any obligation to withhold, deduct or pay amounts with respect
      to
      such Tax was in effect and would apply to amounts payable on the date that
      such
      Lender or Agent became a party to this Agreement or that was paid by such Lender
      or Agent more than one hundred and eighty (180) days prior to such Lenders’ or
      Agent’s demand therefore.




(j)  Without
      affecting its rights under SECTION
      3.04(a) or any
      provision of this Agreement, each Lender and each Agent agrees that if any
      Taxes
      or Other Taxes are imposed and required by law to be paid or to be withheld
      from
      any amount payable to any Lender or Agent with respect to which the Borrowers
      would be obligated to indemnify such Lender or Agent pursuant to SECTION
      3.04(c) ,
      such
      Lender or Agent shall use reasonable efforts to select an alternative lending
      office which would not result in the imposition of such Taxes or Other Taxes, provided  that such
      change in the good faith judgment of such Lender is not otherwise
      disadvantageous to such Lender.




ARTICLE IV


INTEREST




SECTION
      4.01  Interest
      on the Term Loan B Obligations and Other Obligations .




(a)  Interest
      on Term Loan B Obligations .
      The
      Borrowers agree to pay interest on the unpaid principal amount of each Term
      Loan
      B Obligation on each Interest Payment Date, from the date such Term Loan B
      Obligation was funded through and including the date such Term Loan B Obligation
      is repaid in full, at a rate equal to the Interest Rate. The Borrowers shall
      pay
      the accrued interest on the Term Loan B Obligations and the Commitment Fee
      on
      the Term Letter of Credit Obligations in cash on each Interest Payment Date.
      All
      computations of interest and Commitment Fees hereunder shall be made on the
      actual number of days elapsed over a year of, with respect to LIBOR Rate Loans,
      360 days or, with respect to Base Rate Loans only, 365/366 days.




45




(b)  Default
      Interest .
      So long
      as any Event of Default shall be continuing, the Interest Rate and the
      Commitment Fee shall, at the request of the Administrative Agent or the Required
      Lenders, each be increased by 2 percentage points per annum above the Interest
      Rate or Commitment Fee otherwise applicable to the Term Loan B Obligations
      or
      the Term Letter of Credit Obligations. All such additional interest shall be
      payable in Dollars on each Interest Payment Date.




(c)  Maximum
      Interest .
      Notwithstanding anything to the contrary set forth in this SECTION
      4.01(c) ,
      if at
      any time until payment in full of the Term Loan Obligations, the interest rate
      payable on any Term Loan Obligations exceeds the highest rate of interest
      permissible under any law which a court of competent jurisdiction shall deem
      applicable hereto (the “ Highest
      Lawful Rate ”),
      then
      in such event and only for so long as the Highest Lawful Rate would be so
      exceeded, the rate of interest payable on such Term Loan Obligations shall
      be
      equal to the Highest Lawful Rate. Thereafter, the interest rate payable on
      such
      Term Loan Obligations shall be the applicable interest rate pursuant to paragraphs (a) and (b) of this SECTION
      4.01 unless
      and until such rate again exceeds the Highest Lawful Rate, in which event this
      paragraph shall again apply. In no event shall the total interest received
      by
      any Lender for any Term Loan Obligations pursuant to the terms hereof exceed
      the
      amount which it could lawfully have received for such Term Loan Obligations
      had
      the interest due hereunder for such Term Loan Obligations been calculated for
      the full term thereof at the Highest Lawful Rate. Interest on the Highest Lawful
      Rate shall be calculated at a daily rate equal to the Highest Lawful Rate
      divided by the number of days in the year in which such calculation is made.
      In
      the event that a court of competent jurisdiction, notwithstanding the provisions
      of this SECTION
      4.01(c) ,
      shall
      make a determination that a Lender has received interest hereunder or under
      any
      of the Loan Documents in excess of the Highest Lawful Rate, such Lender shall,
      to the extent permitted by Applicable Law, promptly apply such excess first
      to
      any interest due or accrued and not yet paid under the Term Loan Obligations,
      then to the outstanding principal of the Term Loan Obligations, then to other
      unpaid Obligations and thereafter shall refund any excess to the Borrowers
      or as
      a court of competent jurisdiction may otherwise order.




(d)  Conversion
      or Continuation .
      The
      Borrowers shall have the option (i) to convert all or any part of its
      outstanding LIBOR Rate Loans to Base Rate Loans at the end of then-current
      LIBOR
      Period therefor, (ii) to convert Base Rate Loans to LIBOR Rate Loans, or
      (iii) to change or continue the LIBOR Period applicable to all or a portion
      of the Term Loan B Obligations; provided , however ,
      that
      (A) except as provided in SECTION
      4.03 ,
      LIBOR
      Rate Loans may be converted into Base Rate Loans only on the last day of the
      LIBOR Period applicable thereto unless the Borrowers agree to pay all amounts
      due pursuant to SECTION
      4.02 ,
      (B) Term Loan B Obligations extended as, or converted into, LIBOR Rate
      Loans shall be subject to the terms of the definition of “ LIBOR
      Period ”
set
      forth in SECTION
      1.01 ,
      and
      (C) any request for extension or conversion of a LIBOR Rate Loan that shall
      fail to specify an LIBOR Period shall be deemed to be a request for an LIBOR
      Period of one month. Each such extension or conversion shall be effected by
      the
      Borrowers by giving a Notice of Conversion/Continuation (or telephone notice
      promptly confirmed in writing) to the Administrative Agent prior to
      1:00 p.m., New York City time, on the third Business Day prior to the date
      of the proposed extension or conversion, substantially in the form of Exhibit N-2 hereto,
      specifying (x) the date of the proposed extension or conversion,
      (y) the Term Loan B Obligations to be so extended or converted,
      (z) the types of Term Loan B Obligations into which such Term Loan B
      Obligations are to be converted, and, if appropriate, (D) the applicable
      LIBOR Periods with respect thereto. Each Notice of Conversion/Continuation
      shall
      be irrevocable.




46




(e)  Automatic
      Conversion to Base Rate Loans .
      Each
      LIBOR Rate Loan shall automatically be converted to a Base Rate Loan at the
      end
      of the applicable LIBOR Period if (i) the Administrative Borrower does not
      provide a timely Notice of Conversion/Continuation (subject to the provisions
      of SECTION
      4.01 (d) (iii) ),
      (ii) the LIBOR Rate Loan is not permitted to be converted or continued as a
      LIBOR Rate Loan under this Agreement, or (iii) any Default or Event of
      Default is then continuing. The Administrative Agent shall give each Lender
      notice as promptly as practicable of any such proposed extension or conversion
      affecting any Term Loan B Obligation. Promptly after receipt of a Notice of
      Conversion/Continuation under SECTION
      4.01(d) ,
      the
      Administrative Agent shall notify each Lender by telex, telecopy, email, or
      other similar form of transmission, of the proposed conversion/continuation.
      Any
      Notice of Conversion/Continuation for conversion to, or continuation of, a
      Term
      Loan B Obligation shall be irrevocable, and the Borrowers shall be bound to
      convert or continue in accordance therewith.




SECTION
      4.02  Break
      Funding Payments . In
      the
      event of the payment of any principal of any LIBOR Rate Loan other than on
      the
      last day of the LIBOR Period applicable thereto (including as a result of an
      Event of Default), or the failure to borrow or prepay any Term Loan B Obligation
      on the date specified in any notice delivered pursuant hereto, then, in any
      such
      event, the Borrowers shall compensate each applicable Lender for the loss,
      cost
      and expense attributable to such event. A certificate of any Lender setting
      forth any amount or amounts that such Lender is entitled to receive pursuant
      to
      this SECTION
      4.02 shall be
      delivered to the Borrowers and shall be conclusive absent manifest error. The
      Borrowers shall pay such Lender the amount shown as due on any such certificate
      within ten (10) days after receipt thereof.




SECTION
      4.03  Change
      in Law; Illegality .




(a)  If
      the
      adoption or implementation of, or any change in (or the interpretation,
      administration or application of) any Applicable Law shall, in each case after
      the date hereof (i) impose, modify or deem applicable any reserve, special
      deposit or similar requirement against assets of, deposits with or for the
      account of, or credit extended by, any Lender (except any such reserve
      requirement reflected in the LIBOR Rate) or (ii) impose on any Lender or
      the London interbank market any other condition affecting this Agreement or
      LIBOR Rate Loans made by such Lender; and the result of any of the foregoing
      under (i) or (ii) of this SECTION
      4.03(a) shall be
      to increase the cost to such Lender of making or maintaining any LIBOR Rate
      Loan
      (or of maintaining its obligation to make any such Term Loan B Loan), or to
      increase the cost to such Lender 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 hereunder (whether of principal, interest or otherwise), then
      the
      Borrowers will pay to such Lender such additional amount or amounts as will
      compensate such Lender for such additional costs incurred or reduction suffered
      to the extent that such Lender reasonably determines that such increase in
      cost
      be allocable to the existence of such Lender’s LIBOR Rate Loans or its
      commitment to lend hereunder.




47




(b)  If
      any
      Lender reasonably determines that the introduction of or any change in any
      Applicable Law regarding capital requirements, in each case after the date
      hereof, has or would have the effect of reducing the rate of return on such
      Lender’s capital as a consequence of this Agreement, the Term Loan B Loans, or
      the Term Letters of Credit made or issued by such Lender to a level below that
      which such Lender could have achieved but for such change in the Applicable
      Law
      (taking into consideration such Lender’s policies with respect to capital
      adequacy), then from time to time the Borrowers will pay to such Lender such
      additional amount or amounts as will compensate such Lender for any such
      reduction suffered to the extent that such Lender reasonably determines that
      such additional amounts are allocable to the existence of such Lender’s Term
      Loan Obligations or its commitment to lend hereunder.




(c)  A
      certificate of a Lender setting forth in reasonable detail the amount or amounts
      necessary to compensate such Lender as specified in paragraph (a) or (b) of this SECTION
      4.03 shall be
      delivered to the Administrative Borrower and shall be binding and conclusive
      for
      all purposes, so long as it reflects the basis for the calculation of the
      amounts set forth therein and does not contain any manifest error. The Borrowers
      shall pay such Lender the amount shown as due on any such certificate within
      ten
      days after receipt thereof. Notwithstanding the foregoing (i) the
      applicable Lender shall take such actions (including changing the office of
      location of the funding of the Term Loan Commitments) that the Administrative
      Borrower may reasonably request in order to reduce the amounts payable under SECTION
      4.03(a) or (b) , provided  that the
      Borrowers shall reimburse such Lender for any costs incurred by such Lender
      in
      doing so to the extent that such Lender reasonably determines that such costs
      are allocable to the Borrowers with respect to the existence of such Lender’s
      Term Loan Commitment or commitment to lend hereunder and provided  further that
      such Lender shall only be required to take such actions if it determines in
      good
      faith that such actions would not be disadvantageous to it, and (ii) the
      Borrowers shall not be required to compensate a Lender under SECTION
      4.03(a) and (b) for any
      costs or additional amounts arising more than 180 days prior to the date that
      such Lender notifies the Administrative Borrower of the event giving rise to
      such costs and amounts of such Lender’s intention to claim compensation therefor
      and, if the event giving rise to such increased costs and amounts is
      retroactive, then the 180-day period referred to in this
      clause (ii) shall be extended to include the period of retroactive
      effect therefor.




(d)  Notwithstanding
      anything to the contrary contained herein, if the adoption or implementation
      of,
      or any change in, any Applicable Law shall make it unlawful, or any central
      bank
      or other Governmental Authority shall assert that it is unlawful, for any Lender
      to agree to make or to continue to fund or maintain any LIBOR Rate Loan, then,
      unless that Lender is able to make or to continue to fund or to maintain such
      LIBOR Rate Loan at another branch or office of that Lender without, in that
      Lender’s opinion, adversely affecting it or its LIBOR Rate Loans or the income
      obtained therefrom, on notice thereof and demand therefor by such Lender to
      the
      Administrative Borrower through the Administrative Agent (i) the obligation
      of such Lender to make, to continue to fund or maintain LIBOR Rate Loans shall
      terminate, and (ii) each outstanding LIBOR Rate Loan owing by the Borrowers
      to such Lender shall automatically be converted to a Base Rate Loan and the
      Borrowers shall pay any amounts due pursuant to SECTION
      4.02 .




48




SECTION
      4.04  Fees .
      The
      Borrowers hereby agree to pay to the Administrative Agent, for the account
      of
      the Lenders in accordance with their Pro Rata Shares, the
      following amounts: (a) the Commitment Fee, payable in Dollars on each
      Interest Payment Date and on the date upon which any Term Letter of Credit
      expires, terminates, is drawn or is renewed or replaced, and upon the date
      of
      any reduction in the Term Letter of Credit Commitment, and (b) the fees and
      expenses, if any, set forth in the Agent’s Fee Letter and in Annex A hereto.




ARTICLE
      V


CONDITIONS
      TO LOANS




SECTION
      5.01  Conditions
      Precedent to the Funding on the Closing Date . The
      obligation of each Lender to make the Term Loan B Loans requested, and the
      Obligation of any L/C Issuer to issue Term Letters of Credit to be made by
      it on
      the Closing Date shall be subject to the satisfaction, or waiver by each of
      the
      Agents, of each of the following conditions precedent:




(a)  Authority .
      The
      Administrative Agent shall have received certified copies of all resolutions,
      certificates and other documents evidencing other necessary corporate action
      and
      governmental approvals, if any, with respect to the authorization for the
      execution, delivery and performance of each Loan Document by a Credit Party
      and
      for the consummation of the transactions contemplated thereby. All certificates
      shall state that the resolutions or other information referred to in such
      certificates have not been amended, modified, revoked or rescinded as of the
      Closing Date.




(b)  Loan
      Documents .
      The
      Administrative Agent shall have received, on the Closing Date, counterparts
      of
      each of the following documents duly executed and delivered by each party
      thereto, and in full force and effect and reasonably satisfactory to the
      Administrative Agent:




(i)  this
      Agreement and the Revolving Credit Agreement;




(ii)  the
      Notes, if any;




(iii)  the
      Security Documents;




(iv)  such
      corporate resolutions, certificates and other documents as the Administrative
      Agent reasonably requests;




(v)  the
      Agent’s Fee Letter;




(vi)  the
      Intercreditor Agreement; and




49




(vii)  each
      other Loan Document, in each case duly executed and delivered by the parties
      thereto and dated no later than the Closing Date, except for those Loan
      Documents that are dated prior to the Closing Date and have been delivered
      prior
      to the Closing Date to the Agents by the Credit Parties.




(c)  Perfection
      of Liens and Security .
      All
      Obligations shall be secured by perfected, first-priority (subject only to
      Permitted Encumbrances) liens and security interests in the Collateral pursuant
      to the Security Agreement and other Security Documents, in form and substance
      satisfactory to the Administrative Agent; provided  that such
      liens and security interests shall have the priorities specified in the
      Intercreditor Agreement. All Collateral shall be free and clear of other liens,
      claims and encumbrances other than Permitted Encumbrances and the Administrative
      Agent shall have received UCC, tax, judgment and other lien searches in form
      and
      substance satisfactory to the Administrative Agent as confirmation thereof.
      The
      Collateral Agent, on behalf of the Lenders, shall have a perfected
      first-priority lien and security interest in the Term Loan Priority Collateral
      and a perfected second priority lien and security interest in all other
      Collateral; all filings, recordations and searches necessary or desirable in
      connection with such liens and security interests shall have been duly made
      or
      arranged for; and all filing and recording fees and taxes shall have been duly
      paid.




(d)  No
      Material Adverse Effect .
      There
      shall not have occurred any event, circumstance, change or condition since
      September 30, 2006, which could reasonably be expected to have a Material
      Adverse Effect.




(e)  Minimum
      Consolidated EBITDA .
      The
      Administrative Agent shall have received evidence reasonably satisfactory to
      it
      demonstrating that the Consolidated EBITDA of the Borrowers and their
      Subsidiaries for the twelve months ending December 31, 2006 was not less
      than $40,000,000.




(f)  Litigation .
      Except
      as set forth in Schedule 6.01(f) ,
      there
      shall exist no action, suit, claim, investigation, arbitration, litigation
      or
      proceeding or any judgments, decrees, injunctions, rules or orders of any
      governmental or regulatory agency or authority pending or, to the knowledge
      of
      the Credit Parties, threatened against or affecting any Credit Party or its
      property or assets, except for any of the foregoing that could, individually
      or
      in the aggregate, reasonably be expected to have a Material Adverse
      Effect.




(g)  Consents,
      Etc. Each
      Credit Party shall have received all consents and authorizations required
      pursuant to any Material Contract with any other Person and all other material
      consents and shall have obtained all material Permits of, or approvals from,
      and
      effected all notices to and filings with, any Governmental Authority as may
      be
      necessary to allow such Credit Party lawfully (i) to execute, deliver and
      perform, in all material respects, their respective obligations under the Loan
      Documents to which each of them is, or shall be, a party and each other
      agreement or instrument to be executed and delivered by each of them pursuant
      thereto or in connection therewith, (ii) consummate the transactions
      contemplated hereunder and under the other Loan Documents, and (iii) create
      and perfect the Liens on the Collateral to be owned by each of them to the
      extent, in the manner and for the purpose contemplated by the Loan Documents.
      Each Credit Party shall have received all shareholder, Governmental and material
      third-party consents, licenses, approvals, or evidence of other actions
      necessary (without the imposition of any conditions that are not acceptable
      to
      the Lenders), other than with respect to the Leases identified on Schedule 5.01(g) for
      which the Credit Parties shall use commercially reasonable efforts to obtain
      such third-party consents, licenses and approvals, in connection with the
      execution and delivery of the Loan Documents, and the performance thereunder
      and
      the transactions contemplated by the Loan Documents and any applicable waiting
      period shall have expired without any action being taken. No litigation shall
      be
      pending or threatened and no action shall have been taken or threatened by
      any
      Governmental Authority that could restrain, prevent or impose any material
      adverse conditions on such Credit Party or such transactions or that could
      seek
      to restrain or threaten any of the foregoing, and no law or regulation shall
      be
      applicable which in the reasonable judgment of the Administrative Agent could
      have such effect.




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(h)  Solvency .
      Immediately prior to the incurrence of the Loans on the Closing Date, and after
      giving effect to such Loans, and use of the proceeds of the Loans, the Credit
      Parties, taken as a whole, shall be Solvent and the Administrative Agent shall
      have received a solvency certificate from the chief financial officer of the
      Administrative Borrower, on behalf of the Credit Parties (and not in such
      officer’s individual capacity), dated the Closing Date, in a form reasonably
      satisfactory to the Administrative Agent.




(i)  Insurance .
      The
      Agents shall have received (i) evidence of endorsements in form and
      substance reasonably acceptable to the Agents, naming the Collateral Agent
      and
      the collateral agent under the Revolving Credit Agreement, as applicable, on
      behalf of the Lenders, as an additional insured and loss payee as applicable
      under all insurance policies to be maintained with respect to the properties
      of
      the Credit Parties forming part of the Collateral, and (ii) evidence that
      all insurance policies required to be maintained pursuant to SECTION
      7.05 ,
      including any insurance policies with respect to the properties of each Credit
      Party forming part of the Collateral, are in full force and effect.




(j)  Opinions
      of the Borrowers’ Counsel .
      The
      Lenders shall have received customary opinions (including noncontravention
      opinions with respect to the Indenture and other Material Contracts) of
      Kilpatrick Stockton LLP, counsel to the Borrowers and the Guarantors, and such
      local counsel as Administrative Agent may reasonably require, each in form
      and
      substance satisfactory to each of the Agents.




(k)  Fees
      and Expenses Paid .
      There
      shall have been paid to the Administrative Agents all fees and, to the extent
      documented, expenses (including the reasonable legal fees of counsel to each
      of
      the Agents and any local counsel to the Agents) due and payable on or before
      the
      Closing Date.




(l)  Collateral
      Information .
      The
      Collateral Agent shall have received (i) a letter duly executed by each
      Credit Party authorizing the Collateral Agent to file appropriate financing
      statements in such offices as may be necessary or, in the opinion of the
      Collateral Agent, desirable to perfect the security interests on the Collateral
      to be created by the Loan Documents, and (ii) complete and accurate
      information from each Credit Party with respect to its organization,
      capitalization, name, locations, tax identification number and the location
      of
      the principal place of business and chief executive office for such Credit
      Party.




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(m)  Good
      Standing Certificates .
      The
      Administrative Agent shall have received, on the Closing Date, governmental
      certificates, dated the most recent practicable date prior to the Closing Date,
      showing that each Credit Party is organized and in good standing in the
      jurisdiction of its organization, and is qualified as a foreign corporation
      and
      in good standing in all other jurisdictions in which it is qualified to transact
      business except where the failure to so qualify could not reasonably be expected
      to have Material Adverse Effect.




(n)  Organizational
      Documents .
      The
      Administrative Agent shall have received, on the Closing Date, a copy of the
      certificate of incorporation or certificate of formation, as applicable, and
      all
      amendments thereto of each Credit Party, certified as of a recent date by the
      appropriate government official of the jurisdiction of its organization, and
      copies of each Credit Party’s by-laws or limited liability company agreement, as
      applicable, certified by the Secretary, Assistant Secretary or managing member,
      as applicable, of such Credit Party as true and correct as of the Closing
      Date.




(o)  Financial
      Statements .
      The
      Administrative Agent shall have received the 2005 Financial Statements and
      the
      2006 Financial Statements, together with the financial statements and
      projections described in SECTION
      6.01(g)(ii) and SECTION
      7.01 ,
      all in
      form and substance reasonably satisfactory to the Administrative
      Agent.




(p)  Certificates . (i) The
      Administrative Agent shall have received, on the Closing Date, certificates
      of
      the Secretary, Assistant Secretary or managing member of each Credit Party,
      dated the Closing Date, as to the incumbency and signatures of its officers
      executing this Agreement and each other Loan Document to which such Credit
      Party
      is a party and any other certificate or other document to be delivered pursuant
      hereto or thereto, together with evidence of the incumbency of such Secretary,
      Assistant Secretary or managing member.




(ii)  The
      Administrative Agent shall have received, on the Closing Date, the certificate
      of a Senior Officer of each Credit Party, dated the Closing Date, stating that
      (A) to the knowledge of such officer and on behalf of such Credit Party
      (not in such officer’s individual capacity) all of the representations and
      warranties of such Credit Party contained herein or in any of the other Loan
      Documents are true and correct in all material respects on and as of the Closing
      Date as if made on such date, (B) that no breach of any covenant contained
      in ARTICLE
      VIII , ARTICLE
      IX or ARTICLE
      X has
      occurred or would result from the execution, delivery of and performance under
      this Agreement and the transactions contemplated hereunder, (C) that all of
      the conditions set forth in this SECTION
      5.01(p)(ii) have
      been satisfied on such date (or shall, to the extent permitted therein, be
      satisfied substantially simultaneously with the incurrence of Term Loan
      Obligations on the Closing Date); (D) there has been no repayment of
      Indebtedness that (i) would reduce the one hundred and twenty five million
      Dollar ($125,000,000) amount permitted for credit facilities under
      Section 4.03(a)(1) of the Indenture, or (ii) would reduce the ten
      million Dollar ($10,000,000) amount permitted for credit facilities under
      Section 4.03(a)(10) of the Indenture or specify such amounts and
      (E) there is no other Indebtedness that would reduce the permitted amounts
      or specify all such amounts (other than Indebtedness that is subject to the
      Indenture Reserve).




52




(q)  Representations
      and Warranties .
      Both
      before and after giving effect to the Term Loan Obligations to be made on the
      Closing Date, as the case may be, all of the representations and warranties
      of
      any Credit Party contained in ARTICLE
      VI and in
      the other Loan Documents shall be true and correct in all material respects
      (except to the extent such representations and warranties specifically relate
      to
      an earlier date, in which case such representations and warranties shall be
      true
      and correct as of such earlier date).




(r)  No
      Defaults .
      No
      Event of Default or Default, and no default under any other Loan Document,
      shall
      have occurred and be continuing or would result from the execution and delivery
      of, or the performance under, the Loan Documents, or making the requested Term
      Loan B Loans or issuance of the requested Term Letters of Credit, or in each
      case the application of the proceeds therefrom.




(s)  Field
      Examination .
      The
      Administrative Agent shall have received evidence satisfactory to it of the
      completion of a Field Examination (as set forth in SECTION
      8.04(b) ,
      with
      the results of such Field Examination satisfactory to it.




(t)  Mortgaged
      Properties .
      The
      Administrative Agent shall have received:




(i)  fully
      executed and notarized Mortgages, in proper form for recording in each
      applicable jurisdiction, encumbering each Mortgaged Property;




(ii)  an
      opinion of counsel (which counsel shall be reasonably satisfactory to the
      Administrative Agent) in each state in which a Mortgaged Property is located
      with respect to the enforceability of the Mortgage to be recorded in such state
      and such other matters as the Administrative Agent may reasonably request,
      in
      each case in form and substance reasonably satisfactory to the Administrative
      Agent; and




(iii)  such
      other information, documentation, and certifications as may be reasonably
      required by the Administrative Agent.




(u)  Cash
      Management .




(i)  The
      Credit Parties shall have established and maintained cash management services
      of
      a type and on terms satisfactory to the Collateral Agent at one or more of
      the
      banks set forth on Schedule 6.01(v) (each a
“ Cash
      Management Bank ”),
      and
      shall have requested in writing and otherwise taken such reasonable steps to
      ensure that all of their domestic Account Debtors with respect to Accounts
      forward payment of the amounts owed by them directly to a bank account (each
      such account, a “ Cash
      Management Account ”)
      subject to a Control Agreement at such Cash Management Bank.




53




(ii)  Each
      Cash
      Management Bank shall have established and maintained cash management agreements
      (each a “ Cash
      Management Agreement ”)
      with
      the Collateral Agent covering the Deposit Accounts of each Credit Party, in
      form
      and substance reasonably acceptable to each of the Agents, provided , however ,
      that
      Deposit Accounts that are disbursement accounts and that either (A) have an
      average daily balance of less than $100,000, or (B) are accounts for payment
      of
      the workers compensation claims and employment claims, shall be excluded from
      the requirement for Cash Management Agreements, so long as the aggregate amount
      of such excluded Deposit Accounts does not exceed $1,000,000 in the aggregate
      at
      any time. Each such Cash Management Agreement shall have provided, among other
      things, that (A) the Cash Management Bank will comply with any instructions
      originated by the Collateral Agent directing the disposition of the funds in
      such Cash Management Account without further consent by the Credit Parties,
      (B)
      the Cash Management Bank has no rights of setoff or recoupment or any other
      claim against the applicable Cash Management Account, other than for payment
      of
      its service fees and other charges directly related to the administration of
      such Cash Management Account and for returned checks or other items of payment,
      and (C) it will, following notice from the Collateral Agent, forward by
      daily sweep all amounts in the collection Cash Management Accounts to the
      Collateral Agent’s account.




(iii)  The
      Cash
      Management Accounts shall be subject to Control Agreements.




(v)  Legal
      Due Diligence .
      The
      Administrative Agent shall have completed confirmatory legal due diligence
      satisfactory to it with respect to the transactions contemplated by the Loan
      Documents, including confirmation that the Term Loan Obligations are permitted
      under the Indenture.




(w)  Revolving
      Loan Documents .
      The
      Revolving Credit Agreement and all documents related thereto, including the
      Intercreditor Agreement shall be in form and substance satisfactory to the
      Administrative Agent and shall close on or before the Closing Date.




(x)  Other
      Documents .
      The
      Administrative Agent shall have received a payoff letter evidencing repayment
      of
      the obligations under the Prior Credit Agreement; consent and collateral access
      agreements for properties leased by the Credit Parties from KRP, delivery of
      the
      funds flow memo, in each case in form and substance satisfactory to the
      Administrative Agent.




SECTION
      5.02  Conditions
      Precedent to Issuances of Term Letters of Credit . The
      obligation of the Administrative Agent or any Lender to arrange for the issuance
      of any Term Letter of Credit requested to be made by it on any Funding Date,
      shall be subject to the satisfaction of all of the conditions precedent
      specified in SECTION
      5.01 and the
      following additional conditions:




(a)  Representations
      and Warranties .
      As of
      such Funding Date, both before and after giving effect to the issuance of the
      Term Letters of Credit to be issued on such date all of the representations
      and
      warranties of any Credit Party contained in ARTICLE
      VI and in
      the other Loan Documents shall be true and correct in all material respects
      (except to the extent such representations and warranties specifically relate
      to
      an earlier date, in which case such representations and warranties shall be
      true
      and correct as of such earlier date).




(b)  No
      Defaults .
      As of
      such Funding Date, no Default or Event of Default shall have occurred and be
      continuing or would result from the execution and delivery of, or the
      performance under, the Loan Documents, the issuance of the requested Term
      Letters of Credit, or the proposed purpose or application thereof.




(c)  No
      Change in Condition .
      There
      shall not have occurred any event or condition since September 30, 2006 which
      could reasonably be expected to have a Material Adverse Effect.




54




(d)  No
      Legal Impediment .
      No
      injunction, writ, restraining order, or other order of any nature (whether
      temporary, preliminary or permanent) restricting or prohibiting, directly or
      indirectly, the extending of such credit shall have been issued and remain
      in
      force by any Governmental Authority against the Borrowers, any Agent or any
      Lender, and such extension of credit shall not violate any requirement of
      Applicable Law.




(e)  Each
      request by the Borrowers for a Term Loan B Loan or for the issuance of a Term
      Letter of Credit constitutes a representation and warranty by the Borrowers,
      as
      of the Funding Date that all conditions set forth in this SECTION
      5.02 have
      been satisfied.




ARTICLE
      VI


REPRESENTATIONS
      AND WARRANTIES




SECTION
      6.01  Representations
      and Warranties .
      In
      order to induce the Lenders to enter into this Agreement and to make the Term
      Loan B Loans or issue the Term Letters of Credit, as the case may be, each
      Credit Party hereby represents and warrants as follows:




(a)  Organization,
      Good Standing, Etc. Each
      Credit Party (i) is a corporation or limited liability company duly
      organized, validly existing and in good standing under the laws of the
      jurisdiction of its organization, (ii) has all requisite power and
      authority to conduct its business as now conducted and as presently
      contemplated, to make the borrowings hereunder (in the case of the Borrower),
      to
      execute and deliver each Loan Document to which it is a party, and to consummate
      the transactions contemplated thereby, and (iii) except where failure to do
      so, individually or in the aggregate, could not reasonably be expected to have
      a
      Material Adverse Effect, is duly qualified to do business and is in good
      standing in each jurisdiction in which the character of the properties owned
      or
      leased by it or in which the transaction of its business makes such
      qualification necessary for its business as currently conducted.




(b)  Authorization,
      Etc. The
      execution, delivery and performance by each Credit Party of each Loan Document
      to which it is or will be a party and the transactions contemplated thereunder,
      (i) have been or, with respect to such Credit Parties formed or acquired
      hereafter, will be, duly authorized by all necessary corporate, limited
      liability company or partnership action, as applicable, (ii) do not and
      will not contravene its Governing Documents, any Material Contract, any Coal
      Supply Agreement or Mining Permit, (iii) do not and will not violate any
      Requirements of Law binding on or otherwise affecting it, any of its
      Subsidiaries or any of its properties or its Subsidiaries’ properties except in
      each case under this clause (iii) where failure to do so, individually or in
      the
      aggregate, could not reasonably be expected to have a Material Adverse Effect,
      and (iv) do not and will not result in or require the creation of any Lien
      (other than pursuant to any Loan Document) upon or with respect to any of its
      properties or its Subsidiaries’ properties. Each Credit Party has the requisite
      corporate, limited liability company or partnership power and authority, as
      applicable, to execute, deliver and perform each of the Loan Documents to which
      it is a party.




55




(c)  Governmental
      Approvals .
      No
      material authorization or approval or other action by, and no notice to or
      filing with, any Governmental Authority that has not been obtained is required
      in connection with the due execution, delivery and performance by each Credit
      Party of each Loan Document to which it is a party.




(d)  Enforceability
      of Loan Documents .
      Each of
      the Loan Documents to which a Credit Party is a party has been duly executed
      and
      delivered by such Credit Party and constitutes the legal, valid and binding
      obligation of such Credit Party, enforceable against such Credit Party in
      accordance with its terms, except as may be limited by applicable bankruptcy,
      insolvency, reorganization, moratorium or other similar laws, or by general
      principles of equity (regardless of whether enforcement is sought in a
      proceeding at law or in equity).




(e)  Capitalization .
      On the
      Closing Date, the authorized, issued and outstanding Equity Interests of each
      Credit Party are as set forth on Schedule 6.01(e) .
      All of
      the issued and outstanding shares of Equity Interests of each Credit Party
      have
      been validly issued and, to the extent applicable, are fully paid and
      nonassessable, and the holders thereof are not entitled to any preemptive,
      first
      refusal or other similar rights. Schedule 6.01(e) sets
      forth each plan pursuant to which shares of the Equity Interests of the Credit
      Parties are issuable as of the Closing Date, copies of which plans have been
      delivered to the Administrative Agent under this Agreement, in the form and
      on
      the terms in effect on the Closing Date, and the number of shares of Equity
      Interests of each of the Credit Parties issuable under each such plan. Except
      as
      set forth on Schedule 6.01(e) ,
      there
      are no other plans or arrangements in existence relating to the issuance of
      shares of Equity Interests of a Credit Party. Except as set forth on Schedule 6.01(e) ,
      as of
      the Closing Date, there are no outstanding debt or equity securities of a Credit
      Party, and no outstanding obligations of a Credit Party convertible into or
      exchangeable for, or warrants, options or other rights for the purchase or
      acquisition from a Credit Party or other obligations of a Credit Party, to
      issue, directly or indirectly, Equity Interests of any such Person.




(f)  Litigation .
      Except
      as set forth on Schedule 6.01(f) ,
      there
      is no pending or, to the knowledge of such Credit Party, threatened action,
      suit
      or proceeding affecting any Credit Party or any of their respective properties
      or assets before any court or other Governmental Authority or any arbitrator
      that, individually or in the aggregate, (i) could reasonably be expected to
      have a Material Adverse Effect, or (ii) purports to affect the legality,
      validity or enforceability of any Loan Document or the consummation of the
      Term
      Loan Commitments evidenced hereby and by the other Loan Documents.




(g)  Financial
      Condition; Material Adverse Effect .




(i)  The
      2005
      Financial Statements and the 2006 Financial Statements, copies of which have
      been delivered to the Administrative Agent, and any financial statements
      delivered pursuant to SECTION
      7.01 ,
      fairly
      present, in all material respects, the consolidated financial condition of
      the
      Credit Parties as at the respective dates thereof and the consolidated results
      of operations of the Credit Parties for the fiscal periods ended on such
      respective dates, all in accordance with GAAP (subject to normal year-end
      adjustments and absence of footnotes in the case of any quarterly and monthly
      statements).




56




(ii)  The
      Administrative Borrower has furnished, on behalf of the Credit Parties, to
      the
      Administrative Agent under this Agreement (A) projected monthly balance
      sheets, income statements and statements of cash flows for the period from
      January 1, 2007 through December 31, 2007, and
      (B) projected annual balance sheets, income statements and statements of
      cash flows for each subsequent Fiscal Year ending on or prior to
      December 31, 2012. Such projections are based upon assumptions that are
      reasonably believed by the Credit Parties to have been reasonable at the time
      made (it being understood that any such forecasts or projections are subject
      to
      significant uncertainties and contingencies, many of which are beyond the Credit
      Parties’ control, that no assurance can be given that any such forecasts or
      projections will be realized and that actual results may differ from any such
      forecasts or projections and such differences may be material) and have been
      prepared in good faith by the Credit Parties.




(iii)  Since
      September 30, 2006, no event or development has occurred and is continuing
      that has had or could reasonably be expected to have a Material Adverse
      Effect.




(h)  Compliance
      with Law, Etc. No
      Credit Party is in violation of its Governing Documents, any Requirements of
      Law
      (other than violations which, individually or in the aggregate, have not had
      and
      could not reasonably be expected to have a Material Adverse Effect), any
      judgment or order of any Governmental Authority applicable to it or any of
      its
      property or assets, or any Material Contract binding on it or any of its
      properties (other than violations which, individually or in the aggregate,
      could
      not reasonably be expected to have a Material Adverse Effect). The Credit
      Parties have policies in place to observe the requirements of the Patriot Act
      related requirements consistent with U.S. Industry practice.




(i)  ERISA .
      Neither
      the Credit Parties nor any ERISA Affiliate has (i) any “accumulated funding
      deficiency” (within the meaning of Section 412 of the Code and
      Section 302 of ERISA), whether or not waived, with respect to any Benefit
      Plan, (ii) failed to make any contribution or payment to any Benefit Plan
      which has resulted, or could reasonably be expected to result, in the imposition
      of a Lien or the posting of a bond or other security under Section 302(f)
      of ERISA or Section 401(a)(29) of the Code, (iii) incurred, or is
      reasonably likely to incur, any material liability under Title IV of ERISA
      (other than a liability to the Pension Benefit Guaranty Corporation (or
“ PBGC ”)
      for
      premiums under Section 4007 of ERISA), or (iv) violated any provision
      of ERISA that individually or in the aggregate can reasonably be expected to
      result in a material liability to the Credit Parties taken as a whole. Neither
      the Credit Parties nor any ERISA Affiliate participates in or is obligated
      to
      contribute to a Multiemployer Plan or any Plan other than a Benefit Plan, except
      as specified on Schedule 6.01(i) .




57




(j)  Taxes,
      Etc. All
      Federal, and all material state, provincial and local tax returns and other
      material reports required by Applicable Law to be filed by any Credit Party
      have
      been filed, or extensions have been obtained, except to the extent subject
      to a
      Permitted Protest, and all taxes shown on such tax returns to be due and payable
      and all assessments, fees and other governmental charges upon such Credit Party
      and upon its properties, assets, income, businesses and franchises that are
      due
      and payable have been paid when due and payable; except to the extent subject
      to
      a Permitted Protest.




(k)  Margin
      Regulations .
      No
      proceeds of any Term Loan Obligation will be used for any purpose that violates,
      or which is inconsistent with, the provisions of Regulation T, U or X of
      the Board of Governors of the Federal Reserve System of the United States,
      as in
      effect from time to time.




(l)  Permits .
      Such
      Credit Party has, and is in compliance with, all permits, licenses,
      authorizations, approvals, entitlements and accreditations (collectively, the
      “ Permits ”)
      and
      Mining Permits required for such Person lawfully to own, lease, manage or
      operate each business and Property currently owned, leased, managed or operated
      by such Person, except where the failure to have or to so comply, individually
      or in the aggregate, could not reasonably be expected to have a Material Adverse
      Effect. No condition exists or event has occurred which, in itself or with
      the
      giving of notice or lapse of time or both, would result in the suspension,
      revocation, impairment, forfeiture or non-renewal of any Permit, and there
      is no
      claim that any thereof is not in full force and effect, except, in each case,
      with respect to any Permits the loss of which, individually or in the aggregate,
      could not reasonably be expected to have a Material Adverse Effect.




(m)  Personal
      Property .
      Each
      Credit Party has good and marketable title to, or valid leasehold interests
      in
      all Property material to its business, except for minor defects in title that
      could not reasonably be expected to interfere with its ability to conduct its
      business as currently conducted or as proposed to be conducted, free and clear
      of all Liens except Permitted Encumbrances. All such Properties are in good
      working order and condition, ordinary wear and tear excepted, except to the
      extent that the failure be in such condition could not, individually or in
      the
      aggregate, reasonably be expected to have a Material Adverse
      Effect.




(n)  Real
      Estate .




(i)  Owned
      Real Estate . Schedule 6.01(n)(i) sets
      forth the address (or, in respect of any properties that have no addresses,
      legal descriptions with book and page number references) of each Real Estate
      Asset (including the Mortgaged Properties) that is owned by a Credit Party
      as of
      the Closing Date. Except as set forth on such Schedule, no Credit Party owns
      any
      Real Estate Assets. Except as set forth on such Schedule, no Credit Party owns
      any Mines.




(ii)  Mines . Schedule 6.01(n)(ii) sets
      forth a complete and accurate list of all Mines (including addresses (or, in
      respect of any properties that have no addresses, locations) and the owner
      and
      operator thereof) owned or operated by a Credit Party as of the Closing Date.
      Except as set forth on such Schedule, no Credit Party leases any Mines.




58




(iii)  Leases . Schedule 6.01(n)(iii) sets
      forth a complete and accurate list of all (A) Mining Leases (including
      addresses (or, in respect of any properties that have no addresses, locations)
      of the subject coal reserves and the lessor thereof), and (B) all Prep Plant
      Leases (including addresses (or in respect of any properties that have no
      addresses, locations) of the subject properties and lessor thereof) and (C)
      all
      other Leases. Except as set forth on such Schedule, no Credit Party is a party
      to any Lease that constitutes a Material Contract.




(iv)  Permits .
      With
      respect to each Mining Lease and each Prep Plant Lease, a Credit Party possesses
      all leasehold interest mining rights and Mining Permits necessary for the
      operation of the applicable Mine or Coal Handling Facility, as the case may
      be,
      currently being operated on such parcel, and each of its rights under all
      applicable Mining Permits, contracts, rights-of-way and easements necessary
      for
      the operation of such Mine or such Coal Handling Facility, as the case may
      be,
      is in full force and effect and no default exists thereunder, except to the
      extent that such defaults or the failure to maintain such lease, mining rights,
      Mining Permits, contracts, rights of way and easements in full force and effect
      has not had and could not reasonably be expected to result in a Material Adverse
      Effect on the operation and intended use of such parcel by the Credit Parties.




(v)  Title .
      Each
      Credit Party has, and is the sole owner of, good, insurable and marketable
      fee
      simple title to all of its owned Real Estate Assets and a good and valid
      leasehold estate and title in and to its leased Real Estate Assets, and has
      all
      necessary right, power and authority to mortgage, encumber, give, grant,
      bargain, sell, convey, confirm, pledge, assign, and hypothecate all of the
      Real
      Estate Assets in accordance with the terms of this Agreement, and none of its
      Real Estate Assets are subject to Liens other than Permitted
      Encumbrances.




(vi)  No
      Defaults Under Material Contracts .
      The
      Administrative Borrower has delivered to the Administrative Agent a true and
      complete copy of each Material Contract. As of the Closing Date, no Material
      Contract shall have been further amended, modified, extended or supplemented
      in
      any way. Each Material Contract is in full force and effect and no Credit Party
      has any knowledge of any default that has occurred and is continuing thereunder.
      Each Material Contract constitutes the legally valid and binding obligation
      of
      each applicable Credit Party, enforceable against such Credit Party in
      accordance with its terms, except as enforcement may be limited by bankruptcy,
      insolvency, reorganization, moratorium or similar laws relating to or limiting
      creditors’ rights generally or by equitable principles.




(vii)  Restrictions
      on Use .
      No part
      of any Real Estate Asset is subject to any building or use restrictions that
      would prevent or interfere in any material respect with the current use and
      operation of such Real Estate Asset in any material respect. Each Real Estate
      Asset is properly and duly zoned for its current use, and such current use
      is in
      all material respects a conforming use or a non-conforming use permitted by
      variance or other Applicable Law. No Governmental Authority having jurisdiction
      over any Real Estate Asset has issued or, to the knowledge of any Credit Party,
      has threatened to issue any notice or order that adversely affects in any
      material respect the use or operation of such Real Estate Asset, or requires,
      as
      of the date hereof or a specified date in the future, any material repairs,
      alterations, additions or improvements to such Real Estate Asset, or the payment
      or dedication of any money, fee, exaction or property other than amounts (such
      as taxes and utility charges) due in the ordinary course of the ownership,
      use
      or operation of such Real Estate Asset.




59




(viii)  Condemnation .
      As of
      the Closing Date, there are neither any actual, nor, to the knowledge of any
      Credit Party, any threatened or contemplated condemnation or eminent domain
      proceedings that affect any Real Estate Asset or any part thereof, except to
      the
      extent that such proceedings, individually or in the aggregate, could not
      reasonably be expected to have a Material Adverse Effect, and no Credit Party
      has received any notice, oral or written, of the intention of any Governmental
      Authority or other Person to take or use all or any part thereof.




(ix)  Mechanics’
      Liens .
      No
      labor has been performed and no material has been furnished for any portion
      of
      any Real Estate Asset for which full payment has not been made and for which
      a
      mechanic’s or materialmen’s lien, or any other Lien, can be claimed by any
      Person, other than Permitted Encumbrances.




(x)  Encroachments .
      No
      improvements constituting a part of such Real Estate Asset encroach on any
      real
      property not owned or leased by a particular Credit Party.




(xi)  Repairs
      and Alterations .
      As of
      the Closing Date, no Credit Party has received any notice from any insurance
      company which has issued an insurance policy with respect to any Real Estate
      Asset requesting performance of any structural or other repairs or alterations
      to such Real Estate Asset.




(xii)  Access
      to Public Streets .
      Each
      parcel (or group of parcels) comprising each Real Estate Asset is located on
      public roads and streets with adequate ingress and egress available between
      such
      streets and such Real Estate Asset or otherwise has access to public roads
      and
      streets pursuant to access easements benefiting such Real Estate Asset and
      that
      are Mortgaged Properties.




(xiii)  Utilities .
      All
      utility systems required in connection with the use, occupancy and operation
      of
      each Real Estate Asset are sufficient for their present purposes, are fully
      operational and in working order, and are benefited by customary utility
      easements providing for the continued use and maintenance of such systems or,
      in
      the case of a leased Real Estate Asset, the Credit Party leasing the same has
      valid and enforceable rights to the same under the applicable Lease or
      otherwise.




(xiv)  Parking .
      Each
      Real Estate Asset consists of or otherwise has rights to use sufficient land,
      parking areas, sidewalks, driveways and other improvements to permit the
      continued use of such Real Estate Asset in the manner and for the purposes
      to
      which it is presently devoted.




(xv)  Non-Foreign
      Status .
      No
      Credit Party is a “foreign person” as defined in Section 1445 of the
      Code.




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(o)  Full
      Disclosure .
      None of
      the reports, financial statements, certificates or other written information
      furnished by or on behalf of a Credit Party to the Administrative Agent or
      the
      Collateral Agent under this Agreement or any other Loan Document in connection
      with the negotiation of this Agreement or any other Loan Document or delivered
      hereunder or thereunder (as modified or supplemented by other information so
      furnished) contains any misstatement of fact or omits to state any fact
      necessary to make the statements therein, taken as a whole, in the light of
      the
      circumstances under which it was made, not materially misleading; provided  that to the
      extent any such reports, financial statements, certificates or other written
      information therein was based upon or constitutes a forecast or projection,
      such
      Credit Party represents only that the relevant Credit Party acted in good faith
      and utilized assumptions believed by it to be reasonable at the time made (it
      being understood that any such forecasts or projections are subject to
      significant uncertainties and contingencies, many of which are beyond the Credit
      Parties’ control, that no assurance can be given that any such forecasts or
      projections will be realized and that actual results may differ from any such
      forecasts or projections and such differences may be material). As of each
      Funding Date, there are no contingent liabilities or obligations that,
      individually or in the aggregate, could reasonably be expected to have a
      Material Adverse Effect.




(p)  Environmental
      Matters .
      Except
      as set forth on Schedule 6.01(p), (i) the operations of each Credit Party are and have been in material
      compliance with all applicable Environmental Laws, (ii) there has been no
      Release on, in, at, to, from or under any of the properties currently or, to
      the
      knowledge of the Credit Parties, formerly, owned or operated by any Credit
      Party
      or a predecessor in interest for whom any Credit Party could be held liable
      that
      could reasonably be expected to result in any material Environmental Liabilities
      and Costs to any Credit Party, (iii) no Environmental Action has been
      asserted or threatened against any Credit Party which is unresolved, nor to
      the
      knowledge of any Credit Party are there any threatened Environmental Actions
      against a Credit Party that in either case could reasonably be expected to
      result in any material Environmental Liabilities and Costs to any Credit Party,
      (iv) to the knowledge of the Credit Parties no Environmental Action
      has been asserted against any facilities that have received Hazardous Materials
      generated by a Credit Party or any predecessor in interest for whom any Credit
      Party could be held liable that could reasonably be expected to result in any
      material Environmental Liabilities and Costs to any Credit Party, (v) none
      of the Credit Parties is subject to any outstanding order, decree, injunction
      or
      other agreement with any Governmental Authority or any indemnity or other
      agreement (other than routine permits, approvals, credit agreements and lease
      terms) imposing obligations with any third party relating to any Environmental
      Law that could reasonably be expected to result in any material Environmental
      Liabilities and Costs to any Credit Party, (vi) to the knowledge of any
      Credit Parties there are no other circumstances or existing conditions involving
      any Credit Party that could reasonably be expected to result in any such Credit
      Party becoming the subject of any Environmental Actions or material
      Environmental Liabilities and Costs including any restriction on the ownership,
      use, or transfer of any property in connection with any Environmental Law,
      and
      (vii) the Credit Parties made available to the Administrative Agent copies
      of all material environmental reports, studies, assessments and other material,
      non-privileged environmental documents in its possession relating to the Credit
      Parties and their current and former properties and operations.




61




(q)  Coal
      Act; Black Lung Act .
      Each
      Credit Party and each of their respective “related persons” (as defined in the
      Coal Act) are in compliance with the Coal Act and none of the Credit Parties
      or
      their respective related persons has any liability under the Coal Act except
      with respect to premiums or other payments required thereunder that have been
      paid when due, except if subject to a Permitted Protest. Each Credit Party
      is in
      compliance with the Black Lung Act, and no Credit Party has any liability under
      the Black Lung Act except with respect to premiums, contributions or other
      payments required thereunder that have been paid when due, except if subject
      to
      a Permitted Protest.




(r)  Coal
      Supply Agreements . Schedule 6.01(r) sets
      forth a complete and accurate list of each Coal Supply Agreement to which a
      Credit Party is a party as of the Closing Date, including the counterparty
      to
      each such agreement. As of the Closing Date, each such Coal Supply Agreement
      is
      in full force and effect and the Credit Parties are in compliance with their
      obligations thereunder, except to the extent that any such failure to be in
      full
      force and effect or in compliance could not reasonably be expected individually
      or in the aggregate to result in a Material Adverse Effect.




(s)  Surety
      Bonds .
      All
      surety, reclamation and similar bonds required to be maintained by a Credit
      Party under any Requirement of Law or pursuant to any contractual obligation
      binding on any of them are in full force and effect and were not and will not
      be
      terminated, suspended, revoked or otherwise adversely affected as a result
      of
      the Term Loan Obligations; provided  that (i) self-bonding permitted under any Requirement of Law prior to the
      Closing Date may be required to be replaced following the Closing Date with
      surety bonds, (ii) the cost of such bonds may be increased and
      (iii) certain of such bonds may be terminated, suspended or revoked, provided  that ,
      taken
      together, the events specified in clauses (i), (ii) and (iii) above
      could not reasonably be expected to result in a Material Adverse Effect. All
      required guarantees of, and letters of credit with respect to, such surety,
      reclamation and similar bonds are in full force and effect except where such
      failure to be in full force and effect could not reasonably be expected to
      result in a Material Adverse Effect.




(t)  Insurance .
      Each
      Credit Party keeps its property adequately insured and maintains
      (i) insurance to such extent and against such risks, including fire, as is
      customary with companies in the same or similar businesses, (ii) workmen’s
      compensation insurance in the amount required by Applicable Law,
      (iii) public liability insurance, which shall include product liability
      insurance, but only to the extent and in the amount customary with companies
      in
      the same or similar business against claims for personal injury or death on
      properties owned, occupied or controlled by it, and (iv) such other
      insurance as may be required by law (including against larceny, embezzlement
      or
      other criminal misappropriation). Schedule 6.01(t) sets
      forth a list of all insurance maintained by such Credit Party on the Closing
      Date.




(u)  Solvency .
      Each
      Credit Party, taken as a whole, is and, after giving effect to each of the
      transactions contemplated by the Loan Documents, the Credit Parties, taken
      as a
      whole, will be, Solvent.




(v)  Location
      of Bank Accounts . Schedule 6.01(v) sets
      forth a complete and accurate list of all Deposit Accounts and Securities
      Accounts of the Credit Parties, together with a description thereof (i.e.,
      the
      bank or securities firm at which such Deposit Account or Securities Account
      is
      maintained and the account number and the purpose thereof). Except to the extent
      specified in Schedule 6.01(v) ,
      or as
      specified in SECTION
      9.15 the
      Collateral Agent has a control agreement for each such Securities
      Account.




62




(w)  Intellectual
      Property . Schedule 6.01(w) sets
      forth a true and complete list of all Registered Intellectual Property owned
      by
      the Credit Parties, indicating for each registered item the registration or
      application number and the applicable filing jurisdiction. The Credit Parties
      exclusively own (beneficially and of record, where applicable) all right, title
      and interest in and to all Registered Intellectual Property set forth on Schedule 6.01(w) free and
      clear of all Liens other than such exceptions as may be set forth in Schedule 6.01(w) and own
      or have rights in and to all other Intellectual Property material to its
      business or used in the business of the Credit Parties. Except as could not,
      individually or in the aggregate, reasonably be expected to have a Material
      Adverse Effect (i) neither the Registered Intellectual Property set forth
      on Schedule 6.01(w) nor any
      other Intellectual Property material to its business or used in the business
      of
      the Credit Parties is subject to any outstanding order, judgment or decree
      adversely affecting the Credit Parties’ use thereof or their rights thereto and,
      all of the rights of the Credit Parties in and to such Intellectual Property
      is
      valid, subsisting and enforceable; (ii) to the knowledge of the Credit
      Parties, the conduct of the Credit Parties does not infringe or otherwise
      violate the rights of any third party in any respect; (iii) the Credit
      Parties have sufficient rights to use all Intellectual Property material to
      their business and, all such Intellectual Property is Registered Intellectual
      Property; and (iv) there is no litigation, opposition, cancellation,
      proceeding, objection or claim pending, or, to the knowledge of the Credit
      Parties, asserted or threatened against the Credit Parties concerning the
      ownership, validity, registerability, enforceability, infringement or use of,
      or
      licensed right to use, any Intellectual Property, including the Registered
      Intellectual Property.




(x)  Material
      Contracts .
      Set
      forth on Schedule M-1 is a
      complete and accurate list as of the Closing Date of all Material Contracts
      to
      which any Credit Party is a party showing the parties and subject matter thereof
      and amendments and modifications thereto. The Borrower has delivered true and
      complete copies of all Material Contracts, including all amendments thereto,
      to
      the Lenders. As of the Closing Date, each such Material Contract is in full
      force and effect and the Borrowers and their Subsidiaries are in compliance
      with
      their obligations thereunder, except to the extent that such failure to be
      in
      compliance could not, individually or in the aggregate, reasonably be expected
      to have a Material Adverse Effect. In addition the Credit Parties are in
      compliance with all other contractual obligations binding upon them, except
      to
      the extent that any such failure to be in compliance could not reasonably be
      expected individually or in the aggregate to result in a Material Adverse
      Effect.




(y)  Holding
      Company and Investment Company Acts .
      None of
      the Credit Parties is, or is controlled by, an “investment company” or an
“affiliated person” or “promoter” of, or “principal underwriter” of or for, an
“investment company” as such terms are defined in the Investment Company Act of
      1940, as amended.




(z)  Employee
      and Labor Matters .
      As of
      the Closing Date there is (i) no unfair labor practice complaint pending
      or, to the best of any Credit Party’s knowledge, threatened against any Credit
      Party before any Governmental Authority and no grievance or arbitration
      proceeding pending or, to the best of such Credit Party’s knowledge, threatened
      against any Credit Party which arises out of or under any collective bargaining
      agreement, and (ii) no strike, labor dispute, slowdown, stoppage or similar
      action or grievance pending or, to the best of such Credit Party’s knowledge,
      threatened against any Credit Party that, in the case of clause (i) or
      (ii) could reasonably be expected to have a Material Adverse
      Effect.




63




(aa)  Location
      of Collateral; Chief Place of Business; Chief Executive Office FEIN;
      Name .
      All of
      the Inventory is located on one of the locations listed on Schedule 6.01(aa)(1) .
      All of
      the Equipment is located on one of the locations listed on Schedule 6.01(aa)(2) . Schedules 6.01(aa)(1)
      and (2) contain
      a true, correct and complete list, as of the Closing Date, of the legal names
      and addresses of each warehouse at which the Inventory or Equipment, as the
      case
      may be, is stored. None of the receipts received by such Credit Party from
      any
      warehouse states that the goods covered thereby are to be delivered to bearer
      or
      to the order of a named Person or to a named Person and such named Person’s
      assigns. Schedule 6.01(aa)(3) sets
      forth a complete and accurate list as of the date hereof of (i) each place
      of business (other than a location that is only a sales office) of each Credit
      Party, (ii) the chief executive office of each Credit Party, (iii) the
      exact legal name of each Credit Party, (iv) the jurisdiction of
      organization of each Credit Party, (v) the organizational identification
      number of each Credit Party (or indicates that such Credit Party has no
      organizational identification number) and (vi) the federal employer
      identification number of such Credit Party. Attached hereto as Schedule
      6.01(aa)(4) is a
      schedule setting forth, with respect to each Mortgaged Property, the name of
      the
      Credit Party that owns or leases such property and the only filing office(s)
      in
      which a Mortgage and/or local UCC-1 financing statement with respect to such
      Credit Party and such property must be filed or recorded in order for the
      Collateral Agent to obtain a perfected mortgage lien and security interest
      in
      such Mortgaged Property.




(bb)  Equipment;
      Inventory Records; Commercial Tort Claims .
      Each
      material item of Equipment of the Credit Parties is used or held for use in
      their business and is in good working order, ordinary wear and tear and damage
      by casualty excepted. Each Credit Party keeps correct and accurate records
      itemizing and describing the type, quality, and quantity of Inventory and the
      book value thereof in all material respects. As of the Closing Date, Schedule 6.01(bb) sets
      forth a true and complete list of all commercial tort claims of the Credit
      Parties.




(cc)  Security
      Interests .
      Each
      Security Document creates in favor of the Collateral Agent a legal, valid and
      enforceable security interest in the Collateral purported to be secured thereby.
      Upon the filing of the UCC-1 financing statements and the recording of the
      Collateral Assignments for security referred to in the Security Agreement in the
      United States Patent and Trademark Office and the United States Copyright
      Office, such security interests in and Liens on the Collateral granted thereby
      shall be perfected security interests, in each case to the extent a Lien thereon
      can be perfected by filing pursuant to the UCC or by the recording of such
      Collateral Assignments in the United States Patent and Trademark Office or
      the
      United States Copyright Office, and no further recordings or filings are or
      will
      be required in connection with the creation, perfection or enforcement of such
      security interests and Liens, other than (i) the filing of continuation
      statements or financing change statements in accordance with Applicable Law,
      (ii) the recording of the Collateral Assignments for security pursuant to
      the Security Agreement in the United States Patent and Trademark Office and
      the
      United States Copyright Office, as applicable, with respect to after-acquired
      United States patent and trademark applications and registrations and United
      States copyrights and additional filings and/or other actions as may be required
      to perfect the Collateral Agent’s lien in Registered Intellectual Property under
      the laws of a jurisdiction outside the United States, and (iii) additional
      filings if a relevant Credit Party changes its name, identity or organizational
      structure or the jurisdiction in which each relevant Credit Party is
      organized.




64




(dd)  Foreign
      Assets Control Regulations, Etc. Neither
      the execution and delivery of, nor the borrowing under any Loan Document, nor
      the use of proceeds from any Term Loan Obligation will violate (i) the
      Trading with the Enemy Act, as amended, or any of the foreign assets control
      regulations of the United States Treasury Department (31 CFR, Subtitle B,
      Chapter V, as amended) or any enabling legislation or executive order relating
      thereto, (ii) the Patriot Act, or (iii) Executive Order
      No. 13,224, 66 Fed. Reg. 49,079 (2001), issued by the President
      of the United States (Executive Order Blocking Property and Prohibiting
      Transactions with Persons Who Commit, Threaten to Commit or Support Terrorism).
      Without limiting the foregoing, none of the Credit Parties is or will become
      a
“blocked person” as described in Section 1 of such Executive Order or
      engages or will engage in any dealings or transactions with, or is otherwise
      associated with, any such blocked person.




(ee)  Equipment
      Leases .
      Each
      Credit Party has good and indefeasible title to, or a valid leasehold interest
      in, all of its material personal property, in each case, free and clear of
      Liens
      except for Permitted Encumbrances. The Credit Parties enjoy peaceful and
      undisturbed possession under all leases of Equipment and other personal property
      material to their business and to which they are parties or under which they
      are
      operating, and all of such material leases are valid and
      subsisting.




ARTICLE
      VII


REPORTING
      COVENANTS




Each
      Credit Party covenants and agrees that, from and after the date hereof (except
      as otherwise provided herein, or unless the Required Lenders have given their
      prior written consent) until all amounts owing hereunder or under any Loan
      Document or in connection herewith or therewith have been paid in full,
      that:




SECTION
      7.01  Financial
      Statements . Each
      Credit Party (a) shall keep, and cause each of its Subsidiaries to keep,
      proper books of record and account, in which true and correct entries shall
      be
      made of all material financial transactions and the assets and business of
      the
      Credit Parties, and (b) shall maintain a system of accounting established
      and administered in accordance with sound business practices to permit
      preparation of consolidated financial statements in conformity with GAAP, and
      each of the financial statements described below shall be prepared from such
      system and records. The Administrative Borrower shall deliver or cause to be
      delivered to the Administrative Agent:




(a)  Monthly
      Reports .
      As soon
      as available, but in any event within thirty (30) days after the end of each
      Fiscal Month (and with respect to the last Fiscal Month of each Fiscal Quarter
      of the Administrative Borrower (including the last Fiscal Month of the
      Administrative Borrower’s Fiscal Year), forty-five (45) days after the end
      of such Fiscal Month, (i) a consolidated balance sheet for the Credit
      Parties as at the end of such Fiscal Month (and showing a comparison to the
      same
      period from the previous Fiscal Year and the projections for such period),
      (ii) the related consolidated statements of income of the Credit Parties
      for such Fiscal Month, (iii) the related consolidated statements of cash
      flow of the Credit Parties for such Fiscal Month, and (iv) the related
      unaudited consolidated statements of income and cash flow, in each case, for
      such Fiscal Month and for the period commencing on the first day of such Fiscal
      Year and ending the last day of such Fiscal Month (and showing a comparison
      to
      the same periods from the previous Fiscal Year and the projections for such
      period), in a form reasonably satisfactory to the Administrative Agent and
      certified by an Authorized Officer of the Administrative Borrower as fairly
      presenting, in all material respects, the financial position of the Credit
      Parties as at the dates indicated and the results of their operations for the
      Fiscal Months indicated, such consolidated balance sheets and consolidated
      statements of income in accordance with GAAP, subject to normal year-end
      adjustments and the absence of footnotes.




65




(b)  Quarterly
      Reports .
      As soon
      as available, but in any event within forty-five (45) days after the end of
      each Fiscal Quarter in each Fiscal Year (including the last Fiscal Quarter
      of
      each Fiscal Year) (i) the quarterly report of Administrative Borrower
      required to be filed with the SEC pursuant to Section 13 or 15(d) of the
      Securities Exchange Act, including the unaudited consolidated balance sheets
      of
      the Credit Parties as at the end of such period, the related unaudited
      consolidated statements of income and cash flow of the Credit Parties and the
      related unaudited consolidated statements of income for such Fiscal Quarter
      or
      if such quarterly reports are not filed with the SEC for any reason, the
      unaudited consolidated balance sheets of the Credit Parties as at the end of
      such period, the related unaudited consolidated statements of income and cash
      flow of the Credit Parties and the related unaudited consolidated statements
      of
      income for such Fiscal Quarter, (ii) a certificate of a Senior Officer of
      the Administrative Borrower stating that such unaudited financial information
      fairly presents, in all material respects, the financial position of the Credit
      Parties as at the dates indicated and the results of its operations and cash
      flow for the Fiscal Quarters indicated, such consolidated balance sheets and
      consolidated statements of income and cash flow in accordance with GAAP, subject
      to normal year-end adjustments and the absence of footnotes, (iii) a copy
      of the quarterly updated litigation report for such Fiscal Quarter; provided , however ,
      to the
      extent such quarterly report filed with the SEC contains a complete and correct
      disclosure regarding litigation, such quarterly report shall be deemed to
      satisfy this clause ,
      (iv) a detailed report of all Asset Dispositions permitted by SECTION
      9.04 ,
      (v) an update of Schedule 6.01(v) reflecting
      all changes since the last update, and (vi) an updated list of all Coal
      Supply Agreements in reasonable detail reflecting all changes since the last
      update.




(c)  Annual
      Reports .
      As soon
      as available, but in any event within ninety (90) days after the end of
      each Fiscal Year (i) the annual report of Administrative Borrower required
      to be filed with the SEC pursuant to Section 13 or 15(d) of the Securities
      Exchange Act, including the audited consolidated balance sheets of the Credit
      Parties as of the end of such Fiscal Year, the related audited consolidated
      statements of income, stockholders’ equity and cash flow of the Credit Parties
      and the related unaudited consolidated statements of income of the Credit
      Parties for such Fiscal Year or if such annual reports are not filed with the
      SEC for any reason, the audited consolidated balance sheets of the Credit
      Parties as of the end of such Fiscal Year, the related audited consolidated
      statements of income, stockholders’ equity and cash flow of the Credit Parties
      and the related unaudited consolidated statements of income of the Credit
      Parties for such Fiscal Year and (ii) a report on such financial statements
      of KPMG LLP or other independent public accountants of nationally recognized
      standing or other independent certified public accountants reasonably acceptable
      to the Administrative Agent, which report shall be unqualified in all material
      respects.




66




(d)  Officer’s
      Certificate; Etc. Together
      with each delivery of any financial statement pursuant to subsections (a) and (b) of this SECTION
      7.01 ,
      (i) an Officer’s Certificate substantially in the form of Exhibit O-1 attached
      hereto and made a part hereof, stating that a Senior Officer signatory thereto
      has reviewed the terms of the Loan Documents, and has made, or caused to be
      made
      under his or her supervision, a review in reasonable detail of the transactions
      and consolidated financial condition of the Credit Parties during the accounting
      period covered by such financial statements, that such review has not disclosed
      the existence during or at the end of such accounting period, and that such
      officer does not have knowledge of the existence as at the date of such
      Officer’s Certificate, of any condition or event which constitutes an Event of
      Default or a continuing Default, if any such condition or event existed or
      exists, specifying the nature and period of existence thereof and what action
      the Borrowers and their Subsidiaries have taken, are taking and propose to
      take
      with respect thereto (the “ Officer’s
      Certificate ”),
      and
      (ii) a certificate substantially in the form of Exhibit C-2 attached
      hereto and made a part hereof (the “ Compliance
      Certificate ”),
      signed by the Borrower’s Senior Officer or other Senior Officer, setting forth
      calculations (with such specificity as the Administrative Agent may reasonably
      request) for the period then ended which demonstrate compliance, when
      applicable, with the provisions of ARTICLE
      IX and ARTICLE
      X during
      such period.




(e)  Budgets;
      Business Plans; Financial Projections .
      As soon
      as practicable and in any event not later than thirty (30) days prior to the
      beginning of each Fiscal Year, the Administrative Borrower shall deliver to
      Administrative Agent their financial forecast, prepared in accordance with
      the
      Borrowers’ normal accounting procedures applied on a consistent basis, on a
      monthly basis for the upcoming Fiscal Year and on an annual basis for the next
      succeeding Fiscal Year prior to the Maturity Date, including (i) a
      forecasted consolidated and consolidating balance sheet, and the related
      consolidated and consolidating statements of income and cash flows of the Credit
      Parties for and as of the end of such Fiscal Year, and (ii) the amount of
      forecasted Capital Expenditures for such Fiscal Year.




(f)  Shareholder
      Communications and Press Releases .
      To
      Administrative Agent, promptly upon their becoming available, copies of:
      (i) all Financial Statements, reports, notices and proxy statements made
      publicly available by any Credit Party to its security holders; (ii) all
      regular and periodic reports and all registration statements and prospectuses,
      if any, filed by any Credit Party with any securities exchange or with the
      SEC
      or any governmental or private regulatory authority; and (iii) all press
      releases and other statements made available by any Credit Party to the public
      concerning material changes or developments in the business of any such
      Person.




SECTION
      7.02  Other
      Financial Information .
      The
      Administrative Borrower shall deliver to each Agent any Credit Party’s such
      other information, with respect to (a) the Collateral, or (b) any
      Credit Party’s business, financial condition, results of operations, properties,
      projections, business or business prospects as such Agent may, from time to
      time, reasonably request. The Credit Parties hereby authorize each Agent and
      its
      representatives to communicate directly with the certified public accountants
      for the Borrowers so long as the Agent provides a Senior Officer of such Credit
      Party the opportunity to participate in such communication and authorizes the
      accountants to disclose to each Agent, each Lender and their respective
      representatives any and all financial statements and other financial
      information, including copies of any final management letter, that such
      accountants may have with respect to the Collateral or such Credit Party’s
      financial condition, results of operations, properties, projections, business,
      and business prospects. The Agents and such representatives shall treat any
      non-public information so obtained as confidential.




67




SECTION
      7.03  Defaults,
      Events of Default . Promptly
      upon any Senior Officer obtaining knowledge of any condition or event which
      constitutes a breach or violation of any of the covenants, representations
      or
      conditions of this Agreement, an Event of Default or a Default, each Credit
      Party shall deliver to the Administrative Agent an Officer’s Certificate
      specifying (a) the nature and period of existence of any such claimed Event
      of Default, Default, condition or event, (b) the notice given or action
      taken by such Person in connection therewith, and (c) what action such
      Credit Party has taken, is and proposes to take with respect
      thereto.




SECTION
      7.04  Lawsuits . (a) Promptly
      upon any Credit Party obtaining knowledge of the institution of, or written
      threat of (i) any action, suit, proceeding or arbitration against or
      affecting such Credit Party or any asset of such Credit Party or not previously
      disclosed pursuant to SECTION
      6.01(f) ,
      which
      action, suit, proceeding or arbitration could reasonably be expected to have
      a
      Material Adverse Effect, (ii) any investigation or proceeding before or by
      any Governmental Authority, the effect of which could reasonably be expected
      to
      materially limit, prohibit or restrict the manner in which such Credit Party
      currently conducts its business, (iii) any Forfeiture Proceeding, or
      (iv) any material Condemnation or Condemnation proceeding, such Credit
      Party shall give written notice thereof to the Administrative Agent and provide
      such other information reasonably requested by the Administrative Agent as
      may
      be reasonably available to enable the Administrative Agent to evaluate such
      matters except, in each case, where the same is fully covered by insurance
      (other than applicable deductible), and (b) in addition to the requirements
      set forth in clause (a) of this SECTION
      7.04 ,
      such
      Credit Party upon request of the Administrative Agent, shall promptly give
      written notice of the status of any action, suit, proceeding, governmental
      investigation or arbitration covered by a report delivered pursuant to clause (a) above
      and provide such other information as may be reasonably requested by the
      Administrative Agent and reasonably available to such Credit Party to enable
      the
      Administrative Agent to evaluate such matters.




SECTION
      7.05  Insurance . As
      soon
      as practicable and in any event within three (3) Business Days of any notice
      of
      nonrenewal or cancellation without replacement thereof of any material insurance
      coverage set forth on the most recent schedule delivered pursuant to SECTION
      6.01(t) ,
      as
      applicable, the Administrative Borrower shall deliver to the Administrative
      Agent a copy of any such notice.




SECTION
        7.06  Environmental
        Notices .
        The
        Administrative Borrower shall, and shall cause the Credit Parties to, notify
        the
        Administrative Agent and the Collateral Agent, in writing, promptly, and
        in any
        event within five (5) Business Days after such Credit Party’s obtaining
        knowledge thereof, of any: (a) notice or claim to the effect that such
        Credit


68




Party
      is
      or may be liable to any Person as a result of the Release of any Hazardous
      Material; (b) investigation by any Governmental Authority of any Credit
      Party evaluating whether any Remedial Action is needed to respond to the Release
      of any Hazardous Material; (c) notice that any Property of such Credit
      Party is subject to an Environmental Lien; (d) any material violation of
      Environmental Laws by such Credit Party or awareness by such Credit Party of
      a
      condition which would reasonably be expected to result in a material violation
      of any Environmental Law by such Credit Party; (e) commencement or written
      threat of any judicial or administrative proceeding alleging a violation of
      or
      liability under any Environmental Law involving such Credit Party; (f) any
      proposed acquisition of stock, assets, real estate or leasing of property,
      or
      any other action by such Credit Party that would reasonably be expected to
      subject such Credit Party to material Environmental Liabilities and Costs;
      or
      (g) document provided to a Governmental Authority concerning any Release of
      a Hazardous Material in excess of any reportable quantity from or onto property
      owned or operated by such Credit Party or any release or event requiring
      reporting pursuant to any Environmental Law or any material obligation to take
      any Remedial Action to abate any Release. For purposes of clauses (a) , (b) , (c) and (d) ,
      notice
      shall include any other written communications given to an agent or employee
      of
      the Credit Party with direct or indirect supervisory responsibility with respect
      to the activity, if any, which is the subject of such communication. With
      respect to clauses (a) through (g) above,
      such notice shall be required only if (i) the liability or potential
      liability, or with respect to clause (g) ,
      the
      cost or potential cost of compliance, which is the subject matter of the notice
      is reasonably likely to exceed one hundred thousand Dollars ($100,000), or
      if
      (ii) such liability or potential liability or cost of compliance when added
      to other ongoing or pending liabilities of such Credit Party of the kind covered
      by clauses (a) through (f) above
      is reasonably likely to exceed two hundred and fifty thousand Dollars
      ($250,000). Upon the written request of the Administrative Agent, the Credit
      Parties shall provide the Administrative Agent with copies of any non-privileged
      documents related to any matter for which notice has been given pursuant to
      this SECTION
      7.06 .




SECTION
      7.07  Labor
      Matters .
      The
      Administrative Borrower shall, and shall cause each Credit Party to, notify
      the
      Administrative Agent in writing, promptly, but in any event within three (3)
      Business Days after learning thereof, of (a) any material labor dispute to
      which any Credit Party could reasonably be likely to become a party, any actual
      or threatened strikes, lockouts or other disputes relating to such Credit
      Party’s plants and other facilities, and (b) any material liability
      incurred with respect to the closing of any plant or other facility of such
      Credit Party.




SECTION
      7.08  Other
      Information .
      Promptly upon receiving a request therefor from the Administrative Agent, each
      Credit Party shall prepare and deliver to the Administrative Agent (a) such
      other information with respect to such Credit Party’s business, financial
      condition, results of operations, properties, projections, business or business
      prospects, (b) such other information with respect to the Collateral,
      including, without limitation, schedules identifying and describing the
      Collateral and any Dispositions thereof or (c) such other information with
      respect to such Credit Party, as from time to time may be reasonably requested
      by the Administrative Agent.




69




ARTICLE
      VIII


AFFIRMATIVE
      COVENANTS




Each
      Credit Party covenants and agrees, from and after the date hereof (except as
      otherwise provided herein) until all amounts owing hereunder or under any Loan
      Document or in connection herewith or therewith have been paid in full,
      that:




SECTION
      8.01  Compliance
      with Laws and Contractual Obligations .
      Each
      Credit Party shall comply with all Requirements of Law (including with respect
      to the licenses, approvals, certificates, permits, franchises, notices,
      registrations and other governmental authorizations necessary to the ownership
      of its respective properties or to the conduct of its respective business,
      antitrust laws or Environmental Laws and laws with respect to social security
      and pension funds obligations) except where the failure to do so, individually
      or in the aggregate, could not reasonably be expected to result in a Material
      Adverse Effect. Each Credit Party shall comply with all obligations under
      Material Contracts, including the Indenture. In addition the Credit Parties
      are
      in compliance with all other contractual obligations binding upon them, except
      to the extent that any such failure to be in compliance could not reasonably
      be
      expected individually or in the aggregate to result in a Material Adverse
      Effect. Each Credit Party shall have policies in place to observe the applicable
      requirements of the Patriot Act related requirements consistent with U.S.
      industry practice.




SECTION
      8.02  Payment
      of Taxes and Claims .
      Each
      Credit Party shall pay (a) all taxes, assessments and other governmental
      charges imposed upon it or on any of its properties or assets or in respect
      of
      any of its franchises, business, income or property, and (b) all claims
      (including claims for labor, services, materials and supplies) for sums material
      in the aggregate to such Credit Party which have become due and payable and
      which by law have or may become a Lien upon any of such Credit Party’s
      properties or assets, in each case prior to the time when any penalty or fine
      will be incurred by the Credit Party with respect thereto, except for such
      taxes, assessments, other governmental charges and claims that are being
      contested in a Permitted Protest to the extent that the failure to do so
      could not, individually or in the aggregate, reasonably be expected to result
      in
      a Material Adverse Effect.




SECTION
      8.03  Conduct
      of Business and Preservation of Corporate Existence . Each
      Credit Party shall (a) continue to engage in business of the same general
      type as now conducted by the Credit Parties, taken as a whole, and
      (b) preserve and maintain its corporate existence, rights (charter and
      statutory), licenses, consents, permits, notices or approvals and franchises
      deemed material to its business; provided  that no
      Credit Party shall be required to preserve any right or franchise if
      (i) the Credit Party shall determine in good faith that the preservation
      thereof is no longer necessary, and (ii) that the loss thereof could not
      reasonably be expected to have a Material Adverse Effect.




SECTION
      8.04  Inspection
      of Property; Books and Records; Discussions .




(a)  At
      any
      reasonable time during normal business hours with prior notice, or at any time
      without notice if a Default or Event of Default shall have occurred and be
      continuing, each Credit Party shall permit any authorized representative(s)
      designated by any Agent to visit and inspect any of its assets, to examine,
      audit, check and make copies of their respective financial and accounting
      records, books, journals, orders, receipts and any correspondence with
      regulators and other data relating to their respective businesses or the
      transactions contemplated by the Loan Documents (including in connection with
      environmental compliance, hazard, liability or insurance programs), and to
      discuss their affairs, finances and accounts with their officers and independent
      certified public accountants. The visitations and/or inspections by or on behalf
      of any Agent shall be at the Credit Parties’ expense and all costs and expenses
      incurred by the Administrative Agent or the Collateral Agent in connection
      therewith shall constitute Lender Expenses hereunder; provided  that so long
      as no Event of Default is continuing, the Credit Parties shall not be obligated
      to pay for more than such visitations and/or inspections in any twelve
      (12)-month period specified in SECTION
      8.04(b) and 8.04 (c) below.
      Each Credit Party shall keep and maintain in all material respects proper,
      complete and accurate books of record and account, in which entries in
      conformity with GAAP shall be made of all dealings and financial transactions
      and the assets and business of such Credit Party in relation to their respective
      businesses and activities, including transactions and other dealings with
      respect to the Collateral. If an Event of Default has occurred and is continuing
      and the Term Loan Obligations have been accelerated, the Administrative
      Borrower, upon the Administrative Agent’s request, shall make copies of or turn
      over any such records to the Administrative Agent or its
      representatives.




70




(b)  Upon
      three (3) Business Days’ prior written notice to the Credit Parties, each
      Credit Party shall permit any authorized representatives of the Collateral
      Agent
      to conduct a field examination, at the Borrower’s expense, of any of the
      properties of such Credit Party, including its and their financial and
      accounting records, and to make copies and take extracts therefrom, and to
      discuss its and their affairs, finances and business with its and their officers
      and certified public accountants, at such reasonable times during normal
      business hours and, subject to the proviso set forth below, as often as may
      be
      reasonably requested (a “ Field
      Examination ”); provided  that so long
      as no Event of Default is continuing, the Borrowers shall not be obligated
      to
      pay the costs of more than two (2) field exams in any twelve (12)-month
      period.




(c)  Each
      Credit Party shall permit any authorized representatives of the Collateral
      Agent
      to conduct an appraisal of the Inventory of such Credit Party at such Credit
      Party’s expense; provided  that so long
      as no Event of Default is continuing, the Borrowers shall not be obligated
      to
      pay the costs of more than two (2) such Inventory appraisals in any twelve
      (12)-month period.




SECTION
      8.05  Maintenance
      of Properties .
      Each
      Credit Party shall, maintain, preserve and protect consistent with past practice
      all of their tangible properties and Intellectual Property and other intangible
      assets which are material to the conduct of their business in good working
      order
      and condition, ordinary wear and tear excepted, except where the failure to
      do
      so could not reasonably be expected to have a Material Adverse Effect, and
      comply with the provisions of all Material Contracts (including material Mining
      Leases) to which each of them is a party so as to prevent any material loss
      or
      forfeiture thereof or thereunder. Further, each Credit Party shall maintain
      all
      other contractual obligations binding upon it, except to the extent that any
      such failure to do so could not reasonably be expected individually or in the
      aggregate to result in a Material Adverse Effect. Each Credit Party shall
      (a) maintain such Credit Party’s rights in all Intellectual Property
      material to the conduct of its business, including all Registered Intellectual
      Property and all Trade Secrets owned or licensed by such Credit Party
      (b) take all commercially reasonable steps to preserve and protect such
      Intellectual Property, including maintaining the quality of any and all products
      or services used or provided in connection with any material Trademark, at
      least
      at the level of quality of the products and services as of the Closing Date,
      and
      (c) take all commercially reasonable steps to ensure that all licensed
      users of any such Intellectual Property use such substantially consistent
      standards of quality.




71




SECTION
      8.06  Transactions
      with Related Parties .
      Each
      Credit Party shall conduct all transactions otherwise permitted under this
      Agreement with any of its Related Parties on terms that are commercially
      reasonable and no less favorable to such Credit Party than such Credit Party
      would obtain in a comparable arm’s-length transaction with a Person not a
      Related Party.




SECTION
      8.07  Further
      Assurances .
      Each
      Credit Party shall take such action and execute, acknowledge and deliver, at
      its
      sole cost and expense, such agreements, instruments or other documents as the
      Collateral Agent may reasonably require from time to time in order, (a) to
      carry out more effectively the purposes of this Agreement and the other Loan
      Documents, (b) to obtain, maintain, continue, validate or perfect its
      first-priority Liens on any of the Collateral or any other property of the
      Credit Parties, (c) to establish and maintain the validity and
      effectiveness of any of the Loan Documents and the validity, perfection and
      priority of the Liens intended to be created thereby, and (d) to better
      assure, convey, grant, assign, transfer and confirm unto the Collateral Agent
      for the ratable benefit of the Lenders the rights now or hereafter intended
      to
      be granted to the Collateral Agent for the ratable benefit of the Lenders under
      this Agreement or any other Loan Document.




SECTION
      8.08  Additional
      Security; Additional Guaranties; Further Assurances .




(a)  In
      the
      event that any Credit Party acquires a fee interest in any Real Estate Asset
      and
      such interest has not otherwise been made subject to a Lien in favor of the
      Collateral Agent, for the benefit of the Lenders, then such Credit Party, within
      ten (10) days after (or such later time as the Collateral Agent may agree in
      the
      exercise of its reasonable discretion) acquiring such Real Estate Asset, shall
      take all such actions and execute and deliver, or cause to be executed and
      delivered, all such mortgages, documents, instruments, agreements, opinions
      and
      certificates as the Collateral Agent shall reasonably request to create in
      favor
      of the Collateral Agent, for the benefit of the Lenders, a valid and, subject
      to
      any filing and/or recording referred to herein, perfected first-priority
      security interest in such Real Estate Asset. In addition to the foregoing,
      the
      Administrative Borrower shall, at the request of the Required Lenders, deliver,
      from time to time, to the Administrative Agent such appraisals as are required
      by law or regulation of Real Estate Assets with respect to which the Collateral
      Agent has been granted a Lien.




(b)  If
      any
      Credit Party enters into any Material Contract after the Closing Date, then
      such
      Credit Party shall notify the Agents thereof within fifteen (15) days
      thereafter, and such Credit Party shall promptly (and in any event, within
      sixty (60) days following the date of such Material Contract (including any
      Mining Lease that constitutes a Material Contract) or such later time as may
      reasonably be necessary, in the Collateral Agent’s reasonable discretion) use
      commercially reasonable efforts to execute and deliver to the Agents
      (i) all such Mortgages, documents, instruments, agreements, opinions and
      certificates that the Collateral Agent shall reasonably request to create in
      favor of the Collateral Agent, for the benefit of the Lenders, a valid and
      enforceable perfected first-priority Lien and security interest in such
      Leasehold Property (subject to Permitted Encumbrances), (ii) each of the
      documents, instruments and other materials related thereto as may be reasonably
      requested by the Agents, (iii) using such Credit Party’s best efforts, a
      landlord consent and estoppel if required under the applicable Lease, or
      landlord estoppel certificate if no consent is required under the Lease; provided  that any such
      landlord consent and/or estoppel shall be in form and substance reasonably
      acceptable to the Administrative Agent and shall address such matters as are
      reasonably required by the Lenders, which shall include, but not be limited
      to,
      a consent by the Landlord to the lien on such Lease in favor of the Collateral
      Agent to secure the Obligations, a waiver by the landlord of all statutory
      or
      other Liens that the Landlord has or could later have on any of the assets
      of
      the Lessee under such Lease, (iv) evidence that the Lease (or a memorandum
      thereof) has been recorded in all places necessary or desirable, in the
      reasonable judgment of the Administrative Agent, to give constructive notice
      of
      such Lease to third-party purchasers and encumbrances of the affected real
      property, and (v) if requested by Agent in respect of a Material Contract that
      is a Lease under which a Credit Party is the landlord, a subordination,
      non-disturbance and attornment agreement in a form reasonably acceptable to
      the
      Collateral Agent.




72




(c)  Formation
      of Subsidiaries .
      The
      Credit Parties shall not form, acquire or have any Subsidiaries other than
      Credit Parties, and Subsidiaries that are acquired subject to the restrictions
      on Investments provided in SECTION
      9.07 or in
      accordance with this SECTION
      8.08(c) .




(i)  Each
      Credit Party shall (i) cause each Person that becomes a Subsidiary of such
      Credit Party after the Closing Date promptly (and in any event within ten (10)
      days after the creation or acquisition of such Subsidiary) to guarantee the
      Obligations and to grant to the Collateral Agent, for the benefit of the
      Lenders, a security interest in the real, personal and mixed property of such
      Subsidiary to secure the Obligations, and (ii) promptly (and in any event
      within ten (10) days after the creation or acquisition of any Equity Interests)
      pledge, or cause to be pledged, to the Collateral Agent, for the benefit of
      the
      Collateral Agent and Lenders, all of the Equity Interests owned by a Credit
      Party of each Person that becomes a direct Subsidiary of such Credit Party,
      and
      all of the Equity Interests owned by a Credit Party, all in accordance with
      this SECTION
      8.08 ,
      in the
      case of each of subclause (i) and (ii) above, to be accompanied by an
      opinion of counsel to such Credit Party, in form and substance satisfactory
      to
      the Administrative Agent. The documentation for such guaranty, security and
      pledge shall be in form and substance reasonably satisfactory to the
      Administrative Agent or the Collateral Agent and shall be substantially similar
      to the Loan Documents executed concurrently herewith with such modifications
      as
      are reasonably requested by the Collateral Agent.




(ii)  At
      the
      time that any Credit Party forms any Subsidiary or acquires any Subsidiary
      after
      the Closing Date, such Credit Party shall promptly (i) cause such
      Subsidiary to execute and deliver to the Administrative Agent and the Collateral
      Agent the Security Agreement, and such security documents, as well as
      appropriate financing statements, all in form and substance reasonably
      satisfactory to the Administrative Agent and the Collateral Agent (including
      being sufficient to grant the Collateral Agent, on behalf of the Lenders, a
      first-priority Lien in and to the assets of such newly formed or acquired
      Subsidiary), and (ii) provide to the Administrative Agent and the
      Collateral Agent all other documentation, including, at the Collateral Agent’s
      request, one or more opinions of counsel reasonably satisfactory to the
      Administrative Agent and Collateral Agent, which in the opinion of each of
      them
      is appropriate with respect to the execution and delivery of the applicable
      documentation referred to above (including the grant and perfection of any
      Lien
      contemplated thereby). Any document, agreement, or instrument executed or issued
      pursuant to this paragraph (c) shall be
      a Loan Document.




73




(iii)  The
      Credit Parties agree to cause each Subsidiary of a Credit Party which, after
      the
      Closing Date, is required to become a Guarantor in accordance with the
      requirements of this SECTION
      8.08 to, at
      their own expense, execute, acknowledge and deliver, or cause the execution,
      acknowledgment and delivery of, and thereafter register, file or record in
      any
      appropriate governmental office, any document or instrument reasonably deemed
      by
      the Collateral Agent to be necessary or desirable for the creation and
      perfection of the Liens on its assets intended to be created pursuant to the
      relevant Security Documents.




(d)  The
      Liens
      required to be granted pursuant to this SECTION
      8.08 shall be
      granted pursuant to the respective Security Documents previously executed and
      delivered by the Credit Parties (or other security documentation substantially
      similar to such Security Documents or otherwise reasonably satisfactory in
      form
      and substance to the Collateral Agent) for the benefit of the Lenders and shall
      constitute valid and enforceable first-priority perfected security interests
      on
      all of the Collateral subject thereto, prior to the rights of all third Persons
      and subject to no other Liens except Permitted Encumbrances, and with such
      exceptions, conditions and qualifications, as shall be permitted by the
      respective Security Documents. Any Security Documents and other instruments
      related thereto or related to existing Security Documents shall be duly recorded
      or filed in such manner and in such places and at such times as are required
      by
      law to create, maintain, effect, perfect, preserve, maintain and protect the
      Liens, in favor of the Collateral Agent for the benefit of the Lenders, required
      to be granted pursuant to the Security Documents and all taxes, fees and other
      charges payable in connection therewith shall be paid in full by the Borrowers.
      At the time of the execution and delivery of any Security Documents, the
      Borrowers will, at the request of the Collateral Agent, cause to be delivered
      to
      the Collateral Agent such customary opinions of counsel and other related
      documents as may be reasonably requested by the Collateral Agent to assure
      that
      this SECTION
      8.08 has been
      complied with.




(e)  Each
      Credit Party agrees that each action required above by this SECTION
      8.08 shall be
      completed as promptly as reasonably practicable after such action is requested
      to be taken by the Administrative Agent or the Collateral Agent, provided  that any
      action required above by this SECTION
      8.08 with
      respect to a newly formed, created or acquired Subsidiary shall be completed
      as
      promptly as practicable but in any event within ten (10) days following the
      formation, creation or acquisition of such Subsidiary.




74


SECTION
      8.09  Powers;
      Conduct of Business .
      Each
      Credit Party shall qualify and remain qualified to do business in each
      jurisdiction in which the nature of its business requires it to be so qualified
      except for those jurisdictions where failure to so qualify does not have or
      could not reasonably be expected to have a Material Adverse Effect.




SECTION
      8.10  Use
      of
      Proceeds . Proceeds
      of the Term Loan Obligations shall be used solely in accordance with SECTION
      2.01 hereof.




SECTION
      8.11  Obtaining
      of Permits, Etc .  Each
      Credit Party shall obtain, maintain and preserve all Permits which are necessary
      or useful in the proper conduct of its business, except where the failure to
      maintain and preserve such permits, licenses, authorizations, approvals,
      entitlements and accreditations does not or could not reasonably be expected
      to
      have a Material Adverse Effect.




SECTION
      8.12  Environmental .
      Each
      Credit Party shall, (a) comply, and cause its Subsidiaries to comply, in
      all material respects with Environmental Laws and provide to the Collateral
      Agent documentation of such compliance which Collateral Agent reasonably
      requests, which documentation shall include a notice by the Administrative
      Borrower six (6) months after the Closing Date of the steps taken by the Credit
      Parties to address any outstanding matters described on Schedule 6.01(p) ,
      (b)
      promptly provide the Collateral Agent a copy of any document provided to a
      Governmental Authority concerning any Release of a Hazardous Material from
      or
      onto property owned or operated by the Credit Parties and take any Remedial
      Actions required of the Credit Parties by Environmental Laws or otherwise
      appropriate to abate said Release or avoid Environmental Liabilities and Costs,
      and (c) perform any Remedial Action at property owned or operated by the
      Credit Parties (i) that is required of the Credit Parties pursuant to any
      Environmental Law or agreement with a Governmental Authority, or (ii) that
      was initiated prior to the Closing Date and is identified on Schedule 6.01(p) .




SECTION
      8.13  Mining .
      The
      Credit Parties will, (a) take all commercially reasonable efforts to ensure
      that all of their respective tenants, subtenants, contractors, subcontractors,
      and invitees comply with all applicable Mining Laws, and obtain, comply and
      maintain any and all Mining Permits, applicable to any of them, and
      (b) conduct and complete all material investigations, studies, sampling and
      testing, and all remedial, removal and other actions in each case required
      under
      applicable Mining Laws and promptly comply in all respects with all lawful
      orders and directives of any Governmental Authority in respect of applicable
      Mining Laws.




SECTION
      8.14  Maintenance
      of Insurance .
      Each
      Credit Party shall maintain (in the name of such Credit Party), insurance with
      financially sound and reputable insurance companies or associations (including,
      without limitation, commercial general liability, property and business
      interruption insurance) with respect to their Properties (including all Real
      Estate Assets leased or owned by them) and business, in such amounts and
      covering such risks as is required by any Governmental Authority having
      jurisdiction with respect thereto or as is carried generally in accordance
      with
      sound business practice by companies in similar businesses similarly situated.
      All such property and casualty policies shall name the Collateral Agent as
      loss
      payee, and all policies of liability insurance shall name the Collateral Agent
      an additional insured. All certificates of insurance are to be delivered to
      the
      Collateral Agent and the policies shall contain a loss payable and additional
      insured endorsements in favor of the Collateral Agent (substantially in the
      form
      reasonably requested by the Collateral Agent), and shall provide for not less
      than thirty (30) days’ prior written notice to the Collateral Agent and
      other named insureds of the exercise of any right of cancellation.




75




SECTION
      8.15  Condemnation .
      Immediately upon learning of the institution of any Condemnation of any of
      its
      material owned or leased real property, any Credit Party shall notify each
      of
      the Agents of the pendency of such proceeding.




SECTION
      8.16  Fiscal
      Year .
      Each
      Credit Party shall cause its Fiscal Year to end on December 31 of each year
      unless the Required Lenders consent to a change in such Fiscal Year (and
      appropriate related changes to this Agreement).




SECTION
      8.17  Payment
      of Contractual Obligations . Each
      Credit Party shall pay on a timely basis any and all premiums, cash reserves,
      claims or other payment obligations in respect of any material insurance policy
      or any insurance covering the Collateral, and pay on a timely basis any and
      all
      amounts due and payable, and perform all of its obligations, under all Material
      Contracts.




SECTION
      8.18  Change
      in Collateral; Collateral Records .
      Each
      Credit Party shall advise the Collateral Agent promptly, in sufficient detail,
      of any change which could reasonably be expected to have a Material Adverse
      Effect relating to the value of the Collateral or the Lien granted thereon
      and
      execute and, upon the Collateral Agent’s reasonable request, deliver, and cause
      each of its Subsidiaries to execute and deliver, to the Collateral Agent from
      time to time, solely for the Collateral Agent’s convenience in maintaining a
      record of Collateral, such written statements and schedules, maintained by
      the
      Borrowers and their Subsidiaries in the ordinary course of business, as the
      Collateral Agent may reasonably require, designating, identifying or describing
      the Collateral.




SECTION
      8.19  Cash
      Management . (a) No
      Credit Party shall have any Deposit Account or Securities Account other than
      accounts maintained in accordance with SECTION
      9.15 hereof
      and the Administrative Borrower shall cause the Lenders to have a valid,
      perfected, first-priority security interest in such accounts except as otherwise
      specified in SECTION
      9.15 .




(b)  No
      Credit
      Party shall close any Deposit Account or Securities Account or any lockbox
      maintained by it as of the date hereof without the prior written consent of
      the
      Collateral Agent.




(c)  Each
      Credit Party shall take all reasonable steps necessary from time to time to
      deposit or cause to be deposited promptly all of their Collections (including
      those sent in cash or otherwise directly to a Credit Party) into an account
      subject to a Control Agreement.




(d)  The
      Collateral Agent shall have the right to give notice of cash dominion under
      any
      Control Agreement at any time after Revolver Availability is less than twenty
      million Dollars ($20,000,000) and, once given, such cash dominion shall continue
      until such time as the Aggregate Revolver Exposure as defined under the Revolver
      Credit Agreement is zero.




76




SECTION
      8.20  Location
      of Equipment .
      Each
      Credit Party will keep its Equipment only at any of the locations identified
      on Schedule 6.01(aa)(2) or in
      transit from one such location to another; provided , however ,
      that
      the Administrative Borrower may amend Schedule 6.01(aa) so long
      as such amendment occurs by written notice to the Collateral Agent not less
      than
      thirty (30) days prior to the date on which the list of locations has
      changed and such Equipment is moved to such new location in the United
      States.




SECTION
      8.21  Post-Closing
      Matters .
      Each
      Credit Party shall satisfy each condition and complete each item set forth
      on Schedule 8.21 attached
      hereto on or before the time specified on Schedule 8.21 with
      respect to such condition or item.




SECTION
      8.22  Inventory .
      Each
      Credit Party shall maintain its Inventory only (a) at locations that are
      (i) owned or leased by the Credit Parties, or (ii) subject to a Collateral
      Access Agreement or will be within sixty (60) days from the Closing Date, or
      (b) in transit from one such location to another.




SECTION
      8.23  Pledged
      Security Interests .
      The
      Credit Parties shall deliver, within three (3) Business Days following the
      Closing Date, all of the certificated pledged Securities then owned by the
      Borrowers, together with (i) executed and undated transfer powers in the
      case of certificated pledged Securities, and (ii) all other items required
      to be delivered pursuant to the Security Agreement.




ARTICLE
      IX


NEGATIVE
      COVENANTS




Each
      Credit Party covenants and agrees, from and after the date hereof (except as
      otherwise provided herein) until all amounts owing hereunder or under any other
      Loan Document or in connection herewith or therewith have been paid in full
      that:




SECTION
      9.01  Liens . It
      shall
      not create, incur, assume or suffer to exist any Lien upon or with respect
      to any of its property or assets, whether now owned or hereafter acquired,
      or
      assign or otherwise transfer any account receivable or other right to receive
      income, other than Permitted Encumbrances.




SECTION
      9.02  Indebtedness . It
      shall
      not create, incur, assume, guarantee or suffer to exist, or otherwise become
      or
      remain liable with respect to any Indebtedness, other than Permitted
      Indebtedness.




SECTION
      9.03  Consolidation,
      Merger, Subsidiaries, Etc .  It
      shall
      not (a) liquidate or dissolve, consolidate with, or merge into or with, any
      other corporation, provided  that this clause (a) shall
      not prevent (i) a merger or consolidation involving only a Borrower and one
      or more of its Subsidiaries pursuant to which a Borrower is the surviving party,
      (ii) a merger or consolidation involving only one or more Wholly-Owned
      Domestic Subsidiaries of a Borrower pursuant to which the surviving Person
      is a
      Wholly-Owned Domestic Subsidiary of a Borrower that is a Credit Party,
      (iii) a merger or consolidation that has the effect of a disposition of
      assets permitted by SECTION
      9.04 or an
      Investment permitted by SECTION
      9.07 ,
      or
      (iv) purchase or otherwise acquire all or substantially all of the capital
      stock or assets of any Person (or of any division or business unit
      thereof).




77


SECTION
      9.04  Asset
      Dispositions, Etc .  It
      shall
      not sell, transfer, lease or otherwise dispose of, or grant options, warrants
      or
      other rights with respect to, any of its assets (including any capital stock
      or
      Indebtedness of any Person), (each an “ Asset
      Disposition ”)
      except:




(a)  sales,
      transfers, leases or other dispositions of (i) Inventory or rights to Inventory,
      (ii) surplus equipment and (iii) Permitted Investments, in each case in the
      ordinary course of business;




(b)  sales,
      transfers, leases or other dispositions of assets to a Credit
      Party;




(c)  the
      discount or sale, in each case without recourse and in the ordinary course
      of
      business, of receivables more than ninety (90) days overdue and arising in
      the
      ordinary course of business, but only in connection with the compromise or
      collection thereof consistent with customary industry practice (and not as
      part
      of any bulk sale or financing of receivables);




(d)  sales
      or
      other dispositions in the ordinary course of business of equipment and other
      tangible assets that have become obsolete, uneconomic, worn-out or no longer
      useful in the business of a Credit Party or its Subsidiaries;




(e)  Restricted
      Payments permitted by the terms of this Agreement;




(f)  dispositions
      of cash and Cash Equivalents in the ordinary course of business;




(g)  nonexclusive
      licenses of Intellectual Property of a Credit Party or its Subsidiaries entered
      into in the ordinary course of business;




(h)  in
      a
      transaction permitted under SECTION
      9.03  or SECTION
      9.07 ;




(i)  (A)
      the
      Bell County Disposition and (B) Dispositions (excluding the Bell County
      Dispositions) with an aggregate fair market value not exceeding twenty million
      Dollars ($20,000,000) in the aggregate; provided , that with
      respect to sales, conveyances, transfers, leases, subleases, licenses,
      assignments and other dispositions of Equipment and Real Estate Assets, which
      are not replaced within one hundred eighty (180) days, if the Administrative
      Borrower notifies the Administrative Agent in writing within such 180 day period
      that it or the applicable Subsidiary intends to replace such Equipment or Real
      Estate Asset, then such Borrower or such applicable Subsidiary shall, so long
      as
      no Event of Default shall have occurred and be continuing, be permitted to
      do so
      as specified within three hundred and sixty-five (365) days of the Disposition
      of such Equipment or Real Estate Asset; and




(j)  any
      Credit Party shall have the right (i) to terminate or allow to expire or to
      not
      renew any Lease in the ordinary and normal course of its business that is no
      longer needed for the ongoing operations of such Credit Party; or (ii) to enter
      into subleases, easements, licenses and other similar agreements relating to
      portions of its Property with third parties in the ordinary course of business
      of such Credit Party, to the extent that any such sublease, easement, license
      or
      other like agreement or does not otherwise relate to a material portion of
      the
      Property; and in all cases under clauses (i) and (ii), provided  that such
      action or event could not reasonably be expected to result in a Material Adverse
      Effect.




78


SECTION
      9.05  Limitation
      on Issuance of Equity Interests .
      It
      shall not issue or sell or enter into any agreement or arrangement for the
      issuance and sale of any shares of its capital stock or of any other Equity
      Interests, any Securities convertible into or exchangeable for its capital
      stock
      or other Equity Interests or any warrants, options or other rights for the
      purchase or acquisition of any of its capital stock or Equity Interests, other
      than (a) as set forth on Schedule 6.01(e) ,
      (b)  the issuance of capital stock to a Borrower or Wholly-Owned
      Subsidiaries of such Borrower, (c) the issuance of capital stock of
      directors’ qualifying shares; or (d) issuances to employees pursuant to
      existing employee stock option plan as set forth on Schedule 6.01(e) .




SECTION
      9.06  Limitations
      on Dividends and Distributions and Other Payment Restrictions Affecting
      Subsidiaries . It
      shall
      not create or otherwise cause, incur, assume, suffer or permit to exist or
      become effective any consensual encumbrance or restriction of any kind on its
      ability to, (a) pay dividends or to make any other distribution on any
      shares of its Equity Interests, (b) subordinate or to pay, prepay, redeem
      or repurchase any Indebtedness owed to any Credit Party, (c) make loans or
      advances to any Credit Party, or (d) transfer any of its property or assets
      to any Credit Party; provided , however ,
      that
      nothing in clauses (a) through (d) of
      this SECTION
      9.06 shall
      prohibit or restrict: (i) this Agreement and the other Loan Documents;
      (ii) any Applicable Law, rule or regulation (including applicable currency
      control laws and applicable state or provincial corporate statutes restricting
      the payment of dividends or any other distributions in certain circumstances);
      (iii) any restriction set forth in any document or agreement governing or
      securing any Existing Debt; (iv) in the case of clause (d) any
      restrictions on the subletting, assignment or transfer of any property or asset
      included in a lease, license, sale conveyance or similar agreement with respect
      to such property or asset; (v) in the case of clause (d) any
      holder of a Permitted Encumbrance from restricting on customary terms the
      transfer of any property or assets subject to such Permitted Encumbrance;
      (vi) customary provisions restricting assignment of any licensing agreement
      or other contract entered into by the Credit Parties in the ordinary course
      of
      business; (vii) restrictions on the transfer of any asset pending the close
      of the sale of such asset; or (viii) customary provisions requiring payment
      on a pro rata basis of dividends or other distributions by any non-Wholly-Owned
      Subsidiary that is not a Credit Party set forth in the organizational documents
      for such Subsidiary so long as such provisions were not entered into in
      connection with any other agreement or arrangement not otherwise permitted
      under
      this SECTION
      9.06 .




SECTION
      9.07  Investments .
      It
      shall not directly or indirectly, hold, own or invest in or commit or agree
      to
      hold or invest in, or purchase or otherwise acquire or commit or agree to
      purchase or otherwise acquire any Investment, except for Permitted
      Investments and
      Permitted Acquisitions.




SECTION
      9.08  Sale
      and Leaseback .
      It
      shall not directly or indirectly, become or remain liable as lessee or as a
      guarantor or other surety with respect to any lease, whether an Operating Lease
      or a Capitalized Lease, of any property (whether real, personal or mixed),
      whether now owned or hereafter acquired, (i) that a Credit Party has sold
      or transferred or is to sell or transfer to any other Person, or (ii) that
      a Credit Party intends to use for substantially the same purpose as any other
      property that has been or is to be sold or transferred by such Credit Party
      or
      any other Credit Party to any Person in connection with such lease (a
“ Sale
      and Leaseback ”)
      in
      excess of $10,000,000 individually and in the aggregate for all such Sale and
      Leaseback transactions during the term of this Agreement.




79




SECTION
      9.09  Negative
      Pledges .
      It
      shall not enter into any agreement prohibiting the creation or assumption of
      any
      Lien upon any of its properties or assets, whether now owned or hereafter
      acquired, except (a) pursuant to this Agreement and the Security Documents,
      (b) pursuant to any document or instrument governing Existing Debt
      (including the Indenture and the Revolving Credit Agreement) or governing
      Capitalized Leases or purchase money debt incurred pursuant to SECTION
      9.02 or any
      such restriction contained therein relates only to the asset or assets acquired
      in connection therewith or in connection with any Lien permitted by SECTION
      9.01 or any
      Disposition permitted by SECTION
      9.04 ,
      (c) prohibitions or conditions under Applicable Law, rule or regulation,
      (d) any agreement or instrument to which any Person is a party existing on
      the date such Person first becomes a Subsidiary of a Credit Party or the date
      such agreement or instrument is otherwise assumed by a Credit Party (so long
      as
      such agreement or instrument was not entered into solely in contemplation of
      such Person becoming a Subsidiary of a Credit Party or such assumption and
      such
      prohibitions or conditions do not affect any other Subsidiary of the Credit
      Party (other than Subsidiaries of such Person having primary obligation for
      repayment of such Indebtedness)), (e) customary provisions restricting
      subletting or assignment of any lease governing any leasehold interest of a
      Credit Party, and (f)  customary provisions restricting assignment of
      any licensing agreement or other contract entered into by a Credit Party in
      the
      ordinary course of business; or restrictions on the transfer of any asset
      pending the close of the sale of such asset.




SECTION
      9.10  Change
      in Nature of Business .
      Except
      as expressly permitted hereunder, it shall not make any material change in
      the
      nature of its business as such business is carried on as of the Closing Date
      or
      any business substantially related or incidental thereto. It shall not, modify
      or change its fiscal year or materially modify or change its method of
      accounting (other than as may be required to conform to GAAP or, with respect
      to
      Subsidiaries, to conform to the Administrative Borrower’s Fiscal Year) or enter
      into, modify, or terminate any agreement currently existing or at any time
      hereafter entered into with any third-party accounting firm or service bureau
      for the preparation or storage of the Credit Parties’ accounting records in a
      manner that would result in said accounting firm or service bureau declining
      to
      provide the Agents with information regarding the Credit Parties’ financial
      condition.




SECTION
      9.11  Change
      Name .
      It
      shall not change a Credit Party’s name, organizational identification number,
      state of organization, or organizational identity; provided , however ,
      that a
      Credit Party or a Subsidiary of a Credit Party may change its name or state
      of
      organization upon at least thirty (30) days’ prior written notice by the
      Administrative Borrower to the Administrative Agent and the Collateral Agent
      of
      such change and so long as, at the time of such written notification, such
      Credit Party or such Subsidiary provides any financing statements, fixture
      filings or other documents necessary to perfect and continue perfected
      Liens.




SECTION
      9.12  Modifications
      of Indebtedness, Organizational Documents and Certain Other
      Agreements .
      It
      shall not amend, modify or otherwise change, (a) its certificate of
      incorporation or bylaws (or other similar organizational documents), including
      by the filing or modification of any certificate of designation, or any
      agreement or arrangement entered into by it, with respect to any of its capital
      stock (including any shareholders’ agreement) except any such amendments,
      modifications or changes pursuant to this clause that either individually or
      in
      the aggregate would not be materially adverse to the interests of the Lenders,
      (b) its accounting policies or reporting practices, (c) the Indenture, or
      (d) the Revolving Credit Agreement in a manner prohibited by the
      Intercreditor Agreement.




80




SECTION
      9.13  Federal
      Reserve Regulations .
      It
      shall not use the proceeds of any Term Loan Obligation for any purpose that
      would cause such Term Loan Obligation to be a margin loan under the provisions
      of Regulation T, U or X.




SECTION
      9.14  Investment
      Company Act of 1940 .
      It
      shall not engage in any business, enter into any transaction or take any other
      action that would cause it or any of its Subsidiaries to become subject to
      the
      registration requirements of the Investment Company Act of 1940, as amended,
      by
      virtue of being an “investment company” or a company “controlled” by an
“investment company” not entitled to an exemption within the meaning of such
      Act.




SECTION
      9.15  Securities
      Accounts ;
      Deposit Accounts . Subject
      to the Security Agreement and except as permitted by SECTION
      5.01(u) ,
      it
      shall not establish or maintain any Securities Account, Deposit Account or
      similar account unless the Collateral Agent shall have received a Control
      Agreement in respect of such Securities Account, Deposit Account or similar
      account; provided  that ,
      this
      requirement shall not apply to any Deposit Account that is a disbursement
      account and either (A) does not have average daily balances in excess of
      $100,000 for each such account, or (B) is an account for payment of workers
      compensation and employment claims, so long as the aggregate amount of such
      excluded Deposit Accounts does not exceed $1,000,000 in the aggregate for all
      such accounts. Each Credit Party shall comply in all material respects with
      the
      provisions of each Control Agreement to which it is a party.




SECTION
      9.16  Impairment
      of Security Interests .
      Except
      as otherwise permitted pursuant to any of the Loan Documents, it shall not
      directly or indirectly, take any action or do anything that would have the
      effect of terminating, limiting in or impairing the perfection or priority
      of
      any Lien securing the Obligations except as expressly permitted under any Loan
      Document.




SECTION
      9.17  Restricted
      Payments .
      It
      shall not make any Restricted Payment, except (a) intercompany loans and
      advances between Credit Parties to the extent permitted by SECTION
      9.07 ,
      (b) dividends and distributions by a Credit Party to the Credit Party that
      holds of the Stock of such Credit Party, (c) employee loans permitted under SECTION
      9.02 ,
      and
      (d) payments of principal and interest of intercompany notes issued in
      accordance with SECTION
      9.02 .




ARTICLE
      X


FINANCIAL
      COVENANTS




Each
      Credit Party covenants and agrees, from and after the date hereof (except as
      otherwise provided herein, or unless the Required Lenders have given their
      prior
      written consent) until all amounts owing hereunder or under any Security
      Document or in connection herewith or therewith have been paid in full,
      that:




SECTION
      10.01  Minimum
      Consolidated EBITDA .
      The
      Credit Parties shall not permit Consolidated EBITDA




(a)  for the
      six (6) month period ending as of June 30, 2007 to be less than $22.2
      million,




81




(b)  for
      the
      nine (9) month period ending as of September 30, 2007 to be less than $34.5
      million, and




(c)  for
      the
      twelve (12)-month period ending on any date set forth in the table below to
      be
      less than the amount set forth opposite such date:




**Measurement
                Period Ending**
            
            **Consolidated
                EBITDA**December 31,
                2007
            
            $
            43.9
                millionMarch
                31, 2008
            
            $
            50.0
                millionJune
                30, 2008
            
            $
            56.0
                millionSeptember
                30, 2008
            
            $
            62.4
                millionDecember 31,
                2008
            
            $
            68.7
                millionMarch
                31, 2009
            
            $
            70.2
                millionJune
                30, 2009
            
            $
            71.7
                millionSeptember
                30, 2009
            
            $
            73.2
                millionDecember 31,
                2009
            
            $
            74.5
                millionMarch
                31, 2010
            
            $
            74.5
                millionJune
                30, 2010
            
            $
            73.7
                millionSeptember
                30, 2010
            
            $
            72.2
                millionDecember 31,
                2010
            
            $
            74.5
                million





SECTION
      10.02  Leverage
      Ratio .
      The
      Credit Parties shall not permit the Leverage Ratio for the Credit Parties as
      of
      any date set forth in the table below to be greater than the amount set forth
      opposite such date:




**Measurement
                Period Ending**
            
            **Leverage
                Ratio**June
                30, 2007
            
            
            2.3xSeptember
                30, 2007
            
            
            2.2xDecember 31,
                2007
            
            
            2.3xMarch
                31, 2008
            
            
            2.1xJune
                30, 2008
            
            
            1.9xSeptember
                30, 2008
            
            
            1.8xDecember 31,
                2008
            
            
            1.7xMarch
                31, 2009
            
            
            1.6xJune
                30, 2009
            
            
            1.6xSeptember
                30, 2009
            
            
            1.6xDecember 31,
                2009
            
            
            1.5xMarch
                31, 2010
            
            
            1.5xJune
                30, 2010
            
            
            1.5xSeptember
                30, 2010
            
            
            1.6xDecember 31,
                2010
            
            
            1.5x




82




SECTION
      10.03  Capital
      Expenditures .
      The
      Credit Parties will not make or agree to make any Capital Expenditure that
      would
      cause the aggregate amount of all such Capital Expenditures made by the Credit
      Parties in the aggregate to exceed (a) $56.1 million in the Fiscal Year
      ending on or before December 31, 2007 and (b) $70.4 million in the
      Fiscal Year ending on or before December 31, 2008 and (c) $66.0
      million in any Fiscal Year thereafter; provided , however ,
      to the
      extent that actual Capital Expenditures for any Fiscal Year are less than the
      maximum amount set forth above for such Fiscal Year, such unused amount may
      be
      carried forward and used only in the next Fiscal Year (where it shall be deemed
      to be spent last).




ARTICLE
      XI


EVENTS
      OF
      DEFAULT, RIGHTS AND REMEDIES




SECTION
      11.01  Events
      of Default . Each
      of
      the following occurrences shall constitute an event of default (an “ Event
      of Default ”)
      under
      this Agreement.




(a)  Failure
      to Make Payments When Due .
      The
      Borrowers shall fail to pay (i) any principal or interest when due, or
      (ii) any fees, Lender Expenses or any other monetary Obligation, and such
      failure shall continue for a period of three (3) Business Days after such amount
      was due (in each case, whether by scheduled maturity, required prepayment,
      acceleration, demand or otherwise).




(b)  Breach
      of Certain Covenants .
      Any
      Credit Party shall fail to perform or comply with any covenant or agreement
      contained in SECTION
      7.03 , SECTION
      8.03, SECTION 8.04 , SECTION
      8.08(c) , SECTION
      8.10 , SECTION
      8.11 , ARTICLE
      IX ,
      or ARTICLE
      X under
      this Agreement.




(c)  Breach
      of Representation or Warranty .
      Any
      representation, warranty or statement made or deemed made by or on behalf of
      any
      Credit Party or by any officer of the foregoing under any Loan Document or
      in
      any report, certificate, or other document delivered to any Agent or any Lender
      pursuant to any Loan Document prove to be incorrect or misleading in any
      material respect when made or deemed made.




(d)  Five
      (5) Day Cure Period .
      Any
      Credit Party shall fail to perform or comply with any covenant or agreement
      contained in ARTICLE
      VII, except
      for SECTION
      7.03 and such
      default shall continue for five (5) Business Days or more.




(e)  Other
      Defaults (Thirty (30)-Day Cure) .
      Any
      Credit Party shall fail to perform or comply with any other covenant or
      agreement and such failure continues for a period of thirty (30) days after
      learning of such failure or receiving written notice thereof from any Agent, provided  that if such
      cure is not completed within such thirty (30)-day period, so long as such Credit
      Party has a commitment to cure and diligently pursues to complete such cure,
      such period shall be extended an additional thirty (30) days
      thereafter.




83


(f)  Default
      as to Other Indebtedness .
      Any
      Credit Party or any Subsidiary of a Credit Party shall fail to make any payment
      when due (whether by scheduled maturity, required prepayment, acceleration,
      demand or otherwise) with respect to any Indebtedness if the aggregate amount
      of
      such Indebtedness is in excess of $5,000,000 in the aggregate and such failure
      shall continue after the applicable grace period, if any, specified in the
      agreement or instrument relating to such Indebtedness; or any other breach,
      default or event of default shall occur, or any other condition shall exist
      under any instrument, agreement or indenture pertaining to any such
      Indebtedness, if the effect thereof (with or without the giving of notice or
      lapse of time or both) is to permit or require an acceleration, mandatory
      redemption or other required repurchase of such Indebtedness or, as to such
      Indebtedness, permit the holder or holders of such Indebtedness to accelerate
      the maturity of any such Indebtedness or require a redemption or other
      repurchase of such Indebtedness; or any Indebtedness if the aggregate amount
      of
      such Indebtedness is in excess of $5,000,000 shall be declared due and payable
      (by acceleration or otherwise) by a Person (other than a Credit Party or any
      Subsidiary of a Credit Party) as a result of a breach, Default or Event of
      Default by a Credit Party or any Subsidiary of a Credit Party, or required
      to be
      prepaid, redeemed or otherwise repurchased by any Credit Party or any Subsidiary
      of a Credit Party (other than by a regularly scheduled required prepayment)
      prior to the stated maturity thereof; or the holder or holders of any Lien,
      securing obligations of $5,000,000 or more, shall commence foreclosure of such
      Lien upon property of any Credit Party or any Subsidiary of a Credit
      Party.




(g)  Voluntary
      Bankruptcy Proceeding .
      Any
      Credit Party (i) shall institute any proceeding or voluntary case seeking
      to adjudicate it as bankrupt or insolvent, or seeking dissolution, liquidation,
      winding up, reorganization, arrangement, adjustment, protection, relief or
      composition of it or its debts under any law relating to bankruptcy, insolvency,
      reorganization or relief of debtors, or seeking the entry of an order for relief
      or the appointment of a receiver, trustee, receiver and manager, interim
      receiver, sequestrator, administrator, monitor, custodian or other similar
      official for any such Credit Party or any Subsidiaries or for any substantial
      part of its property, (ii) shall consent to the entry of an order for
      relief in an involuntary bankruptcy case or to the conversion of an involuntary
      case to a voluntary case under bankruptcy, insolvency or reorganization law,
      (iii) shall be generally not paying its debts as such debts become due or
      shall admit in writing its inability to pay its debts generally, (iv) shall
      make a general assignment for the benefit of creditors, or (v) shall take
      any action to authorize or effect any of the actions set forth above in this SECTION
      11.01(g) .




(h)  Involuntary
      Bankruptcy Proceeding .




(i)  An
      involuntary case shall be commenced against any Credit Party or any Subsidiary
      of a Credit Party and the petition shall not be dismissed, stayed, bonded or
      discharged within sixty (60) days; or a court having jurisdiction in the
      premises shall enter a decree or order for relief in respect of such Credit
      Party or Subsidiary of a Credit Party in an involuntary case, under any
      applicable bankruptcy, insolvency or other similar law now or hereinafter in
      effect; or any other similar relief shall be granted under any applicable
      federal, state, provincial, local or foreign law; or the board of directors
      of
      such Credit Party or Subsidiary of a Credit Party (or any committee thereof)
      adopts any resolution or otherwise authorizes any action to approve any of
      the
      foregoing.




84




(ii)  A
      decree
      or order of a court having jurisdiction in the premises for the appointment
      of a
      receiver, liquidator, sequestrator, trustee, receiver and manager,
      administrator, monitor, custodian or other officer having similar powers over
      any Credit Party or any Subsidiary of a Credit Party or over all or a
      substantial part of their respective assets shall be entered; or an interim
      receiver, trustee or other custodian of any Credit Party or any Subsidiary
      of a
      Credit Party or of all or a substantial part of their respective assets shall
      be
      appointed or a warrant of attachment, execution or similar process against
      any
      substantial part of their respective assets shall be issued and any such event
      shall not be stayed, dismissed, bonded or discharged; or the board of directors
      of any Credit Party or any Subsidiary of a Credit Party (or any committee
      thereof) adopts any resolution or otherwise authorizes any action to approve
      any
      of the foregoing.




(i)  Invalidity
      of Documents .
      A court
      of competent jurisdiction shall declare that any material provision of any
      Loan
      Document shall at any time for any reason (other than pursuant to the express
      terms thereof) cease to be valid and binding on or enforceable against a Credit
      Party intended to be a party thereto; or the validity or enforceability thereof
      shall be contested by any Credit Party that is a party thereto; or a proceeding
      shall be commenced by a Credit Party or any Governmental Authority having
      jurisdiction over any of them, seeking to establish the invalidity or
      unenforceability thereof; or a Credit Party shall deny in writing that it has
      any liability or obligation purported to be created under any Loan
      Document.




(j)  Loan
      Documents; Impairment .
      At any
      time, for any reason, (i) any Loan Document shall for any reason (other
      than pursuant to the express terms hereof or thereof) fail or cease to create
      a
      valid and perfected Lien on any Collateral or the Liens intended to be created
      or perfected thereby are, or any Credit Party seeks to render such Liens,
      invalid or unperfected with respect to any Collateral except as otherwise
      contemplated hereby or thereby, or (ii) Liens with respect to any
      Collateral in favor of the Collateral Agent contemplated by the Loan Documents
      shall be invalidated or otherwise cease to be in full force and effect, or
      such
      Liens shall be subordinated or shall not have the priority contemplated hereby
      or by the other Loan Documents (subject to Permitted Encumbrances and to the
      exceptions set forth in the applicable Security Documents).




(k)  Judgments .
      One or
      more judgments or judicial or administrative orders for the payment of money
      exceeding five million Dollars ($5,000,000) in the aggregate shall be rendered
      against a Credit Party or any Subsidiary of a Credit Party and remain
      unsatisfied, undischarged, unvacated or unbonded; provided , however ,
      that
      any such judgment or order shall not give rise to an Event of Default under
      this SECTION
      11.01(k) if and
      to the extent that (i) the amount of such judgment or order is covered by a
      valid and binding policy of insurance between the defendant and the insurer
      covering full payment thereof, and (ii) such insurer has been notified, and
      has not disputed the claim made for payment, of the amount of such judgment
      or
      order.




85






(l)  Change
      of Control .
      A
      Change of Control shall have occurred .




(m)  ERISA .
      With
      respect to any Plan or Benefit Plan, as applicable, (i) a prohibited
      transaction within the meaning of Section 4975 of the Code or
      Section 406 of ERISA occurs which could reasonably be expected to result in
      material liability to any Credit Party, (ii) any accumulated funding
      deficiency (within the meaning of Section 412 of the Code and
      Section 302 of ERISA), whether or not waived, shall exist with respect to
      any Benefit Plan, or (iii) the occurrence of any ERISA Event; provided , however ,
      that
      the events listed in clauses
      (i) through (iii) shall
      constitute Events of Default only if the liability or deficiency of any Credit
      Party or ERISA Affiliate, would reasonably be expected to exceed two million
      five hundred thousand Dollars ($2,500,000) in any Fiscal Year and five million
      Dollars ($5,000,000) in the aggregate for all such events.




(n)  Failure
      of Guaranty .
      Any
      Guaranty under the ARTICLE
      XII for any
      reason shall cease to be in full force and effect (other than in accordance
      with
      its terms), or any Guarantor shall deny in writing that it has any further
      liability under its Guaranty (other than as a result of the discharge of such
      Guarantor in accordance with the terms of the Loan Documents).




(o)  Lack
      of Security Interest .
      Any
      Lien created under any Loan Document shall cease to be, or shall be asserted
      by
      any Credit Party not to be, a valid, perfected and, with respect to the Credit
      Parties, first priority (except as otherwise expressly provided in this
      Agreement or the Intercreditor Agreement) Lien on any material Collateral
      covered thereby, except to the extent that any such loss of perfection or
      priority results from any action by Collateral Agent.




SECTION
      11.02  Remedies . If
      any
      Event of Default specified in SECTION
      11.01 shall
      have occurred and be continuing, the Administrative Agent may, and upon the
      written request of Required Lenders shall, by written notice to the
      Administrative Borrower, take any or all of the following actions, without
      prejudice to the rights of any Agent or any Lender to enforce its claims against
      any Credit Party: (i) terminate or reduce the Commitments, whereupon the
      Commitments shall immediately be terminated or reduced, (ii) declare all or
      a portion of the Term Loan Obligations then outstanding to be due and payable,
      whereupon all or such portion of the aggregate principal of such Term Loan
      Obligations, all accrued and unpaid interest thereon, all fees and all other
      amounts payable under this Agreement and all other Obligations (other than
      Hedging Obligations) shall become immediately due and payable, without
      presentment, demand, protest or further notice of any kind, all of which are
      hereby expressly waived by the Borrower, and (iii) exercise any and all of
      its other rights and remedies hereunder, under the other Loan Documents, under
      Applicable Law and otherwise; provided , however ,
      that
      upon the occurrence of any Event of Default described in SECTION
      11.01(e) or SECTION
      11.01(f) ,
      the
      Commitments and shall automatically terminate and the Term Loan Obligations
      then
      outstanding, together with all accrued and unpaid interest thereon, all fees,
      all other amounts due under this Agreement or any other Loan Document and all
      other Obligations shall become immediately due and payable automatically,
      without presentment, demand, protest or notice of any kind, all of which are
      expressly waived by the Credit Parties, and provided  further that the
      Collateral Agent shall pay and apply the proceeds of any sale or other
      disposition of the Collateral, or any part thereof, resulting from the exercise
      of the remedies as provided for in this SECTION
      11.02 in
      accordance with SECTION
      2.08 .




86




SECTION
      11.03  Waivers
      by the Credit Parties .
      Except
      as otherwise provided for in this Agreement and Applicable Law, the Credit
      Parties waive (i) presentment, demand, protest, notice of presentment or
      dishonor, notice of intent to accelerate and notice of acceleration,
      (ii) all rights to notice and a hearing prior to the Lenders taking
      possession or control of, or to the Lenders’ replevin, attachment or levy upon,
      any collateral securing the Obligations or any bond or security which might
      be
      required by any court prior to allowing such Lenders to exercise any of their
      remedies, (iii) the benefit of all valuation, appraisal and exemption laws,
      and (iv) all rights of set-off against any Lender as it applies to the
      payment of the Obligations. The Credit Parties acknowledge that they have been
      advised by counsel of their choice with respect to this Agreement, the other
      Loan Documents and the transactions evidenced by this Agreement and the other
      Loan Documents.




ARTICLE
      XII


GUARANTY
      OF OBLIGATIONS OF BORROWER




SECTION
      12.01  Guaranty . In
      order
      to induce the Agents and the Lenders to enter into this Agreement and to make
      available the Term Loan Commitments hereunder, and in recognition of the direct
      benefits to be received by each Guarantor from the proceeds of the Term Loan
      B
      Loans and the Term Letters of Credit, each Guarantor hereby agrees with the
      Administrative Agent and the Collateral Agent, for the benefit of the Lenders,
      as follows: each Guarantor hereby jointly, severally, unconditionally and
      irrevocably guarantees, as primary obligor and not merely as surety, the full
      and prompt payment when due, whether upon maturity, acceleration or otherwise,
      and the performance, of any and all of the Obligations of all other Credit
      Parties (such Obligations, collectively, the “ Guaranteed
      Obligations ”).
      If
      any or all of the Obligations becomes due and payable hereunder, each Guarantor
      irrevocably and unconditionally promises to pay such Indebtedness to the
      Collateral Agent, for the benefit of the Lenders.




SECTION
      12.02  Nature
      of Liability .
      The
      Guarantors agree that this Guaranty is a guaranty of payment and performance
      and
      not of collection, and that their obligations under this Guaranty shall be
      primary, absolute and unconditional, irrespective of, and the liability of
      each
      Guarantor shall not be affected by, nor shall this Guaranty be discharged or
      reduced by reason of:




(a)  the
      genuineness, validity, regularity, enforceability or any future amendment of,
      or
      change in this Guaranty, any other Loan Document or any other agreement,
      document or instrument to which any Credit Party and/or Guarantors are or may
      become a party;




(b)  the
      absence of any action to enforce this Guaranty or any other Loan Document or
      the
      waiver or consent by the Administrative Agent, the Collateral Agent and/or
      Lenders with respect to any of the provisions thereof;




87




(c)  any
      other
      continuing or other guaranty, undertaking or maximum liability of a Guarantor
      or
      of any other party as to the Obligations, or any payment on or in reduction
      of
      any such other guaranty or undertaking;




(d)  the
      incapacity or any change in the name, style or constitution of any Credit Party
      or any other person liable;




(e)  any
      dissolution, termination, increase, decrease or change in personnel by the
      Borrower;




(f)  the
      Collateral Agent granting any time, indulgence or concession to, or compounding
      with, discharging, releasing or varying the liability of, any Credit Party
      or
      any other person liable or renewing, determining, varying or increasing any
      accommodation, facility or transaction or otherwise dealing with the same in
      any
      manner whatsoever or concurring in, accepting or varying any compromise,
      arrangement or settlement or omitting to claim or enforce payment from any
      Credit Party or any other person liable;




(g)  the
      existence, value or condition of, or failure to perfect its Lien against, any
      Collateral for the Guaranteed Obligations or any action, or the absence of
      any
      action, by the Administrative Agent, or the Collateral Agent in respect thereof
      (including, without limitation, the release of any such
      Collateral);




(h)  the
      insolvency of any Credit Party, or any payment made to any Agent or Lender
      on
      the Obligations which any such Agent or Lender repays to the Borrowers pursuant
      to a court order in any bankruptcy, reorganization, arrangement, moratorium
      or
      other debtor relief proceeding, and each Guarantor waives any right to the
      deferral or modification of its obligations hereunder by reason of any such
      proceeding;




(i)  any
      act
      or omission which would not have discharged or affected the liability of a
      Guarantor had it been a principal debtor instead of a Guarantor or by anything
      done or omitted which but for this provision might operate to exonerate or
      discharge a Guarantor; or




(j)  any
      other
      action or circumstances which might otherwise constitute a legal or equitable
      discharge or defense of a surety or Guarantor.




SECTION
      12.03  Independent
      Obligation .




(a)  The
      obligations of each Guarantor hereunder are independent of the obligations
      of
      any other Guarantor, any other party or any Borrower, and a separate action
      or
      actions may be brought and prosecuted against each Guarantor whether or not
      action is brought against any other Guarantor, any other party or any Borrower
      and whether or not any other Guarantor, any other party or any Borrower be
      joined in any such action or actions.




(b)  Each
      Guarantor shall be regarded, and shall be in the same position, as principal
      debtor with respect to the Guaranteed Obligations. Each Guarantor agrees that
      any notice or directive given at any time to the Administrative Agent that
      is
      inconsistent with the preceding paragraph shall be null and void and may be
      ignored by the Administrative Agent and the Lenders, and, in addition, may
      not
      be pleaded or introduced as evidence in any litigation relating to this Guaranty
      for the reason that such pleading or introduction would be at variance with
      the
      written terms of this Guaranty, unless the Agents and the Lenders have
      specifically agreed otherwise in writing. It is agreed among each Guarantor,
      the
      Administrative Agent and the Lenders that the foregoing waivers are of the
      essence of the transaction contemplated by the Loan Documents and that, but
      for
      this Guaranty and such waivers, the Agents and the Lenders would decline to
      enter into this Agreement.




88




SECTION
      12.04  Demand
      by the Administrative Agent or the Lenders .
      In
      addition to the terms of the Guaranty set forth in SECTION
      12.01 ,
      and in
      no manner imposing any limitation on such terms, it is expressly understood
      and
      agreed that, if, at any time, the outstanding principal amount of the Guaranteed
      Obligations under this Agreement (including all accrued interest thereon) is
      declared to be immediately due and payable, then the Guarantors shall, without
      demand, pay to the holders of the Guaranteed Obligations the entire outstanding
      Guaranteed Obligations due and owing to such holders. Payment by the Guarantors
      shall be made to the Administrative Agent in immediately available funds to
      an
      account designated by the Administrative Agent, as the case may be, or at the
      address set forth herein for the giving of notice to the Administrative Agent
      or
      at any other address that may be specified in writing from time to time by
      the
      Administrative Agent, and shall be credited and applied to the Guaranteed
      Obligations.




SECTION
      12.05  Enforcement
      of Guaranty .
      In no
      event shall the Administrative Agent have any obligation (although it is
      entitled, at its option) to proceed against the Borrowers or any other Credit
      Party or any Collateral pledged to secure Guaranteed Obligations before seeking
      satisfaction from any or all of the Guarantors, and the Administrative Agent
      may
      proceed, prior or subsequent to, or simultaneously with, the enforcement of
      the
      Administrative Agent’s or the Revolving Loan Agent’s rights hereunder, to
      exercise any right or remedy it may have against any Collateral, as a result
      of
      any Lien it may have as security for all or any portion of the Guaranteed
      Obligations.




SECTION
      12.06  Waiver .
      In
      addition to the waivers contained in SECTION
      11.03 ,
      the
      Guarantors waive, and agree that they shall not at any time insist upon, plead
      or in any manner claim or take the benefit or advantage of, any appraisal,
      valuation, stay, extension, marshaling of assets or redemption law, or
      exemption, whether now or at any time hereafter in force, which may delay,
      prevent or otherwise affect the performance by the Guarantors of their
      Guaranteed Obligations under, or the enforcement by the Collateral Agent, the
      Administrative Agent or the Lenders of, the Guaranty. The Guarantors hereby
      waive diligence, presentment and demand (whether for non-payment or protest
      or
      of acceptance, maturity, extension of time, change in nature or form of the
      Guaranteed Obligations, acceptance of further Collateral, release of further
      Collateral, composition or agreement arrived at as to the amount of, or the
      terms of, the Guaranteed Obligations, notice of adverse change in the Borrower’s
      financial condition or any other fact which might increase the risk to the
      Guarantors) with respect to any of the Guaranteed Obligations or all other
      demands whatsoever and waive the benefit of all provisions of law which are
      or
      might be in conflict with the terms of the Guaranty. The Guarantors represent,
      warrant and jointly and severally agree that, as of the date of this Agreement,
      their obligations under the Guaranty are not subject to any offsets or defenses
      against the Administrative Agent or the Lenders or any Credit Party of any
      kind.
      The Guarantors further jointly and severally agree that their obligations under
      this Guaranty shall not be subject to any counterclaims, offsets or defenses
      against the Collateral Agent, the Administrative Agent or any Secured Creditor
      or against any Credit Party of any kind which may arise in the
      future.




89




SECTION
      12.07  Benefit
      of Guaranty .
      The
      provisions of the Guaranty are for the benefit of the Agents and the Lenders
      and
      their respective permitted successors, permitted transferees, endorsees and
      assigns, and nothing herein contained shall impair, as between any Credit Party
      and the Agents or the Lenders, the obligations of any Credit Party under the
      Loan Documents. In the event all or any part of the Guaranteed Obligations
      are
      transferred, endorsed or assigned by the Agents or any Lender to any Person
      or
      Persons in a manner permitted by this Agreement, any reference to “the Agents”
or “the Lender” herein shall be deemed to refer equally to such Person or
      Persons.




SECTION
      12.08  Modification
      of Guaranteed Obligations, Etc. Each
      Guarantor hereby acknowledges and agrees that the Agents and the Lenders may
      at
      any time or from time to time, with or without the consent of, or notice to,
      the
      Guarantors (in their capacity as Guarantors):




(a)  change
      or
      extend the manner, place or terms of payment of, or renew or alter all or any
      portion of, the Guaranteed Obligations;




(b)  take
      any
      action under or in respect of the Loan Documents in the exercise of any remedy,
      power or privilege contained therein or available to it at law, equity or
      otherwise, or waive or refrain from exercising any such remedies, powers or
      privileges;




(c)  amend
      or
      modify, in any manner whatsoever, the Loan Documents;




(d)  extend
      or
      waive the time for any Credit Party’s performance of, or compliance with, any
      term, covenant or agreement on its part to be performed or observed under the
      Loan Documents, or waive such performance or compliance or consent to a failure
      of, or departure from, such performance or compliance;




(e)  take
      and
      hold Collateral for the payment of the Guaranteed Obligations guaranteed hereby
      or sell, exchange, release, dispose of, or otherwise deal with, any property
      pledged, mortgaged or conveyed, or in which the Agents or the Lenders have
      been
      granted a Lien, to secure any Obligations;




(f)  release
      anyone who may be liable in any manner for the payment of any amounts owed
      by
      the Guarantors or any Credit Party to the Agents or any Secured
      Creditor;




(g)  modify
      or
      terminate the terms of any intercreditor or subordination agreement pursuant
      to
      which claims of other creditors of any Guarantor or any Credit Party are
      subordinated to the claims of the Agents and the Lenders;




(h)  apply
      any
      sums by whomever paid or however realized to any amounts owing by any Guarantor
      or any Credit Party to the Agents or any Secured Creditor in such manner as
      the
      Agents or any Secured Creditor shall determine in its discretion;
      and/or




90




(i)  the
      Agents and the Lenders shall not incur any liability to the Guarantors as a
      result thereof, and no such action shall impair or release the Guaranteed
      Obligations of the Guarantors or any of them under the Guaranty.




SECTION
      12.09  Reinstatement .




(a)  The
      Guaranty shall remain in full force and effect and continue to be effective
      should any petition be filed by or against any Credit Party or any Guarantor
      for
      liquidation or reorganization, should any Credit Party or any Guarantor become
      insolvent or make an assignment for the benefit of creditors or should a
      receiver or trustee be appointed for all or any significant part of such Credit
      Party’s or such Guarantor’s assets, and shall continue to be effective or be
      reinstated, as the case may be, if at any time payment and performance of the
      Guaranteed Obligations, or any part thereof, is, pursuant to Applicable Law,
      rescinded or reduced in amount, or must otherwise be restored or returned by
      the
      Administrative Agent or any Secured Creditor, whether as a “voidable
      preference,” “fraudulent conveyance,” or otherwise, all as though such payment
      or performance had not been made. In the event that any payment, or any part
      thereof, is rescinded, reduced, restored or returned, the Guaranteed Obligations
      shall be reinstated and deemed reduced only by such amount paid and not so
      rescinded, reduced, restored or returned.




(b)  If
      any
      claim is ever made upon any Agent or Secured Creditor for repayment or recovery
      of any amount or amounts received in payment or on account of any of the
      Obligations and any of the aforesaid payees repays all or part of said amount
      by
      reason of (i) any judgment, decree or order of any court or administrative
      body having jurisdiction over such payee or any of its property, or
      (ii) compliance by the Lenders or the Agents with any requirement of a
      Governmental Authority having jurisdiction over the Lenders or the Agents,
      then
      and in such event each Guarantor agrees that any such judgment, decree or order
      shall be binding upon it, notwithstanding any revocation of the Guaranty or
      other instrument evidencing any liability of the Borrowers or any termination
      of
      this Agreement, and each Guarantor shall be and remain liable to the aforesaid
      payees hereunder for the amount so repaid or recovered to the same extent as
      if
      such amount had never originally been received by any such payee. In the event
      that any payment, or any part thereof, is rescinded, reduced, restored or
      returned, the Guaranteed Obligations shall be reinstated and deemed reduced
      only
      by such amount paid and not so rescinded, reduced, restored or
      returned.




SECTION
      12.10  Waiver
      of Subrogation, Etc. Notwithstanding anything to the contrary in the Guaranty or in any other Loan
      Document, each Guarantor hereby:




(a)  until
      the
      payment and satisfaction in full in cash of the Guaranteed Obligations,
      expressly waives, on behalf of itself and its successors and assigns (including
      any surety), any and all rights at law or in equity to subrogation, to
      reimbursement, to exoneration, to contribution, to indemnification, to set-off
      or to any other rights that could accrue to a surety against a principal, to
      a
      Guarantor against a principal, to a Guarantor against a maker or obligor, to
      an
      accommodation party against the party accommodated, to a holder or transferee
      against a maker, or to the holder of any claim against any Person, and which
      such Guarantor may have or hereafter acquire against any Credit Party in
      connection with or as a result of such Guarantor’s execution, delivery and/or
      performance of this Agreement, or any other documents to which such Guarantor
      is
      a party or otherwise; and




91




(b)  acknowledges
      and agrees (i) that
      this waiver is intended to benefit the Agents and the Lenders and shall not
      limit or otherwise effect any Guarantor’s liability hereunder or the
      enforceability of the Guaranty, and (ii) that
      the Agents, the Lenders and their respective successors and assigns are intended
      third-party beneficiaries of the waivers and agreements set forth in this SECTION
      12.10 and
      their rights under this SECTION
      12.10 shall
      survive payment in full of the Guaranteed Obligations.




SECTION
      12.11  Election
      of Remedies .
      If any
      Agent may, under Applicable Law, proceed to realize benefits under any of the
      Loan Documents giving the Agents and the Lenders a Lien upon any Collateral
      owned by any Credit Party, either by judicial foreclosure or by non-judicial
      sale or enforcement, the Collateral Agent may, at its sole option, determine
      which of such remedies or rights it may pursue without affecting any of such
      rights and remedies under this Guaranty. If, in the exercise of any of its
      rights and remedies, the Collateral Agent shall forfeit any of its rights or
      remedies, including its right to enter a deficiency judgment against any Credit
      Party, whether because of any Applicable Laws pertaining to “election of
      remedies” or the like, the Guarantors hereby consent to such action by any Agent
      and waive any claim based upon such action, even if such action by any Agent
      shall result in a full or partial loss of any rights of subrogation which the
      Guarantors might otherwise have had but for such action by any Agent. Any
      election of remedies that results in the denial or impairment of the right
      of
      any Agent to seek a deficiency judgment against any Credit Party shall not
      impair each Guarantor’s obligation to pay the full amount of the Guaranteed
      Obligations. In the event any Agent shall bid at any foreclosure or trustee’s
      sale or at any private sale permitted by law or the Loan Documents, such Agent
      may bid all or less than the amount of the Guaranteed Obligations and the amount
      of such bid need not be paid by such Agent but shall be credited against the
      Guaranteed Obligations. The amount of the successful bid at any such sale shall
      be conclusively deemed to be the fair market value of the Collateral and the
      difference between such bid amount and the remaining balance of the Guaranteed
      Obligations shall be conclusively deemed to be the amount of the Guaranteed
      Obligations guaranteed under the Guaranty, notwithstanding that any present
      or
      future law or court decision or ruling may have the effect of reducing the
      amount of any deficiency claim to which the Administrative Agent and the Lenders
      might otherwise be entitled but for such bidding at any such sale.




SECTION
      12.12  Further
      Assurances .
      Each
      Guarantor agrees, upon the written request of the Administrative Agent, to
      execute and deliver to the Administrative Agent, from time to time, any
      additional instruments or documents reasonably considered necessary by the
      Administrative Agent to cause the Guaranty to be, become or remain valid and
      effective in accordance with its terms.




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SECTION
      12.13  Payments
      Free and Clear of Taxes . Except
      as
      set forth below, all payments required to be made by each Guarantor hereunder
      shall be made to the Administrative Agent and the Lenders free and clear of,
      and
      without deduction for, any and all present and future Taxes and other Taxes
      (but
      not Excluded Taxes). If any Guarantor shall be required by law to deduct any
      Taxes from or in respect of any sum payable hereunder (a) the sum payable
      shall be increased as much as shall be necessary so that after making all
      required deductions (including deductions applicable to additional sums payable
      under this SECTION
      12.13 )
      the
      Administrative Agent or the Lenders, as applicable, receive an amount equal
      to
      the sum they would have received had no such deductions been made, (b) such
      Guarantor shall make such deductions, and (c) such Guarantor shall pay the
      full amount deducted to the relevant taxing or other authority in accordance
      with Applicable Law. Notwithstanding the foregoing, no Guarantor should be
      required to pay any such additional amounts to an Agent or a Lender with respect
      to any Taxes in respect of which the Borrowers would not be required to pay
      any
      additional amounts pursuant to SECTION
      3.04 if such
      Taxes were withheld or deducted by the Borrowers and the payment had been made
      by the Borrowers instead of the Guarantor. Within thirty (30) days after the
      date of any payment of Taxes, each applicable Guarantor shall furnish to the
      Administrative Agent the original or a certified copy of a receipt evidencing
      payment thereof. Except as set forth below, each Guarantor shall jointly and
      severally indemnify and, within ten (10) days of receipt of written demand
      therefor, pay the Administrative Agent and each Lender for the full amount
      of
      Taxes (including any Taxes imposed by any jurisdiction on amounts payable under
      this SECTION
      12.13 )
      paid by
      the Administrative Agent or such Lender, as appropriate, with respect to any
      payment by or on account of any obligation of a Guarantor hereunder and any
      penalties, interest and reasonable out-of-pocket expenses arising therefrom
      or
      with respect thereto, whether or not such Taxes were correctly or legally
      asserted. Notwithstanding the foregoing, a Guarantor shall not be required
      to
      indemnify a Lender or an Agent with respect to any Taxes in respect of which
      the
      Borrowers would not be required to indemnify the Lender or the Agent pursuant
      to SECTION
      3.04 if the
      payment had been made by the Borrowers and such Taxes arose with respect to
      any
      payment by or on account of any obligation of the Borrowers. If a
      Lender or Agent receives a refund in respect of Taxes or Other Tax as to which
      it has been indemnified by the Guarantor, and which the Guarantors have paid,
      pursuant to this SECTION
      12.13 ,
      it
      shall within thirty (30) days from the date of such receipt pay over such
      refund to the Guarantor net of all out-of-pocket expenses of such Lender or
      Agent.




SECTION
      12.14  Limitation
      on Amount Guarantied; Contribution by Guarantors . Anything
      contained in this ARTICLE
      XII to the
      contrary notwithstanding, if any Fraudulent Transfer Law is determined by a
      court of competent jurisdiction to be applicable to the obligations of any
      Guarantor under this Agreement, such obligations of such Guarantor hereunder
      shall be limited to a maximum aggregate amount equal to the largest amount
      that
      would not render its obligations hereunder subject to avoidance as a fraudulent
      transfer or conveyance under Section 548 of the Bankruptcy Code or any
      applicable provisions of the Uniform Fraudulent Transfer Act, the Uniform
      Fraudulent Conveyance Act or any other comparable state law (collectively,
      the
“ Fraudulent
      Transfer Laws ”),
      in
      each case after giving effect to all other liabilities of such Guarantor,
      contingent or otherwise, that are relevant under the Fraudulent Transfer Laws
      (excluding, however, any liabilities of such Guarantor (a) in respect of
      intercompany Indebtedness to the Borrowers or other Affiliates of the Borrowers
      to the extent that such Indebtedness would be discharged in an amount equal
      to
      the amount paid by such Guarantor hereunder, and (b) under any guarantee of
      any subordinated Indebtedness which guarantee contains a limitation as to
      maximum amount similar to that set forth in this SECTION
      12.14 ,
      pursuant to which the liability of such Guarantor hereunder is included in
      the
      liabilities taken into account in determining such maximum amount).




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ARTICLE
      XIII


THE
      AGENTS




SECTION
      13.01  Appointment
      Powers and Immunities; Delegation of Duties; Liability of Agents .




(a)  Each
      Lender hereby irrevocably designates and appoints MORGAN STANLEY SENIOR FUNDING,
      INC. as Administrative Agent under this Agreement and the other Loan Documents.
      MORGAN STANLEY & CO. INCORPORATED as Collateral Agent under this Agreement
      and the other Loan Documents. The provisions of this SECTION
      13.01 are
      solely for the benefit of the Agents and Lenders and no Credit Party nor any
      other Person, other than permitted sub-agents, shall have any rights as a
      third-party beneficiary of any of the provisions hereof. In performing its
      functions and duties under this Agreement and the other Loan Documents, each
      Agent shall act solely as an agent of Lenders and does not assume and shall
      not
      be deemed to have assumed any obligation toward or relationship of agency or
      trust with or for any Credit Party or any other Person. No Agent shall have
      duties or responsibilities except for those expressly set forth in this
      Agreement and the other Loan Documents. Unless otherwise provided, each Agent
      may execute its functions and duties under this Agreement and the other Loan
      Documents by or through agents, employees or attorneys-in-fact and shall be
      entitled to the advice of counsel concerning all matters pertaining to such
      functions and duties. No Agent shall be responsible for the negligence or
      misconduct of any agent or attorney-in-fact that it selects as long as such
      selection was made without gross negligence or willful misconduct. The duties
      of
      each Agent shall be mechanical and administrative in nature and no Agent shall
      have, or be deemed to have, by reason of this Agreement, any other Loan Document
      or otherwise, a fiduciary relationship in respect of any Lender. Except as
      expressly set forth in this Agreement and the other Loan Documents, no Agent
      shall have any duty to disclose, and shall not be liable for failure to
      disclose, any information relating to any Credit Party or any of such Credit
      Party’s Subsidiaries or any Account Debtor that is communicated to or obtained
      any Agent or any of its Affiliates in any capacity. No Agent nor any Agent’s
      Affiliates nor any Agent’s respective officers, directors, employees, agents or
      representatives shall be liable to any Lender for any action taken or omitted
      to
      be taken by it hereunder or under any other Loan Document, or in connection
      herewith or therewith, except for damages caused by its own gross negligence
      or
      willful misconduct.




(b)  If
      the
      Administrative Agent or the Collateral Agent shall request instructions from
      the
      Required Lenders or all affected Lenders with respect to any act or action
      (including a failure to act) in connection with this Agreement or any other
      Loan
      Document, then the Administrative Agent or the Collateral Agent, as the case
      may
      be, shall be entitled to refrain from such act or taking such action unless
      and
      until such Agent shall have received instructions from the Required Lenders
      or
      all affected Lenders, as the case may be, and neither the Administrative Agent
      nor the Collateral Agent shall incur liability to any Person by reason of so
      refraining. Each Agent shall be fully justified in failing or refusing to take
      any action hereunder or under any other Loan Document (i) if such action
      would, in the opinion of such Agent, be contrary to law or the terms of this
      Agreement or any other Loan Document, (ii) if such action would, in the
      opinion of such Agent, expose such Agent to Environmental Liabilities and Costs
      or (iii) if such Agent shall not first be indemnified to its satisfaction
      against any and all liability and expense which may be incurred by it by reason
      of taking or continuing to take any such action. Without limiting the foregoing,
      no Lender shall have any right of action whatsoever against any Agent as a
      result of such Agent acting or refraining from acting hereunder or under any
      other Loan Document in accordance with the instructions of Required Lenders
      or
      all affected Lenders, as applicable.




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SECTION
      13.02  Reliance
      by Agents . Each
      Agent shall be entitled to rely, and shall be fully protected in relying, upon
      any writing, resolution, notice, consent, certificate, affidavit, letter,
      telegram, facsimile, telex or telephone message, statement or other document
      or
      conversation reasonably believed by it to be genuine and correct and to have
      been signed, sent, or made by the proper Person, and upon advice and statements
      of legal counsel (including counsel to the Borrowers or counsel to any Lender),
      independent accountants and other experts selected by such Agent. Each Agent
      shall be fully justified in failing or refusing to take any action under this
      Agreement or any other Loan Document unless it first shall receive such advice
      or concurrence of the Lenders as it deems appropriate and until such
      instructions are received, such Agent shall act, or refrain from acting, as
      it
      deems advisable. If the Administrative Agent or the Collateral Agent so
      requests, it first shall be indemnified to its reasonable satisfaction by the
      Lenders against any and all liability and expense that may be incurred by it
      by
      reason of taking or continuing to take any action under this Agreement or any
      other Loan Document. The Administrative Agent and the Collateral Agent in all
      cases shall be fully protected in acting, or in refraining from acting, under
      this Agreement or any other Loan Document in accordance with a request or
      consent of the Required Lenders or the Lenders, as required under this Agreement
      and any action taken or failure to act pursuant to such request or consent
      shall
      be binding upon all Lenders.




SECTION
      13.03  Defaults .
      With
      respect to its relationship with any of the Lenders, no Agent shall be deemed
      to
      have knowledge or notice of the occurrence of any Default or Event of Default,
      except with respect to defaults in the scheduled payment of principal and
      interest required to be paid to such Agent for the account of the Lenders and
      except with respect to Events of Default of which such Agent has actual
      knowledge due to receipt of a written notice thereof from a Lender or the
      Administrative Borrower referring to this Agreement, describing such Default
      or
      Event of Default, and stating that such notice is a “ Notice
      of Default ”.
      Such
      Agent promptly will notify the Lenders of its receipt of any such notice or
      of
      any Event of Default of which such Agent has actual knowledge. If any Lender
      obtains actual knowledge of any Event of Default, such Lender promptly shall
      notify the other Lenders and each Agent of such Event of Default. Each Lender
      shall be solely responsible for giving any notices to its Participants, if
      any.
      Subject to SECTION
      13.03 and SECTION
      13.07 ,
      each
      Agent shall take such action with respect to such Default or Event of Default
      as
      may be requested by the Required Lenders in accordance with ARTICLE
      XI ; provided , however ,
      that
      unless and until such Agent has received any such request, such Agent may (but
      shall not be obligated to) take such action, or refrain from taking such action,
      with respect to such Default or Event of Default as it shall deem advisable
      in
      its sole discretion.




SECTION
      13.04  Rights
      as a Lender .




(a)  With
      respect to its Commitments and the Term Loan B Loans made by it and Term Letters
      of Credit issued by it, the Administrative Agent (and any successor acting
      as
      Administrative Agent, if any, as permitted by SECTION
      13.08(a) in its
      capacity as a Lender under the Loan Documents shall have the same rights,
      privileges and powers under the Loan Documents as any other Lender and may
      exercise the same as though it were not acting as Administrative Agent, and
      the
      term “ Lender ”
or
      “ Lenders ”
shall,
      unless the context otherwise indicates, include the Administrative Agent in
      its
      individual capacity. The Administrative Agent (and any successor acting as
      Administrative Agent) and its Affiliates may (without having to account for
      the
      same to any Lender) accept deposits from, lend money to, make investments in
      and
      generally engage in any kind of banking, trust, principal investment or other
      business with a Borrower (and any of their Subsidiaries or Affiliates) as if
      it
      were not acting as Administrative Agent, and the Administrative Agent (and
      its
      successors) and its Affiliates may accept fees and other consideration from
      a
      Borrower (or any other Person) for services in connection with this Agreement
      or
      otherwise without having to account for the same to the Lenders.




95




(b)  With
      respect to its Commitments and the Term Loan B Loans made by it and Term Letters
      of Credit issued by it, the Collateral Agent (and any successor acting as the
      Collateral Agent, if any, as permitted by SECTION
      13.08(b) in its
      capacity as a Lender under the Loan Documents shall have the same rights,
      privileges and powers under the Loan Documents as any other Lender and may
      exercise the same as though it were not acting as the Collateral Agent, and
      the
      term “ Lender ”
or
      “ Lenders ”
shall,
      unless the context otherwise indicates, include the Collateral Agent in its
      individual capacity. The Collateral Agent (and any successor acting as the
      Collateral Agent) and its Affiliates may (without having to account for the
      same
      to any Lender) accept deposits from, lend money to, make investments in and
      generally engage in any kind of banking, trust, principal investment or other
      business with a Borrower (and any of their Subsidiaries or Affiliates) as if
      it
      were not acting as the Collateral Agent, and the Collateral Agent (and its
      successors) and its Affiliates may accept fees and other consideration from
      a
      Borrower (or any other Person) for services in connection with this Agreement
      or
      otherwise without having to account for the same to the Lenders.




SECTION
      13.05  Costs
      and Expenses; Indemnification . Each
      Agent may incur and pay fees, costs, and expenses under the Loan Documents
      to
      the extent such Agent deems reasonably necessary or appropriate for the
      performance and fulfillment of its functions, powers, and obligations pursuant
      to the Loan Documents, including, without limiting the generality of the
      foregoing, court costs, reasonable attorneys’ fees and expenses, costs of
      collection by outside collection agencies, auctioneer fees, costs of security
      guards, insurance premiums, taxes, or other amounts paid to protect or maintain
      the Collateral or to enhance the likelihood of payment of the Obligations
      following Default, whether or not a Borrower is obligated to reimburse the
      Lenders for such expenses pursuant to the Loan Agreement or otherwise (to the
      extent the Borrowers have not done so and without limiting its obligation to
      do
      so). Each Lender hereby agrees that it is and shall be obligated to pay to
      or
      reimburse the Administrative Agent and the Collateral Agent for the amount
      of
      such Lender’s Pro Rata Share thereof. Whether or not the transactions
      contemplated hereby are consummated, the Lenders shall indemnify upon demand
      the
      Agent-Related Persons (to the extent the Borrowers have not done so and without
      limiting the obligation of the Borrowers to do so), according to their Pro
      Rata
      Shares, from and against any and all Indemnified Matters (including, without
      limitation, Indemnified Matters arising under any Environmental Law as provided
      in SECTION
      14.19 ); provided , however ,
      that no
      Lender shall be liable for the payment to the Agent-Related Persons of any
      portion of such Indemnified Matters resulting solely from such Person’s gross
      negligence or willful misconduct as determined in a final order by a court
      of
      competent jurisdiction. Without limitation of the foregoing, each Lender shall
      reimburse the Administrative Agent or the Collateral Agent, as the case may
      be,
      upon demand for such Lender’s ratable share of any costs or out-of-pocket
      expenses (including reasonable attorneys’ fees and expenses) incurred by such
      Agent in connection with the preparation, execution, delivery, administration,
      modification, amendment, or enforcement (whether through negotiations, legal
      proceedings or otherwise) of, or legal advice in respect of rights or
      responsibilities under, this Agreement, any other Loan Document, or any document
      contemplated by or referred to herein. The undertaking in this SECTION
      13.05 shall
      survive the payment of all Obligations hereunder and the resignation or
      replacement of any Agent.




96




SECTION
      13.06  Non-Reliance
      on Agents and Other Lenders .
      Each
      Lender acknowledges that none of the Agent-Related Persons has made any
      representation or warranty to it, and that no act by any Agent hereinafter
      taken, including any review of the affairs or Property of any of the Credit
      Parties or their Subsidiaries, shall be deemed to constitute any representation
      or warranty by any Agent-Related Person to any Lender. Each Lender represents
      to
      each Agent that it has, independently and without reliance upon any
      Agent-Related Person and based on such documents and information as it has
      deemed appropriate, made its own appraisal of and investigation into the
      business, prospects, operations, property, financial and other condition and
      creditworthiness of the Borrowers and any other Person (other than the Lenders)
      party to a Loan Document, and all applicable bank regulatory laws relating
      to
      the transactions contemplated hereby, and made its own decision to enter into
      this Agreement and to extend credit to the Borrowers. Each Lender also
      represents that it will, independently and without reliance upon any
      Agent-Related Person and based on such documents and information as it shall
      deem appropriate at the time, continue to make its own credit analysis,
      appraisals and decisions in taking or not taking action under this Agreement
      and
      the other Loan Documents, and to make such investigations as it deems necessary
      to inform itself as to the business, prospects, operations, property, financial
      and other condition and creditworthiness of the Borrowers and any other Person
      (other than the Lenders) party to a Loan Document. Except for notices, reports
      and other documents expressly herein required to be furnished to the Lenders
      by
      such Agent, no Agent shall have any duty or responsibility to provide any Lender
      with any credit or other information concerning the business, prospects,
      operations, Property, financial and other condition or creditworthiness of
      the
      Borrowers or of any other Person party to a Loan Document that may come into
      the
      possession of any of the Agent-Related Persons.




SECTION
      13.07  Failure
      to Act . Except
      for action expressly required of any Agent under the Loan Documents, such Agent
      shall in all cases be fully justified in failing or refusing to act under any
      Loan Document unless it shall receive further assurances to its satisfaction
      from the Lenders of their indemnification obligations under SECTION
      13.05 against
      any and all liability and expense that may be incurred by it by reason of taking
      or continuing to take any such action.




SECTION
      13.08  Resignation
      of Agent .




(a)  Subject
      to the appointment and acceptance of a successor Administrative Agent as
      provided below, the Administrative Agent may resign at any time by notice to
      the
      Lenders and the Administrative Borrower. Upon any such resignation, the Required
      Lenders with the consent of the Administrative Borrower (which consent shall
      not
      be unreasonably withheld) shall have the right to appoint a successor
      Administrative Agent. If no successor Administrative Agent shall have been
      appointed by the Required Lenders and consented to by the Administrative
      Borrower and no successor Administrative Agent shall have accepted such
      appointment within thirty (30) days after the retiring Administrative Agent’s
      giving of notice of resignation, then the retiring Administrative Agent may,
      on
      behalf of the Lenders, appoint a successor Administrative Agent; provided , however ,
      if the
      failure to do so was not a result of the failure by the Administrative Borrower
      to consent to any appointment, the Administrative Borrower shall retain the
      right to consent; provided , further ,
      that if
      the failure to do so was not a result of the failure of the Required Lenders
      to
      appoint such successor, the Required Lenders shall obtain the right to consent
      to such successor. Upon the acceptance of any appointment as the Administrative
      Agent by a successor Administrative Agent, such successor Administrative Agent
      shall thereupon succeed to and become vested with all the rights, remedies,
      powers, privileges, duties and obligations of the retiring Administrative Agent,
      and the retiring Administrative Agent shall be discharged from its duties and
      obligations, under the Loan Documents. After any retiring Administrative Agent’s
      resignation as Administrative Agent, the provisions of this ARTICLE
      XIII shall
      continue in effect for its benefit in respect of any actions taken or omitted
      to
      be taken by it while it was acting as Administrative Agent.




97




(b)  Subject
      to the appointment and acceptance of a successor Collateral Agent as provided
      below, the Collateral Agent may resign upon thirty (30) days, prior written
      notice to the Lenders and the Administrative Borrower. Upon any such
      resignation, the Required Lenders with the consent of the Administrative
      Borrower (which consent shall not be unreasonably withheld or delayed) shall
      have the right to appoint a successor Collateral Agent. If no successor
      Collateral Agent shall have been appointed by the Required Lenders and consented
      to by the Administrative Borrower and no successor Collateral Agent shall have
      accepted such appointment within thirty (30) days after the retiring Collateral
      Agent’s giving of notice of resignation, then the retiring Collateral Agent may,
      on behalf of the Lenders, appoint a successor Collateral Agent; provided , however ,
      if the
      failure to do so was not a result of the failure by the Administrative Borrower
      to consent to any appointment, the Administrative Borrower shall retain the
      right to consent. Upon the acceptance of any appointment as Collateral Agent
      by
      a successor Collateral Agent, such successor Collateral Agent shall thereupon
      succeed to and become vested with all the rights, remedies, powers, privileges,
      duties and obligations of the retiring Collateral Agent, and the retiring
      Collateral Agent shall be discharged from its duties and obligations, under
      the
      Loan Documents. After any retiring Collateral Agent’s resignation as the
      Collateral Agent, the provisions of this ARTICLE
      XIII shall
      continue in effect for its benefit in respect of any actions taken or omitted
      to
      be taken by it while it was acting as the Collateral Agent.




SECTION
      13.09  Collateral
      Sub-Agents .
      Each
      Lender by its execution and delivery of this Agreement (or any Assignment and
      Acceptance hereunder), agrees that, in the event it shall hold any monies or
      other investments on account of the Borrowers or any other Credit Party, such
      monies or other investments shall be held in the name and under the control
      of
      the Administrative Agent or such Lender, and the Administrative Agent or such
      Lender shall hold such monies or other investments as a collateral sub-agent
      for
      Administrative Agent and Collateral Agent under this Agreement and the other
      Loan Documents. The Borrowers and each other Credit Party, by its execution
      and
      delivery of this Agreement, hereby consents to the foregoing.




98




SECTION
      13.10  Communications
      by the Borrowers .
      Except
      as otherwise provided in this Agreement, the Borrowers’ communications with
      respect to the Loan Documents shall be with the Administrative Agent or the
      Collateral Agent, as the case may be, and the Borrowers shall be under no
      obligation to communicate directly with the Lenders.




SECTION
      13.11  Collateral
      Matters .




(a)  The
      Lenders hereby irrevocably authorize the Collateral Agent, at its option and
      in
      its sole discretion, to release any Lien on any Collateral (i) upon the
      termination of the Commitments and payment and satisfaction in full of all
      Obligations owed to the Lenders (other than Hedging Obligations and those
      contingent Obligations for reimbursement and indemnity that expressly survive
      the termination of this Agreement); (ii) constituting property being sold
      or disposed of if a release is required or desirable in connection therewith
      and
      if the Administrative Borrower certifies in writing to the Collateral Agent
      that
      the sale or disposition is permitted under this Agreement or the other Loan
      Documents (and the Collateral Agent may rely conclusively on any such
      certificate, without further inquiry); (iii) constituting property in which
      the Borrowers owned no interest at the time the security interest was granted
      or
      at any time thereafter; (iv) constituting property leased to the Borrowers
      under a lease that has expired or is terminated in a transaction permitted
      under
      this Agreement; (v) constituting Equipment which, in the aggregate with all
      other dispositions of Equipment covered by this clause (v) ,
      has a
      fair market value or book value, whichever is less, of five million Dollars
      ($5,000,000) or less in any single fiscal year; or (vi) any other release
      consented by the Required Lenders. Upon request by the Collateral Agent or
      the
      Borrowers at any time, the Administrative Agent and the Lenders will confirm
      in
      writing the Collateral Agent’s authority to release any such Liens on particular
      types or items of Collateral pursuant to this SECTION
      13.11 ; provided , however ,
      that
      (A) the Collateral Agent shall not be required to execute any document
      necessary to evidence such release on terms that, in the Collateral Agent’s
      opinion, would expose the Collateral Agent to liability or create any obligation
      or entail any consequence other than the release of such Lien without recourse,
      representation, or warranty, and (B) such release shall not in any manner
      discharge, affect, or impair the Obligations or any Liens (other than those
      expressly being released) upon (or obligations of the Borrowers in respect
      of)
      all interests retained by the Borrowers in any asset(s) transferred, including,
      the proceeds of any sale, all of which shall continue to constitute part of
      the
      Collateral.




(b)  Neither
      the Administrative Agent not the Collateral Agent shall have any obligation
      whatsoever to any other Lenders to assure that the Collateral exists or is
      owned
      by the applicable Credit Party or is cared for, protected, or insured or has
      been encumbered, or that all or any portion of the Liens securing the
      Obligations have been properly or sufficiently or lawfully created, perfected,
      protected, or enforced or are entitled to any particular priority, or to
      exercise at all or in any particular manner or under any duty of care,
      disclosure or fidelity, or to continue exercising, any of the rights,
      authorities and powers granted or available to the Administrative Agent or
      the
      Collateral Agent pursuant to any of the Loan Documents, it being understood
      and
      agreed that in respect of the Collateral, or any act, omission or event related
      thereto, subject to the terms and conditions contained herein, the
      Administrative Agent and the Collateral Agent each may act in any manner it
      may
      deem appropriate, in its sole discretion given its own interest in the
      Collateral and that neither the Administrative Agent nor the Collateral Agent
      shall have any other duty or liability whatsoever to any other Lender as to
      any
      of the foregoing, except as otherwise expressly provided herein.




99




SECTION
      13.12  Restrictions
      on Actions by the Agents and the Lenders; Sharing Payments .




(a)  The
      Administrative Agent and each of the Lenders agrees that it shall not, without
      the express consent of the Collateral Agent, and that it shall, to the extent
      it
      is lawfully entitled to do so, upon the request of the Administrative Agent
      and
      the Collateral Agent, set-off against the Obligations, any amounts owing by
      such
      Lenders to the Credit Parties or any accounts of the Credit Parties now or
      hereafter maintained with such Lenders. The Administrative Agent and each of
      the
      Lenders further agrees that it shall not, unless specifically requested to
      do so
      by the Collateral Agent, take or cause to be taken any action, including the
      commencement of any legal or equitable proceedings, to foreclose any Lien on,
      or
      otherwise enforce any security interest in, any of the Collateral the purpose
      of
      which is, or could be, to give such Lenders any preference or priority against
      the other Lenders with respect to the Collateral.




(b)  If,
      at
      any time or times any Lender shall receive (i) by payment, foreclosure,
      set-off or otherwise, any proceeds of Collateral or any payments with respect to
      the Obligations arising under, or relating to, this Agreement or the other
      Loan
      Documents, except for any such proceeds or payments received by such Lender
      from
      the Administrative Agent pursuant to the terms of this Agreement, or
      (ii) payments from the Administrative Agent in excess of such Lender’s
      ratable portion of all such distributions by the Administrative Agent, such
      Lender promptly shall turn the same over to the Administrative Agent, in kind,
      and with such endorsements as may be required to negotiate the same to the
      Administrative Agent, or in same-day funds, as applicable, for the account
      of
      the Lenders and for apportionment and application to the Obligations in
      accordance with SECTION
      3.02(c) and SECTION
      3.03(b) .




SECTION
      13.13  Several
      Obligations; No Liability .
      Notwithstanding that certain of the Loan Documents now or hereafter may have
      been or will be executed only by or in favor of an Agent in its capacity as
      such, and not by or in favor of the Lenders, any and all obligations on the
      part
      of the Administrative Agent, if any, to make any credit available hereunder
      shall constitute the several (and not joint) obligations of the respective
      Lenders on a ratable basis, according to their respective Commitments, to make
      an amount of such credit not to exceed, in principal amount, at any one time
      outstanding, the amount of their respective Commitments. Nothing contained
      herein shall confer upon any Lender any interest in, or subject any Lender
      to
      any liability for, or in respect of, the business, assets, profits, losses,
      or
      liabilities of any other Lenders. Each Lender shall be solely responsible for
      notifying its Participants of any matters relating to the Loan Documents to
      the
      extent any such notice may be required, and no Lender shall have any obligation,
      duty, or liability to any Participant of any other Lender. Except as provided
      in SECTION
      13.05 ,
      no
      Agent and no Lender shall have any liability for the acts of any other Agent
      or
      any other Lender. No Lender shall be responsible to the Borrowers or any other
      Person for any failure by any other Lender to fulfill its obligations to make
      credit available hereunder, nor to advance for it or on its behalf in connection
      with its Commitment, nor to take any other action on its behalf hereunder,
      under
      any other Loan Document or in connection with the financing contemplated
      herein.




100




ARTICLE
      XIV


MISCELLANEOUS




SECTION
      14.01  Notices,
      Etc .  All
      notices and other communications provided for hereunder shall be in writing
      and
      shall be mailed, certified mail return receipt requested, telecopied, emailed
      or
      delivered by overnight delivery service or in person:




if
                to the Credit Parties, c/o the Administrative Borrower at the following
                address:James
                River Coal Company901
                E. Byrd Street, Suite 1600Richmond,
                VA 23219Attn:
                Samuel M. Hopkins IIwith
                a copy to:Kilpatrick
                Stockton LLP1100
                Peachtree Street, Suite 2800Atlanta,
                GA 30309Attn:
                Douglas S. GosdenTelephone:
                404-815-6415Facsimile:
                404-541-3112Email:
                dgosden@kilpatrickstockton.comif
                to the Administrative Agent, at the following address:Morgan
                Stanley Senior Funding, Inc.1585
                BroadwayNew
                York, NY 10036Telephone:(212)
                761-1576Facsimile:(646)
                290-2655Email:robert.louzan@morganstanley.comAttn:
                Robert Louzanwith
                a copy to:Sullivan
                & Cromwell LLP1888
                Century Park East, 21stFloorLos
                Angeles, CA 90067Telephone:(310)
                712-6600Facsimile:(310)
                712-8890Email:feldsteinh@sullcrom.comAttn:
                Hydee R. Feldstein




101




and
                a copy to:Morgan
                Stanley Senior Funding, Inc.One
                Pierrepont Plaza, 7th Floor300
                Cadman Plaza WestBrooklyn,
                NY 11201Telephone:(718)
                754-7291Facsimile:(212)
                507-6680Email:adminagent@morganstanley.comAttn:
                Joshua Rawlinsif
                to the Collateral Agent, at the following address:Morgan
                Stanley & Co. Incorporated1585
                BroadwayNew
                York, NY 10036Telephone:(212)
                761-1576Facsimile:(646)
                290-2655Email:robert.louzan@morganstanley.comAttn:
                Robert Louzanwith
                a copy to:Sullivan
                & Cromwell LLP1888
                Century Park East, 21stFloorLos
                Angeles, CA 90067Telephone:(310)
                712-6600Facsimile:(310)
                712-8890Email:feldsteinh@sullcrom.comAttn:
                Hydee R. Feldsteinand
                a copy to:Morgan
                Stanley & Co. IncorporatedOne
                Pierrepont Plaza, 7th Floor300
                Cadman Plaza WestBrooklyn,
                NY 11201Telephone:(718)
                754-7286 / 7285Facsimile:(212)
                507-3544 / 212-404-9645Email:docs4loans@morganstanley.comAttn:
                Erma Dell’Aquila / Ed Henley




102




or,
      as to
      each party, at such other address as shall be designated by such party in a
      written notice to the other party complying as to delivery with the terms of
      this SECTION
      14.01 .
      All
      such notices and other communications shall be effective (i) if mailed,
      when received or five (5) days after deposited in the mails as registered or
      certified (in each case with return receipt requested) with postage pre-paid
      and
      properly addressed, whichever occurs first, (ii) if telecopied, when
      transmitted and confirmation received, (iii) if emailed, when transmitted
      and confirmation acknowledged by recipient, or (iv) if delivered, upon
      delivery, except that notices to the Administrative Agent pursuant to ARTICLE
      II shall
      not be effective until received by the Administrative Agent.




SECTION
      14.02  Amendments,
      Etc .  No
      amendment or waiver of any provision of this Agreement, any Term Loan B Loan,
      Term Letter of Credit or any other Loan Document, nor consent to any departure
      by any Credit Party therefrom, shall in any event be effective unless the same
      shall be in writing and signed by the Borrowers (or the Administrative Borrower)
      and the Required Lenders (or the Administrative Agent at the request of the
      Required Lenders), and then such waiver or consent shall be effective only
      in
      the specific instance and for the specific purpose for which given; provided , however ,
      that no
      amendment, waiver or consent shall, in each case, without the consent of the
      Administrative Agent, the Borrowers and each Lender directly affected
      thereby;




(a)  increase
      or extend any Commitment of such Lender;




(b)  reduce
      or
      forgive the principal of, or interest on, any Term Loan Obligation made by
      such
      Lender, or reduce or forgive any fees or other amounts payable hereunder to
      such
      Lender or release or discharge the Borrowers from their obligations to make
      such
      payments;




(c)  postpone
      any date fixed for any scheduled payment of principal of, or interest on, any
      Term Loan Obligation or any other monetary Obligations owed to such
      Lender;




(d)  other
      than as expressly permitted hereunder or in the other Loan Documents, release
      (or otherwise limit such Person’s liability with respect to its Obligations) any
      Borrower or any Guarantor;




(e)  release,
      or consent to the Credit Parties disposition of, all or substantially all of
      the
      Collateral, or subordinate the right of the Collateral Agent and the Lenders
      with respect to all or substantially all of the Collateral (except as expressly
      permitted herein or in the other Loan Documents);




(f)  amend,
      modify or waive SECTION
      2.08 , SECTION
      3.03(a) , SECTION
      3.03(b) or SECTION
      3.03(c) ,
      or this SECTION
      14.02 or the
      definitions of “Pro Rata Share”; or




(g)  change
      the percentage specified in the definition of Required Lenders which shall
      be
      required for the Lenders or any of them to take any action under this
      Agreement.




No
      amendment, waiver or consent in relation to any provision of the Loan Documents
      shall affect the rights, duties or obligations of any Agent or the L/C Issuer
      without obtaining the consent of such Agent or L/C Issuer, as the case may
      be.




103




SECTION
      14.03  Non-Consenting
      Lenders .




(a)  If,
      in
      connection with any proposed amendment, waiver or consent requiring consent
      of
“each Lender” or “each Lender affected thereby,” the consent of the Required
      Lenders is obtained, but the consent of other necessary Lenders is not obtained
      (any such Lender whose consent is necessary but not obtained being referred
      to
      herein as a “ Non-Consenting
      Lender ”),
      then
      so long as no Agent is a Non-Consenting Lender and no Default or Event of
      Default has occurred and is continuing, the Borrowers may elect to replace
      a
      Non-Consenting Lender as a Lender party to this Agreement, provided  that ,
      concurrently with such replacement, (a) another bank or other entity that
      is reasonably satisfactory to the Administrative Borrower and reasonably
      satisfactory to the Administrative Agent, shall agree, as of such date, to
      purchase for cash the Term Loan Obligations and other Obligations due to the
      Non-Consenting Lender pursuant to an Assignment and Acceptance and to become
      a
      Lender for all purposes under this Agreement and to assume all obligations
      of
      the Non-Consenting Lender to be terminated as of such date and to comply with
      the requirements of SECTION
      14.10 ,
      and
      (b) the Borrowers shall pay to such Non-Consenting Lender in same day funds
      on the day of such replacement (i) all principal, interest, fees and other
      amounts then accrued but unpaid to such Non-Consenting Lender by the Borrowers
      hereunder to and including the date of termination, including, without
      limitation, payments due to such Non-Consenting Lender under SECTION
      3.04 ,
      and
      (ii) an amount, if any, equal to the payment which would have been due to
      such Lender on the day of such replacement under this SECTION
      14.03 had the
      Term Loan Obligations of such Non-Consenting Lender been prepaid on such date
      rather than sold to the replacement Lender, in each case other than the amount
      of the Applicable Payment Fee and Applicable Reduction Fee. Any processing
      or
      recordation fees associated with the transfer of a Non-Consenting Lender’s Term
      Loan Obligations shall be for the account of the Borrowers.




SECTION
      14.04  No
      Waiver; Remedies, Etc. No
      failure on the part of the Lenders or any Agent to exercise, and no delay in
      exercising, any right hereunder or under any other Loan Document shall operate
      as a waiver thereof, nor shall any single or partial exercise of any right
      under
      any Loan Document preclude any other or further exercise thereof or the exercise
      of any other right. The rights and remedies of the Lenders and the Agents
      provided herein and in the other Loan Documents are cumulative and are in
      addition to, and not exclusive of, any rights or remedies provided by law.
      The
      rights of the Lenders and the Agents under any Loan Document against any party
      thereto are not conditional or contingent on any attempt by the Lenders and
      the
      Agents to exercise any of their rights under any other Loan Document against
      such party or against any other Person.




SECTION
      14.05  Expenses;
      Taxes; Attorneys’ Fees . The
      Borrowers will pay upon demand therefor, all of the following fees, costs,
      expenses and other charges (the “ Lender
      Expenses ”):







(a)  all
      reasonable out-of-pocket fees, costs and expenses incurred by or on behalf
      of
      any Agent, (including attorneys, consultants, advisors and agents retained
      by
      such Agent) and miscellaneous disbursements, examination, and travel, lodging
      and meals arising from or relating to or incurred in (i) the negotiation,
      preparation, execution, delivery, performance, administration, monitoring,
      amendment or termination of this Agreement, the other Loan Documents and all
      other documents and agreements relating to the transactions contemplated hereby
      or thereby (whether incurred before or after the date of this Agreement) or
      any
      consents, amendments, waivers or other modifications thereof, whether or not
      such documents become effective or are given, (ii) the preservation and
      protection of any of the Agent’s or Lender’s rights under this Agreement or the
      other Loan Documents, (iii) the filing of any petition, complaint, answer,
      motion or other pleading by any Agent or the Lenders, or the taking of any
      action in respect of the Collateral or other security, in connection with this
      Agreement or any other Loan Document, (iv) the protection, collection,
      lease, sale, taking possession, liquidation or release of any Collateral or
      other security in connection with this Agreement or any other Loan Document,
      (v) any attempt to create, perfect, record, correct, release or enforce any
      Lien or security interest in any Collateral or other security in connection
      with
      this Agreement or any other Loan Document, (vi) any attempt to enhance the
      likelihood of repayment of the Obligations or to collect any Obligations from
      any Credit Party, any Collateral or any other source of repayment,
      (vii) all collateral audit, appraisal and valuation fees and charges
      (including any expenses and allocated costs of personnel employed by an Agent)
      and all financial advisor fees and expenses, and (viii) otherwise in
      connection with the Lenders’ transactions with the Credit Parties or their
      Subsidiaries, including fees or charges for photocopying, notarization, couriers
      and messengers, telecommunication, public record searches (including tax lien,
      litigation, and UCC searches, searches with the patent and trademark office,
      the
      copyright office or any other governmental or central registry), filing,
      recording, publication, real estate surveys, title policies and endorsements,
      environmental audits, insurance costs and any other out-of-pocket expenses
      necessary or desirable to administer the Loan Documents or to create or perfect
      the liens in favor of the Collateral Agent or the Lenders or which the Borrowers
      are required to pay hereunder,




(b)  all
      reasonable fees, costs and expenses incurred in obtaining any advice regarding
      any Credit Party, Loan Document or transaction contemplated hereby or thereby
      from professionals (including, without limitation, the reasonable fees of
      attorneys, auditors, accountants, advisors and consultants) for any Agent and,
      during the continuance of an Event of Default, a single counsel for all Lenders
      to the extent that such fees, costs and expenses are not otherwise recoverable
      pursuant to any other provision of this Agreement or any other Loan
      Document,




(c)  all
      liabilities and costs arising from or in connection with the past, present
      or
      future operations of a Credit Party involving any damage to real or personal
      Property or natural resources or harm or injury alleged to have resulted from
      any Release of Hazardous Materials on, upon or into such Property,




(d)  all
      Environmental Liabilities and Costs incurred in connection with any Collateral,
      the Loan Documents or any Credit Party including any Remedial Action for any
      Hazardous Materials present or arising out of the operations of any facility
      of
      a Credit Party,




(e)  all
      liabilities and costs incurred in connection with any Environmental
      Lien,




(f)  all
      stamp, document, transfer, recording or filing taxes or fees and similar
      impositions now or hereafter determined by the Agent to be payable in connection
      with this Agreement or any other Loan Document, and any and all present or
      future claims, liabilities or losses with respect to or resulting from any
      omission to pay or delay in paying any such taxes, fees or
      impositions,







(g)  all
      broker fees if any with respect to any broker retained by a Credit Party or
      any
      Subsidiary of a Credit Party that may become due in the connection with the
      transactions contemplated by this Agreement,




(h)  during
      the continuance of an Event of Default, all amounts expended by the Agents,
      if
      any, to correct a Credit Party’s failure to (i)  make any payments or
      deposits with respect to any taxes of any kind or nature to the extent that
      such
      payments or deposits are due and payable prior to delinquency, (ii)  make
      any payments or deposits with respect to any other governmental assessment
      prior
      to the time that any Lien may inure against any property of any Credit Party,
      or
      (iii)  make any payments or deposits with respect to any insurance premiums
      then due and payable or otherwise comply with SECTION
      8.03 ,
      which
      amounts the Administrative Agent or the Collateral Agent, each in its sole
      discretion and without prior notice to the Borrowers, may but shall not be
      required to make payment of the same or any part thereof, or, in the case of
      any
      failure to comply with SECTION
      8.03 ,
      make
      payments to obtain and maintain insurance policies of the type described in SECTION
      8.03 ;




(i)  all
      other
      costs or expenses required to be paid by a Credit Party or its Subsidiaries
      under any of the Loan Documents that are paid, advanced, or incurred by the
      Lenders,




(j)  charges
      paid or incurred by an Agent resulting from the dishonor of checks,




(k)  reasonable
      expenditures made by any Agent in connection with the custody or preservation
      of
      any of the Collateral or of the Liens in favor of the Collateral Agent,
      including payment of any amounts to preserve rights of the Credit Parties under
      any Material Contracts or other agreements necessary or desirable to maintain
      the value of the Collateral,




(l)  reasonable
      costs and expenses paid or incurred by any Agent or one or more of the Lenders
      in enforcing or defending the Loan Documents or in connection with the
      transactions contemplated by the Loan Documents or the relationship of any
      one
      or more of the Lenders with any Credit Party or any Subsidiary of a Credit
      Party, and




(m)  each
      Agent’s reasonable costs and expenses (including attorneys’, accountants’,
      consultants’, and other advisors’ fees and expenses) and reasonable fees, costs
      and expenses for one counsel to separately represent the Lenders, in each case,
      incurred after the occurrence of any Default or Event of Default, including
      in
      any forbearance, workout or restructuring of the Obligations, in any bankruptcy
      or insolvency case or proceeding or in terminating, enforcing, or defending
      the
      Loan Documents, irrespective of whether suit is brought, or in taking any
      Remedial Action concerning the Collateral.







SECTION
      14.06  Right
      of Set-Off, Sharing of Payments, Etc .




(a)  Upon
      the
      occurrence and during the continuance of any Event of Default, and in addition
      to (and without limitation of) any right of set-off, banker’s lien or
      counterclaim any Lender may otherwise have, each Lender may, and is hereby
      authorized by the Credit Parties to, at any time and from time to time, without
      notice to the Credit Parties (any such notice being expressly waived by the
      Credit Parties), to the fullest extent permitted by law, set-off and apply
      any
      and all deposits (general or special, time or demand, provisional or final)
      at
      any time held and other indebtedness at any time owing by such Lender to or
      for
      the credit or the account of the Credit Parties against any and all Obligations
      now or hereafter existing under any Loan Document, irrespective of whether
      or
      not the Lenders shall have made any demand hereunder or thereunder and although
      such obligations may be contingent or unmatured. During the continuance of
      any
      Event of Default, the Lenders may, and are hereby authorized to, at any time
      and
      from time to time, without notice to the Credit Parties (any such notice being
      expressly waived by the Credit Parties), to the fullest extent permitted by
      law,
      set-off and apply any and all deposits (general or special, time or demand,
      provisional or final) at any time held and other indebtedness at any time owing
      by the Lenders to or for the credit or the account of the Credit Parties against
      any and all Obligations now or hereafter existing under any Loan Document,
      irrespective of whether or not the Lenders shall have made any demand hereunder
      or thereunder. The Lenders agree to notify the Administrative Borrower, the
      Collateral Agent and the Administrative Agent promptly after any such set-off
      and application made by the Lenders, provided  that the
      failure to give such notice to the Administrative Borrower shall not affect
      the
      validity of such set-off and application. The rights of the Lenders under this SECTION
      14.06 are in
      addition to other rights and remedies which the Lenders may have.




(b)  Nothing
      contained in this SECTION
      14.06 shall
      require any Lender to exercise any such right or shall affect the right of
      any
      Lender to exercise, and retain the benefits of exercising, any such right with
      respect to any other Indebtedness or Obligation of the Credit Parties. If,
      under
      any applicable bankruptcy, insolvency or other similar law, any Lender receives
      a secured claim in lieu of a set-off to which this SECTION
      14.06 applies,
      such Lender shall, to the extent practicable, exercise its rights in respect
      of
      such secured claim in a manner consistent with the rights of the Lenders
      entitled under SECTION
      3.03(b) and this SECTION
      14.06 to share
      in the benefits of any recovery on such secured claim.




SECTION
      14.07  Severability .
      Any
      provision of this Agreement, which is prohibited or unenforceable in any
      jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
      such prohibition or unenforceability without invalidating the remaining portions
      hereof or affecting the validity or enforceability of such provision in any
      other jurisdiction.




SECTION
      14.08  Replacement
      of Lenders . If
      (a) a Lender requests compensation under SECTION
      3.04 , SECTION
      4.02 ,
      or SECTION
      4.03 ,
      or if
      the Credit Parties are required to pay any additional amount to any Lender
      or
      any Governmental Authority for the account of any Lender pursuant to SECTION
      3.04 ,
      and
      such compensation or additional amount is not applicable to the Lenders
      generally, or (b) if any Lender defaults in its obligation to fund Term
      Loan Commitments hereunder, then in the case of either (a) or (b) of
      this SECTION
      14.08 ,
      the
      Credit Parties 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 this SECTION
      14.08 ),
      all
      its interests, rights and obligations under this Agreement to an assignee that
      shall assume such obligations (which assignee may be another Lender, if a Lender
      accepts such assignment); provided  that ,
      (i) the Credit Parties shall have received the prior written consent of the
      Administrative Agent, which consent shall not unreasonably be withheld, and
      (ii) such Lender shall have received payment of an amount equal to the
      outstanding principal of its Term Loan Obligations, accrued interest thereon,
      accrued fees and all other amounts payable to it hereunder, from the assignee
      (to the extent of such outstanding principal and accrued interest and fees)
      or
      the Credit Parties (in the case of all other amounts). A Lender shall not be
      required to make any such assignment and delegation if, prior thereto, as a
      result of a waiver by such Lender or otherwise, the circumstances entitling
      the
      Credit Parties to require such assignment and delegation cease to
      apply.









SECTION
      14.09  Complete
      Agreement; Sale of Interest .
      The
      Loan Documents constitute the complete agreement between the parties with
      respect to the subject matter hereof and thereof, supersede any previous
      agreement or understanding between them relating hereto or thereto and may
      not
      be modified, altered or amended except by an agreement in writing signed by
      the
      Credit Parties and the Lenders in accordance with SECTION
      14.02 .
      The
      Credit Parties may not sell, assign or transfer any of the Loan Documents or
      any
      portion thereof, including their rights, title, interests, remedies, powers
      and
      duties hereunder or thereunder. The Credit Parties hereby consent to any
      Lender’s sale of participations, assignment, transfer or other disposition, at
      any time or times, of any of the Loan Documents or of any portion thereof or
      interest therein, including such Lender’s rights, title, interests, remedies,
      powers or duties thereunder, subject, in the case of a participation,
      assignment, transfer or other disposition, to the provisions of SECTION
      14.10 .




SECTION
      14.10  Assignment;
      Register .




(a)  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 no Credit Party may assign or otherwise transfer any of its rights
      or obligations hereunder without the prior written consent of each Lender (and
      any attempted assignment or transfer by any Credit Party without such consent
      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 and, to the extent expressly
      contemplated hereby, the Affiliates of the Administrative Agent) any legal
      or
      equitable right, remedy or claim under or by reason of this
      Agreement.




(b)  Any
      Lender may assign to one or more Eligible Assignees all or a portion of its
      rights and obligations under this Agreement (including all or a portion of
      its
      Term Loan Obligations at the time owing to it); provided  that ,
      (i) except in the case of an assignment of the entire remaining outstanding
      amount of the Term Loan Obligations at the time owing to it (determined as
      of
      the date the Assignment and Acceptance with respect to such assignment is
      delivered to the Administrative Agent) or in the case of an assignment to an
      entity described in clause (a), (b) or (c) of the definition of
      Eligible Assignee, any such assignment shall not be less than $1,000,000, unless
      the Administrative Agent otherwise consents (such consent not to be unreasonably
      withheld or delayed), (ii) the consent of the Administrative Agent shall be
      required for any such assignment, (iii) if no Event of Default has occurred
      and is continuing, the consent of the Administrative Borrower, such consent
      not
      to be unreasonably withheld, delayed or conditioned, shall be required for
      any
      such assignment, and (iv) the parties to each assignment shall execute and
      deliver to the Administrative Agent an Assignment and Acceptance and shall
      pay
      to the Administrative Agent a $3500 assignment fee. Subject to acceptance and
      recording thereof by the Administrative Agent pursuant to
      paragraph (c) of this SECTION
      14.10 ,
      from
      and after the Closing Date specified in each Assignment and Acceptance, the
      Eligible Assignee thereunder shall be a party hereto and, to the extent of
      the
      interest assigned by such Assignment and Acceptance, 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
      Acceptance, be released from its obligations under this Agreement (and, in
      the
      case of an Assignment and Acceptance 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 SECTION
      3.04 , SECTION
      4.02 , SECTION
      4.03 and SECTION
      14.18 to the
      extent any claim thereunder relates to an event arising or such Lender’s status
      or activity as Lender prior to such assignment.









(c)  Any
      assignment or transfer by a Lender of rights or obligations under this Agreement
      that does not comply with this SECTION
      14.10 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
      paragraph (e) of this SECTION
      14.10 .




(d)  The
      Administrative Agent, acting solely for this purpose as an agent of the
      Borrowers, shall maintain at the Administrative Agent’s Office a copy of each
      Assignment and Acceptance delivered to it and a register for the recordation
      of
      the names and addresses of the Lenders, and the Commitment of, and principal
      amount of the Term Loan Obligation owing to, each Lender pursuant to the terms
      hereof from time to time (the “ Register ”).
      The
      entries in the Register shall be conclusive, and the Borrowers, the
      Administrative Agent and the Lenders may treat each Person whose name is
      recorded in the Register pursuant to the terms hereof as a Lender hereunder
      for
      all purposes of this Agreement, notwithstanding notice to the contrary. The
      Register shall be available for inspection by any Borrower and any Lender,
      at
      any reasonable time and from time to time upon reasonable prior notice. The
      Borrowers may request in writing a copy of the Register from time to time and
      the Administrative Agent will promptly deliver a copy of such Register to the
      Administrative Borrower promptly thereafter.




(e)  Any
      Lender may, without the consent of, or notice to, the Administrative Borrower
      or
      the Administrative Agent, sell participations to one or more banks or other
      entities (a “ Participant ”)
      in all
      or a portion of such Lender’s rights and/or obligations under this Agreement
      (including all or a portion of the Term Loan Obligations 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 Borrowers,
      the Agents, the Issuing Bank and the other Lenders 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 to any amendment, modification or waiver
      described in SECTION
      14.02(a) that
      affects such Participant. Subject to paragraph (f) of this SECTION
      14.10 the
      Borrowers agree that each Participant shall be entitled to the benefits of SECTION
      3.04 , SECTION
      4.02 and SECTION
      4.03 to the
      same extent as if it were a Lender and had acquired its interest by assignment
      pursuant to paragraph (b) of this SECTION
      14.10 .
      To the
      extent permitted by law, each Participant also shall be entitled to the benefits
      of SECTION
      14.06 as
      though it were a Lender, provided such Participant agrees to be subject to SECTION
      3.03 as
      though it were a Lender.









(f)  A
      Participant shall not be entitled to receive any greater payment under SECTION
      3.04 or ARTICLE
      IV than the
      applicable Lender would have been entitled to receive with respect to the
      participation sold to such Participant, unless the sale of the participation
      to
      such Participant is made with the Administrative Borrower’s prior written
      consent. A Participant shall be subject to SECTION
      14.03 as
      though it were a Lender. A Participant that would be a Non-U.S. Lender if it
      were a Lender shall not be entitled to the benefits of SECTION
      3.04 unless
      the Administrative Borrower is notified of the participation sold to such
      Participant and such Participant agrees, for the benefit of the Borrowers,
      to
      comply with SECTION
      3.04 and SECTION
      12.14 as
      though it were a Lender.




(g)  Any
      Lender may, without the consent of the Borrowers or the Administrative Agent,
      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,
      without limitation (i) any pledge or assignment to secure obligations to a
      Federal Reserve Bank, and (ii) in the case of any Lender that is a Fund,
      any pledge or assignment of all or any portion of such Lender’s rights under
      this Agreement to any holders of obligations owed, or securities issued, by
      such
      Lender as security for such obligations or securities, or to any trustee for,
      or
      any other representative of, such holders, and this SECTION
      14.10(g) shall
      not apply to any such pledge or assignment of a security interest; provided  that no such
      pledge or assignment of a security interest shall release a Lender from any
      of
      its obligations hereunder or substitute any such pledgee or assignee for such
      Lender as a party hereto.




SECTION
      14.11  Administrative
      Borrower .




(a)  Each
      Borrower hereby irrevocably appoints JRCC as the borrowing agent and
      attorney-in-fact for all Borrowers (the “ Administrative
      Borrower ”)
      which
      appointment shall remain in full force and effect unless and until Agent shall
      have received prior written notice signed by each Borrower that such appointment
      has been revoked and that another Borrower has been appointed Administrative
      Borrower.




(b)  Each
      Borrower hereby irrevocably appoints and authorizes the Administrative Borrower
      (i) to provide the Administrative Agent with all notices with respect to
      Term Loan B Loans and Term Letters of Credit obtained for the benefit of any
      Borrower and all other notices and instructions under this Agreement, and
      (ii) to take such action as the Administrative Borrower deems appropriate
      on its behalf to obtain Term Loan B Loans and Term Letters of Credit under
      this
      Agreement and to exercise such other powers as are reasonably incidental thereto
      to carry out the purposes of this Agreement. It is understood that the handling
      of the Loan Account and Collateral of Borrowers in a combined fashion, as more
      fully set forth herein, is done solely as an accommodation to the Borrowers
      in
      order to utilize the collective borrowing powers of Borrowers in the most
      efficient and economical manner and at their request, and that none of the
      Administrative Agent, the L/C Issuer or any Lender shall incur any liability
      to
      any Borrower as a result hereof. Each Borrower expects to derive benefit,
      directly or indirectly, from the handling of the Loan Account and the Collateral
      in a combined fashion since the successful operation of each Borrower is
      dependent on the continued successful performance of the integrated group.
      To
      induce the Administrative Agent and the Lenders to do so, and in consideration
      thereof, each Borrower hereby jointly and severally agrees to indemnify the
      Administrative Agent, the L/C Issuer and each Lender and hold each harmless
      against any and all liability, expense, loss or claim of damage or injury,
      made
      against any of them by any Borrower or by any third party whosoever, arising
      from or incurred by reason of (a) the handling of the Loan Account and
      Collateral of Borrowers as provided in this SECTION
      14.11 and
      (b) the reliance by the Administrative Agent, the Issuing Bank or any
      Lender on any instructions of the Administrative Borrower, except that Borrowers
      will have no liability to the relevant Agent-Related Person or Lender-Related
      Person under this SECTION
      14.11 with
      respect to any liability that has been finally determined by a court of
      competent jurisdiction to have resulted solely from the gross negligence or
      willful misconduct of such Agent-Related Person or Lender-Related Person, as
      the
      case may be.









SECTION
      14.12  Counterparts .
      This
      Agreement may be executed in any number of counterparts and by different parties
      hereto in separate counterparts, each of which shall be deemed to be an
      original, but all of which taken together shall constitute one and the same
      agreement. Delivery of an executed counterpart of this Agreement or any of
      the
      other Loan Documents by telecopy shall have the same force and effect as the
      delivery of an original executed counterpart of this Agreement or any of such
      other Loan Documents. Any party delivering an executed counterpart of any such
      agreement by telecopy shall also deliver an original executed counterpart,
      but
      the failure to do so shall not affect the validity, enforceability or binding
      effect of such agreement.




SECTION
      14.13  GOVERNING
      LAW .
      THIS
      AGREEMENT, THE NOTES AND, EXCEPT TO THE EXTENT OTHERWISE PROVIDED THEREIN,
      THE
      OTHER LOAN DOCUMENTS SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
      THE
      LAWS OF THE STATE OF NEW YORK.




SECTION
      14.14  CONSENT
      TO JURISDICTION, SERVICE OF PROCESS AND VENUE .
      ANY
      LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER LOAN
      DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK IN THE BOROUGH
      OF
      MANHATTAN, COUNTY OF NEW YORK OR OF THE UNITED STATES DISTRICT COURT FOR THE
      SOUTHERN DISTRICT OF NEW YORK, AND, BY EXECUTION AND DELIVERY OF THIS AGREEMENT,
      THE CREDIT PARTIES HEREBY IRREVOCABLY ACCEPT IN RESPECT OF ITS PROPERTY,
      GENERALLY AND UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID COURTS. THE
      CREDIT PARTIES FURTHER IRREVOCABLY CONSENT TO THE SERVICE OF PROCESS OUT OF
      ANY
      OF THE AFOREMENTIONED COURTS AND IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING
      OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO THE
      CREDIT PARTIES AT THEIR ADDRESS FOR NOTICES SET FORTH IN SECTION
      14.01 ,
      SUCH
      SERVICE TO BECOME EFFECTIVE FIVE (5) DAYS AFTER SUCH MAILING. NOTHING HEREIN
      SHALL AFFECT THE RIGHT OF THE LENDERS OR THE AGENTS TO SERVICE OF PROCESS IN
      ANY
      OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE
      PROCEED AGAINST THE CREDIT PARTIES IN ANY OTHER JURISDICTION. THE CREDIT PARTIES
      HEREBY EXPRESSLY AND IRREVOCABLY WAIVE, TO THE FULLEST EXTENT PERMITTED BY
      LAW,
      ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE JURISDICTION OR LAYING
      OF VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT REFERRED TO ABOVE
      AND
      ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT
      FORUM.









SECTION
      14.15  WAIVER
      OF JURY TRIAL, ETC. THE
      CREDIT PARTIES, THE LENDERS AND THE AGENTS HEREBY WAIVE ANY RIGHT TO A TRIAL
      BY
      JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM CONCERNING ANY RIGHTS UNDER
      THIS
      AGREEMENT, THE NOTES OR OTHER LOAN DOCUMENTS, OR UNDER ANY AMENDMENT, WAIVER,
      CONSENT, INSTRUMENT, DOCUMENT OR OTHER AGREEMENT DELIVERED OR WHICH IN THE
      FUTURE MAY BE DELIVERED IN CONNECTION THEREWITH, OR ARISING FROM ANY FINANCING
      RELATIONSHIP EXISTING IN CONNECTION WITH THIS AGREEMENT, AND AGREE THAT ANY
      SUCH
      ACTION, PROCEEDING OR COUNTERCLAIM SHALL BE TRIED BEFORE A COURT AND NOT BEFORE
      A JURY. THE CREDIT PARTIES CERTIFY THAT NO OFFICER, REPRESENTATIVE, AGENT OR
      ATTORNEY OF THE LENDERS OR THE AGENTS HAS REPRESENTED, EXPRESSLY OR OTHERWISE,
      THAT THE LENDERS OR THE AGENTS WOULD NOT, IN THE EVENT OF ANY ACTION, PROCEEDING
      OR COUNTERCLAIM, SEEK TO ENFORCE THE FOREGOING WAIVERS. THE CREDIT PARTIES
      HEREBY ACKNOWLEDGE THAT THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE LENDERS
      AND THE AGENTS ENTERING INTO THIS AGREEMENT.




SECTION
      14.16  Consent . Except
      as
      otherwise expressly set forth herein or in any other Loan Document to the
      contrary, if the consent, approval, satisfaction, determination, judgment,
      acceptance or similar action (an “ Action ”)
      of the
      Lenders or the Agents, shall be permitted or required pursuant to any provision
      hereof or any provision of any other agreement to which the Borrowers or any
      Guarantors are parties and to which the Lenders or the Agents have succeeded
      thereto, such Action shall be required to be in writing and may be withheld
      or
      denied by the Lenders or the Agents with or without any reason in their
      discretion.




SECTION
      14.17  Interpretation .
      Neither
      this Agreement nor any uncertainty or ambiguity herein shall be construed or
      resolved against the Lenders, the Agents or the Borrower, whether under any
      rule
      of construction or otherwise. On the contrary, this Agreement has been reviewed
      by all parties represented by counsel of their choosing and shall be construed
      and interpreted according to the ordinary meaning of the words used so as to
      accomplish fairly the purposes and intentions of all parties
      hereto.




SECTION
      14.18  Reinstatement;
      Certain Payments . If
      any
      claim is ever made upon the Lenders or the Agents for repayment or recovery
      of
      any amount or amounts received by the Lenders or the Agents in payment or
      received on account of any of the Obligations, the Lenders or the Agents shall
      give prompt notice of such claim to the Administrative Borrower, and if the
      Lenders or the Agents repay all or part of such amount by reason of (a) any
      judgment, decree or order of any court of competent jurisdiction or
      administrative body having jurisdiction over the Lenders or the Agents or any
      of
      their respective property, or (b) compliance by the Lenders or the Agents
      with any requirement of a Governmental Authority having jurisdiction over the
      Lenders or the Agents, then and in such event the Credit Parties agree that
      (i) any such judgment, decree or order shall be binding upon it
      notwithstanding the cancellation of any instrument evidencing the Obligations
      or
      the other Loan Documents or the termination of this Agreement or the other
      Loan
      Documents, and (ii) it shall be and remain liable to the Lenders or the
      Agents hereunder for the amount so repaid or recovered to the same extent as
      if
      such amount had never originally been received by the Lenders or the
      Agents.









SECTION
      14.19  Indemnification . In
      addition to the Credit Parties’ other Obligations under this Agreement, the
      Credit Parties agree to defend, protect, indemnify and hold harmless the Lenders
      and each of their respective Affiliates and their officers, directors, trustees,
      employees, agents and advisors, the Administrative Agent, the Collateral Agent,
      the Agent-Related Persons and the Lender-Related Persons (collectively called
      the “ Indemnitees ”)
      from
      and against any and all claims, losses, demands, settlements, damages,
      liabilities, obligations, penalties, fines, fees, reasonable costs and expenses
      (including, without limitation, reasonable attorneys’ fees, costs and expenses,
      but excluding income, franchise and similar taxes of an Indemnitee) incurred
      by
      such Indemnitees (but not taxes, which shall be governed by SECTION
      3.04 ),
      whether prior to or from and after the Closing Date, as a result of or arising
      from or relating to or in connection with any of the following: (a) the
      Administrative Agent, the Collateral Agent or the Lenders furnishing of funds
      to
      the Credit Parties under this Agreement, including, without limitation, the
      management of any such Term Loan Commitment and Term Loan Obligations,
      (b) any matter relating to the financing transactions contemplated by this
      Agreement or the other Loan Documents or by any document executed in connection
      with the transactions contemplated by this Agreement or the other Loan
      Documents, (c) any claim, litigation, investigation or administrative or
      judicial proceeding in connection with any transaction contemplated in, or
      consummated under, the Loan Documents, or (d) any claim, litigation,
      investigation or proceeding relating to any of the foregoing, whether or not
      any
      Indemnitee is a party thereto, including, without limitation, claims,
      litigations, investigations or other proceedings arising out of (i) the
      presence, disposal, Release of any Hazardous Materials on, in, at, to, from
      or
      under any property at any time owned or occupied by the Credit Parties (or
      any
      of their respective predecessors in interest or title) or at any facility which
      received Hazardous Materials generated by the Credit Parties or any of their
      respective predecessors in interest in connection with the receipt of such
      Hazardous Materials, (ii) any personal injury (including wrongful death) or
      property damage (real or personal) arising out of or related to any Hazardous
      Materials generated by the Credit Parties, (iii) any investigation, lawsuit
      brought or threatened, settlement reached or government order relating to such
      Hazardous Materials, (iv) any violation of any Environmental Law by the
      Credit Parties or any of their respective predecessors in interest, and/or
      (v) any Environmental Action (collectively, the “ Indemnified
      Matters ”); provided , however ,
      that
      the Credit Parties shall not have any obligations to any Indemnitee under this SECTION
      14.19 for any
      Indemnified Matter to the extent resulting from the gross negligence or willful
      misconduct of such Indemnitee; provided , however ,
      that no
      Credit Party shall be required to reimburse the legal fees and expenses of
      more
      than one outside counsel (in addition to up to one local counsel in each
      applicable local jurisdiction) for all Indemnitees under this SECTION
      14.19 unless
      on advice of outside counsel, representation of all such Indemnitees would
      be
      inappropriate due to the existence of an actual or potential conflict of
      interest. Such indemnification for all of the foregoing losses, damages, fees,
      costs and expenses of the Indemnitees shall be due and payable promptly after
      demand therefor. To the extent that the undertaking to indemnify, pay and hold
      harmless set forth in this SECTION
      14.19 may be
      unenforceable because it is violative of any law or public policy, the Credit
      Parties shall contribute the maximum portion which it is permitted to pay and
      satisfy under Applicable Law, to the payment and satisfaction of all Indemnified
      Matters incurred by the Indemnitees. This Indemnity shall survive the repayment
      of the Obligations and the discharge of the Liens granted under the Loan
      Documents.









SECTION
      14.20  Records .
      The
      unpaid principal of, and interest on, the Obligations, the interest rate or
      rates applicable to such unpaid principal and interest, the duration of such
      applicability, the Commitment, and the accrued and unpaid fees payable pursuant
      to SECTION
      4.04 ,
      shall
      at all times be ascertained from the records of the Lender and Agents, which
      shall be conclusive and binding absent manifest or demonstrable
      error.




SECTION
      14.21  Binding
      Effect .
      This
      Agreement shall be binding upon and inure to the benefit of the Borrower, the
      Lenders and the Agents, and their respective successors and assigns, subject
      to SECTION
      14.10 .




SECTION
      14.22  Confidentiality . The
      Lenders, the Administrative Agent and the Collateral Agent each agree (on behalf
      of itself and each of its Affiliates, directors, officers, employees and
      representatives) (each, a “ Recipient ”)
      to
      hold in confidence and not disclose, in accordance with its customary procedures
      for handling confidential information of this nature and in accordance with
      safe
      and sound practices of comparable commercial finance companies, any non-public
      information supplied to it by the Credit Parties pursuant to this Agreement
      or
      the other Loan Documents (and which at the time is not, and does not thereafter
      become, publicly available or available to such Person from another source
      not
      known to be subject to a confidentiality obligation to such Person not to
      disclose such information), or available to such Person from another source
      not
      known to be subject to a confidentiality obligation to such Person not to
      disclose such information, provided  that nothing
      herein shall limit the disclosure of any such information (a) to the extent
      required by Applicable Law or other statute, rule, regulation or judicial
      process, (b) to any Lender, any Agent, or to employees of or counsel,
      accountants, auditors and other advisors for any of the foregoing, (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 pursuant to the terms hereof), (c) to any actual
      or prospective counterparty (or its advisors) to any swap or derivative
      transaction relating to the Borrowers or any of their Subsidiaries and their
      obligations so long as such counterparty or prospective counterparty first
      agrees in writing to the confidentiality provisions of this SECTION
      14.22 ,
      (d) to third-party examiners, auditors, accountants, regulators or members
      of any self-regulatory organization for any Agent or Lender who are advised
      of
      the confidential nature of such information, (e) to the extent required by
      any court, governmental or administrative agency, pursuant to any subpoena
      or
      other legal process, or by any law, statute, regulation or court order, or
      in
      connection with any litigation to which any of the Agents or the Lenders are
      party, to cooperate, at the Borrower’s sole cost and expense, with any
      protective order sought by the Borrower, (f) to any assignee or participant
      (or prospective assignee or participant) and to any potential successor Agent
      so
      long as such assignee or participant (or prospective assignee or participant)
      or
      potential successor Agent first agrees in writing to the confidentiality
      provisions of this SECTION
      14.22 ,
      (g) to any Person that is an investor or prospective investor in a
      securitization that agrees that its access to information regarding the Credit
      Parties and the Term Loan Commitments and the Term Loan Obligations is solely
      for purposes of evaluating an investment in such securitization, or (h) to
      a Person that is a trustee, collateral manager, servicer, noteholder, rating
      agency or secured party in a securitization in connection with the
      administration, servicing and reporting on the assets serving as collateral
      for
      such securitization.









SECTION
      14.23  Lender
      Advertising . The
      Agents and the Lenders shall be entitled to advertise the closing of the
      transactions contemplated by this Agreement in such trade publications, business
      journals, newspapers of general circulation and otherwise, as the Agents and
      the
      Lenders shall deem appropriate, including, without limitation, the publication
      of a tombstone announcing the closing of this transaction.




SECTION
      14.24  Press
      Releases .
      The
      Credit Parties will not issue press releases describing this Agreement or the
      transactions represented hereby or conducted hereunder without the prior written
      consent of the Administrative Agent.




SECTION
      14.25  Common
      Enterprise .
      The
      successful operation and condition of the Borrowers is dependent on the
      continued successful performance of the functions of the group of the Credit
      Parties as a whole and the successful operation of each Borrower is dependent
      on
      the successful performance and operation of each other Credit Party. Each Credit
      Party expects to derive benefit (and its board of directors or other governing
      body has determined that it may reasonably be expected to derive benefit),
      directly and indirectly, from (a) successful operations of each of the
      other Credit Parties, and (b) the credit extended by the Lenders to the
      Borrowers hereunder, both in their separate capacities and as members of the
      group of companies. Each Credit Party has determined that execution, delivery
      and performance of this Agreement and any other Loan Documents to be executed
      by
      such Credit Party is within its purpose, will be of direct and indirect benefit
      to such Credit Party, and is in its best interest.




SECTION
      14.26  USA
      Patriot Act .
      Each
      Lender that is subject to the requirements of the Patriot Act hereby notifies
      the Borrowers and each other Credit Party that pursuant to the requirements
      of
      the Patriot Act, it is required to obtain, verify and record information that
      identifies each Credit Party, which information includes the name and address
      of
      the Credit Party and other information that will allow such Lender to identify
      each Credit Party in accordance with the Patriot Act.




[ *Signature
      Page Follows* ]







IN
      WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
      by
      their respective officers thereunto duly authorized, as of the date first above
      written.


BORROWERS:JAMES
                RIVER COAL COMPANYBy:Name:Title:


JAMES
                RIVER COAL SERVICE COMPANYBy:Name:Title:


LEECO,
                INC.By:Name:Title:


TRIAD
                MINING, INC.By:Name:Title:


TRIAD
                UNDERGROUND MINING, LLCBy:Name:Title:


TRIAD
                UNDERGROUND MINING, LLCBy:Name:Title:


Signature
        Page to Term Credit Agreement





BLEDSOE
                COAL CORPORATIONBy:Name:Title:


JOHNS
                CREEK ELKHORN COAL CORPORATIONBy:Name:Title:


BELL
                  COUNTY COAL CORPORATIONBy:Name:Title:


JAMES
                RIVER COAL SALES, INC.By:Name:Title:


BLEDSOE
                  COAL LEASING COMPANYBy:Name:Title:


Signature
        Page to Term Credit Agreement









BLUE
                DIAMOND COAL COMPANYBy:Name:Title:


MCCOY
                ELKHORN COAL CORPORATIONBy:Name:Title:


GUARANTORS:BDCC
                HOLDING COMPANY, INC.By:Name:Title:


EOLIA
                RESOURCES, INC.By:Name:Title:


SHAMROCK
                COAL COMPANY, INCORPORATEDBy:Name:Title:


Signature
        Page to Term Credit Agreement









JOHNS
                CREEK COAL COMPANYBy:Name:Title:






JOHNS
                CREEK PROCESSING COMPANYBy:Name:Title:


Signature
        Page to Term Credit Agreement





ADMINISTRATIVE
                AGENT AND LENDER:MORGAN
                STANLEY SENIOR FUNDING, INC.By:Name:Title:


COLLATERAL
                AGENT:MORGAN
                STANLEY & CO. INCORPORATEDBy:Name:Title:


Signature
        Page to Term Credit Agreement












**ANNEX
      A**




**to**




**CREDIT
      AGREEMENT**




**LETTERS
      OF CREDIT**




(a)  Issuance .
      Subject
      to the terms and conditions of the Agreement, the Administrative Agent and
      the
      Lenders agree to arrange for and cause to be issued, from time to time prior
      to
      the Maturity Date, upon the request of Administrative Borrower, Term Letters
      of
      Credit by causing Term Letters of Credit to be issued by an L/C Issuer for
      the
      Borrowers’ account. The aggregate amount of all such Term Letters of Credit
      shall not at any time exceed the least of (i) the Maximum Term Letter of
      Credit Amount less the amount of any reductions in the Term Letter of Credit
      Commitment pursuant to this Annex A and the Agreement (including any
      reductions that occur as the result of the conversion of a Term Letter of Credit
      into a Term Loan B Obligation), and (ii) the Maximum Term Loan Amount less
      the sum of (A) the aggregate outstanding Term Loan B Obligations, and (B) the
      aggregate outstanding Term Letter of Credit Obligations. No Term Letter of
      Credit shall have an expiry date that is more than one year following the date
      of issuance thereof, unless otherwise determined by the Administrative Agent
      and
      L/C Issuer, in their respective discretion (including with respect to customary
      evergreen provisions), and neither the Administrative Agent nor the Lenders
      shall be under any obligation to arrange for, provide or purchase risk
      participations in, any Term Letter of Credit having an expiry date that is
      later
      than the Maturity Date. No L/C Issuer shall issue a Term Letter of Credit under
      this Agreement with an expiry date after the Maturity Date.




(b)  Conversion
      to Term Loan B Obligations Automatic Upon Draw; No Reduction in Commitment
      upon
      Expiry .




(i)  In
      the
      event that any L/C Issuer, the Administrative Agent or any Lender shall make
      any
      payment on or pursuant to any Term Letter of Credit (including due to a draw
      on
      a Term Letter of Credit or due to the Borrowers failure to pay any amounts
      due
      to any L/C Issuer), the amount of such payment (the “ Conversion
      Amount ”)
      shall
      then automatically and immediately convert into (“ Term
      Letter of Credit Conversion ”)
      and be
      deemed to constitute a Term Loan B Obligation under the Agreement, regardless
      of
      whether a Default or Event of Default has occurred and is continuing and
      notwithstanding any failure to satisfy the conditions precedent set forth in SECTION
      5.02 .
      Upon
      any Term Letter of Credit Conversion and from and after the date upon which
      any
      such Term Letter of Credit Conversion occurs (a) the Borrowers shall
      immediately pay to the Administrative Agent, for the account of the Lenders
      in
      accordance with their Pro Rata Shares, the amount of the Commitment Fee then
      due
      on such Term Letter of Credit through the date of such Term Letter of Credit
      Conversion and the Applicable Reduction Fee on the Conversion Amount,
      (b) the Conversion Amount shall be a Term Loan Obligation for all purposes
      under the Agreement and bear interest at the Interest Rate applicable to Term
      Loan Obligations from and after such date, and (c) the Conversion Amount
      shall permanently reduce the amount of the Term Letter of Credit
      Commitment.




A-1




(ii)  The
      expiration, termination or replacement of a Term Letter of Credit without draw,
      so long as there is then no Default or Event of Default continuing and so long
      as the Borrowers have paid all Obligations under the Agreement (including all
      amounts then due to any L/C Issuer), shall not reduce the Term Letter of Credit
      Commitment




(c)  Cash
      Collateral .




(i)  If
      Borrowers are required to provide cash collateral for any Term Letter of Credit
      Obligations pursuant to the Agreement prior to the Maturity Date, each Borrower
      will pay to the Administrative Agent for the ratable benefit of itself and
      Lenders cash or cash equivalents acceptable to the Administrative Agent
      (“ Cash
      Collateral ”)
      in an
      amount equal to 105% of the maximum amount then available to be drawn under
      each
      such Term Letter of Credit. Such Cash Collateral shall be held by The
      Administrative Agent in a cash collateral account (the “ Cash
      Collateral Account ”)
      maintained at a bank or financial institution acceptable to the Administrative
      Agent. The Cash Collateral Account shall be in the name of the Administrative
      Borrower and shall be pledged to, and subject to the control of, the
      Administrative Agent, for the benefit of the Administrative Agent, the Lenders
      and each L/C Issuer, in a manner satisfactory to the Administrative Agent and
      each L/C Issuer with Term Letters of Credit being provided with Cash Collateral.
      The Borrowers hereby pledge and grant to the Administrative Agent, on behalf
      of
      itself, each L/C Issuer and the Lenders, a security interest in all such Cash
      Collateral and all proceeds thereof, as security for the payment of all amounts
      due in respect of the Term Letter of Credit Obligations and the other Term
      Loan
      Obligations, whether or not then due. The Agreement, including this Annex A ,
      shall
      constitute a security agreement under applicable law.




(ii)  If
      any
      Term Letter of Credit shall for any reason be outstanding on the Maturity Date,
      the Borrowers shall do one or more of the following with respect to each such
      outstanding Term Letter of Credit (A) provide Cash Collateral therefor in the
      manner described above, (B) cause such Term Letter of Credit and all guaranties
      thereof, if any, to be canceled and returned to each L/C Issuer, or (C) deliver
      to each L/C Issuer a stand-by letter (or letters) of credit (each, a
“ Backstop
      Letter of Credit ”)
      in
      guaranty of each outstanding Term Letter of Credit, which Backstop Letter of
      Credit meets all of the following requirements: (x) each Backstop Letter of
      Credit shall have an expiry or termination date that is at least thirty (30)
      additional days later than the expiry or termination date of the corresponding
      Term Letter of Credit with respect to which the Backstop Letter of Credit is
      issued, (y) each Backstop Letter of Credit shall be in an amount equal to 105%
      of the maximum amount then available to be drawn under the outstanding Term
      Letter of Credit with respect to which the Backstop Letter of Credit is issued,
      and (z) each Backstop Letter of Credit shall be issued by a Person, and shall
      be
      subject to such terms and conditions, as are satisfactory to the Administrative
      Agent and each L/C Issuer of a Term Letter of Credit being provided with a
      Backstop Letter of Credit in their respective sole discretion..




A-2




(iii)  From
      time
      to time after funds are deposited as Cash Collateral by any Borrower, whether
      before or after the Maturity Date, the Administrative Agent may apply such
      funds
      then held by it to the payment of any amounts, and in such order as the
      Administrative Agent may elect, as shall be or shall become due and payable
      by
      the Borrowers to the Administrative Agent and the Lenders with respect to any
      Letters of Credit and, upon the repayment or expiration of all amounts
      constituting Term Letter of  Credit
      Usage, to any other Obligations of the Borrowers then due and
      payable.




(iv)  No
      Borrower nor any Person claiming on behalf of or through any Borrower shall
      have
      any right to withdraw any of the Cash Collateral, except that upon the
      termination or expiry of all Term Letters of Credit and the payment of all
      amounts payable by the Borrowers to the Administrative Agent and the Lenders
      in
      respect thereof, any remaining Cash Collateral shall be applied to other
      Obligations then due and owing and upon payment in full of such Obligations,
      any
      remaining amount shall be paid to the Borrowers or as otherwise required by
      law.
      Interest earned on Cash Collateral shall be held as additional
      collateral.




(d)  Fees
      and Expenses .
      Borrowers agree to pay to the Administrative Agent for the benefit of the
      Lenders, as compensation to such Lenders for Term Letters of Credit issued
      hereunder (i) all costs and expenses incurred by the Administrative Agent
      or any Lender on account of such Term Letters of Credit, and (ii) the
      Commitment Fee. The Commitment Fee shall be paid to the Administrative Agent
      for
      the benefit of the Lenders in arrears, on the first day of each month and on
      the
      Maturity Date. In addition, the Borrowers shall pay to each L/C Issuer, on
      demand and for its own account, such fees (including all per annum fees),
      charges and expenses of each L/C Issuer in respect of the issuance, negotiation,
      acceptance, amendment, transfer and payment of such Term Letters of Credit
      or
      otherwise payable pursuant to the application and related documentation under
      which such Term Letter of Credit is issued.




(e)  Request
      for Incurrence of Term Letter of Credit Obligations .
      The
      Administrative Borrower shall give the Administrative Agent at least five (5)
      Business Days’ prior written notice requesting the issuance of any Term Letter
      of Credit. The notice shall be accompanied by the form of the Term Letter of
      Credit (which shall be acceptable to the applicable L/C Issuer) and a completed
      application in the form required by the applicable L/C Issuer for the Term
      Letter of Credit requested. Notwithstanding anything contained herein to the
      contrary, applications for Term Letters of Credit by the Administrative Borrower
      and approvals by the Administrative Agent and any L/C Issuer may be made and
      transmitted pursuant to electronic codes and security measures mutually agreed
      upon and established by and among the Administrative Borrower, the
      Administrative Agent and any L/C Issuer.




(f)  Obligation
      Absolute .
      The
      obligation of the Borrowers to reimburse the Administrative Agent and the
      Lenders for payments made by any L/C Issuer with respect to any Term Letter
      of
      Credit shall be absolute, unconditional and irrevocable, without necessity
      of
      presentment, demand, protest or other formalities, and the obligations of each
      Lender to make payments to the Administrative Agent with respect to Term Letters
      of Credit shall be unconditional and irrevocable. Such obligations of Borrowers
      and Lenders shall be paid strictly in accordance with the terms hereof under
      all
      circumstances including the following:




A-3




(i)  any
      lack
      of validity or enforceability of any Term Letter of Credit, any application
      or
      agreement with any L/C Issuer, the Agreement or the other Loan Documents or
      any
      other agreement;




(ii)  the
      existence of any claim, set-off, defense or other right that any Borrower or
      any
      of their respective Affiliates or any Lender may at any time have against a
      beneficiary or any transferee of any Term Letter of Credit (or any Persons
      or
      entities for whom any such transferee may be acting), the Administrative Agent,
      any Lender, or any other Person, whether in connection with the Agreement,
      the
      Term Letter of Credit, the transactions contemplated herein or therein or any
      unrelated transaction (including any underlying transaction between any Borrower
      or any of their respective Affiliates and the beneficiary for which the Term
      Letter of Credit was procured);




(iii)  any
      draft, demand, certificate or any other document presented under any Term Letter
      of Credit proving to be forged, fraudulent, invalid or insufficient in any
      respect or any statement therein being untrue or inaccurate in any
      respect;




(iv)  payment
      by the Administrative Agent (except as otherwise expressly provided in paragraph
      (g)(ii)(C) below) or any L/C Issuer under any Term Letter of Credit or guaranty
      thereof against presentation of a demand, draft or certificate or other document
      that does not comply with the terms of such Letter of Credit or such
      guaranty;




(v)  any
      other
      circumstance or event whatsoever, that is similar to any of the foregoing;
      or




(vi)  the
      fact
      that a Default or an Event of Default has **** occurred
      and is continuing.




(g)  Indemnification;
      Nature of Lenders’ Duties .




(i)  In
      addition to amounts payable as elsewhere provided in the Agreement, the
      Borrowers hereby agree to pay and to protect, indemnify, and save harmless
      the
      Administrative Agent, each L/C Issuer and each Lender from and against any
      and
      all claims, demands, liabilities, damages, losses, costs, charges and expenses
      (including reasonable attorneys’ fees and allocated costs of internal counsel)
      that the Administrative Agent or any Lender may incur or be subject to as a
      consequence, direct or indirect, of (A) the issuance of any Term Letter of
      Credit or guaranty thereof, or (B) the failure of the Administrative Agent
      or
      any Lender seeking indemnification or of any L/C Issuer to honor a demand for
      payment under any Term Letter of Credit or guaranty thereof as a result of
      any
      act or omission, whether rightful or wrongful, of any present or future de
      jure
      or de facto government or Governmental Authority, in each case other than to
      the
      extent solely as a result of the gross negligence or willful misconduct of
      such
      indemnified person (as finally determined by a court of competent
      jurisdiction).




A-4




(ii)  As
      between the Administrative Agent and any Lender on the one hand and, on the
      other hand, the Borrowers, the Borrowers assume all risks of the acts and
      omissions of, or misuse of any Term Letter of Credit by, beneficiaries of any
      Term Letter of Credit. In furtherance and not in limitation of the foregoing,
      to
      the fullest extent permitted by law, neither the Administrative Agent nor any
      Lender shall be responsible for: (A) the form, validity, sufficiency, accuracy,
      genuineness or legal effect of any document issued by any party in connection
      with the application for and issuance of any Term Letter of Credit, even if
      it
      should in fact prove to be in any or all respects invalid, insufficient,
      inaccurate, fraudulent or forged, (B) the validity or sufficiency of any
      instrument transferring or assigning or purporting to transfer or assign any
      Term Letter of Credit or the rights or benefits thereunder or proceeds thereof,
      in whole or in part, that may prove to be invalid or ineffective for any reason,
      (C) failure of the beneficiary of any Term Letter of Credit to comply fully
      with
      conditions required in order to demand payment under such Term Letter of Credit; provided , that in the
      case of any payment by the Administrative Agent under any Term Letter of Credit
      or guaranty thereof, the Administrative Agent shall be liable to the extent
      such
      payment was made solely as a result of its gross negligence or willful
      misconduct (as finally determined by a court of competent jurisdiction) in
      determining that the demand for payment under such Term Letter of Credit or
      guaranty thereof complies on its face with any applicable requirements for
      a
      demand for payment under such Term Letter of Credit or guaranty thereof, (D)
      errors, omissions, interruptions or delays in transmission or delivery of any
      messages, by mail, cable, telegraph, telex or otherwise, whether or not they
      may
      be in cipher, (E) errors in interpretation of technical terms, (F) any loss
      or
      delay in the transmission or otherwise of any document required in order to
      make
      a payment under any Term Letter of Credit or guaranty thereof or of the proceeds
      thereof, (G) the credit of the proceeds of any drawing under any Term Letter
      of
      Credit or guaranty thereof, and (H) any consequences arising from causes beyond
      the control of the Administrative Agent or any Lender. None of the above shall
      affect, impair, or prevent the vesting of any of the Administrative Agent’s or
      any Lender’s rights or powers hereunder or under the Agreement.




(iii)  Nothing
      contained herein shall be deemed to limit or to expand any waivers, covenants
      or
      indemnities made by Borrowers in favor of any L/C Issuer in any letter of credit
      application, reimbursement agreement or similar document, instrument or
      agreement between or among Borrowers and any L/C Issuer.




(h)  Letter
      of Credit Amounts .
      Unless
      otherwise specified herein, the amount of a Term Letter of Credit at any time
      shall be deemed to be the stated amount of such Term Letter of Credit as in
      effect at such time; provided , however ,
      that
      with respect to any Term Letter of Credit that, by its terms or the terms of
      any
      document issued in connection with such Term Letter of Credit, provides for
      one
      or more automatic increases in the stated amount thereof, the amount of such
      Term Letter of Credit shall be deemed to be the maximum stated amount of such
      Term Letter of Credit after giving effect to all such increases, whether or
      not
      such maximum stated amount is in effect at such time.




A-5


**EXHIBIT
      A-1**


**TO
      TERM CREDIT AGREEMENT**




DEPOSIT
      ACCOUNT OF ADMINISTRATIVE AGENT




FOR
      AGENT




Citibank,
      N.A.


New
      York,
      NY 10043


ABA
      #:
      021-000-089


Account
      #: 406-99-776


Account
      Name: Morgan Stanley Senior Funding, Inc.


Reference:
      James River Coal Company




BORROWER
      FUNDING ACCOUNT :




Wachovia
      Bank, N.A


ABA
      #:  051400549


Account
      #:  2000010101379


Account
      Name: James River Coal Company




A-1-1


**EXHIBIT
      A-2**


**TO
      TERM CREDIT AGREEMENT**




[FORM
      OF]
      ASSIGNMENT AND ACCEPTANCE




This
      Assignment and Acceptance (the “ Assignment ”)
      is
      dated as of the Effective Date set forth below and is entered into by and
      between [ *Insert
      name of Assignor* ]
      (the
“ Assignor ”)
      and
      [ *Insert
      name of Assignee* ]
      (the
“ Assignee ”).
      Capitalized terms used but not defined herein shall have the meanings given
      to
      them in the Credit Agreement (as defined below), receipt of a copy of which
      is
      hereby acknowledged by the Assignee. The Standard Terms and Conditions set
      forth
      in Annex A-1 attached hereto are hereby agreed to and incorporated herein by
      reference and made a part of this Assignment as if set forth herein in
      full.




For
      an
      agreed consideration, the Assignor hereby irrevocably sells and assigns to
      the
      Assignee, and the Assignee hereby irrevocably purchases and assumes from the
      Assignor, subject to and in accordance with the Standard Terms and Conditions
      and the Credit Agreement, as of the Effective Date inserted by the
      Administrative Agent as contemplated below, the interest in and to all of the
      Assignor’s rights and obligations under the Credit Agreement and any other
      documents or instruments delivered pursuant thereto that represent the amount
      and percentage interest identified below of all of the Assignor’s outstanding
      rights and obligations under the respective facilities identified below
      (including, to the extent included in any such facilities, Letters of Credit)
      (the “ Assigned
      Interest ”).
      Such
      sale and assignment is without recourse to the Assignor and, except as expressly
      provided in this Assignment and the Credit Agreement, without representation
      or
      warranty by the Assignor.




1.Assignor:
            ______________________2.Assignee:
            ______________________3.Borrowers:
            James
                River Coal Company and _______________4.Administrative
                Agent:
            Morgan
                Stanley Senior Funding, Inc., as Administrative Agent under the
                Credit Agreement5.Credit
                Agreement:
            The
                Term Credit Agreement, dated as of February 26, 2007 (as it may be
                amended, supplemented or otherwise modified, the “Credit
                Agreement”;
                the terms defined therein and not otherwise defined herein being
                used
                herein as therein defined), by and among**JAMES
                RIVER COAL COMPANY**and
                certain of its Subsidiaries identified as borrowers on the signature
                pages
                thereto****(collectively,
                the “Borrowers”),
                and certain other Credit Parties party thereto from time to time,
                as
                Guarantors, the Lenders party thereto from time to time,**MORGAN
                STANLEY SENIOR FUNDING, INC.**,
                as Administrative Agent, Sole Bookrunner and Lead Arranger and**MORGAN
                STANLEY & CO. INCORPORATED**,
                as Collateral Agent.




A-2-1




6.Assigned
                Interest:





Facility
            
            Percentage
                Assigned [1]
            
            Aggregate
                Amount of Commitment/Loans for all Lenders
            
            Amount
                of Commitment/Loans Assigned
            
            Percentage
                Assigned of Commitment/Loans [1]____________
            
            ____________
            
            $______________
            
            $______________
            
            ____________%





Effective
      Date: ______________, 20__ [TO BE INSERTED BY ADMINISTRATIVE AGENT AND WHICH
      SHALL BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER IN THE REGISTER
      THEREFOR.]




7.  Notice
      and Wire Instructions:




**[NAME
                  OF ASSIGNOR]**
                
                Notices:
                _________________________
                _________________________
                _________________________
                Attention:
                Telecopy:
                
                with
                  a copy to:
                _________________________
                _________________________
                _________________________
                Attention:
                Telecopy:
                
                Wire
                  Instructions:
              
              **[NAME
                  OF ASSIGNEE]**
                
                Notices:
                _________________________
                _________________________
                _________________________
                Attention:
                Telecopy:
                
                with
                  a copy to:
                _________________________
                _________________________
                _________________________
                Attention:
                Telecopy:
                
                Wire
                  Instructions:




The
          terms
          set forth in this Assignment are hereby agreed to:
  ASSIGNOR
 [NAME
          OF
          ASSIGNOR]
  
  [1]
              Set
                  forth, to at least 9 decimals, as a percentage of the Commitment/Loans
                  of
                  all Lenders thereunder.


A-2-2




The
      terms
      set forth in this Assignment are hereby agreed to:




ASSIGNOR
              [NAME
                OF ASSIGNOR]By:Title:




ASSIGNEE
              [NAME
                OF ASSIGNEE]By:Title:





Consented
      to and Accepted:




**MORGAN
                STANLEY SENIOR FUNDING, INC.**,
                as
              Administrative
                AgentBy:Title:




A-2-3


**ANNEX
      A-1**




STANDARD
      TERMS AND CONDITIONS FOR


ASSIGNMENT
      AND ACCEPTANCE




Representations
      and Warranties .




1.1
            Assignor.
                The Assignor (a) represents and warrants that (i) it is the legal
                and
                beneficial owner of the Assigned Interest, (ii) the Assigned Interest
                is
                free and clear of any lien, encumbrance or other adverse claim and
                (iii)
                it has full power and authority, and has taken all action necessary,
                to
                execute and deliver this Assignment and to consummate the transactions
                contemplated hereby; and (b) assumes no responsibility with respect
                to
                (i) any statements, warranties or representations made in or in
                connection with any Loan Document, (ii) the execution, legality,
                validity,
                enforceability, genuineness, sufficiency or value of the Credit Agreement
                or any other instrument or document delivered pursuant thereto, other
                than
                this Assignment (herein collectively the “Credit
                Documents”),
                or any collateral thereunder, (iii) the financial condition of the
                Borrowers, any of their respective Subsidiaries or Affiliates or
                any other
                Person obligated in respect of any Credit Document or (iv) the performance
                or observance by the Borrowers, any of their respective Subsidiaries
                or
                Affiliates or any other Person of any of their respective obligations
                under any Credit Document.




1.2
            Assignee.
                The Assignee (a) represents and warrants that (i) it has full power
                and
                authority, and has taken all action necessary, to execute and deliver
                this
                Assignment and to consummate the transactions contemplated hereby
                and to
                become a Lender under the Credit Agreement, (ii) it meets all requirements
                of an Eligible Assignee under the Credit Agreement, (iii) from and
                after the Effective Date, it shall be bound by the provisions of
                the
                Credit Agreement and, to the extent of the Assigned Interest, shall
                have
                the obligations of a Lender thereunder, (iv) it has received a copy
                of the
                Credit Agreement and such other documents and information as it has
                deemed
                appropriate to make its own credit analysis and decision to enter
                into
                this Assignment and to purchase the Assigned Interest on the basis
                of
                which it has made such analysis and decision, and (v) if it is a
                Lender
                not organized under the laws of the United States of America, any
                State
                thereof or the District of Columbia, attached to the Assignment is
                any
                documentation required to be delivered by it pursuant to the terms
                of the
                Credit Agreement, duly completed and executed by the Assignee; and
                (b)
                agrees that (i) it will, independently and without reliance on the
                Administrative Agent, the Assignor or any other Lender, and based
                on such
                documents and information as it shall deem appropriate at that time,
                continue to make its own credit decisions in taking or not taking
                action
                under the Loan Documents, and (ii) it will perform in accordance
                with
                their terms all of the obligations which by the terms of the Credit
                Documents are required to be performed by it as a
                Lender.




ANNEX
          A-1-1




Payments .
      From
      and after the Effective Date, the Administrative Agent shall make all payments
      in respect of the Assigned Interest (including payments of principal, interest,
      fees and other amounts) to the Assignor for amounts which have accrued to but
      excluding the Effective Date and to the Assignee for amounts which have accrued
      from and after the Effective Date.[ 2  ]




General
      Provisions .
      This
      Assignment shall be binding upon, and inure to the benefit of, the parties
      hereto and their respective successors and assigns. This Assignment may be
      executed in any number of counterparts, which together shall constitute one
      instrument. Delivery of an executed counterpart of a signature page of this
      Assignment by telecopy shall be effective as delivery of a manually executed
      counterpart of this Assignment. This Assignment shall be governed by, and
      construed in accordance with, the internal laws of the State of New York without
      regard to conflict of laws principles thereof.


[2]
                Or,
                    if agreed among Administrative Agent, Assignor and Assignee:
“From and
                    after the Effective Date, the Administrative Agent shall make
                    all payments
                    in respect of the Assigned Interest (including payments of principal,
                    interest, fees and other amounts) to the Assignee whether such
                    amounts
                    have accrued prior to or on or after the Effective Date. The
                    Assignor and
                    the Assignee shall make all appropriate adjustments in payments
                    by the
                    Administrative Agent for periods prior to the Effective Date
                    or with
                    respect to the making of this assignment directly between
                    themselves.”


ANNEX
          A-1-2


**EXHIBIT
      B-1**


**TO
      TERM CREDIT AGREEMENT**




[FORM
      OF] BORROWING REQUEST




[DATE]




Reference
      is made to the Term Credit Agreement, dated as of February 26, 2007 (as it
      may
      be amended, supplemented or otherwise modified, the “ Credit
      Agreement ”;
      the
      terms defined therein and not otherwise defined herein being used herein as
      therein defined), by and among **JAMES
      RIVER COAL COMPANY** and
      certain of its Subsidiaries **** (the
      “ Borrowers ”),
      and
      certain other Credit Parties party thereto from time to time, as Guarantors,
      the
      Lenders party thereto from time to time, **MORGAN
      STANLEY SENIOR FUNDING, INC.** ,
      as
      Administrative Agent, Sole Bookrunner and Lead Arranger and **MORGAN
      STANLEY & CO. INCORPORATED** ,
      as
      Collateral Agent.




Pursuant
      to Section
      2.01 of the
      Credit Agreement, the Borrowers desire that Lenders make the following Term
      Loan
      B Loans to the Borrowers in accordance with the applicable terms and conditions
      of the Credit Agreement on the Closing Date **** (the
      “ Funding
      Date ”):




oLIBOR
                Rate Loans, with a LIBOR Period of ________ Month(s):
              
              oBase
                Rate Loans:
            
            $**[___,___,___]**
              
              
              $**[___,___,___]**




The
      Borrowers hereby certify that:




(i) as
      of the
      Funding Date, the representations and warranties contained in each of the Loan
      Documents are true and complete in all material respects on and as of such
      Funding Date to the same extent as though made on and as of such date, except
      to
      the extent such representations and warranties specifically relate to an earlier
      date, in which case such representations and warranties are true and complete
      in
      all material respects on and as of such earlier date;




(ii) as
      of the
      Funding Date, all conditions precedent specified in Article
      V of the
      Credit Agreement have been satisfied;




(iii) as
      of the
      Funding Date, no event has occurred and is continuing or would result from
      the
      consummation of the borrowing contemplated hereby that would constitute an
      Event
      of Default or a Default; and




(iv) the
      proceeds of such Loans shall be used only as permitted under the Credit
      Agreement.




B-1-1




The
      Borrowers hereby instruct the Administrative Agent to apply the proceeds of
      Term
      Loan B Loans available to the Borrowers on the Funding Date to make transfers
      in
      the amounts and to the accounts specified in Schedule A hereto and agree that
      (i) such Term Loan B Loans will be fully disbursed and borrowed for purposes
      of
      the Credit Agreement as of the Funding Date upon the initiation of such
      transfers by the Administrative Agent (whether or not such transfers are
      completed or value is received therefor by the Borrowers), (ii) such transfers
      are being made at the instruction and risk of the Borrowers and (iii) the
      provisions of this Borrowing Request and Schedule A hereto may be changed only
      by a written agreement signed by the Borrowers and the Administrative
      Agent.




B-1-2


Pursuant
      to Section
      4.02 of the
      Credit Agreement, in the event of the failure to borrow any Term Loan B
      Obligation on the Funding Date, the Borrowers shall compensate each applicable
      Lender for the loss, cost and expense attributable to such event.




**JAMES
                RIVER COAL COMPANY**,
              as
                Administrative BorrowerBy:Title:




B-1-3




**EXHIBIT
      C-1**


**TO
      TERM CREDIT AGREEMENT**




[FORM
      OF]
      COLLATERAL ACCESS AGREEMENT




This
      COLLATERAL ACCESS AGREEMENT (this “ Agreement ”)
      is
      given this _____ day of _______________, 2007, by ___________, a ___________
      (“ Landlord ”)
      and
      ____________________a _________ (“ Tenant ”)
      in
      favor of _________________, as collateral agent for the Lenders under the Credit
      Agreement described below (together with its successors and permitted assigns,
      “ Agent ”),
      for
      the benefit of the Secured Creditors under such Credit Agreement (the
“ Lenders ”).


BACKGROUND




A.  Landlord
      and Tenant are parties to that certain __________ Lease dated ____________
      (as
      amended, supplemented or otherwise modified from time to time, the “ Lease ”).




B.  Tenant
      is
      a direct or indirect subsidiary entity of James River Coal Company
      (“ Borrower ”).




C.  Borrower,
      together with other related parties, is entering into a Credit Agreement (as
      the
      same may be amended, restated or refinanced from time to time, the “ Credit
      Agreement ”)
      with
      Agent, acting for itself and as Administrative Agent for the other Lenders
      that
      are also parties to the Credit Agreement.




D.  The
      Credit Agreement requires that Tenant pledge and grant a security interest
      to
      Agent in, among other things, all of Tenant’s accounts, inventory, general
      intangibles, documents, chattel paper, instruments, machinery, equipment,
      furniture and fixtures, including without limitation all tipples, conveyor
      belts
      and systems, loading and coal washing facilities and railroad tracks and all
      other surface or subsurface machinery, equipment, fixtures, facilities and
      other
      property of whatsoever kind or nature now or hereafter located on or under
      any
      of the premises under the Lease(the “ Premises ”)
      which
      are used or useful for the mining, gathering, extraction, loading, production,
      treatment, processing, storage or transportation of coal and other minerals,
      together with all other tangible property of any kind or character, together
      with all replacements thereof, together with all additions, accessions,
      substitutions, replacements and improvements to, and proceeds of, the foregoing
      (all of foregoing, the “ Collateral ”).




C-1-1




Intending
      to be legally bound, Landlord hereby covenants and agrees with Agent as
      follows:




1. Lease .
      The
      Lease is in full force and effect. To the knowledge of Landlord, no default
      exists under the Lease. A true and correct copy of the Lease is attached to
      this
      Agreement as Exhibit A.




2. Notices
      to Agent .
      If any
      default or event shall occur under the Lease which would be grounds for Landlord
      to terminate the Lease, and Landlord sends a written notice to Tenant, Landlord
      shall at the same time provide a copy of such notice to Agent.




3. Waiver
      of Liens .
      Landlord waives any interest in the Collateral and agrees not to distrain or
      levy upon any Collateral or to assert any lien, right of distraint or other
      claim against the Collateral for any reason. Landlord agrees that the Collateral
      may be stored, utilized, and/or installed at the Premises and shall not be
      deemed a fixture or part of the real estate but shall at all times be considered
      personal property, whether or not any Collateral becomes so related to the
      real
      estate that an interest therein would otherwise arise under applicable
      law.




C-1-2




4. Access
      and Opportunity to Cure .
      (a) Agent may, at any time or times hereafter, without any fee or charge
      for rent or otherwise, enter upon the Premises to inspect the Collateral and
      Tenant’s other assets located on the Premises. Agent shall have the right, but
      not the obligation, to cure Tenant’s defaults under the Lease; *provided* ,
      that
      Agent shall have at least thirty (30) days following receipt of written notice
      of default to cure such default (or to commence the cure thereof, as provided
      below) before the Lease terminates or Landlord takes any action to terminate
      the
      Lease or otherwise to exercise its rights and remedies under the Lease in
      respect of such default.




(b) Landlord
      will accept performance by or on behalf of Agent as if it were done by Tenant.
      During such cure period, the Agent shall have the right to (i) notify
      Landlord of Agent’s desire to cure Tenant’s default and to nullify any notice of
      any such default, (ii) pay or cause to be paid all amounts due and payable
      under the Lease (whether in the form of tonnage royalties, minimum annual
      royalty or otherwise), and (iii) comply or in good faith, with reasonable
      diligence, commence to remedy any Tenant default under the Lease, which is
      reasonably susceptible of being remedied by Agent.




(c) Agent
      shall have the right to access the Premises and take possession of, sale and/or
      remove collateral securing Tenant’s obligations so long as (i) Agent pays
      the rent and other charges payable under the Lease for such period during which
      Agent remains on the Premises and Agent assumes Tenant’s responsibilities under
      the Lease which arise during such period Agent remains on the Premises, and
      (ii) Agent shall repair any damage to the Premises directly resulting from
      its possession thereof. Notwithstanding anything to the contrary herein, Agent
      shall at no time have any obligation to remove the Collateral from the Premises
      and nothing shall obligate Agent to pay any amounts due or perform any
      obligations of Tenant under the Lease.




C-1-3




5. Amendments
      to Lease .
      Landlord will promptly deliver to Agent a copy of any amendment or other
      modification to the Lease.




6. Memorandum
      of Lease .
      Upon
      request from Tenant or Agent, Landlord shall execute a Memorandum of Lease
      in
      form and substance reasonably acceptable to Landlord and Agent and as otherwise
      sufficient for recordation in the county real estate records where the property
      subject to the Lease is located.




7. Remedies
      under Credit Agreement .
      Landlord understands that upon a default under the Credit Agreement, the
      enforcement of the rights and legal remedies of Agent under the Credit Agreement
      could result in the Lease being sold and assigned to a third party chosen by
      Agent. Landlord confirms that such an assignment or transfer of the Lease will
      not be a default under the Lease, including an assignment or transfer of the
      Lease to Agent or any Lender, or
      any
      nominee of Agent or a  Lender, in
      connection with any exercise of any judicial or other remedies available to
      the
      Agent or the Lenders following a default under the Loan, including without
      limitation the appointment by a court of a receiver to assume possession and/or
      operation of the Premises and a transfer resulting from an order given in a
      bankruptcy, reorganization, insolvency or similar proceeding.




8. Reliance;
      Binding Effect .
      Agent
      and the Lenders and their respective successors and assigns shall be permitted
      to rely upon and enforce this Agreement, which shall not be amended, modified
      or
      revoked without Agent’s prior written consent and shall be third-party
      beneficiaries hereof. This Agreement will be binding upon the successors and
      assigns of the parties.




C-1-4




9. Notices .
      Notices
      to the Agent and any Lender shall be sent to the Agent by certified mail or
      reputable overnight delivery service at Agent’s address on the first page
      hereof, Attention __________ (as such address may be changed by notice to
      Landlord).




10. Governing
      Jurisdiction .
      This
      Agreement shall be governed by and shall be construed and enforced in accordance
      with the internal laws of the state of jurisdiction for the Lease.




11. Continuing
      Obligation .
      This
      Agreement shall continue until such time as all of the obligations of Tenant
      with respect to the Loan have been paid and performed in full, and all
      commitments of all Lenders under all loan documents in connection with the
      Credit Agreement have been terminated and the Landlord has been notified thereof
      in writing by Agent.




12. Counterparts
      and Facsimile Signatures .  This
      Agreement may be executed in any number of counterparts, by different parties
      hereto in separate counterparts and by facsimile signature, each of which when
      so executed and delivered shall be deemed to be an original and all of which
      taken together shall constitute but one and the same agreement.




[REMAINDER
      OF THIS PAGE IS LEFT BLANK INTENTIONALLY]




C-1-5


IN
      WITNESS WHEREOF, Landlord and Tenant have executed this Agreement, intending
      to
      be legally bound, as of the date set forth above:


LANDLORD:By:Name:
              Title:






Accepted:




AGENT:[_______________]By:Name:
              Title:





C-1-6


ACKNOWLEDGEMENT






STATE OF __________
            )) ss.:COUNTY OF _________
            )





On
      ____________________, before me, ____________________________ __________, a
      notary public, personally appeared __________________________________,
      personally known to me (or proved to me on the basis of satisfactory evidence)
      to be the person(s) whose name(s) is/are subscribed to the within instrument
      and
      acknowledged to me that he/she/they executed the same in his/her/their
      authorized capacity(ies), and that by his/her/their signature(s) on the
      instrument the person(s), or the entity upon behalf of which the person(s)
      acted, executed the instrument.


WITNESS
      my hand and official seal.


Notary
                Public
              
              Print
                Name:


A
      resident of ______________ County




State
      of
      _____________





My
      commission expires:





_________________________


(Space
      above for official notarial seal)





C-1-7


ACKNOWLEDGEMENT


STATE OF __________
              )) ss.:COUNTY OF _________
              )


On
      ____________________, before me, ____________________________ __________, a
      notary public, personally appeared __________________________________,
      personally known to me (or proved to me on the basis of satisfactory evidence)
      to be the person(s) whose name(s) is/are subscribed to the within instrument
      and
      acknowledged to me that he/she/they executed the same in his/her/their
      authorized capacity(ies), and that by his/her/their signature(s) on the
      instrument the person(s), or the entity upon behalf of which the person(s)
      acted, executed the instrument.


WITNESS
      my hand and official seal.


Notary
                  Public
                
                Print
                  Name:


A
      resident of ______________ County




State
      of
      _____________





My
      commission expires:





_________________________


(Space
      above for official notarial seal)





C-1-8


**EXHIBIT
      C-2**


**TO
      TERM CREDIT AGREEMENT**




[FORM
      OF]
      COMPLIANCE CERTIFICATE




[DATE]




THE
      UNDERSIGNED HEREBY CERTIFIES SOLELY IN HIS CAPACITY AS THE [CHIEF
      FINANCIAL OFFICER]/[CHIEF ACCOUNTING OFFICER] OF JAMES
      RIVER COAL COMPANY AS
      FOLLOWS:




1.  I
      am the
      [Chief Financial Officer]/[Chief Accounting Officer] of **JAMES
      RIVER COAL COMPANY.**




2.  I
      have
      reviewed the terms of that certain Term Credit Agreement, dated as of February
      26, 2007 (as it may be amended, supplemented or otherwise modified, the
“ Credit
      Agreement ”;
      the
      terms defined therein and not otherwise defined herein being used herein as
      therein defined), by and among **JAMES
      RIVER COAL COMPANY** and
      certain of its Subsidiaries identified as borrowers on the signature pages
      thereto **** (collectively,
      the “ Borrowers ”),
      and
      certain other Credit Parties party thereto from time to time, as Guarantors,
      the
      Lenders party thereto from time to time, **MORGAN
      STANLEY SENIOR FUNDING, INC.** ,
      as
      Administrative Agent, Sole Bookrunner and Lead Arranger and **MORGAN
      STANLEY & CO. INCORPORATED** ,
      as
      Collateral Agent, and the other Loan Documents thereunder, and I have made,
      or
      have caused to be made under my supervision, a review in reasonable detail
      of
      the transactions and consolidated financial condition of the Borrowers and
      their
      respective Subsidiaries during the accounting period covered by the attached
      financial statements.




3.  The
      attached financial statements for the Fiscal Month or Fiscal Quarter, as the
      case may be, ended [ **mm/dd/yy** ]
      are
      prepared in accordance with GAAP. Attached as Annex C-2 is (a) a detailed
      listing of all Asset Dispositions made pursuant to Section
      9.04(j) of the
      Credit Agreement, all Permitted Investments made pursuant to Section
      9.07 of the
      Credit Agreement, all Sales and Leasebacks made pursuant to Section
      9.08 of the
      Credit Agreement and all Restricted Payments made pursuant to Section
      9.17 of the
      Credit Agreement, together with cumulative calculations of the amount of all
      such transactions since the Closing Date and (b) a calculation of compliance
      with Sections
      10.01 , 10.02 and 10.03 of the
      Credit Agreement, including a reconciliation of the applicable items to the
      financial statements being delivered herewith. The Credit Parties have paid
      all
      premiums, contributions and other payments required to be made under the Coal
      Act and the Black Lung Act (each as defined in the Credit Agreement) as and
      when
      due, in each case except to the extent subject to a Permitted Protest (as
      defined in the Credit Agreement).




C-2-1


The
      foregoing certifications, together with the financial statements delivered
      with
      this Certificate in support hereof, are made and delivered as of the date hereof
      pursuant to Section 7.01(d) of the
      Credit Agreement.


**JAMES
                RIVER COAL COMPANY**,
              as
                Administrative BorrowerBy:Title:





C-2-2




**EXHIBIT
      N-1**


**TO
      TERM CREDIT AGREEMENT**




[FORM
      OF] NOTE




$ **[___,___,___]**


**[mm/dd/yy]**
            New York, New
              York





**FOR
      VALUE RECEIVED, JAMES RIVER COAL COMPANY** ,
      a
      corporation formed under the laws of the State of Virginia, and certain of
      its
      Subsidiaries (the “ Borrowers ”),
      promise to pay **[NAME
      OF LENDER]** ( **“** Payee **”** )
      or its
      registered assigns the principal amount of **DOLLARS
      _______________________________** ($ **[___,___,___]** )
      in the
      installments referred to below.




The
      Borrowers also promise to pay interest on the unpaid principal amount hereof,
      from the date hereof until paid in full, at the rates and at the times which
      shall be determined in accordance with the provisions of that certain Term
      Credit Agreement, dated as of February 26, 2007 (as it may be amended,
      supplemented or otherwise modified, the “ Credit
      Agreement ”;
      the
      terms defined therein and not otherwise defined herein being used herein as
      therein defined), by and among the Borrowers and certain other Credit Parties
      party thereto from time to time, as Guarantors, the Lenders party thereto from
      time to time, **MORGAN
      STANLEY SENIOR FUNDING, INC.** ,
      as
      Administrative Agent, Sole Bookrunner and Lead Arranger and **MORGAN
      STANLEY & CO. INCORPORATED** ,
      as
      Collateral Agent.




The
      Borrowers shall make scheduled installments of principal payments on this Note
      as set forth in Section
      2.01(e) of the
      Credit Agreement.




All
      cash
      payments of principal and interest in respect of this Note shall be made in
      lawful money of the United States of America in same day funds at the
      Administrative Agent’s Office or at such other place as shall be designated in
      writing for such purpose in accordance with the terms of the Credit Agreement.
      Unless and until an Assignment and Acceptance effecting the assignment or
      transfer of the obligations evidenced hereby shall have been accepted by
      Administrative Agent and recorded in the Register, the Borrowers, each Agent
      and
      Lender shall be entitled to deem and treat Payee as the owner and holder of
      this
      Note and the obligations evidenced hereby. Payee hereby agrees, by its
      acceptance hereof, that before disposing of this Note or any part hereof it
      will
      make a notation hereon of all principal payments previously made hereunder
      and
      of the date to which interest hereon has been paid; provided ,
      the
      failure to make a notation of any payment made on this Note shall not limit
      or
      otherwise affect the obligations of the Borrowers hereunder with respect to
      payments of principal of or interest on this Note.




This
      Note
      is subject to mandatory prepayment and to prepayment at the option of the
      Borrowers, each as provided in the Credit Agreement.




N-1-1




THIS
      NOTE
      AND THE RIGHTS AND OBLIGATIONS OF THE BORROWERS AND PAYEE HEREUNDER SHALL BE
      GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS
      OF
      THE STATE OF NEW YORK.




Upon
      the
      occurrence of an Event of Default, the unpaid balance of the principal amount
      of
      this Note, together with all accrued and unpaid interest thereon, may become,
      or
      may be declared to be, due and payable in the manner, upon the conditions and
      with the effect provided in the Credit Agreement.




The
      terms
      of this Note are subject to amendment only in the manner provided in the Credit
      Agreement.




The
      Borrowers promise to pay all costs and expenses, including reasonable attorneys’
fees, all as provided in the Credit Agreement, incurred in the collection and
      enforcement of this Note.




N-1-2


**IN
      WITNESS WHEREOF** ,
      the
      Borrowers have caused this Note to be duly executed and delivered by its officer
      thereunto duly authorized as of the date and at the place first written
      above.




**JAMES
                RIVER COAL COMPANY**By:Title:




N-1-3




**JAMES
                RIVER COAL SERVICE COMPANY**By:Title:




N-1-4




**LEECO,
                INC.**By:Title:




N-1-5




**TRIAD
                MINING, INC.**By:Title:




N-1-6


**TRIAD
                  UNDERGROUND MINING, LLC**By:Title:
 
 N-1-7
  **BLEDSOE
                        COAL CORPORATION**By:Title:
 N-1-8
  **JOHNS
                                CREEK ELKHORN COAL CORPORATION**By:Title:




N-1-9




**BELL
                            COUNTY COAL CORPORATION**By:Title:
 
 N-1-10
 **JAMES
                                RIVER COAL SALES, INC.**By:Title:
 
 N-1-11
  **BLEDSOE
                                    COAL LEASING COMPANY**By:Title:
 
 N-1-12
  **BLUE
                                        DIAMOND COAL COMPANY**By:Title:
 N-1-13
  **MCCOY
                                              ELKHORN COAL CORPORATION**By:Title:


N-1-14




**EXHIBIT
      N-2**


**TO
      TERM CREDIT AGREEMENT**




[FORM
      OF]
      NOTICE OF CONVERSION/CONTINUATION




Reference
      is made to the Term Credit Agreement, dated as of February 26, 2007 (as it
      may
      be amended, supplemented or otherwise modified, the “ Credit
      Agreement ”;
      the
      terms defined therein and not otherwise defined herein being used herein as
      therein defined), by and among **JAMES
      RIVER COAL COMPANY** and
      certain of its Subsidiaries identified as borrowers on the signature pages
      thereto **** (collectively,
      the “ Borrowers ”),
      and
      certain other Credit Parties party thereto from time to time, as Guarantors,
      the
      Lenders party thereto from time to time, **MORGAN
      STANLEY SENIOR FUNDING, INC.** ,
      as
      Administrative Agent, Sole Bookrunner and Lead Arranger and **MORGAN
      STANLEY & CO. INCORPORATED** ,
      as
      Collateral Agent.




Pursuant
      to Section 4.01(d) of the
      Credit Agreement, the Borrowers desire to convert or to continue the following
      Loans, each such conversion and/or continuation to be effective as of **[mm/dd/yy]** :




$**[___,___,___]**
            
            LIBOR
                Rate Loans to be continued with LIBOR of ____ month(s)$**[___,___,___]**
            
            Base
                Rate Loans to be converted to LIBOR Rate Loans with LIBOR of ____
                month(s)$**[___,___,___]**
            
            LIBOR
                Rate Loans to be converted to Base Rate
                Loans




The
      Administrative Borrower hereby certifies, on behalf of itself and the other
      Credit Parties, that as of the date hereof, no event has occurred and is
      continuing that would constitute an Event of Default or a Default.




Date:
                [mm/dd/yy]
            **JAMES
                RIVER COAL COMPANY**,
              as
                Administrative BorrowerBy:Title:


N-2-1


**EXHIBIT
      O-1**


**TO
      TERM CREDIT AGREEMENT**




[FORM
      OF]
      OFFICER’S CERTIFICATE




THE
      UNDERSIGNED HEREBY CERTIFIES SOLELY IN HIS CAPACITY AS AN AUTHORIZED OFFICER
      OF
      JAMES RIVER COAL COMPANY AS FOLLOWS:




1. I
      am the
      [Chief Financial Officer]/[Chief Accounting Officer] of **[JAMES
      RIVER COAL COMPANY].**




2. I
      have
      reviewed the terms of that certain Term Credit Agreement, dated as of February
      26, 2007 (as it may be amended, supplemented or otherwise modified, the
“ Credit
      Agreement ”;
      the
      terms defined therein and not otherwise defined herein being used herein as
      therein defined), by and among **JAMES
      RIVER COAL COMPANY** and
      certain of its Subsidiaries **** (the
      “ Borrowers ”),
      and
      certain other Credit Parties party thereto from time to time, as Guarantors,
      the
      Lenders party thereto from time to time, **MORGAN
      STANLEY SENIOR FUNDING, INC.** ,
      as
      Administrative Agent, Sole Bookrunner and Lead Arranger and **MORGAN
      STANLEY & CO. INCORPORATED** ,
      as
      Collateral Agent, and the other Loan Documents thereunder, and I have made,
      or
      have caused to be made under my supervision, a review in reasonable detail
      of
      the transactions and financial condition of the Borrowers and their respective
      Subsidiaries during the accounting period covered by the attached financial
      statements.




3. The
      examination described in paragraph 2 above did not disclose, and I have no
      knowledge of, the existence of any condition or event which constitutes, during
      or at the end of the accounting period covered by the attached financial
      statements or as of the date of this Certificate, an Event of Default or a
      continuing Default as of the date of this Certificate, except as set forth
      in a
      separate attachment, if any, to this Certificate, describing in detail, the
      nature of the condition or event, the period during which it has existed and
      the
      action which the Borrowers and their respective Subsidiaries have taken, are
      taking, and propose to take with respect to each such condition or
      event.




O-1-1




The
      foregoing certifications, together with the financial statements delivered
      with
      this Certificate in support hereof, are made and delivered as of the date first
      written above, pursuant to Section 7.01(d) of the
      Credit Agreement.




**JAMES
                RIVER COAL COMPANY**,
              as
                Administrative BorrowerBy:Title:




O-1-2


**EXHIBIT
      O-2**


**TO
      TERM CREDIT AGREEMENT**




[FORM
      OF]
      OFFICER’S CERTIFICATE





[DATE]





THE
      UNDERSIGNED HEREBY CERTIFIES SOLELY IN HIS CAPACITY AS AN AUTHORIZED OFFICER
      OF
      EACH OF THE UNDERSIGNED CREDIT PARTIES AS FOLLOWS:




1. I
      am the
      [Senior Officer] of each of the undersigned Credit Parties (each, a
“ Company ”).




2. I
      have
      reviewed the terms of that certain Term Credit Agreement, dated as of February
      26, 2007 (as it may be amended, supplemented or otherwise modified, the
“ Credit
      Agreement ”;
      the
      terms defined therein and not otherwise defined herein being used herein as
      therein defined), by and among **JAMES
      RIVER COAL COMPANY** and
      certain of its Subsidiaries **** identified
      as borrowers on the signature pages thereto (the “ Borrowers ”),
      and
      certain other Credit Parties party thereto from time to time, as Guarantors,
      the
      Lenders party thereto from time to time, **MORGAN
      STANLEY SENIOR FUNDING, INC.** ,
      as
      Administrative Agent, Sole Bookrunner and Lead Arranger and **MORGAN
      STANLEY & CO. INCORPORATED** ,
      as
      Collateral Agent, and the other Loan Documents thereunder, and to my knowledge
      and on behalf of each Company, all of the representations and warranties of
      each
      Company contained in the Credit Agreement or in any of the other Loan Documents
      are true and correct in all material respects on and as of the date hereof
      as if
      made on such date, that no breach of any covenant contained in Articles VIII,
      Article IX or Article X of the Credit Agreement has occurred or would result
      from the execution, delivery of and performance under the Credit Agreement
      and
      the transactions contemplated thereunder; all of the conditions set forth in Section
      5.01(p)(ii) of the
      Credit Agreement have been satisfied on such date (or shall, to the extent
      permitted by the Credit Agreement, be satisfied substantially simultaneously
      with the incurrence of Term Loan Obligations on the date hereof); there has
      been
      no repayment of Indebtedness that (i) would reduce the $125,000,000 amount
      permitted for credit facilities under Section 4.03(a)(10) of the Indenture,
      or (ii) would reduce the $10,000,000 amount permitted for credit facilities
      under Section 4.03(a)(1) of the Indenture or specify such amounts; and
      there is no other Indebtedness that would reduce the permitted amounts or
      specify all such amounts (other than Indebtedness that is subject to the
      Indenture Reserve).




O-2-1


The
      foregoing certifications, together with the financial statements delivered
      with
      this Certificate in support hereof, are made and delivered as of the date set
      forth above, pursuant to Section 5.01(p)(ii) of the
      Credit Agreement.




**ADMINISTRATIVE
                BORROWER**
              
              **JAMES
                RIVER COAL COMPANY**By:Title:
                Vice President




O-2-2




**BORROWERS**
                
                **JAMES
                    RIVER COAL SERVICE COMPANY**
                  **LEECO,
                    INC.**
                  **TRIAD
                    MINING, INC.**
                  **TRIAD
                    UNDERGROUND MINING, LLC**
                  **BLEDSOE
                    COAL CORPORATION**
                  **JOHNS
                    CREEK ELKHORN COAL CORPORATION**
                  **BELL
                    COUNTY COAL CORPORATION**
                  **JAMES
                    RIVER COAL SALES, INC.**
                  **BLEDSOE
                    COAL LEASING COMPANY**
                  **BLUE
                    DIAMOND COAL COMPANY**
                  **MCCOY
                    ELKHORN COAL CORPORATION**By:Title:
              Vice
                  President on behalf of each of the above
                  entities
 
 O-2-3
  **GUARANTORS**
                
                **JOHNS
                  CREEK PROCESSING COMPANY**
                **JOHNS
                  CREEK COAL COMPANY**
                **SHAMROCK
                  COAL COMPANY, INCORPORATED**
                **EOLIA
                  RESOURCES, INC.**
                **BDCC
                  HOLDING COMPANY, INC.**By:Title:
              Vice
                  President on behalf of each of the above
                  entities
  O-2-4