exv10w1






Exhibit 10.1




EXECUTION VERSION




$100,000,000 REVOLVING CREDIT FACILITY

CREDIT AGREEMENT




by and among




THE NORTH AMERICAN COAL CORPORATION




and




THE LENDERS PARTY HERETO




and




U.S. BANK NATIONAL ASSOCIATION and REGIONS BANK, as Co-Syndication Agents




and




PNC BANK, NATIONAL ASSOCIATION, as Administrative Agent




Dated as of October 27, 2009




 









 





TABLE OF CONTENTS




	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	Page
	1.	 	CERTAIN DEFINITIONS	 	1
	 	 	1.1	 	Certain Definitions	 	1
	 	 	1.2	 	Construction	 	22
	 	 	1.3	 	Accounting Principles	 	23
	 
	 	 	 	 	 	 	 	 
	2.	 	REVOLVING CREDIT AND SWING LOAN FACILITIES	 	23
	 	 	2.1	 	Revolving Credit Commitments	 	23
	 
	 	 	 	2.1.1	 	Revolving Credit Loans	 	23
	 
	 	 	 	2.1.2	 	Swing Loan Commitment	 	24
	 	 	2.2	 	Nature of Lenders’ Obligations with Respect to Revolving Credit Loans	 	24
	 	 	2.3	 	Commitment Fees	 	24
	 	 	2.4	 	[Intentionally Omitted]	 	24
	 	 	2.5	 	Revolving Credit Loan Requests; Swing Loan Requests	 	25
	 
	 	 	 	2.5.1	 	Revolving Credit Loan Requests	 	25
	 
	 	 	 	2.5.2	 	Swing Loan Requests	 	25
	 	 	2.6	 	Making Revolving Credit Loans and Swing Loans; Presumptions by the
Administrative Agent; Repayment of Revolving Credit Loans; Borrowings to Repay
Swing Loans	 	25
	 
	 	 	 	2.6.1	 	Making Revolving Credit Loans	 	25
	 
	 	 	 	2.6.2	 	Presumptions by the Administrative Agent	 	26
	 
	 	 	 	2.6.3	 	Making Swing Loans	 	26
	 
	 	 	 	2.6.4	 	Repayment of Revolving Credit Loans	 	26
	 
	 	 	 	2.6.5	 	Borrowings to Repay Swing Loans	 	26
	 	 	2.7	 	Notes	 	27
	 	 	2.8	 	Use of Proceeds	 	27
	 	 	2.9	 	Letter of Credit Subfacility	 	27
	 
	 	 	 	2.9.1	 	Issuance of Letters of Credit	 	27
	 
	 	 	 	2.9.2	 	Letter of Credit Fees	 	28
	 
	 	 	 	2.9.3	 	Disbursements, Reimbursement	 	28
	 
	 	 	 	2.9.4	 	Repayment of Participation Advances	 	29
	 
	 	 	 	2.9.5	 	Documentation	 	30
	 
	 	 	 	2.9.6	 	Determinations to Honor Drawing Requests	 	30
	 
	 	 	 	2.9.7	 	Nature of Participation and Reimbursement Obligations	 	30
	 
	 	 	 	2.9.8	 	Indemnity	 	32
	 
	 	 	 	2.9.9	 	Liability for Acts and Omissions	 	32
	 
	 	 	 	2.9.10	 	Issuing Lender Reporting Requirements	 	33
	 	 	2.10	 	Reduction of Revolving Credit Commitment 	 	34
	 	 	2.11	 	Increase in Revolving Credit Commitments 	 	34
	 
	 	 	 	2.11.1	 	Increasing Lenders and New Lenders	 	34
	 
	 	 	 	2.11.2	 	Treatment of Outstanding Loans and Letters of Credit	 	35






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	 	 	 	 	 	 	 	 	Page
	3.	 	[INTENTIONALLY OMITTED]	 	35
	 
	 	 	 	 	 	 	 	 
	4.	 	INTEREST RATES	 	35
	 	 	4.1	 	Interest Rate Options	 	35
	 
	 	 	 	4.1.1	 	Revolving Credit Interest Rate Options; Swing Line Interest Rate	 	36
	 
	 	 	 	4.1.2	 	Rate Quotations	 	36
	 	 	4.2	 	Interest Periods	 	36
	 
	 	 	 	4.2.1	 	Amount of Borrowing Tranche	 	36
	 
	 	 	 	4.2.2	 	Renewals	 	36
	 	 	4.3	 	Interest After Default	 	36
	 
	 	 	 	4.3.1	 	Letter of Credit Fees, Interest Rate	 	37
	 
	 	 	 	4.3.2	 	Other Obligations	 	37
	 
	 	 	 	4.3.3	 	Acknowledgment	 	37
	 	 	4.4	 	LIBOR Rate Unascertainable; Illegality; Increased Costs; Deposits
Not Available	 	37
	 
	 	 	 	4.4.1	 	Unascertainable	 	37
	 
	 	 	 	4.4.2	 	Illegality; Increased Costs; Deposits Not Available	 	37
	 
	 	 	 	4.4.3	 	Administrative Agent’s and Lender’s Rights	 	37
	 	 	4.5	 	Selection of Interest Rate Options	 	38
	 
	 	 	 	 	 	 	 	 
	5.	 	PAYMENTS	 	38
	 	 	5.1	 	Payments	 	38
	 	 	5.2	 	Pro Rata Treatment of Lenders	 	39
	 	 	5.3	 	Sharing of Payments by Lenders	 	39
	 	 	5.4	 	Presumptions by Administrative Agent	 	40
	 	 	5.5	 	Interest Payment Dates	 	40
	 	 	5.6	 	Voluntary Prepayments	 	41
	 
	 	 	 	5.6.1	 	Right to Prepay	 	41
	 
	 	 	 	5.6.2	 	Replacement of a Lender	 	41
	 	 	5.7	 	[Intentionally Omitted]	 	42
	 	 	5.8	 	Increased Costs	 	42
	 
	 	 	 	5.8.1	 	Increased Costs Generally	 	42
	 
	 	 	 	5.8.2	 	Capital Requirements	 	43
	 
	 	 	 	5.8.3	 	Certificates for Reimbursement; Repayment of Outstanding Loans; Borrowing of New Loans	 	43
	 
	 	 	 	5.8.4	 	Delay in Requests	 	43
	 	 	5.9	 	Taxes	 	43
	 
	 	 	 	5.9.1	 	Payments Free of Taxes	 	43
	 
	 	 	 	5.9.2	 	Payment of Other Taxes by the Borrower	 	44
	 
	 	 	 	5.9.3	 	Indemnification by the Borrower	 	44
	 
	 	 	 	5.9.4	 	Evidence of Payments	 	44
	 
	 	 	 	5.9.5	 	Status of Lenders	 	44
	 	 	5.10	 	Indemnity	 	45
	 	 	5.11	 	Settlement Date Procedures	 	46






ii









 






	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	Page
	6.	 	REPRESENTATIONS AND WARRANTIES	 	46
	 	 	6.1	 	Representations and Warranties	 	46
	 	 	 	 	6.1.1	 	Organization and Qualification; Power and Authority;
Compliance With Laws; Title to Properties; Event of Default	 	46
	 
	 	 	 	6.1.2	 	Subsidiaries and Owners; Investment Companies	 	47
	 
	 	 	 	6.1.3	 	Validity and Binding Effect	 	47
	 
	 	 	 	6.1.4	 	No Conflict; Material Contracts; Consents	 	47
	 
	 	 	 	6.1.5	 	Litigation	 	48
	 
	 	 	 	6.1.6	 	Financial Statements	 	48
	 
	 	 	 	6.1.7	 	Margin Stock	 	49
	 
	 	 	 	6.1.8	 	Full Disclosure	 	49
	 
	 	 	 	6.1.9	 	Taxes	 	49
	 
	 	 	 	6.1.10	 	Patents, Trademarks, Copyrights, Licenses, Etc	 	49
	 
	 	 	 	6.1.11	 	Employment Matters	 	49
	 
	 	 	 	6.1.12	 	Insurance	 	50
	 
	 	 	 	6.1.13	 	ERISA Compliance	 	50
	 
	 	 	 	6.1.14	 	Environmental Matters	 	51
	 
	 	 	 	6.1.15	 	Title to Property	 	52
	 
	 	 	 	6.1.16	 	Solvency	 	53
	 
	 	 	 	6.1.17	 	Coal Act; Black Lung Act	 	53
	 
	 	 	 	6.1.18	 	Bonding Capacity	 	53
	 
	 	 	 	6.1.19	 	Permit Blockage	 	53
	 	 	6.2	 	Updates to Schedules	 	53
	 
	 	 	 	 	 	 	 	 
	7.	 	CONDITIONS OF LENDING AND ISSUANCE OF LETTERS OF CREDIT	 	53
	 	 	7.1	 	First Loans and Letters of Credit	 	54
	 
	 	 	 	7.1.1	 	Deliveries	 	54
	 
	 	 	 	7.1.2	 	Payment of Fees	 	55
	 	 	7.2	 	Each Loan or Letter of Credit	 	55
	 
	 	 	 	 	 	 	 	 
	8.	 	COVENANTS	 	55
	 	 	8.1	 	Affirmative Covenants	 	55
	 
	 	 	 	8.1.1	 	Preservation of Existence, Etc	 	55
	 
	 	 	 	8.1.2	 	Payment of Liabilities, Including Taxes, Etc	 	55
	 
	 	 	 	8.1.3	 	Maintenance of Insurance	 	56
	 
	 	 	 	8.1.4	 	Maintenance of Properties and Leases	 	56
	 
	 	 	 	8.1.5	 	Visitation Rights	 	56
	 
	 	 	 	8.1.6	 	Keeping of Records and Books of Account	 	56
	 
	 	 	 	8.1.7	 	Compliance with Laws; Use of Proceeds	 	56
	 
	 	 	 	8.1.8	 	Anti-Terrorism Laws	 	57
	 
	 	 	 	8.1.9	 	Maintenance of Material Contracts	 	57
	 
	 	 	 	8.1.10	 	Maintenance of Licenses, Etc	 	57
	 
	 	 	 	8.1.11	 	Maintenance of Permits	 	57
	 	 	8.2	 	Negative Covenants	 	57
	 
	 	 	 	8.2.1	 	Indebtedness	 	57
	 
	 	 	 	8.2.2	 	Liens, Etc	 	58






iii









 






	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	Page
	 
	 	 	 	8.2.3	 	Guaranties	 	59
	 
	 	 	 	8.2.4	 	Loans and Investments	 	59
	 
	 	 	 	8.2.5	 	Dividends and Related Distributions	 	61
	 
	 	 	 	8.2.6	 	Liquidations, Mergers, Consolidations, Acquisitions	 	61
	 
	 	 	 	8.2.7	 	Dispositions of Assets or Subsidiaries	 	61
	 
	 	 	 	8.2.8	 	Affiliate Transactions	 	63
	 
	 	 	 	8.2.9	 	Subsidiaries, Partnerships and Joint Ventures	 	63
	 
	 	 	 	8.2.10	 	Continuation of or Change in Business	 	63
	 
	 	 	 	8.2.11	 	Fiscal Year	 	63
	 
	 	 	 	8.2.12	 	Issuance of Stock	 	64
	 
	 	 	 	8.2.13	 	Changes in Organizational Documents	 	64
	 
	 	 	 	8.2.14	 	Negative Pledges	 	64
	 
	 	 	 	8.2.15	 	Amendments to Senior Note Purchase Agreements	 	64
	 
	 	 	 	8.2.16	 	Maximum Debt/EBITDA Ratio	 	65
	 
	 	 	 	8.2.17	 	Minimum Interest Coverage Ratio	 	65
	 	 	8.3	 	Reporting Requirements	 	65
	 
	 	 	 	8.3.1	 	Quarterly Financial Statements	 	65
	 
	 	 	 	8.3.2	 	Annual Financial Statements	 	65
	 
	 	 	 	8.3.3	 	Certificate of the Borrower	 	65
	 
	 	 	 	8.3.4	 	Notices	 	65
	 
	 	 	 	 	 	 	 	 
	9.	 	DEFAULT	 	66
	 	 	9.1	 	Events of Default	 	66
	 
	 	 	 	9.1.1	 	Payments Under Loan Documents	 	66
	 
	 	 	 	9.1.2	 	Breach of Warranty	 	67
	 
	 	 	 	9.1.3	 	Breach of Negative Covenants or Visitation Rights	 	67
	 
	 	 	 	9.1.4	 	Breach of Other Covenants	 	67
	 
	 	 	 	9.1.5	 	Defaults in Other Agreements or Indebtedness	 	67
	 
	 	 	 	9.1.6	 	Final Judgments or Orders	 	67
	 
	 	 	 	9.1.7	 	Loan Document Unenforceable	 	67
	 
	 	 	 	9.1.8	 	[Intentionally Omitted]	 	67
	 
	 	 	 	9.1.9	 	Events Relating to Plans and Benefit Arrangements	 	67
	 
	 	 	 	9.1.10	 	Change in Control	 	68
	 
	 	 	 	9.1.11	 	Relief Proceedings	 	68
	 	 	9.2	 	Consequences of Event of Default	 	68
	 
	 	 	 	9.2.1	 	Events of Default Other Than Bankruptcy, Insolvency or	 	 
	 
	 	 	 	 	 	Reorganization Proceedings	 	68
	 
	 	 	 	9.2.2	 	Bankruptcy, Insolvency or Reorganization Proceedings	 	68
	 
	 	 	 	9.2.3	 	Set-off	 	68
	 
	 	 	 	9.2.4	 	Application of Proceeds	 	69
	 
	 	 	 	 	 	 	 	 
	10.	 	THE ADMINISTRATIVE AGENT	 	69
	 	 	10.1	 	Appointment and Authority	 	69
	 	 	10.2	 	Rights as a Lender	 	70
	 	 	10.3	 	Exculpatory Provisions	 	70
	 	 	10.4	 	Reliance by Administrative Agent	 	71






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	 	 	 	 	 	 	 	 	Page
	 	 	10.5	 	Delegation of Duties	 	71
	 	 	10.6	 	Resignation of Administrative Agent	 	71
	 	 	10.7	 	Non-Reliance on Administrative Agent and Other Lenders	 	72
	 	 	10.8	 	No Other Duties, etc	 	72
	 	 	10.9	 	Administrative Agent’s Fee	 	72
	 	 	10.10	 	No Reliance on Administrative Agent’s Customer Identification Program	 	73
	 
	 	 	 	 	 	 	 	 
	11.	 	MISCELLANEOUS	 	73
	 	 	11.1	 	Modifications, Amendments or Waivers	 	73
	 
	 	 	 	11.1.1	 	Increase of Commitment	 	73
	 
	 	 	 	11.1.2	 	Extension of Payment; Reduction of Principal Interest or Fees; Modification of Terms of Payment	 	73
	 
	 	 	 	11.1.3	 	Miscellaneous	 	73
	 	 	11.2	 	No Implied Waivers; Cumulative Remedies	 	74
	 	 	11.3	 	Expenses; Indemnity; Damage Waiver	 	74
	 
	 	 	 	11.3.1	 	Costs and Expenses	 	74
	 
	 	 	 	11.3.2	 	Indemnification by the Borrower	 	74
	 
	 	 	 	11.3.3	 	Reimbursement by Lenders	 	75
	 
	 	 	 	11.3.4	 	Waiver of Consequential Damages, Etc	 	75
	 
	 	 	 	11.3.5	 	Payments	 	75
	 	 	11.4	 	Holidays.	 	75
	 	 	11.5	 	Notices; Effectiveness; Electronic Communication	 	76
	 
	 	 	 	11.5.1	 	Notices Generally	 	76
	 
	 	 	 	11.5.2	 	Electronic Communications	 	76
	 
	 	 	 	11.5.3	 	Change of Address, Etc	 	77
	 	 	11.6	 	Severability	 	77
	 	 	11.7	 	Duration; Survival	 	77
	 	 	11.8	 	Successors and Assigns	 	77
	 
	 	 	 	11.8.1	 	Successors and Assigns Generally	 	77
	 
	 	 	 	11.8.2	 	Assignments by Lenders	 	77
	 
	 	 	 	11.8.3	 	Register	 	79
	 
	 	 	 	11.8.4	 	Participations	 	79
	 
	 	 	 	11.8.5	 	Limitations upon Participant Rights Successors and Assigns Generally	 	80
	 
	 	 	 	11.8.6	 	Certain Pledges; Successors and Assigns Generally	 	80
	 	 	11.9	 	Confidentiality	 	80
	 
	 	 	 	11.9.1	 	General	 	80
	 
	 	 	 	11.9.2	 	Sharing Information With Affiliates of the Lenders	 	80
	 	 	11.10	 	Counterparts; Integration; Effectiveness	 	81
	 
	 	 	 	11.10.1	 	Counterparts; Integration; Effectiveness	 	81
	 	 	11.11	 	CHOICE OF LAW; SUBMISSION TO JURISDICTION; WAIVER OF VENUE;
SERVICE OF PROCESS; WAIVER OF JURY TRIAL	 	81
	 
	 	 	 	11.11.1	 	Governing Law	 	81
	 
	 	 	 	11.11.2	 	SUBMISSION TO JURISDICTION	 	81
	 
	 	 	 	11.11.3	 	WAIVER OF VENUE	 	82
	 
	 	 	 	11.11.4	 	SERVICE OF PROCESS	 	82
	 
	 	 	 	11.11.5	 	WAIVER OF JURY TRIAL	 	82






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	 	 	 	 	 	 	 	 	Page
	 	 	11.12	 	USA Patriot Act Notice	 	82






vi









 






LIST OF SCHEDULES AND EXHIBITS




	 	 	 	 	 
	SCHEDULES
	 	 	 	 
	 
	 	 	 	 
	SCHEDULE 1.1(A)
	 	—	 	PRICING GRID
	SCHEDULE 1.1(B)
	 	—	 	COMMITMENTS OF LENDERS AND ADDRESSES FOR NOTICES
	SCHEDULE 1.1(P)
	 	—	 	PERMITTED LIENS
	SCHEDULE 1.1(S)
	 	—	 	PROJECT MINING SUBSIDIARIES
	SCHEDULE 6.1.1
	 	—	 	QUALIFICATIONS TO DO BUSINESS
	SCHEDULE 6.1.2
	 	—	 	SUBSIDIARIES
	SCHEDULE 6.1.4
	 	—	 	MATERIAL CONTRACTS
	SCHEDULE 6.1.14
	 	—	 	ENVIRONMENTAL DISCLOSURES
	SCHEDULE 7.1.1
	 	—	 	OPINION OF COUNSEL
	SCHEDULE 8.2.1
	 	—	 	PERMITTED INDEBTEDNESS
	 
	 	 	 	 
	EXHIBITS
	 	 	 	 
	 
	 	 	 	 
	EXHIBIT 1.1(A)
	 	—	 	ASSIGNMENT AND ASSUMPTION AGREEMENT
	EXHIBIT 1.1(N)(1)
	 	—	 	REVOLVING CREDIT NOTE
	EXHIBIT 1.1(N)(2)
	 	—	 	SWING LOAN NOTE
	EXHIBIT 2.5.1
	 	—	 	LOAN REQUEST
	EXHIBIT 2.5.2
	 	—	 	SWING LOAN REQUEST
	EXHIBIT 2.11
	 	—	 	NEW LENDER JOINDER
	EXHIBIT 8.3.3
	 	—	 	QUARTERLY COMPLIANCE CERTIFICATE







vii

















 





CREDIT AGREEMENT




     THIS CREDIT AGREEMENT (as hereafter amended, the “Agreement”) is dated as of October 27, 2009
and is made by and among The North American Coal Corporation, a Delaware corporation (the
"Borrower”), the LENDERS (as hereinafter defined), U.S. BANK NATIONAL ASSOCIATION and REGIONS BANK,
each as Co-Syndication Agents and PNC BANK, NATIONAL ASSOCIATION, in its capacity as administrative
agent for the Lenders under this Agreement (hereinafter referred to in such capacity as the
"Administrative Agent”).



     The Borrower has requested the Lenders to provide a revolving credit facility to the Borrower
in an aggregate principal amount not to exceed $100,000,000. In consideration of their mutual
covenants and agreements hereinafter set forth and intending to be legally bound hereby, the
parties hereto covenant and agree as follows:



1. CERTAIN DEFINITIONS




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



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




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




          Administrative Agent’s Letter shall have the meaning specified in Section10.9
[Administrative Agent’s Fee].




          Affiliate as to any Person shall mean any other Person (i) which directly or
indirectly controls, is controlled by, or is under common control with such Person, (ii) which
beneficially owns or holds 10% or more of any class of the voting interests or other equity
interests of such Person, or (iii) 10% or more of any class of voting interests or other equity
interests of which is beneficially owned or held, directly or indirectly, by such Person.




          Anti-Terrorism Laws shall mean any Laws relating to terrorism or money laundering,
including Executive Order No. 13224, the USA Patriot Act, the Laws comprising or implementing the
Bank Secrecy Act, and the Laws administered by the United States Treasury Department’s Office of
Foreign Asset Control (as any of the foregoing Laws may from time to time be amended, renewed,
extended, or replaced).




          Applicable Letter of Credit Fee Rate shall mean the percentage rate per annum based on
the Debt/EBITDA Ratio then in effect according to the pricing grid on Schedule 1.1(A) below
the heading “Letter of Credit Fee.”





 









 








          Applicable Margin shall mean, as applicable:




          (A) the percentage spread to be added to the Base Rate applicable to Revolving Credit Loans
under the Base Rate Option based on the Debt/EBITDA Ratio then in effect according to the pricing
grid on Schedule 1.1(A) below the heading “Revolving Credit Base Rate Spread”, or




          (B) the percentage spread to be added to the LIBOR Rate applicable to Revolving Credit Loans
under the LIBOR Rate Option based on the Debt/EBITDA Ratio then in effect according to the pricing
grid on Schedule 1.1(A) below the heading “Revolving Credit LIBOR Rate Spread”.




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




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




          Authorized Officer shall mean, with respect to the Borrower, the Chairman of the Board
of Directors, Chief Executive Officer, President, Chief Financial Officer, Secretary, Assistant
Secretary, Vice President, Principal Accounting Officer, Controller, Treasurer or Assistant
Treasurer of the Borrower or such other individuals, designated by written notice to the
Administrative Agent from the Borrower, authorized to execute notices, reports and other documents
on behalf of the Borrower required hereunder. The Borrower may amend such list of individuals from
time to time by giving written notice of such amendment to the Administrative Agent.




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




          Base Rate Option shall mean the option of the Borrower to have Loans bear interest at
the rate and under the terms set forth in Section 4.1.1(i) [Revolving Credit Base Rate Option].




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




          Borrower shall mean The North American Coal Corporation, a corporation organized and
existing under the laws of the State of Delaware.




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





 - 2 -









 








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




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




          Change in Control shall mean each and every issue, sale or other disposition of shares
of stock of the Borrower which results in any person (as such term is used in section 13(d) and
section 14(d)(2) of the Exchange Act) or related persons (other than (i) NACCO or any of its
Affiliates or (ii) the Permitted Holders) constituting a group (as such term is used in Rule 13d-5
under the Exchange Act), becoming the “beneficial owners” (as such term is used in Rule 13d-3 under
the Exchange Act as in effect on the Closing Date), directly or indirectly, of more than 50% of the
total voting power of all classes then outstanding of the Borrower’s voting stock.




          Change in Law shall mean the occurrence, after the date of this Agreement, of any of
the following: (a) the adoption or taking effect of any Law, (b) any change in any Law or in the
administration, interpretation or application thereof by any Official Body or (c) the making or
issuance of any request, guideline or directive (whether or not having the force of Law) by any
Official Body.




          Closing Date shall mean the Business Day on which the first Loan shall be made, which
shall be October 27, 2009.




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




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




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




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




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





 - 3 -









 








          Consolidated Current Debt shall mean, without duplication, (a) all liabilities of the
Borrower and its Consolidated Subsidiaries for borrowed money and liabilities for borrowed money
secured by any real or personal property of any kind of the Borrower and its Consolidated
Subsidiaries, which are payable within one year plus (b) the aggregate amount of any Guaranty by
the Borrower or any of its Consolidated Subsidiaries of liabilities of the type described in the
foregoing clause (a) except:





          (i) any liabilities which are renewable or extendable at the option of the debtor to a
date in excess of one year;




          (ii) any liabilities, although payable in one year, which constitute principal payments
on indebtedness expected to mature more than one year from their creation; and



          (iii) any liabilities to reimburse the issuer of letters of credit or other surety
instruments, which letters of credit or other sureties are not drawn.




          Consolidated Debt shall mean the total amount of Consolidated Current Debt and
Consolidated Funded Debt of the Borrower and its Consolidated Subsidiaries outstanding on the date
of determination, after eliminating all offsetting debits and credits between the Borrower and its
Consolidated Subsidiaries and all other items required to be eliminated in the course of
preparation of consolidated financial statements of the Borrower and its Consolidated Subsidiaries.




          Consolidated EBITDA shall mean, for any period, Consolidated Net Income for such
period plus the sum of (i) to the extent deducted in computing such Consolidated Net Income and
without duplication, (A) income tax expense, (B) Consolidated Interest Expense, (C) depreciation
and amortization expense and (D) depletion expense, and (E) the product of (1) equity in
earnings of unconsolidated Affiliates multiplied by (2) the tax rate of such unconsolidated
Affiliates divided by (3) (1 minus such tax rate) and (ii) the aggregate amount of equity
advances and capital contributions made to the Borrower or any of its Consolidated Subsidiaries in
cash during such period or within thirty (30) days following the end of such period and
specifically designated for allocation to such period and not in the period in which made; provided
that there shall be excluded from such calculation, to the extent included in Consolidated Net
Income for such period, (a) non-cash extraordinary items of gain or loss, (b) non-recurring gains
or losses and (c) any items of gain or loss of any Person (other than a Person in which the
Borrower owns all of the outstanding equity interests) which is accounted for by the Borrower on
the equity method of accounting. For purposes of calculating Consolidated EBITDA for any period,
if during such period the Borrower or any of its Subsidiaries shall have acquired the equity
interest of any Person which becomes a Subsidiary of the Borrower or acquired all, substantially
all or a substantial part of the operating assets of any Person or disposed of all or substantially
all of the equity interest in any Subsidiary or all or substantially all of the operating assets of
any Subsidiary of the Borrower or a substantial part of the assets of the Borrower, Consolidated
EBITDA for such period shall be calculated after giving pro forma effect thereto as if such
acquisition or disposition occurred on the first day of such period.





 - 4 -









 








          As used in this definition of Consolidated EBITDA, a sale, lease or other disposition of
assets shall be deemed to be a “substantial part” of the assets of the Borrower and its
Subsidiaries if the book value of such assets, when added to the book value of all other assets
sold, leased or otherwise disposed of by the Borrower and its Subsidiaries during the same fiscal
year, exceeds 15% of the book value of Consolidated Total Assets, determined as of the end of the
fiscal year immediately preceding such sale, lease or other disposition; provided that
there shall be excluded from any determination of a “substantial part” any (i) sale or disposition
of assets in the ordinary course of business of the Borrower and its Subsidiaries, and (ii) any
transfer of assets from the Borrower to any Wholly-Owned Subsidiary or from any Subsidiary to the
Borrower or a Wholly-Owned Subsidiary.




          Consolidated Funded Debt shall mean:





          (i) liabilities of the Borrower and its Consolidated Subsidiaries for borrowed money,
other than Consolidated Current Debt and Indebtedness of the Borrower owed to any of its
Subsidiaries;




          (ii) liabilities for borrowed money secured by any lien existing on any real or
personal property of any kind owned by the Borrower or its Consolidated Subsidiaries
(whether or not those liabilities have been assumed);




          (iii) any Obligations in connection with any capital leases of the Borrower and its
Consolidated Subsidiaries; and



          (iv) the aggregate amount of any Guaranty by the Borrower or any of its Consolidated
Subsidiaries of liabilities of the types described in the foregoing clause (i), (ii) and (iii)
other than Guaranties which constitute Consolidated Current Debt.




          Consolidated Interest Coverage Ratio shall mean at any date, the ratio of (a)
Consolidated EBITDA for the period of four consecutive fiscal quarters most recently ended as of
such date to (b) Consolidated Interest Expense for such period of four consecutive fiscal quarters
taken as a single accounting period.




          Consolidated Interest Expense shall mean for any period, the sum of (i) interest
expense of the Borrower and its Consolidated Subsidiaries for such period (including imputed
interest on any Obligations in connection with any capital leases), determined on a consolidated
basis in accordance with GAAP and (ii) letter of credit fees paid by the Borrower with respect to
Consolidated Debt for such period. For purposes of calculation of Consolidated Interest Expense
for any period, if during such period the Borrower or any Subsidiary of the Borrower shall have
acquired the equity interest of any Person which becomes a Subsidiary of the Borrower or acquired
all, substantially all or a substantial part of the operating assets of any Person or disposed of
all or substantially all of the equity interest in any Subsidiary or all or substantially all of
the operating assets of any Subsidiary of the Borrower or a substantial part of the assets of the
Borrower, Consolidated Interest Expense for such period shall be calculated after giving pro forma
effect to any Consolidated Funded Debt incurred or assumed in connection with the any such
acquisition and to any Consolidated Funded Debt assumed by a third party or otherwise




 - 5 -









 







discharged in connection with any such disposition as if such Consolidated Funded Debt has
been incurred or discharged as of the first day of such period.




          As used in this definition of Consolidated Interest Expense, a sale, lease or other
disposition of assets shall be deemed to be a “substantial part” of the assets of the Borrower and
its Subsidiaries if the book value of such assets, when added to the book value of all other assets
sold, leased or otherwise disposed of by the Borrower and its Subsidiaries during the same fiscal
year, exceeds 15% of the book value of Consolidated Total Assets, determined as of the end of the
fiscal year immediately preceding such sale, lease or other disposition; provided that
there shall be excluded from any determination of a “substantial part” any (i) sale or disposition
of assets in the ordinary course of business of the Borrower and its Subsidiaries, and (ii) any
transfer of assets from the Borrower to any Wholly-Owned Subsidiary or from any Subsidiary to the
Borrower or a Wholly-Owned Subsidiary.




          Consolidated Net Income shall mean with reference to any period, the net income (or
loss) of the Borrower and its Consolidated Subsidiaries for such period (taken as a cumulative
whole), as determined in accordance with GAAP, after deducting all operating expenses, provisions
for all taxes and reserves (including reserves for all deferred income taxes) and all other items
required to be deducted in the course of the preparation of consolidated financial statements of
the Borrower and its Consolidated Subsidiaries in accordance with GAAP.




          Consolidated Subsidiary shall mean each Subsidiary that is included in the
consolidated balance sheet of the Borrower prepared in accordance with GAAP, other than Project
Mining Subsidiaries.




          Consolidated Total Assets means, as of any date of determination, (a) the total amount
of all assets of the Borrower and its Consolidated Subsidiaries as such amounts would be shown as
assets on a Consolidated balance sheet of the Borrower and its Consolidated Subsidiaries as of such
time prepared in accordance with GAAP, minus (b) to the extent included in clause (a), all amounts
properly attributable to minority interest, if any, in the stock and surplus of Consolidated
Subsidiaries.




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




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




          Debt/EBITDA Ratio shall mean, as of the end of any date of determination, the ratio of
Consolidated Debt at such date to Consolidated EBITDA for the period of four





 - 6 -









 







consecutive fiscal quarters immediately preceding such date of determination taken as a single
accounting period.




          Defaulting Lender shall mean any Lender that (a) has failed to fund any portion of the
Loans, participations with respect to Letters of Credit, or participations in Swing Line Loans
required to be funded by it hereunder within one Business Day of the date required to be funded by
it hereunder unless such failure has been cured and all interest accruing as a result of such
failure has been fully paid in accordance with the terms hereof, (b) has otherwise failed to pay
over to the Administrative Agent or any other Lender any other amount required to be paid by it
hereunder within one Business Day of the date when due, unless the subject of a good faith dispute
or unless such failure has been cured and all interest accruing as a result of such failure has
been fully paid in accordance with the terms hereof, or (c) has since the date of this Agreement
been deemed insolvent by an Official Body or become the subject of a bankruptcy, receivership,
conservatorship or insolvency proceeding.




          Delinquent Lender shall have the meaning specified in Section 5.3 [Sharing of Payments
by Lenders].




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




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




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




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




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




 - 7 -









 







including Environmental Laws or (v) a floodplain or other flood hazard area as defined pursuant to any
applicable Laws.




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




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




          ERISA Event shall mean (a) a reportable event (under Section 4043 of ERISA and
regulations thereunder) with respect to a Pension Plan, (b) the filing of a notice of intent to
terminate, the treatment of a Plan amendment as a termination under Sections 4041 or 4041A of
ERISA, or the commencement of proceedings by the PBGC to terminate a Pension Plan, (c) an event or
condition which constitutes grounds under Section 4042 of ERISA for the termination of, or the
appointment of a trustee to administer, any Pension Plan, or (d) the imposition of any liability
under Title IV of ERISA, other than for PBGC premiums due but not delinquent under Section 4007 of
ERISA, upon Borrower or any ERISA Affiliate; excluding (i) those events for which the requirement
of notice has been waived by the PBGC; (ii) a reportable event described in ERISA Section
4043(c)(3) (decline in number of participants); (iii) a reportable event described in ERISA Section
4043(c)(9) (change in members of a control group) to the extent that the reportable event is
permitted under Section 8.2.5 hereof or relates to members of the ERISA Group other than the
Borrower and its Subsidiaries; (iv) a reportable event described in ERISA Section 4043(c)(10)
(liquidation) to the extent that the reportable event results from a liquidation of a member of the
ERISA Group that is permitted under Section 8.2.6 hereof or is unrelated to a case under Title 11
of the United States Code or a similar State law; and (v) a reportable event described in ERISA
section 4043(c)(11) (extraordinary dividend or stock redemption) to the extend that the reportable
event is permitted under Section 8.2.5 hereof or results from the declaration of an extraordinary
dividend payable to, or an extraordinary stock redemption of, a member of the ERISA Group other
than the Borrower and its Subsidiaries (clauses (i) through (v) above, collectively, the “Exempt
Reportable Events”).




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




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




          Exchange Act shall mean the Securities Exchange Act of 1934, as amended.




          Excluded Taxes shall mean, with respect to the Administrative Agent, any Lender, the
Issuing Lender or any other recipient of any payment to be made by or on account of any obligation
of the Borrower hereunder, (a) taxes imposed on or measured by its overall net income (however
denominated), and franchise taxes imposed on it (in lieu of net income taxes),




 - 8 -









 







by the jurisdiction (or any political subdivision thereof) under the Laws of which such
recipient is organized or in which its principal office is located or, in the case of any Lender,
in which its applicable lending office is located, (b) any branch profits taxes imposed by the
United States of America or any similar tax imposed by any other jurisdiction in which the Borrower
is located and (c) in the case of a Foreign Lender, any withholding tax that is imposed on amounts
payable to such Foreign Lender at the time such Foreign Lender becomes a party hereto (or
designates a new lending office) or is attributable to such Foreign Lender’s failure or inability
(other than as a result of a Change in Law) to comply with Section 5.9.5 [Status of Lenders],
except to the extent that such Foreign Lender (or its assignor, if any) was entitled, at the time
of designation of a new lending office (or assignment), to receive additional amounts from the
Borrower with respect to such withholding tax pursuant to Section 5.9.1 [Payment Free of Taxes].




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




          Expiration Date shall mean, with respect to the Revolving Credit Commitments, October
27, 2012.




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




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





 - 9 -









 








          Foreign Lender shall mean any Lender that is organized under the Laws of a
jurisdiction other than that in which the Borrower is resident for tax purposes. For purposes of
this definition, the United States of America, each State thereof and the District of Columbia
shall be deemed to constitute a single jurisdiction.




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




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




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




          Indebtedness shall mean, as to any Person at any time, without duplication, (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 such Person’s business and amounts owed to NACCO under the Tax Sharing Agreement and/or in
respect of state taxes paid by NACCO on behalf of the Borrower and its Subsidiaries), (c) all
obligations of such Person evidenced by notes, bonds, debentures or other similar instruments, (d)
all obligations of such Person created or arising under any conditional sale or other title
retention agreement with respect to property acquired by such Person (even though the rights and
remedies of the seller or lender under such agreement in the event of default are limited to
repossession or sale of such property), (e) all obligations of such Person as lessee under leases
that have been or should be, in accordance with GAAP, recorded as capital leases, (f) all
obligations, contingent or otherwise, of such Person in respect of acceptances, letters of credit,
surety bonds or similar extensions of credit, (g) net reimbursement obligations (contingent or
otherwise) under any letter of credit, currency swap agreement, interest rate swap, cap, collar or
floor agreement or other interest rate management device, (h) all Indebtedness of others referred
to in clauses (a) through (g) above or clause (i) below guaranteed directly or indirectly in any
manner by such Person, or in effect guaranteed directly or indirectly by such Person through an
agreement (1) to pay or purchase such Indebtedness or to advance or supply funds for the payment or
purchase of such Indebtedness, (2) to purchase, sell or lease (as lessee or lessor) property, or to
purchase or sell services, primarily for the purpose of enabling the debtor to make payment of such
Indebtedness or to assure the holder of such Indebtedness against loss, (3) to supply funds to or
in any other manner invest in the debtor (including any agreement to pay for property or services
irrespective of whether such property is received or such services are rendered) or (4) otherwise
to assure a creditor against loss, and (i) all Indebtedness referred to in clauses (a) through (h)
above secured by any Lien on property (including, without limitation, accounts and contract rights)
owned by such Person, even though such Person has not assumed or become liable for the payment of
such Indebtedness.





 - 10 -









 








          Indemnified Taxes shall mean Taxes other than Excluded Taxes.




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




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




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




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




          Interest Rate Hedge shall mean an interest rate exchange, collar, cap, swap,
adjustable strike cap, adjustable strike corridor or similar agreements entered into by the
Borrower in order to provide protection to, or minimize the impact upon, the Borrower of increasing
floating rates of interest applicable to Indebtedness.




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




          IRS shall mean the Internal Revenue Service.




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





 - 11 -









 








          Joint Venture shall mean a corporation, partnership, limited liability company or
other entities in which any Person other than the Borrower and its Subsidiaries holds, directly or
indirectly, an equity interest.




          Law shall mean any law (including common law), constitution, statute, treaty,
regulation, rule, ordinance, opinion, release, ruling, order, injunction, writ, decree, bond,
judgment, authorization or approval, lien or award by or settlement agreement with any Official
Body.




          Lender Provided Interest Rate Hedge shall mean an Interest Rate Hedge which is
provided by any Lender or its Affiliate and with respect to which the Administrative Agent
confirms: (i) is documented in a standard International Swap Dealer Association Agreement, (ii)
provides for the method of calculating the reimbursable amount of the provider’s credit exposure in
a reasonable and customary manner, and (iii) is entered into for hedging (rather than speculative)
purposes.




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




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




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




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




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




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




          LIBOR Rate shall mean, with respect to the Loans comprising any Borrowing Tranche to
which the LIBOR Rate Option applies for any Interest Period, the interest rate per annum determined
by the Administrative Agent by dividing (the resulting quotient rounded upwards, if necessary, to
the nearest 1/100th of 1% per annum) (i) the rate which appears on the Bloomberg Page BBAM1 (or on
such other substitute Bloomberg page that displays rates at which US dollar deposits are offered by
leading banks in the London interbank deposit market), or the rate which is quoted by another
source selected by the Administrative Agent which has been approved by the British Bankers’
Association as an authorized information vendor for the purpose of displaying rates at which US
dollar deposits are offered by leading banks in the London interbank deposit market (an “Alternate
Source”), at approximately 11:00 a.m., London





 - 12 -









 







time, two (2) Business Days prior to the commencement of such Interest Period as the London
interbank offered rate for U.S. Dollars for an amount comparable to such Borrowing Tranche and
having a borrowing date and a maturity comparable to such Interest Period (or if there shall at any
time, for any reason, no longer exist a Bloomberg Page BBAM1 (or any substitute page) or any
Alternate Source, a comparable replacement rate determined by the Administrative Agent at such time
(which determination shall be conclusive absent manifest error)), by (ii) a number equal to 1.00
minus the LIBOR Reserve Percentage. LIBOR may also be expressed by the following formula:




Average of London interbank offered rates quoted

by Bloomberg or appropriate successor as shown on




	 	 	 	 	 
	 

	 	LIBOR =	 	Bloomberg Page BBAM1
	 

	 	 	 	 
	 

	 	 	 	 1.00 – LIBOR Reserve Percentage






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




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




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




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




          Loan Documents shall mean this Agreement, the Administrative Agent’s Letter, the Notes
and any other instruments, certificates or documents delivered in connection herewith or therewith.




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




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





 - 13 -









 








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




          Material Contract shall mean each coal or other supply or services contract to which
the Borrower or any Subsidiary is a party and which provides for annual payments to the Borrower or
any Subsidiary which are expected to be in excess of $5,000,000.




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




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




          NACCO shall mean NACCO Industries, Inc., a Delaware corporation.




          Net Proceeds means, with respect to any sale of property by the Borrower or any
Subsidiary, the net proceeds from such sale received by the Person, net of:




               (a) actual expenses and fees relating to such sale (including, without limitation, legal,
accounting and investment banking fees, sales commissions and relocation expenses);



               (b) taxes paid or payable or estimated by the Borrower (in good faith) to be payable in
connection with such sale after taking into account any reduction in consolidated tax liability due
to available tax credits or deductions or any tax sharing arrangements;



               (c) repayment or prepayment of any Indebtedness that is required to be repaid or prepaid in
connection with such sale;



 - 14 -









 





               (d) provision for minority interest holders in any Subsidiary as a result of such sale;



               (e) payments of unassumed liabilities (not constituting Indebtedness ) relating to the assets
or property sold at the time of, or within thirty (30) days after, the date of such sale; and



               (f) appropriate amounts to be provided by the Borrower or any Subsidiary as the case may be,
as reserves in accordance with GAAP, against any liabilities associated with such sale and retained
by the Borrower or any Subsidiary, as the case may be, after the sale including, without
limitation, pension and other post-employment benefit liabilities, liabilities related to
environmental matters and liabilities under any indemnification obligations associated with such
sale.



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




          Non-Consenting Lender shall have the meaning specified in Section 11.1 [Modifications,
Amendments or Waivers].




          Non-Recourse Indebtedness shall mean any Indebtedness other than Recourse
Indebtedness.




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




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




          Obligation shall mean any obligation or liability of the Borrower howsoever created,
arising or evidenced, whether direct or indirect, absolute or contingent, now or hereafter
existing, or due or to become due, under or in connection with (i) this Agreement, the Notes, the
Letters of Credit, the Administrative Agent’s Letter or any other Loan Document whether to the
Administrative Agent, any of the Lenders or their Affiliates or other persons provided for under
such Loan Documents, (ii) any Lender Provided Interest Rate Hedge and (iii) any Other Lender
Provided Financial Service Product.




          Official Body shall mean the government of the United States of America or any other
nation, or of any political subdivision thereof, whether state or local, and any agency, authority,
instrumentality, regulatory body, court, central bank or other entity exercising executive,
legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to
government (including any supra-national bodies such as the European Union or the European Central
Bank).




          Other Lender Provided Financial Service Product shall mean agreements or other
arrangements under which any Lender or Affiliate of a Lender provides any of the following




 - 15 -









 







products or services to the Borrower: (a) credit cards, (b) credit card processing services,
(c) debit cards, (d) purchase cards, (e) ACH transactions, (f) cash management, including
controlled disbursement, accounts or services, or (g) foreign currency exchange.




          Other Taxes shall mean all present or future stamp or documentary taxes or any other
excise or property taxes, charges or similar levies arising from any payment made hereunder or
under any other Loan Document or from the execution, delivery or enforcement of, or otherwise with
respect to, this Agreement or any other Loan Document.




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




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




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




          Payment In Full shall mean the indefeasible payment in full in cash of the Loans and
other Obligations hereunder, termination of the Commitments and expiration or termination of all
Letters of Credit.




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




          Pension Plan shall mean any “employee pension benefit plan” (as such term is defined
in Section 3(2) of ERISA), other than a Multiemployer Plan, that is subject to Title IV of ERISA
and is sponsored or maintained by Borrower or any ERISA Affiliate or to which Borrower or any ERISA
Affiliate contributes or has an obligation to contribute, or in the case of a multiple employer or
other plan described in Section 4064(a) of ERISA, has made contributions at any times during the
immediately preceding five plan years.




          Permitted Holders shall mean, collectively, the parties to the Stockholders’
Agreement, dated as of March 15, 1990, as amended from time to time, by and among National City
Bank (Cleveland, Ohio), as depository, the Participating Stockholders (as defined therein) and
NACCO.




          Permitted Investments shall mean:




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




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




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





 - 16 -











 





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




          Permitted Liens shall mean:




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




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




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




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




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




          (vi) Liens on property leased by the Borrower or any Subsidiary of the Borrower under capital
leases securing obligations of the Borrower or such Subsidiary to the lessor under such leases;




          (vii) Any Lien existing on the date of this Agreement and described on Schedule 1.1(P)
and any renewal, extension or replacement of such Lien, provided that if such Lien secures
any Indebtedness, the principal amount secured thereby is not hereafter increased, and no
additional assets become subject to such Lien;




          (viii) Purchase Money Security Interests and capitalized leases;




          (ix) Liens securing Indebtedness other than Recourse Indebtedness in an aggregate principal
amount not to exceed $1,000,000 at any time outstanding;




          (x) other Liens securing Recourse Debt in an aggregate principal amount not to exceed
$1,000,000 at any time outstanding; and




          The following, (A) if the validity or amount thereof is being contested in good faith by
appropriate and lawful proceedings diligently conducted so long as levy and execution





- 17 -









 







thereon have been stayed and continue to be stayed or (B) if a final judgment is entered and
such judgment is discharged within thirty (30) days of entry, and in either case they do not in the
aggregate, materially impair the ability of the Borrower to perform its Obligations hereunder or
under the other Loan Documents:




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




          (2) Claims, Liens or encumbrances upon, and defects of title to, real or personal property,
including any attachment of personal or real property or other legal process prior to adjudication
of a dispute on the merits;




          (3) Claims or Liens of mechanics, materialmen, warehousemen, carriers, or other statutory
nonconsensual Liens; or




          (4) Liens resulting from final judgments or orders described in Section 9.1.6 [Final Judgments
or Orders].




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




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




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




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




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




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




          Project Mining Subsidiary shall mean any Subsidiary of the Borrower (a) whose
Indebtedness is Non-Recourse Indebtedness and (b) the customers of which finance or guarantee



- 18 -









 






the financing and certain other obligations of such Subsidiary. Schedule 1.1(S)
hereto sets forth a list of such Project Mining Subsidiaries as of the Closing Date.




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




          Purchase Money Security Interest shall mean Liens upon tangible personal property
securing loans to the Borrower or any Subsidiary of the Borrower or deferred payments by the
Borrower or such Subsidiary for the purchase of such tangible personal property.




          Ratable Share shall mean the proportion that a Lender’s Commitment (excluding the
Swing Loan Commitment) bears to the Commitments (excluding the Swing Loan Commitment) of all of the
Lenders. If the Commitments have terminated or expired, the Ratable Shares shall be determined
based upon the Commitments (excluding the Swing Loan Commitment) most recently in effect, giving
effect to any assignments.




          Real Property shall mean the real property, both owned and leased, and the surface,
coal, and mineral rights, interests and coal leases of the Borrower and its Subsidiaries.




          Recourse Indebtedness of any Person shall mean all items that, in accordance with
GAAP, would be classified as indebtedness on a Consolidated balance sheet of such Person (other
than trade payables incurred in the ordinary course of business and amounts owed to NACCO under the
Tax Sharing Agreement and/or in respect of state taxes paid by NACCO on behalf of the Borrower and
its Subsidiaries; but shall not include indebtedness as to which no recourse may be asserted
against the Borrower or any of its Consolidated Subsidiaries except to the extent that such
indebtedness is secured by a Lien on specified assets of the Borrower or any of its Consolidated
Subsidiaries.




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




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




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




- 19 -









 








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




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




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




          Required Lenders shall mean




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




          (B) If there exist three (3) or more Lenders, Lenders (other than any Defaulting Lender)
having more than 50% of the sum of the aggregate amount of the Revolving Credit Commitments of the
Lenders (excluding any Defaulting Lender) or, after the termination of the Revolving Credit
Commitments, the outstanding Revolving Credit Loans and Ratable Share of Letter of Credit
Obligations of the Lenders (excluding any Defaulting Lender).




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




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




          Restricted Payments shall have the meaning specified in Section 8.2.5 [Dividends and
Related Distributions].




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




- 20 -









 








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




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




          Senior Notes shall mean those certain notes in an original aggregate amount of
$45,000,000, issued in connection with the Senior Note Purchase Agreements.




          Senior Note Purchase Agreements shall mean those certain note purchase agreements
dated October 4, 2004 and January 27, 2005, by and among the Borrower and the Purchasers (in each
case, as defined therein).




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




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




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




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




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




- 21 -









 








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




          Swing Loan Commitment shall mean PNC’s commitment to make Swing Loans to the Borrower
pursuant to Section 2.1.2 [Swing Loan Commitment] hereof in an aggregate principal amount up to
$10,000,000 outstanding at any one time.




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




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




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




          Tax Sharing Agreement shall mean that certain Amended Tax Sharing Agreement between
NACCO and its Subsidiaries, dated May 14, 1997, related to the allocation of federal tax
liabilities among NACCO and its Consolidated U.S. Subsidiaries, as amended, supplemented or
otherwise modified from time to time.




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




          Unused Revolving Credit Commitment shall mean, at any time, the amount in excess of
(i) the Revolving Credit Commitment, minus (ii) the Revolving Facility Usage.




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




          Voting Stock shall mean capital stock issued by a corporation, or equivalent interests
in any other Person, the holders of which are ordinarily, in the absence of contingencies, entitled
to vote for the election of directors (or persons performing similar functions) of such Person,
even if the right so to vote has been suspended by the happening of such a contingency.




          Wholly-Owned Subsidiary means, at any time, any Subsidiary one hundred percent (100%)
of all of the equity interests (except directors’ qualifying shares) and voting interests of which
are owned by any one or more of the Borrower and the Borrower’s other Wholly-Owned Subsidiaries at
such time.




     1.2 Construction. Unless the context of this Agreement otherwise clearly requires,
the following rules of construction shall apply to this Agreement and each of the other Loan
Documents: (i) references to the plural include the singular, the plural, the part and the whole
and



- 22 -









 




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




     1.3 Accounting Principles. Except as otherwise provided in this Agreement, all
computations and determinations as to accounting or financial matters and all financial statements
to be delivered pursuant to this Agreement shall be made and prepared in accordance with GAAP
(including principles of consolidation where appropriate), and all accounting or financial terms
shall have the meanings ascribed to such terms by GAAP; provided, however, that all
accounting terms used in Section 8.2 [Negative Covenants] (and all defined terms used in the
definition of any accounting term used in Section 8.2 [Negative Covenants] shall have the meaning
given to such terms (and defined terms) under GAAP as in effect on the date hereof applied on a
basis consistent with those used in preparing Statements referred to in Section 6.1.6(i)
[Historical Statements]. In the event of any change after the date hereof in GAAP, and if such
change would affect the computation of any of the financial covenants set forth in Section 8.2
[Negative Covenants], then the parties hereto agree to endeavor, in good faith, to agree upon an
amendment to this Agreement that would adjust such financial covenants in a manner that would
preserve the original intent thereof, but would allow compliance therewith to be determined in
accordance with the Borrower’s financial statements at that time, provided that,
until so amended such financial covenants shall continue to be computed in accordance with GAAP
prior to such change therein.



2. REVOLVING CREDIT AND SWING LOAN FACILITIES




     2.1 Revolving Credit Commitments.



          2.1.1 Revolving Credit Loans. Subject to the terms and conditions hereof and relying
upon the representations and warranties herein set forth, each Lender severally agrees to make
Revolving Credit Loans to the Borrower at any time or from time to time on or after the date hereof
to the Expiration Date; provided that after giving effect to such Loan (i) the aggregate
amount of Loans from such Lender shall not exceed such Lender’s Revolving Credit Commitment minus
such Lender’s Ratable Share of the Letter of Credit Obligations and (ii) the





- 23 -









 







Revolving Facility Usage shall not exceed the Revolving Credit Commitments. Within such
limits of time and amount and subject to the other provisions of this Agreement, the Borrower may
borrow, repay and reborrow pursuant to this Section 2.1.




          2.1.2 Swing Loan Commitment. Subject to the terms and conditions hereof and relying
upon the representations and warranties herein set forth, and in order to facilitate loans and
repayments between Settlement Dates, PNC may, at its option, cancelable at any time for any reason
whatsoever, make swing loans (the “Swing Loans”) to the Borrower at any time or from time to time
after the date hereof to, but not including, the Expiration Date, in an aggregate principal amount
up to but not in excess of $10,000,000 (the “Swing Loan Commitment”), provided that after giving
effect to such Loan, the Revolving Facility Usage shall not exceed the Revolving Credit
Commitments. Within such limits of time and amount and subject to the other provisions of this
Agreement, the Borrower may borrow, repay and reborrow pursuant to this Section 2.1.2.




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



     2.3 Commitment Fees. Accruing from the date hereof until the Expiration Date, the
Borrower agrees to pay to the Administrative Agent for the account of each Lender according to its
Ratable Share, a nonrefundable commitment fee (the “Commitment Fee”) equal to 0.50% (computed on
the basis of a year of 365 or 366 days, as the case may be, and actual days elapsed) multiplied by
the average daily difference between the amount of (i) the Revolving Credit Commitments (for
purposes of this computation, PNC’s Swing Loans shall be deemed to be borrowed amounts under its
Revolving Credit Commitment) and (ii) the Revolving Facility Usage; provided,
however, that any Commitment Fee accrued with respect to the Revolving Credit Commitment of
a Defaulting Lender during the period prior to the time such Lender became a Defaulting Lender and
unpaid at such time shall not be payable by the Borrower so long as such Lender shall be a
Defaulting Lender except to the extent that such Commitment Fee shall otherwise have been due and
payable by the Borrower prior to such time; and provided further that no Commitment
Fee shall accrue with respect to the Revolving Commitment of a Defaulting Lender so long as such
Lender shall be a Defaulting Lender. Subject to the proviso in the directly preceding sentence,
all Commitment Fees shall be payable in arrears on each Payment Date.



     2.4 [Intentionally Omitted] 



- 24 -









 





     2.5 Revolving Credit Loan Requests; Swing Loan Requests. 



          2.5.1 Revolving Credit Loan Requests. Except as otherwise provided herein, the
Borrower may from time to time prior to the Expiration Date request the Lenders to make Revolving
Credit Loans, or renew or convert the Interest Rate Option applicable to existing Revolving Credit
pursuant to Section 4.2 [Interest Periods], by delivering to the Administrative Agent, not later
than 10:00 a.m., (i) three (3) Business Days prior to the proposed Borrowing Date with respect to
the making of Revolving Credit Loans to which the LIBOR Rate Option applies or the conversion to or
the renewal of the LIBOR Rate Option for any Loans; and (ii) the same Business Day of the proposed
Borrowing Date with respect to the making of a Revolving Credit Loan to which the Base Rate Option
applies or the last day of the preceding Interest Period with respect to the conversion to the Base
Rate Option for any Loan, a duly completed request therefor substantially in the form of
Exhibit 2.5.1 or a request by telephone immediately confirmed in writing by letter, e-mail,
facsimile or telex in such form (each, a “Loan Request”), it being understood that the
Administrative Agent may rely on the authority of any individual making such a telephonic request
without the necessity of receipt of such written confirmation. Each Loan Request shall be
irrevocable and shall specify the aggregate amount of the proposed Loans comprising each Borrowing
Tranche, and, if applicable, the Interest Period, which amounts shall be in integral multiples of
$1,000,000 and not less than $5,000,000 for each Borrowing Tranche under the LIBOR Rate Option and
in integral multiples of $1,000,000 and not less than the lesser of $5,000,000 or the maximum
amount available for Borrowing Tranches under the Base Rate Option.




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




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



          2.6.1 Making Revolving Credit Loans. The Administrative Agent shall, promptly after
receipt by it of a Loan Request pursuant to Section 2.5 [Revolving Credit Loan Requests; Swing Loan
Requests], notify the Lenders of its receipt of such Loan Request specifying the information
provided by the Borrower and the apportionment among the Lenders of the requested Revolving Credit
Loans as determined by the Administrative Agent in accordance with Section 2.2 [Nature of Lenders’
Obligations with Respect to Revolving Credit Loans]. Each Lender shall remit the principal amount
of each Revolving Credit Loan to the Administrative Agent such that the Administrative Agent is
able to, and the Administrative Agent shall, to the extent the Lenders have made funds available to
it for such purpose and





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subject to Section 7.2 [Each Loan or Letter of Credit], fund such Revolving Credit Loans to
the Borrower in U.S. Dollars and immediately available funds at the Principal Office prior to 2:00
p.m., on the applicable Borrowing Date; provided that if any Lender fails to remit such
funds to the Administrative Agent in a timely manner, the Administrative Agent may elect in its
sole discretion to fund with its own funds the Revolving Credit Loans of such Lender on such
Borrowing Date, and such Lender shall be subject to the repayment obligation in Section 2.6.2
[Presumptions by the Administrative Agent].




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




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




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




          2.6.5 Borrowings to Repay Swing Loans. PNC may, at its option, exercisable at any time
for any reason whatsoever, request that Swing Loans be refunded as Revolving Loans, and each Lender
shall make a Revolving Credit Loan in an amount equal to such Lender’s Ratable Share of the
aggregate principal amount of the outstanding Swing Loans, plus, if PNC so requests, accrued
interest thereon, provided that no Lender shall be obligated in any event to make Revolving
Credit Loans in excess of its Revolving Credit Commitment minus its Ratable Share of Letter of
Credit Obligations. Revolving Credit Loans made pursuant to the preceding sentence shall bear
interest at the Base Rate Option unless and until converted to a LIBOR Rate Option in accordance
with this Agreement and shall be deemed to have been properly requested in accordance with Section
2.5.1 [Revolving Credit Loan Requests] without regard to any of the requirements of that provision.
PNC shall provide notice to the Lenders (which may be telephonic or written notice by letter,
facsimile or telex) that such Revolving Credit Loans are to be made under this Section 2.6.5 and of
the apportionment among the Lenders, and the Lenders





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shall be unconditionally obligated to fund such Revolving Credit Loans (whether or not the
conditions specified in Section 2.5.1 [Revolving Credit Loan Requests] are then satisfied) by the
time PNC so requests, which shall not be earlier than 3:00 p.m. on the Business Day next after the
date the Lenders receive such notice from PNC.




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



     2.8 Use of Proceeds. The proceeds of the Loans shall be used (i) to refinance
existing Indebtedness of the Borrower, (ii) to pay for transaction fees and expenses related to
entering into this Credit Agreement and (iii) for general corporate purposes.



     2.9 Letter of Credit Subfacility. 



          2.9.1 Issuance of Letters of Credit. Borrower may at any time prior to the Expiration
Date request the issuance of a standby or trade letter of credit (each a “Letter of Credit”) on
behalf of itself or any Subsidiary (provided that such Subsidiary also completes any necessary
documentation, including a letter of credit application, to the reasonable satisfaction of the
Issuing Lender) or the amendment or extension of an existing Letter of Credit, by delivering to the
Issuing Lender (with a copy to the Administrative Agent) a completed application and agreement for
letters of credit, or request for such amendment or extension, as applicable, in such form as the
Issuing Lender may specify from time to time by no later than 10:00 a.m. at least five (5) Business
Days, or such shorter period as may be agreed to by the Issuing Lender, in advance of the proposed
date of issuance. Promptly after receipt of any letter of credit application, the Issuing Lender
shall confirm with the Administrative Agent (by telephone or in writing) that the Administrative
Agent has received a copy of such Letter of Credit application and if not, such Issuing Lender will
provide Administrative Agent with a copy thereof. Unless the Issuing Lender has received notice
from any Lender, Administrative Agent or the Borrower, at least one day prior to the requested date
of issuance, amendment or extension of the applicable Letter of Credit, that one or more applicable
conditions in Section 7 [Conditions of Lending and Issuance of Letters of Credit] is not satisfied,
then, subject to the terms and conditions hereof and in reliance on the agreements of the other
Lenders set forth in this Section 2.9, the Issuing Lender or any of the Issuing Lender’s Affiliates
will issue a Letter of Credit or agree to such amendment or extension, provided that each Letter of
Credit shall (A) have a maximum maturity of twelve (12) months from the date of issuance (unless
the Borrower requests a Letter of Credit with automatic extension provisions, then the maximum
maturity shall be the maturity set forth therein), and (B) in no event expire later than the
Expiration Date and provided further that in no event shall (i) the Letter of Credit Obligations
exceed, at any one time, $10,000,000 (the “Letter of Credit Sublimit”) or (ii) the Revolving
Facility Usage exceed, at any one time, the Revolving Credit Commitments. Each request by the
Borrower for the issuance, amendment or extension of a Letter of Credit shall be deemed to be a
representation by the Borrower that it shall be in compliance with the preceding sentence and with
Section 7 [Conditions of Lending and Issuance of Letters of Credit] after giving effect to the
requested issuance, amendment or extension of such Letter of Credit. Promptly after its delivery
of any Letter of Credit or any amendment to a





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Letter of Credit to the beneficiary thereof, the applicable Issuing Lender will also deliver
to Borrower and Administrative Agent a true and complete copy of such Letter of Credit or
amendment. Notwithstanding the foregoing, the Issuing Lender shall not be under any obligation to
issue any Letter of Credit if any Law shall by its terms purport to enjoin or restrain the Issuing
Lender from issuing such Letter of Credit or any Law applicable to the Issuing Lender or any
request or directive (whether or not having the force of law) from any Official Body with
jurisdiction over the Issuing Lender shall prohibit, or request that the Issuing Lender refrain
from, the issuance of letters of credit generally or such Letter of Credit in particular.




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




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




               2.9.3.1 In the event of any request for a drawing under a Letter of Credit by the beneficiary
or transferee thereof, the Issuing Lender will promptly notify the Borrower and the Administrative
Agent thereof prior to 10:00 a.m. on the date of such drawing. Provided that it shall have
received such notice, the Borrower shall reimburse (such obligation to reimburse the Issuing Lender
shall sometimes be referred to as a “Reimbursement Obligation”) the Issuing Lender prior to 2:00
p.m. on each date that an amount is paid by the Issuing Lender under any Letter of Credit (each
such date, a “Drawing Date”) by paying to the Administrative Agent for the account of the Issuing
Lender an amount equal to the amount so paid by the Issuing Lender. In the event the Borrower
fails to reimburse the Issuing Lender (through the Administrative Agent) for the full amount of any
drawing under any Letter of Credit by 2:00 p.m. on the Drawing Date, the Administrative Agent will
promptly notify each Lender thereof, and the Borrower shall be deemed to have requested that
Revolving Credit Loans be made by the Lenders under the Base Rate Option to be disbursed on the
Drawing Date under such Letter of Credit, subject to the amount of the unutilized portion of the
Revolving Credit Commitment and subject to the conditions set forth in Section 7.2 [Each Loan or
Letter of Credit] other than any notice requirements. Any notice given by the Administrative Agent
or Issuing Lender pursuant to this Section 2.9.3.1 may be oral if immediately confirmed in writing;
provided that the lack of such an immediate confirmation shall not affect the conclusiveness or
binding effect of such notice.



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



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



          2.9.4 Repayment of Participation Advances.




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



               2.9.4.2 If the Administrative Agent is required at any time to return to the Borrower, or to a
trustee, receiver, liquidator, custodian, or any official in any Insolvency



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




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




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




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




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




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




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




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




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




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




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




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




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




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




          (xi) the occurrence or continuance of an Insolvency Proceeding with respect to the Borrower;




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




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




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




          Nothing in the preceding section shall relieve the Issuing Lender from liability for the
Issuing Lender’s gross negligence or willful misconduct in connection with actions or omissions
described in clauses (i) through (xiv) of such section. In no event shall the Issuing Lender or
its Affiliates be liable to any Lender for any indirect, consequential, incidental, punitive,
exemplary or special damages or expenses (including without limitation attorneys’ fees), or for any
damages resulting from any change in the value of any property relating to a Letter of Credit.




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




          2.9.9 Liability for Acts and Omissions. As between the Borrower and the Issuing
Lender, or the Issuing Lender’s Affiliates, the Borrower assumes all risks of the acts and
omissions of, or misuse of the Letters of Credit by, the respective beneficiaries of such Letters
of Credit. In furtherance and not in limitation of the foregoing, the Issuing Lender shall not be
responsible for any of the following, including any losses or damages to the Borrower or other
Person or property relating therefrom: (i) the form, validity, sufficiency, accuracy, genuineness
or legal effect of any document submitted by any party in connection with the application for an
issuance of any such Letter of Credit, even if it should in fact prove to be in any or all respects
invalid, insufficient, inaccurate, fraudulent or forged (even if the Issuing Lender or its
Affiliates shall have been notified thereof); (ii) the validity or sufficiency of any instrument
transferring or assigning or purporting to transfer or assign any such Letter of Credit or the
rights or benefits thereunder or proceeds thereof, in whole or in part, which may prove to be
invalid or ineffective for any reason; (iii) the failure of the beneficiary of any such Letter of
Credit, or any other party to which such Letter of Credit may be transferred, to comply fully with
any conditions required in order to draw upon such Letter of Credit or any other claim of the
Borrower against any beneficiary of such Letter of Credit, or any such transferee, or any dispute
between or among the Borrower and any beneficiary of any Letter of Credit or any such transferee;
(iv) errors, omissions, interruptions or delays in transmission or delivery of any messages, by
mail, cable, telegraph, telex or otherwise, whether or not they be in cipher; (v) errors in
interpretation of technical terms; (vi) any loss or delay in the transmission or otherwise of any
document required





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in order to make a drawing under any such Letter of Credit or of the proceeds thereof; (vii)
the misapplication by the beneficiary of any such Letter of Credit of the proceeds of any drawing
under such Letter of Credit; or (viii) any consequences arising from causes beyond the control of
the Issuing Lender or its Affiliates, as applicable, including any act or omission of any Official
Body, and none of the above shall affect or impair, or prevent the vesting of, any of the Issuing
Lender’s or its Affiliates rights or powers hereunder. Nothing in the preceding sentence shall
relieve the Issuing Lender from liability for the Issuing Lender’s gross negligence or willful
misconduct in connection with actions or omissions described in such clauses (i) through (viii) of
such sentence. In no event shall the Issuing Lender or its Affiliates be liable to the Borrower
for any indirect, consequential, incidental, punitive, exemplary or special damages or expenses
(including without limitation attorneys’ fees), or for any damages resulting from any change in the
value of any property relating to a Letter of Credit.




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




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




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




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     2.10 Reduction of Revolving Credit Commitment. The Borrower shall have the right at
any time after the Closing Date upon five (5) days’ prior written notice to the Administrative
Agent to permanently reduce (ratably among the Lenders in proportion to their Ratable Shares) the
Revolving Credit Commitments, in a minimum amount of $5,000,000 and whole multiples of $1,000,000,
or to terminate completely the Revolving Credit Commitments, without penalty or premium except as
hereinafter set forth; provided that any such reduction or termination shall be accompanied
by prepayment of the Notes, together with outstanding Commitment Fees, and the full amount of
interest accrued on the principal sum to be prepaid (and all amounts referred to in Section 5.10
[Indemnity] hereof) to the extent necessary to cause the aggregate Revolving Facility Usage after
giving effect to such prepayments to be equal to or less than the Revolving Credit Commitments as
so reduced or terminated. Any notice to reduce the Revolving Credit Commitments under this Section
shall be irrevocable, except a termination in full of the Revolving Credit Commitments may be
conditioned on the effectiveness of a replacement credit facility.



     2.11 Increase in Revolving Credit Commitments.



          2.11.1 Increasing Lenders and New Lenders. The Borrower may, at any time prior to the
second anniversary of the Closing Date, make a one time request that (1) the current Lenders
increase their Revolving Credit Commitments (any current Lender which elects to increase its
Revolving Credit Commitment shall be referred to as an “Increasing Lender”) or (2) one or more new
lenders (each a “New Lender”) join this Agreement and provide a Revolving Credit Commitment
hereunder, subject to the following terms and conditions:




          (i) No Obligation to Increase. No current Lender shall be obligated to increase its
Revolving Credit Commitment and any increase in the Revolving Credit Commitment by any current
Lender shall be in the sole discretion of such current Lender.




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




          (iii) Aggregate Revolving Credit Commitments. Such increase shall be in an amount
less than or equal to $50,000,0000.




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




          (v) Notes. The Borrower shall execute and deliver (1) to each Increasing Lender a
replacement revolving credit Note reflecting the new amount of such Increasing Lender’s Revolving
Credit Commitment after giving effect to the increase (and the prior Note issued to such Increasing
Lender shall be deemed to be terminated) and (2) to each New Lender



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a revolving credit Note reflecting the amount of such New Lender’s Revolving Credit
Commitment.




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




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




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




          2.11.2 Treatment of Outstanding Loans and Letters of Credit.




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




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




3.
[INTENTIONALLY OMITTED]


4. INTEREST RATES




     4.1 Interest Rate Options. The Borrower shall pay interest in respect of the outstanding
unpaid principal amount of the Loans as selected by it from the Base Rate Option or LIBOR Rate
Option set forth below applicable to the Loans, it being understood that, subject to the provisions
of this Agreement, the Borrower may select different Interest Rate Options and different Interest
Periods to apply simultaneously to the Loans comprising different Borrowing Tranches and may
convert to or renew one or more Interest Rate Options with respect to all or any portion of the
Loans comprising any Borrowing Tranche; provided that there shall not be at any one time
outstanding more than six (6) Borrowing Tranches in the aggregate among all of the Loans and
provided further that if an Event of Default or Potential Default exists and is



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continuing, the Borrower may not request, convert to, or renew the LIBOR Rate Option for any Loans
and the Required Lenders may demand that all existing Borrowing Tranches bearing interest under the
LIBOR Rate Option shall be converted at the end of the applicable Interest Period to the Base Rate
Option. If at any time the designated rate applicable to any Loan made by any Lender exceeds such
Lender’s highest lawful rate, the rate of interest on such Lender’s Loan shall be limited to such
Lender’s highest lawful rate.




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




          (i) Revolving Credit Base Rate Option: A fluctuating rate per annum (computed on the
basis of a year of 360 days and actual days elapsed) equal to the Base Rate plus the Applicable
Margin, such interest rate to change automatically from time to time effective as of the effective
date of each change in the Base Rate; or




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




Subject to Section 4.3 [Interest After Default], only the Base Rate Option applicable to Revolving
Credit Loans shall apply to the Swing Loans.




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




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



          4.2.1 Amount of Borrowing Tranche. Each Borrowing Tranche of Loans under the LIBOR
Rate Option shall be in integral multiples of $1,000,000 and not less than $5,000,000; and




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




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



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




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




          4.3.3 Acknowledgment. The Borrower acknowledges that the increase in rates referred
to in this Section 4.3 reflects, among other things, the fact that such Loans or other amounts have
become a substantially greater risk given their default status and that the Lenders are entitled to
additional compensation for such risk; and all such interest shall be payable by Borrower upon
demand by Administrative Agent.




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



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




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




          (ii) a contingency has occurred which materially and adversely affects the London interbank
eurodollar market relating to the LIBOR Rate, the Administrative Agent shall have the rights
specified in Section 4.4.3 [Administrative Agent’s and Lender’s Rights].




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




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




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




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



then the Administrative Agent shall have the rights specified in Section 4.4.3 [Administrative
Agent’s and Lender’s Rights].




          4.4.3 Administrative Agent’s and Lender’s Rights. In the case of any event specified
in Section 4.4.1 [Unascertainable] above, the Administrative Agent shall promptly so



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notify the Lenders and the Borrower thereof, and in the case of an event specified in Section
4.4.2 [Illegality; Increased Costs; Deposits Not Available] above, such Lender shall promptly so
notify the Administrative Agent and endorse a certificate to such notice as to the specific
circumstances of such notice, and the Administrative Agent shall promptly send copies of such
notice and certificate to the other Lenders and the Borrower. Upon such date as shall be specified
in such notice (which shall not be earlier than the date such notice is given), the obligation of
(A) the Lenders, in the case of such notice given by the Administrative Agent, or (B) such Lender,
in the case of such notice given by such Lender, to allow the Borrower to select, convert to or
renew a LIBOR Rate Option shall be suspended until the Administrative Agent shall have later
notified the Borrower, or such Lender shall have later notified the Administrative Agent, of the
Administrative Agent’s or such Lender’s, as the case may be, determination that the circumstances
giving rise to such previous determination no longer exist. If at any time the Administrative
Agent makes a determination under Section 4.4.1 [Unascertainable] and the Borrower has previously
notified the Administrative Agent of its selection of, conversion to or renewal of a LIBOR Rate
Option and such Interest Rate Option has not yet gone into effect, such notification shall be
deemed to provide for selection of, conversion to or renewal of the Base Rate Option otherwise
available with respect to such Loans. If any Lender notifies the Administrative Agent of a
determination under Section 4.4.2 [Illegality; Increased Costs; Deposits Not Available], the
Borrower shall, subject to the Borrower’s indemnification Obligations under Section 5.10
[Indemnity], as to any Loan of the Lender to which a LIBOR Rate Option applies, on the date
specified in such notice either convert such Loan to the Base Rate Option otherwise available with
respect to such Loan or prepay such Loan in accordance with Section 5.6 [Voluntary Prepayments].
Absent due notice from the Borrower of conversion or prepayment, such Loan shall automatically be
converted to the Base Rate Option otherwise available with respect to such Loan upon such specified
date.




     4.5 Selection of Interest Rate Options. If the Borrower fails to select a new
Interest Period to apply to any Borrowing Tranche of Loans under the LIBOR Rate Option at the
expiration of an existing Interest Period applicable to such Borrowing Tranche in accordance with
the provisions of Section 4.2 [Interest Periods], the Borrower shall be deemed to have converted
such Borrowing Tranche to the Base Rate Option commencing upon the last day of the existing
Interest Period.



5. PAYMENTS




     5.1 Payments. All payments and prepayments to be made in respect of principal,
interest, Commitment Fees, Letter of Credit Fees, Administrative Agent’s Fee or other fees or
amounts due from the Borrower hereunder shall be payable prior to 2:00 p.m. on the date when due
without presentment, demand, protest or notice of any kind, all of which are hereby expressly
waived by the Borrower, and without set-off, counterclaim or other deduction of any nature, and an
action therefor shall immediately accrue. Such payments shall be made to the Administrative Agent
at the Principal Office for the account of PNC with respect to the Swing Loans and for the ratable
accounts of the Lenders with respect to the Revolving Credit Loans in U.S. Dollars and in
immediately available funds, and the Administrative Agent shall promptly distribute such amounts to
the Lenders in immediately available funds; provided that in the event payments are
received by 2:00 p.m. by the Administrative Agent with respect to the Loans and such payments are
not distributed to the Lenders on the same day received by the Administrative



- 38 -









 




Agent, the Administrative Agent shall pay the Lenders the Federal Funds Effective Rate with
respect to the amount of such payments for each day held by the Administrative Agent and not
distributed to the Lenders. The Administrative Agent’s and each Lender’s statement of account,
ledger or other relevant record shall, in the absence of manifest error, be conclusive as the
statement of the amount of principal of and interest on the Loans and other amounts owing under
this Agreement and shall be deemed an “account stated.”




     5.2 Pro Rata Treatment of Lenders. Each borrowing shall be allocated to each Lender
according to its Ratable Share, and each selection of, conversion to or renewal of any Interest
Rate Option and each payment or prepayment by the Borrower with respect to principal, interest,
Commitment Fees, Letter of Credit Fees, or other fees (except for the Administrative Agent’s Fee
and the Issuing Lender’s fronting fee) or amounts due from the Borrower hereunder to the Lenders
with respect to the Loans, shall (except as otherwise may be provided with respect to a Defaulting
Lender or a Delinquent Lender and except as provided in Section 4.4.3 [Administrative Agent’s and
Lender’s Rights] in the case of an event specified in Section 4.4 [LIBOR Rate Unascertainable;
Etc.], 5.6.2 [Replacement of a Lender] or 5.8 [Increased Costs]) be made in proportion to the
applicable Loans outstanding from each Lender and, if no such Loans are then outstanding, in
proportion to the Ratable Share of each Lender. Notwithstanding any of the foregoing, each
borrowing or payment or prepayment by the Borrower of principal, interest, fees or other amounts
from the Borrower with respect to Swing Loans shall be made by or to PNC according to Section 2.6.5
[Borrowings to Repay Swing Loans].



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



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




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




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



Notwithstanding anything to the contrary contained in this Agreement or any of the other Loan
Documents, any Lender that fails at any time to comply with the provisions of this Section 5.3 with
respect to purchasing participations from the other Lenders whereby such Lender’s share of any
payment received, whether by setoff or otherwise, is in excess of its Ratable Share of such
payments due and payable to all of the Lenders, when and to the full extent required by the
provisions of this Agreement, shall be deemed delinquent (a “Delinquent Lender”)
and shall be deemed a Delinquent Lender until such time as each such delinquency and all of its
obligations hereunder are satisfied. A Delinquent Lender shall be deemed to have assigned any and
all payments due to it from the Borrower, whether on account of or relating to outstanding Loans,
Letters of Credit, interest, fees or otherwise, to the remaining nondelinquent Lenders for
application to, and reduction of, their respective Ratable Share of all outstanding Loans and other
unpaid Obligations of the Borrower. The Delinquent Lender hereby authorizes the Administrative
Agent to distribute such payments to the nondelinquent Lenders in proportion to their respective
Ratable Share of all outstanding Loans and other unpaid Obligations of the Borrower. A Delinquent
Lender shall be deemed to have satisfied in full a delinquency when and if, as a result of
application of the assigned payments to all outstanding Loans and other unpaid Obligations of the
Borrower to the nondelinquent Lenders, the Lenders’ respective Ratable Share of all outstanding
Loans and unpaid Obligations have returned to those in effect immediately prior to such delinquency
and without giving effect to the nonpayment causing such delinquency.




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



     5.5 Interest Payment Dates. Interest on Loans to which the Base Rate Option applies
shall be due and payable in arrears on each Payment Date. Interest on Loans to which the LIBOR
Rate Option applies shall be due and payable on the last day of each Interest Period for those
Loans and, if such Interest Period is longer than three (3) Months, also on the 90th day of such
Interest Period. Interest on the principal amount of each Loan or other monetary Obligation shall
be due and payable on demand after such principal amount or other monetary Obligation



- 40 -









 




becomes due and payable (whether on the stated Expiration Date, upon acceleration or
otherwise).




     5.6 Voluntary Prepayments.



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




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



          (x) a statement indicating the application of the prepayment between Loans to
which the Base Rate Option applies and Loans to which the LIBOR Rate Option applies;



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



          (z) the total principal amount of such prepayment, which shall not be less than
the lesser of (i) the Facility Usage or (ii) $100,000 for any Swing Loan or
$1,000,000 for any Revolving Credit Loan.



          All prepayment notices shall be irrevocable. The principal amount of the Loans for which a
prepayment notice is given, together with interest on such principal amount except with respect to
Loans to which the Base Rate Option applies, shall be due and payable on the date specified in such
prepayment notice as the date on which the proposed prepayment is to be made. Except as provided
in Section 4.4.3 [Administrative Agent’s and Lender’s Rights], if the Borrower prepays a Loan but
fails to specify the applicable Borrowing Tranche which the Borrower is prepaying, the prepayment
shall be applied first to Loans to which the Base Rate Option applies, then to Loans to which the
LIBOR Rate Option applies. Any prepayment hereunder shall be subject to the Borrower’s Obligation
to indemnify the Lenders under Section 5.10 [Indemnity].



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



- 41 -









 






assume such obligations (which assignee may be another Lender, if a Lender accepts such
assignment), provided that:




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




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




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




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



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




     5.7 [Intentionally Omitted]




     5.8 Increased Costs.




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




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




          (ii) subject any Lender or the Issuing Lender to any tax of any kind whatsoever with respect
to this Agreement, any Letter of Credit, any participation in a Letter of Credit or any Loan under
the LIBOR Rate Option made by it, or change the basis of taxation of payments to such Lender or the
Issuing Lender in respect thereof (except for Indemnified Taxes or Other Taxes covered by Section
5.9 [Taxes] and the imposition of, or any change in the rate of, any Excluded Tax payable by such
Lender or the Issuing Lender); or




          (iii) impose on any Lender, the Issuing Lender or the London interbank market any other
condition, cost or expense affecting this Agreement or any Loan under the LIBOR Rate Option made by
such Lender or any Letter of Credit or participation therein;



and the result of any of the foregoing shall be to increase the cost to such Lender of making or
maintaining any Loan under the LIBOR Rate Option (or of maintaining its obligation to make



- 42 -









 






any such Loan), or to increase the cost to such Lender or the Issuing 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 or the Issuing Lender hereunder (whether of principal, interest or any other amount) then,
upon request of such Lender or the Issuing Lender, the Borrower will pay to such Lender or the
Issuing Lender, as the case may be, such additional amount or amounts as will compensate such
Lender or the Issuing Lender, as the case may be, for such additional costs incurred or reduction
suffered.




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




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




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




     5.9 Taxes. 



          5.9.1 Payments Free of Taxes. Any and all payments by or on account of any obligation
of the Borrower hereunder or under any other Loan Document shall be made free and



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clear of and without reduction or withholding for any Indemnified Taxes or Other Taxes;
provided that if the Borrower shall be required by applicable Law to deduct any Indemnified
Taxes (including any Other Taxes) from such payments, then (i) the sum payable shall be increased
as necessary so that after making all required deductions (including deductions applicable to
additional sums payable under this Section) the Administrative Agent, Lender or Issuing Lender, as
the case may be, receives an amount equal to the sum it would have received had no such deductions
been made, (ii) the Borrower shall make such deductions and (iii) the Borrower shall timely pay the
full amount deducted to the relevant Official Body in accordance with applicable Law.




          5.9.2 Payment of Other Taxes by the Borrower. Without limiting the provisions of
Section 5.9.1 [Payments Free of Taxes] above, the Borrower shall timely pay any Other Taxes to the
relevant Official Body in accordance with applicable Law.




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




          5.9.4 Evidence of Payments. As soon as practicable after any payment of Indemnified
Taxes or Other Taxes by the Borrower to an Official Body, the Borrower shall deliver to the
Administrative Agent the original or a certified copy of a receipt issued by such Official Body
evidencing such payment, a copy of the return reporting such payment or other evidence of such
payment reasonably satisfactory to the Administrative Agent.




          5.9.5 Status of Lenders. Any Foreign Lender that is entitled to an exemption from or
reduction of withholding tax under the Law of the jurisdiction in which the Borrower is resident
for tax purposes, or any treaty to which such jurisdiction is a party, with respect to payments
hereunder or under any other Loan Document shall deliver to the Borrower (with a copy to the
Administrative Agent), at the time or times prescribed by applicable Law or reasonably requested by
the Borrower or the Administrative Agent, such properly completed and executed documentation
prescribed by applicable Law as will permit such payments to be made without withholding or at a
reduced rate of withholding. Notwithstanding the submission of such documentation claiming a
reduced rate of or exemption from U.S. withholding tax, the Administrative Agent shall be entitled
to withhold United States federal income taxes at the full 30% withholding rate if in its
reasonable judgment it is required to do so under the due diligence requirements imposed upon a
withholding agent under § 1.1441-7(b) of the United States Income Tax Regulations. Further, the
Administrative Agent is indemnified under § 1.1461-1(e) of the United States Income Tax Regulations
against any claims and demands of any Lender or assignee or participant of a Lender for the amount
of any tax it deducts and withholds in



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accordance with regulations under § 1441 of the Internal Revenue Code. In addition, any
Lender, if requested by the Borrower or the Administrative Agent, shall deliver such other
documentation prescribed by applicable Law or reasonably requested by the Borrower or the
Administrative Agent as will enable the Borrower or the Administrative Agent to determine whether
or not such Lender is subject to backup withholding or information reporting requirements.




          Without limiting the generality of the foregoing, in the event that the Borrower is resident
for tax purposes in the United States of America, any Foreign Lender shall deliver to the Borrower
and the Administrative Agent (in such number of copies as shall be requested by the recipient) on
or prior to the date on which such Foreign Lender becomes a Lender under this Agreement (and from
time to time thereafter upon the request of the Borrower or the Administrative Agent, but only if
such Foreign Lender is legally entitled to do so), whichever of the following is applicable:




          (i) two (2) duly completed valid originals of IRS Form W-8BEN claiming eligibility for
benefits of an income tax treaty to which the United States of America is a party,




          (ii) two (2) duly completed valid originals of IRS Form W-8ECI,




          (iii) in the case of a Foreign Lender claiming the benefits of the exemption for portfolio
interest under section 881(c) of the Code, (x) a certificate to the effect that such Foreign Lender
is not (A) a “bank” within the meaning of section 881(c)(3)(A) of the Code, (B) a “10 percent
shareholder” of the Borrower within the meaning of section 881(c)(3)(B) of the Code, or (C) a
“controlled foreign corporation” described in section 881(c)(3)(C) of the Code and (y) two (2) duly
completed valid originals of IRS Form W-8BEN, or




          (iv) any other form prescribed by applicable Law as a basis for claiming exemption from or a
reduction in United States Federal withholding tax duly completed together with such supplementary
documentation as may be prescribed by applicable Law to permit the Borrower to determine the
withholding or deduction required to be made.




          (v) To the extent that any Lender is not a Foreign Lender, such Lender shall submit to the
Administrative Agent two (2) originals of a W-9 or any other form prescribed by applicable Law
demonstrating that such Lender is not a Foreign Lender.




     5.10 Indemnity. In addition to the compensation or payments required by Section 5.8
[Increased Costs]or Section 5.9 [Taxes], the Borrower shall indemnify each Lender against all
liabilities, losses or expenses (including loss of margin, any loss or expense incurred in
liquidating or employing deposits from third parties and any loss or expense incurred in connection
with funds acquired by a Lender to fund or maintain Loans subject to a LIBOR Rate Option) which
such Lender sustains or incurs as a consequence of any



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




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          (ii) attempt by the Borrower to revoke (expressly, by later inconsistent notices or otherwise)
in whole or part any Loan Requests under Section 2.5 [Revolving Credit Loan Requests; Swing Loan
Requests] or Section 4.2 [Interest Periods] or notice relating to prepayments under Section 5.6
[Voluntary Prepayments], or




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




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




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



6. REPRESENTATIONS AND WARRANTIES




     6.1 Representations and Warranties. The Borrower represents and warrants to the
Administrative Agent and each of the Lenders as follows:



          6.1.1 Organization and Qualification; Power and Authority; Compliance With Laws; Title to
Properties; Event of Default. The Borrower has full power to enter into, execute, deliver and
carry out this Agreement and the other Loan Documents, to incur the Indebtedness



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contemplated by the Loan Documents and to perform its Obligations under the Loan Documents to
which it is a party, and all such actions have been duly authorized by all necessary proceedings on
its part. The Borrower and each Subsidiary of the Borrower (i) is a corporation, partnership or
limited liability company duly organized, validly existing and in good standing under the laws of
its jurisdiction of organization, (ii) has the lawful power to own or lease its properties and to
engage in the business it presently conducts or proposes to conduct, (iii) as of the Closing Date
and as of each subsequent date that any updated Schedules are delivered pursuant to Section 6.2
[Updates to Schedule] hereof, is duly licensed or qualified and in good standing in each
jurisdiction listed on Schedule 6.1.1 and in all other jurisdictions where the property
owned or leased by it or the nature of the business transacted by it or both makes such licensing
or qualification necessary except where failure to do so could not individually or in the
aggregate, reasonably be expected to constitute a Material Adverse Change, (iv) is in compliance in
all material respects with all applicable Laws (other than Environmental Laws which are
specifically addressed in Section 6.1.14 [Environmental Matters]) in all jurisdictions in which the
Borrower or any Subsidiary of the Borrower is presently or will be doing business except where the
failure to do so could not reasonably be expected to constitute a Material Adverse Change, and (v)
has good and marketable title to or valid leasehold interest in all properties, assets and other
material rights which it purports to own or lease or which are reflected as owned or leased on its
books and records and that are necessary to the operation of its business, free and clear of all
Liens and encumbrances except Permitted Liens. No Event of Default or Potential Default exists or
is continuing.




          6.1.2 Subsidiaries and Owners; Investment Companies. Schedule 6.1.2 states as
of the Closing Date and as of each subsequent date that any updated Schedules are delivered
pursuant to Section 6.2 [Updates to Schedule] hereof (i) the name of each of the Borrower’s
Subsidiaries, its jurisdiction of organization and the amount, percentage and type of equity
interests in such Subsidiary (the “Subsidiary Equity Interests”), (ii) the name of each holder of
an equity interest in the Borrower, the amount, percentage and type of such equity interest (the
"Borrower Equity Interests”), and (iii) any options, warrants or other rights outstanding to
purchase any such equity interests referred to in clause (i) or (iii) (collectively the “Equity
Interests”). All of the Subsidiary Equity Interests that the Borrower and its Subsidiaries purport
to own are free and clear in each case of any Lien and all such Subsidiary Equity Interests have
been validly issued and are fully paid and nonassessable. Neither the Borrower nor any of the
Subsidiaries of the Borrower is an “investment company” registered or required to be registered
under the Investment Company Act of 1940 or under the “control” of an “investment company” as such
terms are defined in the Investment Company Act of 1940 and shall not become such an “investment
company” or under such “control.”




          6.1.3 Validity and Binding Effect. This Agreement and each of the other Loan
Documents (i) has been duly and validly executed and delivered by the Borrower, and (ii)
constitutes, or will constitute, legal, valid and binding obligations of the Borrower, enforceable
against the Borrower in accordance with its terms, subject in each case to applicable bankruptcy,
insolvency, reorganization or similar laws generally affecting creditor’s rights.




          6.1.4 No Conflict; Material Contracts; Consents. Neither the execution and delivery
of this Agreement or the other Loan Documents by the Borrower nor the consummation of the
transactions herein or therein contemplated or compliance with the terms and provisions





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hereof or thereof by the Borrower will conflict with, constitute a default under or result in any breach of
(i) the terms and conditions of the certificate of incorporation, bylaws, certificate of limited
partnership, partnership agreement, certificate of formation, limited liability company agreement
or other organizational documents of the Borrower or (ii) any Material Contracts or order, writ,
judgment, injunction or decree to which the Borrower or any of its Subsidiaries is a party or by
which it or any of its Subsidiaries is bound or to which it is subject, or result in the creation
or enforcement of any Lien, charge or encumbrance whatsoever upon any property (now or hereafter
acquired) of the Borrower or any of its Subsidiaries (other than Liens granted under the Loan
Documents) except where failure to do so could not reasonably be expected to result in a Material
Adverse Change. There is no default under such Material Contract and neither the Borrower, nor its
Subsidiaries is bound by any contractual obligation, or subject to any restriction in any
organization document, or any requirement of Law which could reasonably be expected to result in a
Material Adverse Change. No consent, approval, exemption, order or authorization of, or a
registration or filing with, any Official Body or any other Person is required by any Law or any
agreement in connection with the execution, delivery and carrying out of this Agreement and the
other Loan Documents. Schedule 6.1.4 accurately sets out, as of the Closing Date and as of
each subsequent date that any updated Schedules are delivered pursuant to Section 6.2 [Updates to
Schedule] hereof, a list and description of all Material Contracts.




          6.1.5 Litigation. There are no actions, suits, proceedings or investigations pending
or, to the knowledge of the Borrower, threatened against the Borrower or any Subsidiary of the
Borrower at law or in equity before any Official Body which individually or in the aggregate (i)
could reasonably be expected to result in any Material Adverse Change or (ii) purports to
materially adversely affect the legality, validity or enforceability of this Agreement or any Note
or the consummation of the transactions contemplated hereby. Neither the Borrower nor any
Subsidiaries of the Borrower is in violation of any order, writ, injunction or any decree of any
Official Body which could reasonably be expected to result in any Material Adverse Change.




          6.1.6 Financial Statements.




          (i) Historical Statements. The Borrower has delivered to the Administrative Agent
copies of its audited consolidated year-end financial statements for and as of the end of the three
(3) fiscal years ended December 31, 2008. In addition, the Borrower has delivered to the
Administrative Agent copies of its unaudited consolidated interim financial statements for the
fiscal year to date and as of the end of the fiscal quarter ended June 30, 2009 (all such annual
and interim statements being collectively referred to as the “Statements”). The Statements were
compiled from the books and records maintained by the Borrower’s management, are correct and
complete in all material respects and fairly represent the consolidated financial condition of the
Borrower and its Subsidiaries as of the respective dates thereof and the results of operations for
the fiscal periods then ended and have been prepared in accordance with GAAP consistently applied,
subject (in the case of the interim statements) to normal year-end audit adjustments.




     (ii) Accuracy of Financial Statements. Neither the Borrower nor any Subsidiary of the
Borrower has any material liabilities, contingent or otherwise, or forward or long-term commitments
that are not disclosed in the Statements or in the notes thereto, and except as disclosed therein
there are no unrealized or anticipated losses from any commitments



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of the Borrower or any Subsidiary of the Borrower which could reasonably be expected to cause a Material Adverse Change.
Since December 31, 2008, no Material Adverse Change has occurred.




          6.1.7 Margin Stock. Neither the Borrower nor any Subsidiaries of the Borrower engages
or intends to engage principally, or as one of its important activities, in the business of
extending credit for the purpose, immediately, incidentally or ultimately, of purchasing or
carrying margin stock (within the meaning of Regulation U, T or X as promulgated by the Board of
Governors of the Federal Reserve System). No part of the proceeds of any Loan has been or will be
used, immediately, incidentally or ultimately, to purchase or carry any margin stock or to extend
credit to others for the purpose of purchasing or carrying any margin stock or which is
inconsistent with the provisions of the regulations of the Board of Governors of the Federal
Reserve System. Neither the Borrower nor any Subsidiary of the Borrower holds or intends to hold
margin stock in such amounts that more than 25% of the reasonable value of the assets of the
Borrower or any Subsidiary of the Borrower are or will be represented by margin stock.




          6.1.8 Full Disclosure. Neither this Agreement nor any other Loan Document, nor any
certificate, statement, agreement or other documents furnished to the Administrative Agent or any
Lender in connection herewith or therewith, contains any untrue statement of a material fact or
omits to state a material fact necessary in order to make the statements contained herein and
therein, in light of the circumstances under which they were made, not misleading.




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




          6.1.10 Patents, Trademarks, Copyrights, Licenses, Etc. The Borrower and each
Subsidiary of the Borrower owns or possesses all the material patents, trademarks, service marks,
trade names, copyrights, licenses, registrations, franchises, permits and rights necessary to own and operate its properties and to carry on its business as presently conducted and planned to
be conducted by the Borrower or such Subsidiary, without known possible, alleged or actual conflict
with the rights of others, except where the failure to do so could not reasonably be expected to
result in a Material Adverse Change.




          6.1.11 Employment Matters. The Borrower is in compliance with all employment
agreements, employment contracts, collective bargaining agreements and other agreements among the
Borrower and its employees (collectively, “Labor Contracts”) and all applicable federal, state and
local labor and employment Laws including those related to equal employment opportunity and
affirmative action, labor relations, minimum wage, overtime, child labor, medical insurance
continuation, worker adjustment and relocation notices, immigration controls and worker and
unemployment compensation, in each case where the failure to comply






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could reasonably be expected to constitute a Material Adverse Change. There are no outstanding grievances, arbitration awards or
appeals therefrom arising out of the Labor Contracts or current or threatened strikes, picketing,
handbilling or other work stoppages or slowdowns at facilities of the Borrower or any such
Subsidiary which in any case could reasonably be expected to constitute a Material Adverse Change.




          6.1.12 Insurance. The properties of the Borrower and each of its Subsidiaries are
insured pursuant to policies and other bonds which are valid and in full force and effect and which
provide adequate coverage from reputable and financially sound insurers in amounts sufficient to
insure the assets and risks of the Borrower and each such Subsidiary in accordance with prudent
business practice in the industry of the Borrower and such Subsidiaries.




          6.1.13 ERISA Compliance. (i) Each Plan is in compliance in all material respects with
the applicable provisions of ERISA, the Code and other federal or state Laws;




               (ii) Each Plan that is intended to qualify under Section 401(a) of the Code has received a
favorable determination letter from the IRS or an application for such a letter is currently being
processed by the IRS with respect thereto and, to the best knowledge of Borrower, nothing has
occurred which would prevent, or cause the loss of, such qualification;



               (iii) Borrower and each ERISA Affiliate have made all required contributions to each Plan
subject to Section 412 of the Code, and no application for a funding waiver or an extension of any
amortization period pursuant to Section 412 of the Code has been made with respect to any Plan;



               (iv) No ERISA Event (other than an Exempt Reportable Event) has occurred or is reasonably
expected to occur;



               (v) No Pension Plan has any Unfunded Pension Liability. For purposes of this Agreement, the
term “Unfunded Pension Liability” means that the Pension Plan’s assets are less than 60% of its
funding target, using the funding calculation required by Section 303 of ERISA and Section 436 of
the Code;



               (vi) Neither Borrower nor any ERISA Affiliate has incurred, or reasonably expects to incur,
any liability under Title IV of ERISA with respect to any Pension Plan (other than premiums due and
not delinquent under Section 4007 of ERISA);



               (vii) Neither Borrower nor any ERISA Affiliate has incurred, or reasonably expects to incur,
any liability (and no event has occurred which, with the giving of notice under Section 4219 of
ERISA, would result in such liability) under Sections 4201 or 4243 of ERISA with respect to a
Multiemployer Plan;



               (viii) Neither Borrower nor any ERISA Affiliate has engaged in a transaction that could be
subject to Sections 4069 or 4212(c) of ERISA; and



               (ix) The expected post-retirement benefit obligations of the Borrower and its Subsidiaries, as
determined in accordance with the applicable provisions of the Financial Accounting Standards
Board, and without regard to liabilities attributable to the Project Mine



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Subsidiaries or continued coverage mandated by Section 4980B of the Code, are less than $5,000,000.




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




               (i) Neither the Borrower nor its Subsidiaries has received any Environmental Complaint,
whether directed or issued to the Borrower or its Subsidiaries or relating or pertaining to
activities undertaken by any prior owner, operator or occupant of the Real Property, which could
reasonably be expected to result in a Material Adverse Change, and has no reason to believe that it
might receive an Environmental Complaint that could reasonably be expected to result in a Material
Adverse Change.



               (ii) No activity of the Borrower or its Subsidiaries at the Real Property is being conducted
in violation of any Environmental Law or Required Environmental Permit, which such activity could
reasonably be expected to result in a Material Adverse Change, and to the knowledge of the Borrower
or its Subsidiaries, no activity of any prior owner, operator or occupant of the Real Property has
caused an on-going violation of any Environmental Law, which such activity could reasonably be
expected to result in a Material Adverse Change.



               (iii) There are no Regulated Substances present on, in, under, or emanating from, or, to the
Borrower’s or its Subsidiaries’ knowledge, emanating to, the Real Property or any portion thereof
which result in Contamination, which such Contamination could reasonably be expected to result in a
Material Adverse Change.



               (iv) The Borrower and its Subsidiaries have all Required Environmental Permits, the absence of
which could reasonably be expected to result in a Material Adverse Change, and all such Required
Environmental Permits are in full force and effect.



               (v) The Borrower and its Subsidiaries have submitted to an Official Body and/or maintains, as
appropriate, all Required Environmental Notices where the failure to submit and/or maintain such
Required Environmental Notices could reasonably be expected to result in a Material Adverse Change.



               (vi) No structures, improvements, equipment, fixtures, impoundments, pits, lagoons or
aboveground or underground storage tanks located on the Real Property contain or use, except in
compliance with Environmental Laws and Required Environmental Permits, Regulated Substances or
otherwise are operated or maintained except in compliance with Environmental Laws and Required
Environmental Permits where such failure to contain, or the use of, Regulated Substances or the
noncompliance with Environmental Laws or Required Environmental Permits, could reasonably be
expected to result in a Material Adverse Change. To the knowledge of the Borrower and its
Subsidiaries, no structures, improvements, equipment, fixtures, impoundments, pits, lagoons or
aboveground or underground storage tanks of prior owners, operators or occupants of the Real
Property contained or used, except in compliance with Environmental Laws, Regulated Substances or
otherwise were operated or maintained by



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any such prior owner, operator or occupant except in compliance with Environmental Laws where such failure to contain, or the use of, Regulated Substances or the noncompliance with
Environmental Laws or Required Environmental Permits, could reasonably be expected to result in a
Material Adverse Change.




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



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



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



               (x) No lien or other encumbrance authorized by Environmental Laws exists against the Real
Property and neither the Borrower nor its Subsidiaries has any reason to believe that such a lien
or encumbrance may be imposed where such lien or encumbrance could reasonably be expected to result
in a Material Adverse Change.



          6.1.15 Title to Property. As of the Closing Date, the Borrower and its Subsidiaries
have good and sufficient title to their respective properties which the Borrower and its
Subsidiaries own or purport to own that in the aggregate are material, including all such
properties reflected in the most recent audited balance sheet referred to in Section 6.1.6(i)
[Historical Statements] or purported to have been acquired by the Borrower or any Subsidiary after
said date (except as sold or otherwise disposed of in the ordinary course of business), in each
case free and clear of Liens prohibited by this Agreement. All leases that in the aggregate are
material in relation to the business, operation, financial condition, assets or properties of the
Borrower and its Subsidiaries, taken as a whole, are valid and subsisting and are in full force and
effect in all material respects.





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          6.1.16 Solvency. The Borrower is Solvent. After giving effect to the transactions
contemplated by the Loan Documents on the Closing Date, including all Indebtedness incurred thereby
and the payment of all fees related thereto, the Borrower will be Solvent, determined as of the
Closing Date.




          6.1.17 Coal Act; Black Lung Act. To the extent applicable, the Borrower, its
Subsidiaries and its “related persons” (as defined in the Coal Act) are in compliance in all
material respects with the Coal Act and none of the Borrower, its Subsidiaries or its related
persons has any liability under the Coal Act except with respect to premiums or other payments
required thereunder which have been paid when due and except to the extent that the liability
thereunder could not reasonably be expected to result in a Material Adverse Change. The Borrower and its Subsidiaries are in compliance in all material respects with the Black Lung
Act, and neither the Borrower nor its Subsidiaries has any liability under the Black Lung Act
except with respect to premiums, contributions or other payments required thereunder which have
been paid when due and except to the extent that the liability thereunder could not reasonably be
expected to result in a Material Adverse Change.




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




          6.1.19 Permit Blockage. Neither the Borrower nor its Subsidiaries have been barred
for a period in excess of fourteen (14) consecutive days from receiving surface mining or
underground mining permits pursuant to the permit block provisions of the Surface Mining Control
and Reclamation Act, 30 U.S.C. §§ 1201 et seq., and the regulations promulgated
thereto, or any corresponding state laws or regulations.




     6.2 Updates to Schedules. Should any of the information or disclosures provided on
any of the Schedules attached hereto become outdated or incorrect in any material respect, the
Borrower shall, on the date it delivers its annual financial statements to the Administrative Agent
pursuant to Section 8.3.2 [Annual Financial Statements] hereof, provide the Administrative Agent in
writing with such revisions or updates to such Schedule as may be necessary or appropriate to
update or correct same; provided, however, that no Schedule shall be deemed to have
been amended, modified or superseded by any such correction or update, nor shall any breach of
warranty or representation resulting from the inaccuracy or incompleteness of any such Schedule be
deemed to have been cured thereby, unless and until the Required Lenders, in their sole and
absolute discretion, shall have accepted in writing such revisions or updates to such Schedule.



7. CONDITIONS OF LENDING AND ISSUANCE OF LETTERS OF CREDIT




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



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     7.1 First Loans and Letters of Credit.



          7.1.1 Deliveries. On the Closing Date, the Administrative Agent shall have received
each of the following in form and substance satisfactory to the Administrative Agent:




          (i) A certificate of the Borrower signed by an Authorized Officer, dated the Closing Date
stating that the Borrower is in compliance with each of its representations, warranties, covenants
and conditions hereunder, no Event of Default or Potential Default exists, no litigation which is
material adverse to the Borrower and its Subsidiaries, taken as a whole, exists and no Material
Adverse Change has occurred since the date of the last audited financial statements of the Borrower
delivered to the Administrative Agent;




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




          (iii) This Agreement and each of the other Loan Documents signed by an Authorized Officer;




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




          (v) Evidence that adequate insurance required to be maintained under this Agreement is in full
force and effect in form and substance satisfactory to the Administrative Agent and its counsel;




          (vi) The Borrower shall have terminated the commitments, and paid in full all Indebtedness,
interest, fees and other amounts outstanding, under the $130,000,000 Credit Agreement dated as of
March 8, 2005, among the Borrower, the lenders parties thereto and Citibank, N.A., as agent for
such lenders, and each of the lenders that is a party to such Credit Agreement hereby waives, upon
execution of this Agreement, the three Business Days notice required by Section 2.04 of such Credit
Agreement relating to the termination of commitments thereunder;




          (vii) A Lien search in acceptable scope and with acceptable results;




          (viii) All material consents, approvals and licenses required to effectuate the transactions
contemplated hereby have been obtained;




          (ix) The projected financial projections (including balance sheets, statements of operations
and cash flows) of the Borrower for the 2009 through 2012 fiscal years;





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          (x) Evidence that after giving effect to the transactions contemplated by the Loan Documents,
the Borrower has a sufficient mine bonding capacity to conduct its operations as projected in
accordance with the financial projections of the Borrower and its Subsidiaries provided to the
Administrative Agent; and




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




          7.1.2 Payment of Fees. The Borrower shall have paid all fees payable on or before the
Closing Date.




     7.2 Each Loan or Letter of Credit. At the time of making any Loans or issuing,
extending or increasing any Letters of Credit and after giving effect to the proposed extensions of
credit: the representations, warranties and covenants of the Borrower subject to materiality or to
a Material Adverse Change clause shall then be true and correct; all other representations,
warranties and covenants of the Borrower shall then be true and correct in all material respects;
no Event of Default or Potential Default shall have occurred and be continuing; the making of the
Loans or issuance, extension or increase of such Letter of Credit shall not contravene any Law
applicable to the Borrower or any Subsidiary of the Borrower; and the Borrower shall have delivered
to the Administrative Agent a duly executed and completed Loan Request or to the Issuing Lender an
application for a Letter of Credit, as the case may be to the extent required pursuant to this
Agreement.



8. COVENANTS




     The Borrower covenants and agrees that until Payment In Full, the Borrower shall comply at all
times with the following covenants:



     8.1 Affirmative Covenants. 



          8.1.1 Preservation of Existence, Etc. The Borrower shall, and shall cause (or with
respect to any Project Mining Subsidiary, will use its best efforts to cause) each of its
Subsidiaries to, maintain its legal existence as a corporation, limited partnership or limited
liability company and its license or qualification and good standing in each jurisdiction in which
its ownership or lease of property or the nature of its business makes such license or
qualification necessary, except where the failure to do so could not, individually or in the
aggregate, reasonably be expected to result in a Material Adverse Change or as otherwise expressly
permitted in Section 8.2.6 [Liquidations, Mergers, Etc.] and provided further that
neither the Borrower nor any of its Subsidiaries shall be required to preserve any right or
franchise if the Board of Directors of the Borrower or such Subsidiary shall determine that the
preservation thereof is no longer desirable in the conduct of the business of the Borrower or such
Subsidiary, as the case may be, and that the loss thereof is not disadvantageous in any material
respect to the Borrower, such Subsidiary or the Lenders.




          8.1.2 Payment of Liabilities, Including Taxes, Etc. The Borrower shall, and shall
cause each of its Subsidiaries (other than the Project Mining Subsidiaries) to, duly pay and
discharge all liabilities to which it is subject or which are asserted against it, promptly as and
when the same shall become due and payable, including all taxes, assessments and governmental






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charges upon it or any of its properties, assets, income or profits, prior to the date on which
penalties attach thereto, except to the extent that the failure to do so could not reasonably be
expected to result in a Material Adverse Change or to the extent that such liabilities, including
taxes, assessments or charges, are being contested in good faith and by appropriate and lawful
proceedings diligently conducted and for which such reserve or other appropriate provisions, if
any, as shall be required by GAAP shall have been made. The Borrower will cause each Project
Mining Subsidiary to pay and discharge at or before the due date thereof, all of its income tax
liabilities and obligations under the Tax Sharing Agreement.




          8.1.3 Maintenance of Insurance. The Borrower shall, and shall cause each of its
Subsidiaries to, insure its properties and assets against loss or damage by fire and such other
insurable hazards as such assets are commonly insured (including fire, extended coverage, property
damage, workers’ compensation, public liability and business interruption insurance) and against
other risks (including errors and omissions) in such amounts as similar properties and assets are
insured by prudent companies in similar circumstances carrying on similar businesses, and with
reputable and financially sound insurers, including self-insurance to the extent customary.




          8.1.4 Maintenance of Properties and Leases. The Borrower shall, and shall cause (or
with respect to any Project Mining Subsidiary, will use its best efforts to cause) each of its
Subsidiaries to, maintain in good repair, working order and condition (ordinary wear and tear
excepted) in accordance with the general practice of other businesses of similar character and size, all of those properties useful or necessary to its business, and from time to time, the
Borrower will make or cause to be made all appropriate repairs, renewals or replacements thereof.




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




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




          8.1.7 Compliance with Laws; Use of Proceeds. The Borrower shall, and shall cause each
of its Subsidiaries to, comply with all applicable Laws, including all Environmental





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Laws, in all respects; provided that it shall not be deemed to be a violation of this Section 8.1.7 if
any failure to comply with any Law would not result in fines, penalties, remediation costs, other
similar liabilities or injunctive relief which in the aggregate could reasonably be expected to
constitute a Material Adverse Change. The Borrower will use the Letters of Credit and the proceeds
of the Loans only in accordance with Section 2.8 [Use of Proceeds] and as permitted by applicable
Law.




          8.1.8 Anti-Terrorism Laws. Neither the Borrower nor its Subsidiaries is or shall be
(i) a Person with whom any Lender is restricted from doing business under Executive Order No. 13224
or any other Anti-Terrorism Law, (ii) engaged in any business involved in making or receiving any
contribution of funds, goods or services to or for the benefit of such a Person or in any
transaction that evades or avoids, or has the purpose of evading or avoiding, the prohibitions set
forth in any Anti-Terrorism Law, or (iii) otherwise in violation of any Anti-Terrorism Law. The
Borrower shall provide to the Lenders any certifications or information that a Lender requests to
confirm compliance by the Borrower and its Subsidiaries with Anti-Terrorism Laws.




          8.1.9 Maintenance of Material Contracts. The Borrower and its Subsidiaries shall
maintain and materially comply with the terms and conditions of all Material Contracts, the
nonperformance of which could reasonably be expected to result in a Material Adverse Change.




          8.1.10 Maintenance of Licenses, Etc. The Borrower and its Subsidiaries shall maintain
in full force and effect all licenses, franchises, permits and other authorizations necessary for
the ownership and operation of its properties and business if the failure so to maintain the same
could reasonably be expected to constitute a Material Adverse Change.




          8.1.11 Maintenance of Permits. The Borrower and its Subsidiaries shall maintain all
Required Mining Permits in full force and effect in accordance with their terms except where the
failure to do so could not reasonably be expected to result in a Material Adverse Change.




     8.2 Negative Covenants.



          8.2.1 Indebtedness.




          (i) The Borrower shall not at any time create, incur, assume or suffer to exist any
Indebtedness, except:




               (A) Indebtedness under the Loan Documents;



               (B) Existing Indebtedness as set forth on Schedule 8.2.1 (including any extensions or renewals
thereof); provided there is no increase in the amount thereof;



               (C) Indebtedness secured by Purchase Money Security Interests and capitalized leases;



               (D) Indebtedness secured by Liens permitted under Section 8.2.2 [Liens, Etc.];



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               (E) Indebtedness consisting of the Senior Notes (and any replacements thereof);



               (F) other unsecured Indebtedness of the Borrower not to exceed $25,000,000 in the aggregate at
any one time; and



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



          (ii) The Borrower shall not permit any of its Consolidated Subsidiaries to, at any time
create, incur, assume or suffer to exist any Indebtedness, except:




               (A) Existing Indebtedness as set forth on Schedule 8.2.1 (including any extensions or renewals
thereof); provided there is no increase in the amount thereof;



               (B) Indebtedness owing to the Borrower or to a Wholly-Owned Consolidated Subsidiary; and



               (C) Indebtedness secured by Liens permitted under Section 8.2.2 [Liens, Etc.].



          8.2.2 Liens, Etc. The Borrower shall not, and shall not permit any of its
Consolidated Subsidiaries to, at any time create, incur, assume or suffer to exist any Lien on any
of its property or assets, tangible or intangible, now owned or hereafter acquired, or agree or
become liable to do so or assign, or permit any of its Consolidated Subsidiaries to assign, any
right to receive income (unless it makes, or causes to be made, effective provisions whereby the
Notes will be equally and ratably secured with any and all other obligations thereby secured, such
security to be pursuant to a written agreement satisfactory to the Required Lenders), other than:




          (i) Permitted Liens;




          (ii) options or rights granted to the customers of any Project Mining Subsidiary to acquire
the equity interests of such Project Mining Subsidiary in connection with the mining or lignite
sales agreement relating to such Project Mining Subsidiary;




          (iii) restrictions on the transferability of the equity interests and certain assets of any
Project Mining Subsidiary without the consent of the customers of such Project Mining Subsidiary;




          (iv) options or rights granted to (A) the customer of any Project Mining Subsidiary to acquire
the equity interests of such Project Mining Subsidiary and/or certain assets of such Project Mining
Subsidiary and (B) the Borrower to transfer to the customer of any Project Mining Subsidiary the
equity interests and/or certain assets of such Project Mining Subsidiary, in each case in
connection with the termination, if any, of the mining or lignite sales agreement relating to such
Project Mining Subsidiary;





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          (v) rights of any customer of the Borrower or any Subsidiary to acquire, or rights of the
Borrower or such Subsidiary to transfer to such customer, certain assets or other property of the
Borrower (other than property that constitutes the equity interests of a Subsidiary) or such
Subsidiary and used solely in the conduct of the business of the Borrower or such Subsidiary with
such customer, to the extent that such rights are exercisable in connection with a mining agreement
or sales agreement;




          (vi) any interest or title of a lessor under any lease entered into by the Borrower or any
other Subsidiary in the ordinary course of its business and covering only the assets so leased;




          (vii) legal or equitable encumbrances deemed to exist by reason of the existence of any
litigation or other legal proceeding or arising out of a judgment or award with respect to which an
appeal is being prosecuted, to the extent the amount thereof (in excess of applicable insurance
coverage) does not exceed, in the aggregate, $10,000,000, but only so long as such legal or
equitable encumbrances (A) are being actively contested in good faith by appropriate proceedings or
(B) are paid or otherwise discharged within ten (10) days after an Authorized Officer obtains
knowledge thereof;




          (viii) environmental Liens with respect to liabilities in an aggregate amount (in excess of
applicable insurance coverage) not exceeding $1,000,000 (A) to the extent such liabilities are not
yet due or which are being contested in good faith by appropriate proceedings and with respect to
which appropriate reserves have been established or (B) which are released or otherwise discharged
within ten (10) days after an Authorized Officer obtains knowledge thereof; and




          (ix) Liens arising pursuant to Section 412(n) of the Internal Revenue Code or ERISA Section
4068(a) with respect to liabilities in an aggregate amount not exceeding $1,000,000 if (A) the
defaulted payments to which such Liens relate are made within ten days after an Authorized Officer
obtains knowledge of such defaulted payments and such Liens are released as promptly as practicable
thereafter or (B) the obligation to make such payments is being contested in good faith by
appropriate proceedings and with respect to which appropriate reserves have been established.




          8.2.3 Guaranties. The Borrower shall not, and shall not permit any of its Subsidiaries
to, at any time, directly or indirectly, become or be liable in respect of any Guaranty, or assume,
guarantee, become surety for, endorse or otherwise agree to become or remain directly or
contingently liable upon or with respect to any obligation or liability of any other Person, except
for (i) Guaranties issued on behalf of Consolidated Subsidiaries other than Guaranties of
Indebtedness, and (ii) Guaranties of operating performance of Project Mining Subsidiaries.




          8.2.4 Loans and Investments. The Borrower shall not, and shall not permit any of its
Subsidiaries to, at any time make or suffer to remain outstanding any loan or advance to, or
purchase, acquire or own any stock, bonds, notes or securities of, or any partnership interest
(whether general or limited) or limited liability company interest in, or any other





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investment or interest in, or make any capital contribution to, any other Person, or agree,
become or remain liable to do any of the foregoing, except:




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




          (ii) advances to employees to meet expenses incurred by such employees in the ordinary course
of business not to exceed $1,000,000 at any time outstanding;




          (iii) Permitted Investments;




          (iv) Indebtedness of the Borrower or its Subsidiaries to the Borrower or its Subsidiaries
which is permitted under this Agreement;




          (v) loans and advances to NACCO made by the Borrower in the ordinary course of business (which
loans and advances will be used by NACCO for general corporate purposes); provided that: (1) the
Debt/EBITDA Ratio as of the last day of the fiscal quarter ending immediately prior to the date
such loan or advance is made, giving pro forma effect to such loan or advance as if it had been
made on the last day of such fiscal quarter, does not exceed 2.75 to 1.00 and (2) the Unused
Revolving Credit Commitment immediately after giving effect to such loan or advance is greater than
or equal to $15,000,000;




          (vi) investments made with the proceeds of subordinated debt issued to NACCO and/or equity
contributions from NACCO;




          (vii) investments permitted under Sections 8.2.1 [Indebtedness], 8.2.5 [Dividends and Related
Distributions] or 8.2.12 [Issuance of Stock];




          (viii) investments in Joint Ventures not to exceed $15,000,000 per each Joint Venture and
$45,000,000 in the aggregate;




          (ix) loans, advances and investments in the Borrower or its Consolidated Subsidiaries; and




          (x) other investments or acquisitions of the Borrower or any of its Consolidated Subsidiaries;
provided that with respect to investments made under this clause, (A) immediately before
and after giving effect thereto, no Event of Default shall have occurred and be continuing or would
result therefrom, (B) any company or business acquired or invested in pursuant to this clause shall
be in the same line of business as the Borrower or any of its Subsidiaries or shall be in a related
natural resource business arising from or connected to the assets or expertise of the Borrower or
any of its Subsidiaries, (C) immediately after giving effect to such investment pursuant to this
clause, the Debt/EBITDA Ratio as of the last day of the fiscal quarter ending immediately prior to
the date such investment is made, giving pro forma effect to such investment as if it had been made
on the last day of such fiscal quarter, does not exceed 2.75 to 1.00, as evidenced by a certificate
of a Responsible Officer of the Borrower delivered to the Lenders demonstrating such compliance and
(D) the Unused Revolving Credit Commitment immediately after giving effect to such Restricted
Payment is greater than or equal to $15,000,000.




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          8.2.5 Dividends and Related Distributions. The Borrower shall not, and shall not
permit any of its Subsidiaries to, make or pay, or agree to become or remain liable to make or pay,
any dividend or other distribution of any nature (whether in cash, property, securities or
otherwise) on account of or in respect of its shares of equity interests, partnership interests or
limited liability company interests on account of the purchase, redemption, retirement or
acquisition of its shares of equity interests (or warrants, options or rights therefor),
partnership interests or limited liability company interests (collectively, the “Restricted
Payments”), except:




          (i) Restricted Payments payable by any Subsidiary of the Borrower to the Borrower;




          (ii) Restricted Payments payable by the Borrower and its Subsidiaries provided that such
Restricted Payments are made solely in the common stock of such Person making the Restricted
Payment;




          (iii) Restricted Payments payable by the Borrower provided that: (1) the Debt/EBITDA Ratio as
of the last day of the fiscal quarter ending immediately prior to such Restricted Payment, giving
pro forma effect to such Restricted Payment as it if it had occurred on the last day of such fiscal
quarter, is less than or equal to 2.75 to 1.0; (2) the Unused Revolving Credit Commitment
immediately after giving effect to such Restricted Payment is greater than or equal to $15,000,000;
and (3) no Event of Default shall have occurred and be continuing at the time of such proposed
Restricted Payment or would result therefrom; and




          (iv) Restricted Payments payable by the Borrower to NACCO (i) in respect of the Borrower’s
allocable share of NACCO’s overhead and other selling, general and administrative expenses
(including legal, accounting, other professional fees and costs) incurred in the ordinary course of
business, (ii) in respect of liabilities of NACCO up to, but not exceeding $5,000,000 for any
twelve-month period, arising from, in connection with or relating to the closing of certain mining
operations of Bellaire Corporation, (iii) in respect of amounts due to NACCO under the Tax Sharing
Agreement and (iv) in respect of state taxes paid by NACCO on behalf of the Borrower and its
Subsidiaries.




          8.2.6 Liquidations, Mergers, Consolidations, Acquisitions. The Borrower shall not
dissolve, liquidate or wind-up its affairs, and except as permitted pursuant to Section 8.2.4
[Loans and Investments], the Borrower shall not, and shall not permit any of its Subsidiaries to
become a party to any merger or consolidation, or acquire by purchase, lease or otherwise all or
substantially all of the assets or equity interests of any other Person; provided that (i)
any Subsidiary of the Borrower may merge or consolidate with or into any other Wholly-Owned
Subsidiary of the Borrower, (ii) any Project Mining Subsidiary may merge or consolidate with or
into its customers, (iii) any Subsidiary may merge or consolidate with or into any Person if such
Subsidiary is the surviving entity and (iv) any Subsidiary of the Borrower may merge into the
Borrower, provided, in each case, that no Event of Default shall have occurred and be
continuing at the time of such proposed transaction or would result therefrom.




          8.2.7 Dispositions of Assets or Subsidiaries. The Borrower shall not, and shall not
permit any of its Subsidiaries to, sell, convey, assign, lease, abandon or otherwise transfer or
dispose of, voluntarily or involuntarily, any substantial part (as defined below) of its properties



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or assets, tangible or intangible (including sale, assignment, discount or other disposition
of accounts, contract rights, chattel paper, equipment or general intangibles with or without
recourse or of equity interests, shares of beneficial interest, partnership interests or limited
liability company interests of a Subsidiary of the Borrower or its Subsidiaries), except:




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




          (ii) any sale, transfer or lease of assets in the ordinary course of business which are no
longer necessary or required in the conduct of the Borrower’s or such Subsidiary’s business;




          (iii) any sale, transfer or lease of assets by any Wholly-Owned Subsidiary of the Borrower or
its Subsidiaries to the Borrower or its Subsidiaries;




          (iv) any sale, transfer or lease of assets owned by Red River Mining Company or any of its
Subsidiaries as of the date of this Agreement;




          (v) any sale, transfer or lease of assets by a Project Mining Subsidiary to its customers,
provided that no Event of Default shall have occurred and be continuing at the time of such
proposed transaction or would result therefrom; and




          (vi) any sale, transfer or lease of assets in the ordinary course of business which are
replaced by substitute assets acquired or leased in connection with any capital expenditures or
capitalized leases.




     Notwithstanding the above, the Borrower or any Subsidiary may sell, lease or otherwise dispose
of assets constituting a substantial part of the assets of the Borrower and its Subsidiaries if (a)
such assets are sold for cash in an arm’s-length transaction for fair market value to a Person
other than an Affiliate; (b) at such time and after giving effect thereto, no Event of Default
shall have occurred and be continuing; (c) the Debt/EBITDA Ratio as of the last day of the fiscal
quarter ending immediately prior to such sale, lease or disposition, giving pro forma effect to
such sale, lease or disposition as it if it had occurred on the last day of such fiscal quarter, is
less than or equal to 2.75 to 1.0; (d) the Unused Revolving Credit Commitment immediately after
giving effect to such sale, lease or disposition is greater than or equal to $15,000,000; and (e)
an amount equal to the Net Proceeds received from such sale, lease or other disposition (but
excluding any portion of the Net Proceeds which are attributable to assets which constitute less
than a substantial part of the assets of the Borrower and its Subsidiaries) shall be used, in any
combination:



          (1) within two years of such sale, lease or disposition to acquire productive assets used or
useful in carrying on the business of the Borrower and its Subsidiaries and having a value at least
equal to the value of such assets sold, leased or otherwise disposed of; or




          (2) within two years of such sale, lease or disposition to prepay or retire consolidated
Indebtedness of the Borrower and/or its Subsidiaries.




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     As used in this Section, a sale, lease or other disposition of assets shall be deemed to be a
“substantial part” of the assets of the Borrower and its Subsidiaries if the book value of such
assets, when added to the book value of all other assets sold, leased or otherwise disposed of by
the Borrower and its Subsidiaries during the same fiscal year, exceeds 15% of the book value of
Consolidated Total Assets, determined as of the end of the fiscal year immediately preceding such
sale, lease or other disposition; provided that there shall be excluded from any
determination of a “substantial part” any (i) sale or disposition of assets in the ordinary course
of business of the Borrower and its Subsidiaries, and (ii) any transfer of assets from the Borrower
to any Wholly-Owned Subsidiary or from any Subsidiary to the Borrower or a Wholly-Owned Subsidiary.



          8.2.8 Affiliate Transactions. The Borrower will not and will not permit any
Subsidiary to enter into directly or indirectly any transaction or group of related transactions
(including without limitation the purchase, lease, sale or exchange of properties of any kind or
the rendering of any service) with any Affiliate (other than the Borrower or another Subsidiary),
except upon fair and reasonable terms no less favorable to the Borrower or such Subsidiary than
would be obtainable in a comparable arm’s-length transaction with a Person not an Affiliate;
provided that nothing herein shall prohibit the Borrower from making Restricted Payments to NACCO
(i) in respect of the Borrower’s allocable share of NACCO’s overhead and other selling, general and
administrative expenses (including legal, accounting and other professional fees and costs)
incurred in the ordinary course of business, (ii) in respect of liabilities of NACCO up to, but not
exceeding, $5,000,000 for any twelve-month period, arising from, in connection with, or relating to
the closing of certain mining operations of Bellaire Corporation, (iii) in respect of amounts due
to NACCO under the Tax Sharing Agreement, (iv) in respect of state taxes paid by NACCO on behalf of
the Borrower and its Subsidiaries and (v) in respect of dividends on the common stock of the
Borrower to the extent payment of such dividends is permitted pursuant to Section 8.2.5 [Dividends
and Related Distributions].




          8.2.9 Subsidiaries, Partnerships and Joint Ventures. The Borrower shall not, and
shall not permit any of its Consolidated Subsidiaries to own or create directly or indirectly any
Subsidiaries other than (i) Consolidated Subsidiaries; (ii) Project Mining Subsidiaries, and (iii)
Joint Ventures permitted under this Agreement.




          8.2.10 Continuation of or Change in Business. The Borrower shall not, and shall not
permit any of its Subsidiaries to, engage in any business other than those businesses in which the
Borrower and its Subsidiaries engage in as of the Closing Date, substantially as conducted and
operated by the Borrower or such Subsidiary during the present fiscal year, and the Borrower or
such Subsidiary shall not permit any material change in such business.




          8.2.11 Fiscal Year. The Borrower shall not, and shall not permit any Subsidiary of
the Borrower to, change its fiscal year from the twelve-month period beginning January 1 and ending
December 31.




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          8.2.12 Issuance of Stock.




          (i) The Borrower shall not permit any of its Subsidiaries to issue or sell any additional
shares of their equity interests or any options, warrants or other rights in respect thereof to any
Person other than the Borrower or a Wholly-Owned Subsidiary, except for the purpose of qualifying
directors, or except in satisfaction of the validly pre-existing preemptive or contractual rights
of minority shareholders in connection with the simultaneous issuance of stock or other equity
interests to the Borrower and/or a Subsidiary whereby the Borrower and/or such Subsidiary maintain
their same proportionate interest in such Subsidiary; and




          (ii) The Borrower will not sell, transfer or otherwise dispose of any shares of stock or other
equity interests of any Subsidiary (except to qualifying directors), and will not permit any
Subsidiary to sell, transfer or otherwise dispose of (except to the Borrower or a Wholly-Owned
Subsidiary) any shares of stock or other equity interests of any other Subsidiary, unless (A) the
consideration for such sale, transfer or other disposition is either cash or shares of stock, (B)
such sale, transfer or other disposition is made to a Person (other than an Affiliate), and
consists of the Borrower’s entire investment in such Subsidiary and (C) such sale, transfer or
other disposition can be made within the limitations of Section 8.2.7 [Disposition of Assets or
Subsidiaries.




          8.2.13 Changes in Organizational Documents. The Borrower shall not, and shall not
permit any of its Consolidated Subsidiaries to, amend in any respect its certificate of
incorporation (including any provisions or resolutions relating to equity interests ), by-laws,
certificate of limited partnership, partnership agreement, certificate of formation, limited
liability company agreement or other organizational documents without providing at least thirty
(30) calendar days’ prior written notice to the Administrative Agent and the Lenders and, in the
event such change would be adverse to the Lenders as determined by the Administrative Agent in its
sole discretion, obtaining the prior written consent of the Required Lenders.




          8.2.14 Negative Pledges. The Borrower covenants and agrees that it shall not, and
shall not permit any of its Consolidated Subsidiaries to, enter into or permit to exist any
agreement (other than this Agreement and the Senior Note Purchase Agreements) with any Person
which, in any manner, whether directly or contingently, prohibits, restricts or limits the right of
the Borrower or any of the Consolidated Subsidiaries from granting any Liens to the Administrative
Agent or the Lenders except as permitted by Section 8.2.2 [Liens, Etc.] of this Agreement or the
ability to make Restricted Payments to the Borrower or any of its Subsidiaries or otherwise
transfer property to or invest in the Borrower or any of its Subsidiaries.




          8.2.15 Amendments to Senior Note Purchase Agreements. The Borrower shall not supplement,
modify, amend, or restate in any material way any of the Senior Note Purchase Agreements, from time
to time without providing at least fifteen (15) calendar days’ prior written notice to the
Administrative Agent and the Lenders and, in the event any supplement, modification, amendment or
restatement would make any covenant, default, event of default or other material term under any of
the Senior Note Purchase Agreements more restrictive, in any material respect, than the covenants,
defaults, events of default or other material terms of such Indebtedness, as in effect on the
Closing Date, as reasonably determined by the Administrative



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Agent in its sole discretion, shall not make any such supplement, modification, amendment or
restatement without obtaining the prior written consent of the Required Lenders.




          8.2.16 Maximum Debt/EBITDA Ratio. The Borrower shall not at any time permit the
Debt/EBITDA Ratio to be greater than 3.25 to 1.0.




          8.2.17 Minimum Interest Coverage Ratio. The Borrower shall not permit the
Consolidated Interest Coverage Ratio to be less than 4.0 to 1.0.




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



          8.3.1 Quarterly Financial Statements. As soon as available and in any event within
forty-five (45) calendar days after the end of each of the first three fiscal quarters in each
fiscal year, financial statements of the Borrower and its Consolidated Subsidiaries, consisting of
a consolidated and consolidating balance sheet as of the end of such fiscal quarter and related
consolidated and consolidating statements of income, stockholders’ equity and cash flows for the
fiscal quarter then ended and the fiscal year through that date, all in reasonable detail and
certified (subject to normal year-end audit adjustments) by the Chief Executive Officer, President,
Chief Financial Officer or Treasurer of the Borrower as having been prepared in accordance with
GAAP, consistently applied, and setting forth in comparative form the respective financial
statements for the corresponding date and period in the previous fiscal year.




          8.3.2 Annual Financial Statements. As soon as available and in any event within
ninety (90) days after the end of each fiscal year of the Borrower, financial statements of the
Borrower and its Consolidated Subsidiaries consisting of a consolidated and consolidating balance
sheet as of the end of such fiscal year, and related consolidated and consolidating statements of
income, stockholders’ equity and cash flows for the fiscal year then ended, all in reasonable
detail and setting forth in comparative form the financial statements as of the end of and for the
preceding fiscal year, and certified by independent certified public accountants of nationally
recognized standing . The certificate or report of accountants shall be reasonably acceptable to
the Required Lenders.




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




          8.3.4 Notices.




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



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               8.3.4.2 Litigation. Promptly after the commencement thereof, notice of all actions,
suits, proceedings or investigations before or by any Official Body or any other
Person against the Borrower or any Subsidiary of the Borrower that involve a claim or series
of claims in excess of $10,000,000 and not covered by insurance or which if adversely determined
could reasonably be expected to constitute a Material Adverse Change.



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



               8.3.4.4 Erroneous Financial Information. Promptly following the conclusion by the
Borrower or upon the advice of its accountants that any previously issued financial statement,
audit report or interim review is no longer materially correct and should no longer be relied upon
or that disclosure should be made or action should be taken to prevent future reliance.



               8.3.4.5 ERISA Event. Promptly, and in any event within thirty (30) days after an
Authorized Officer of the Borrower has knowledge or reason to know that an ERISA Event (other than
an Exempt Reportable Event) has occurred, notice of such ERISA Event.



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



          (i) Annual Budget. The annual budget, forecasts and board approved projections of the
Borrower, to be supplied not later than sixty (60) days after the commencement of the fiscal year
to which any of the foregoing may be applicable,




          (ii) SEC Reports; Shareholder Communications. Reports, including Forms 10-K, 10-Q and
8-K, registration statements and prospectuses and other shareholder communications, filed by the
Borrower with the Securities and Exchange Commission and copies of all reports, if any, that the
Borrower sends to any of its security holders other than NACCO, and




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




9. DEFAULT




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



          9.1.1 Payments Under Loan Documents. The Borrower shall fail to pay (i) when due any
principal of any Loan (including scheduled installments, mandatory prepayments or the payment due
at maturity), Reimbursement Obligation or Letter of Credit or Obligation, or (ii) within three (3)
Business Days of when due any interest on any Loan, Reimbursement Obligation or Letter of Credit
Obligation or any other amount owing hereunder or under the





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other Loan Documents on the date on
which such principal, interest or other amount becomes due in accordance with the terms hereof or
thereof;




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




          9.1.3 Breach of Negative Covenants or Visitation Rights. The Borrower shall default
in the observance or performance of any covenant contained in Section 8.1.5 [Visitation Rights] or
Section 8.2 [Negative Covenants];




          9.1.4 Breach of Other Covenants. The Borrower shall default in the observance or
performance of any other covenant, condition or provision hereof or of any other Loan Document and
such default shall continue unremedied for a period of thirty (30) Business Days;




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




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




          9.1.7 Loan Document Unenforceable. Any of the Loan Documents shall cease to be legal,
valid and binding agreements enforceable against the party executing the same or such party’s
successors and assigns (as permitted under the Loan Documents) in accordance with the respective
terms thereof or shall in any way be terminated (except in accordance with its terms) or become or
be declared ineffective or inoperative or shall in any way be challenged or contested by the
Borrower;




          9.1.8 [Intentionally Omitted]




          9.1.9 Events Relating to Plans and Benefit Arrangements. (i) An ERISA Event (other
than an Exempt Reportable Event) occurs with respect to a Pension Plan or Multiemployer Plan which
has resulted or could reasonably be expected to result in liability of Borrower under Title IV of
ERISA to the Pension Plan, Multiemployer Plan or the PBGC in an





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aggregate amount in excess of $10,000,000, or (ii) Borrower or any ERISA Affiliate fails to pay when due, after the expiration of
any applicable grace period, any installment payment with respect to its withdrawal liability under Section 4201 of ERISA under a Multiemployer Plan in
an aggregate amount in excess of $10,000,000;




          9.1.10 Change in Control. A Change in Control shall have occurred.




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




     9.2 Consequences of Event of Default.



          9.2.1 Events of Default Other Than Bankruptcy, Insolvency or Reorganization
Proceedings. If an Event of Default specified under Sections 9.1.1 through 9.1.10 shall occur
and be continuing, the Lenders and the Administrative Agent shall be under no further obligation to
make Loans and the Issuing Lender shall be under no obligation to issue Letters of Credit and the
Administrative Agent may, and upon the request of the Required Lenders shall, (i) by written notice
to the Borrower, declare the unpaid principal amount of the Notes then outstanding and all interest
accrued thereon, any unpaid fees and all other Indebtedness of the Borrower to the Lenders
hereunder and thereunder to be forthwith due and payable, and the same shall thereupon become and
be immediately due and payable to the Administrative Agent for the benefit of each Lender without
presentment, demand, protest or any other notice of any kind, all of which are hereby expressly
waived, and (ii) require the Borrower to, and the Borrower shall thereupon, deposit in a
non-interest-bearing account with the Administrative Agent, as cash collateral for its Obligations
under the Loan Documents, an amount equal to the maximum amount currently or at any time thereafter
available to be drawn on all outstanding Letters of Credit, and the Borrower hereby pledges to the
Administrative Agent and the Lenders, and grants to the Administrative Agent and the Lenders a
security interest in, all such cash as security for such Obligations; and




          9.2.2 Bankruptcy, Insolvency or Reorganization Proceedings. If an Event of Default
specified under Section 9.1.11 [Relief Proceedings] shall occur, the Lenders shall be under no
further obligations to make Loans hereunder and the Issuing Lender shall be under no obligation to
issue Letters of Credit and the unpaid principal amount of the Loans then outstanding and all
interest accrued thereon, any unpaid fees and all other Indebtedness of the Borrower to the Lenders
hereunder and thereunder shall be immediately due and payable, without presentment, demand, protest
or notice of any kind, all of which are hereby expressly waived; and




          9.2.3 Set-off. If an Event of Default shall have occurred and be continuing, each
Lender, the Issuing Lender, and each of their respective Affiliates and any participant of such
Lender or Affiliate which has agreed in writing to be bound by the provisions of Section 5.3
[Sharing of Payments] is hereby authorized at any time and from time to time, to the fullest




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




          9.2.4 Application of Proceeds. From and after the date on which the Administrative
Agent has taken any action pursuant to this Section 9.2 and until all Obligations of the Borrower
have been paid in full, any and all proceeds received by the Administrative Agent from any sale or
other disposition of any of the Borrower’s property, or any part thereof, or the exercise of any
other remedy by the Administrative Agent, shall be applied as follows:




          (i) first, to reimburse the Administrative Agent and the Lenders for out-of-pocket costs,
expenses and disbursements, including reasonable attorneys’ and paralegals’ fees and legal
expenses, incurred by the Administrative Agent or the Lenders;




          (ii) second, to the repayment of all Obligations then due and unpaid of the Borrower to the
Lenders or their Affiliates incurred under this Agreement or any of the other Loan Documents or
agreements evidencing any Lender Provided Interest Rate Hedge or Other Lender Provided Financial
Services Obligations, whether of principal, interest, fees, expenses or otherwise and to cash
collateralize the Letter of Credit Obligations, in such manner as the Administrative Agent may
determine in its reasonable discretion; and




          (iii) the balance, if any, to the Borrower or as required by Law.




10. THE ADMINISTRATIVE AGENT




     10.1 Appointment and Authority. Each of the Lenders and the Issuing Lender hereby
irrevocably appoints PNC to act on its behalf as the Administrative Agent hereunder and under the
other Loan Documents and authorizes the Administrative Agent to take such actions on its behalf and
to exercise such powers as are delegated to the Administrative Agent by the terms hereof or
thereof, together with such actions and powers as are reasonably incidental thereto. The
provisions of this Section 10 are solely for the benefit of the Administrative Agent, the Lenders
and the Issuing Lender, except as specifically set forth herein, and the Borrower shall have no
rights as a third party beneficiary of any of such provisions.



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



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



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




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




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




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




          The Administrative Agent shall not be responsible for or have any duty to ascertain or inquire
into (i) any statement, warranty or representation made in or in connection with this Agreement or
any other Loan Document, (ii) the contents of any certificate, report or other document delivered
hereunder or thereunder or in connection herewith or therewith, (iii) the performance or observance
of any of the covenants, agreements or other terms or conditions set forth herein or therein or the
occurrence of any Potential Default or Event of





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Default, (iv) the validity, enforceability, effectiveness or genuineness of this Agreement, any other Loan Document or any other agreement,
instrument or document or (v) the satisfaction of any condition set forth in Section 7 [Conditions of Lending and Issuance of Letters of Credit] or
elsewhere herein, other than to confirm receipt of items expressly required to be delivered to the
Administrative Agent.




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



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



     10.6 Resignation of Administrative Agent. The Administrative Agent may at any time
give notice of its resignation to the Lenders, the Issuing Lender and the Borrower. Upon receipt
of any such notice of resignation, the Required Lenders shall have the right, with approval from
the Borrower (so long as no Event of Default has occurred and is continuing), to appoint a
successor, such approval not to be unreasonably withheld or delayed. If no such successor shall
have been so appointed by the Required Lenders and shall have accepted such appointment within
thirty (30) days after the retiring Administrative Agent gives notice of its resignation, then the
retiring Administrative Agent may on behalf of the Lenders and the Issuing Lender, appoint a
successor Administrative Agent meeting the qualifications set forth above; provided that if
the Administrative Agent shall notify the Borrower and the Lenders that no qualifying Person has
accepted such appointment, then such resignation shall nonetheless become effective in accordance
with such notice and (i) the retiring Administrative Agent shall be discharged from its duties and
obligations hereunder and under the other Loan Documents and (ii) all payments, communications and
determinations provided to be made by, to or through the Administrative



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Agent shall instead be made by or to each Lender and the Issuing Lender directly, until such time as the Required Lenders
appoint a successor Administrative Agent as provided for above in this
Section 10.6. Upon the acceptance of a successor’s appointment as Administrative Agent
hereunder, such successor shall succeed to and become vested with all of the rights, powers,
privileges and duties of the retiring (or retired) Administrative Agent, and the retiring
Administrative Agent shall be discharged from all of its duties and obligations hereunder or under
the other Loan Documents (if not already discharged therefrom as provided above in this Section).
The fees payable by the Borrower to a successor Administrative Agent shall be the same as those
payable to its predecessor unless otherwise agreed between the Borrower and such successor. After
the retiring Administrative Agent’s resignation hereunder and under the other Loan Documents, the
provisions of this Section 10 and Section 11.3 [Expenses; Indemnity; Damage Waiver] shall continue
in effect for the benefit of such retiring Administrative Agent, its sub-agents and their
respective Related Parties in respect of any actions taken or omitted to be taken by any of them
while the retiring Administrative Agent was acting as Administrative Agent.




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



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



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



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



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



11. MISCELLANEOUS




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



          11.1.1 Increase of Commitment. Increase the amount of the Revolving Credit Commitment
of any Lender hereunder without the consent of such Lender;




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




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



provided that no agreement, waiver or consent which would modify the interests, rights or
obligations of the Administrative Agent or the Issuing Lender may be made without the written
consent of such Administrative Agent or Issuing Lender, as applicable, and provided,
further that, if in connection with any proposed waiver, amendment or modification referred to
in Sections 11.1.1 through 11.1.3 above, the consent of the Required Lenders is obtained but the





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consent of one or more of such other Lenders whose consent is required is not obtained (each a
“Non-Consenting Lender”), then the Borrower shall have the right to replace any such Non-
Consenting Lender with one or more replacement Lenders pursuant to Section 5.6.2 [Replacement of a
Lender].




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



     11.3 Expenses; Indemnity; Damage Waiver.



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




          11.3.2 Indemnification by the Borrower. The Borrower shall indemnify the
Administrative Agent (and any sub-agent thereof), each Lender and the Issuing Lender, and each
Related Party of any of the foregoing Persons (each such Person being called an “Indemnitee”)
against, and hold each Indemnitee harmless from, any and all losses, claims, damages, liabilities
and related expenses (including the fees, charges and disbursements of any counsel for any
Indemnitee), and shall indemnify and hold harmless each Indemnitee from all fees and time charges
and disbursements for attorneys who may be employees of any Indemnitee, incurred by any Indemnitee
or asserted against any Indemnitee by any third party or by the Borrower arising out of, in
connection with, or as a result of (i) the execution or delivery of this Agreement, any other Loan
Document or any agreement or instrument contemplated hereby or thereby, the performance or
nonperformance by the parties hereto of their respective obligations hereunder or thereunder or the
consummation of the transactions contemplated hereby or thereby, (ii) any





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Loan or Letter of Credit or the use or proposed use of the proceeds therefrom (including any refusal by the Issuing Lender
to honor a demand for payment under a Letter of Credit if the
documents presented in connection with such demand do not strictly comply with the terms of
such Letter of Credit), (iii) breach of representations, warranties or covenants of the Borrower
under the Loan Documents, or (iv) any actual or prospective claim, litigation, investigation or
proceeding relating to any of the foregoing, including any such items or losses relating to or
arising under Environmental Laws or pertaining to environmental matters, whether based on contract,
tort or any other theory, whether brought by a third party or by the Borrower, and regardless of
whether any Indemnitee is a party thereto; provided that such indemnity shall not, as to
any Indemnitee, be available to the extent that such losses, claims, damages, liabilities or
related expenses (x) are determined by a court of competent jurisdiction by final and nonappealable
judgment to have resulted from the gross negligence or willful misconduct of such Indemnitee or (y)
result from a claim brought by the Borrower against an Indemnitee for breach in bad faith of such
Indemnitee’s obligations hereunder or under any other Loan Document, if the Borrower has obtained a
final and nonappealable judgment in its favor on such claim as determined by a court of competent
jurisdiction.




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




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




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




     11.4 Holidays. Whenever payment of a Loan to be made or taken hereunder shall be due
on a day which is not a Business Day such payment shall be due on the next Business Day



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(except as provided in Section 4.2 [Interest Periods]) and such extension of time shall be included in
computing interest and fees, except that the Loans shall be due on the Business Day
preceding the Expiration Date if the Expiration Date is not a Business Day. Whenever any
payment or action to be made or taken hereunder (other than payment of the Loans) shall be stated
to be due on a day which is not a Business Day, such payment or action shall be made or taken on
the next following Business Day, and such extension of time shall not be included in computing
interest or fees, if any, in connection with such payment or action.




     11.5 Notices; Effectiveness; Electronic Communication. 



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




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




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





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




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



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



     11.8 Successors and Assigns.



          11.8.1 Successors and Assigns Generally. The provisions of this Agreement shall be
binding upon, and inure to the benefit of, the parties hereto and their respective successors and
assigns permitted hereby, except that the Borrower may not assign or otherwise transfer any of its
rights or obligations hereunder without the prior written consent of the Administrative Agent and
each Lender and no Lender may assign or otherwise transfer any of its rights or obligations
hereunder except (i) to an assignee in accordance with the provisions of Section 11.8.2
[Assignments by Lenders], (ii) by way of participation in accordance with the provisions of Section
11.8.4 [Participations], or (iii) by way of pledge or assignment of a security interest subject to
the restrictions of Section 11.8.6 [Certain Pledges; Successors and Assigns Generally] (and any
other attempted assignment or transfer by any party hereto shall be null and void). Nothing in
this Agreement, expressed or implied, shall be construed to confer upon any Person (other than the
parties hereto, their respective successors and assigns permitted hereby, Participants to the
extent provided in Section 11.8.4 [Participations] and, to the extent expressly contemplated
hereby, the Related Parties of each of the Administrative Agent and the Lenders) any legal or
equitable right, remedy or claim under or by reason of this Agreement.




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




          (i) Minimum Amounts.




               (A) in the case of an assignment of the entire remaining amount of the assigning Lender’s
Commitment and the Loans at the time owing to it or in the case of an



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assignment to a Lender, an Affiliate of a Lender or an Approved Fund, no minimum amount need
be assigned; and




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



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




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




               (A) the consent of the Borrower (such consent not to be unreasonably withheld or delayed)
shall be required unless (x) an Event of Default has occurred and is continuing at the time of such
assignment or (y) such assignment is to a Lender, an Affiliate of a Lender or an Approved Fund; and



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



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




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




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



Subject to acceptance and recording thereof by the Administrative Agent pursuant to Section 11.8.3
[Register], from and after the effective date specified in each Assignment and Assumption
Agreement, the assignee thereunder shall be a party to this Agreement and, to the extent of the
interest assigned by such Assignment and Assumption Agreement, have the rights and obligations of a
Lender under this Agreement, and the assigning Lender thereunder shall, to the




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extent of the interest assigned by such Assignment and Assumption Agreement, be released from its
obligations under this Agreement (and, in the case of an Assignment and Assumption Agreement
covering all of the assigning Lender’s rights and obligations under this Agreement, such Lender
shall cease to be a party hereto) but shall continue to be entitled to the benefits of Sections 4.4
[LIBOR Rate Unascertainable; Illegality; Increased Costs; Deposits Not Available], 5.8 [Increased
Costs], and 11.3 [Expenses, Indemnity; Damage Waiver] with respect to facts and circumstances
occurring prior to the effective date of such assignment. Any assignment or transfer by a Lender
of rights or obligations under this Agreement that does not comply with this Section 11.8.2 shall
be treated for purposes of this Agreement as a sale by such Lender of a participation in such
rights and obligations in accordance with Section 11.8.4 [Participations].




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




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




          Any agreement or instrument pursuant to which a Lender sells such a participation shall
provide that such Lender shall retain the sole right to enforce this Agreement and to approve any
amendment, modification or waiver of any provision of this Agreement; provided that such
agreement or instrument may provide that such Lender will not, without the consent of the
Participant, agree to any amendment, modification or waiver with respect to Sections 11.1.1
[Increase of Commitment, Etc.] or 11.1.2 [Extension of Payment, Etc.]. Subject to Section 11.8.5
[Limitations upon Participant Rights Successors and Assigns Generally], the Borrower agrees that
each Participant shall be entitled to the benefits of Sections 4.4 [LIBOR Rate Unascertainable;
Illegality; Increased Costs; Deposits Not Available] and 5.8 [Increased Costs] to the same extent
as if it were a Lender and had acquired its interest by assignment pursuant to Section 11.8.2
[Assignments by Lenders]. To the extent permitted by Law, each Participant also shall be entitled
to the benefits of Section 9.2.3 [Setoff] as though it were a Lender; provided such
Participant agrees to be subject to Section 5.3 [Sharing of Payments by Lenders] as though it were
a Lender.





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          11.8.5 Limitations upon Participant Rights Successors and Assigns Generally. A
Participant shall not be entitled to receive any greater payment under Sections 5.8 [Increased
Costs], 5.9 [Taxes] or 11.3 [ Expenses; Indemnity; Damage Waiver] than the applicable Lender would
have been entitled to receive with respect to the participation sold to such Participant, unless
the sale of the participation to such Participant is made with the Borrower’s prior written
consent. A Participant that would be a Foreign Lender if it were a Lender shall not be entitled to
the benefits of Section 5.9 [Taxes] unless the Borrower is notified of the participation sold to
such Participant and such Participant agrees, for the benefit of the Borrower, to comply with
Section 5.9.5 [Status of Lenders] as though it were a Lender.




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




     11.9 Confidentiality.



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




          11.9.2 Sharing Information With Affiliates of the Lenders. The Borrower acknowledges
that from time to time financial advisory, investment banking and other services may be offered or
provided to the Borrower or one or more of its Affiliates (in connection with





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this Agreement or otherwise) by any Lender or by one or more Subsidiaries or Affiliates of
such Lender and the Borrower hereby authorizes each Lender to share any information delivered to
such Lender by the Borrower and its Subsidiaries pursuant to this Agreement to any such Subsidiary
or Affiliate subject to the provisions of Section 11.9.1 [General].




     11.10 Counterparts; Integration; Effectiveness.



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




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



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




          11.11.2 SUBMISSION TO JURISDICTION. THE BORROWER IRREVOCABLY AND UNCONDITIONALLY
SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE NONEXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE
OF NEW YORK SITTING IN NEW YORK COUNTY AND OF THE UNITED STATES DISTRICT COURT OF THE SOUTHERN
DISTRICT OF NEW YORK, AND ANY APPELLATE COURT FROM ANY THEREOF, IN ANY ACTION OR PROCEEDING ARISING
OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR FOR RECOGNITION OR ENFORCEMENT
OF ANY JUDGMENT, AND EACH OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL
CLAIMS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH NEW YORK
STATE COURT OR, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, IN SUCH FEDERAL COURT.




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EACH OF THE PARTIES HERETO AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL
BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER
MANNER PROVIDED BY LAW. NOTHING IN THIS AGREEMENT OR IN ANY OTHER LOAN DOCUMENT SHALL AFFECT ANY
RIGHT THAT THE ADMINISTRATIVE AGENT, OR ANY LENDER MAY OTHERWISE HAVE TO BRING ANY ACTION OR
PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AGAINST THE BORROWER OR ITS
PROPERTIES IN THE COURTS OF ANY JURISDICTION.




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




          11.11.4 SERVICE OF PROCESS. EACH PARTY HERETO IRREVOCABLY CONSENTS TO SERVICE OF
PROCESS IN THE MANNER PROVIDED FOR NOTICES IN SECTION 11.5 [NOTICES; EFFECTIVENESS; ELECTRONIC
COMMUNICATION]. NOTHING IN THIS AGREEMENT WILL AFFECT THE RIGHT OF ANY PARTY HERETO TO SERVE
PROCESS IN ANY OTHER MANNER PERMITTED BY APPLICABLE LAW.




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




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




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[SIGNATURE PAGE TO CREDIT AGREEMENT]




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



	 	 	 	 	 	 
	WITNESS/ATTEST:

	 	THE NORTH AMERICAN COAL CORPORATION	 
	 
	 	 	 	 	 
	 
	 	 	 	 	 
	By:
	/s/
Thomas A. Koza
	 	By:	/s/ K. Donald Grischow	 
	 	Name: Thomas A. Koza

	 	 	Name: K. Donald Grischow	 
	 	Title: Secretary

	 	 	Title: Treasurer	 






 









 






[SIGNATURE PAGE TO CREDIT AGREEMENT]




	 	 	 	 	 
	 	PNC BANK, NATIONAL ASSOCIATION,
 individually and as
Administrative Agent

 	 
	 	By:  	/s/ Richard L. Munsick
 	 
	 	 	Name:  	Richard L. Munsick 	 
	 	 	Title:  	Senior Vice President 	 
	 
	 	REGIONS BANK, individually and as Co-Syndication Agent

 	 
	 	By:  	/s/ Brad Campbell
 	 
	 	 	Name:  	Brad Campbell 	 
	 	 	Title:  	Vice President 	 
	 
	 	U.S. BANK NATIONAL ASSOCIATION,
individually and as
Co-Syndication Agent

 	 
	 	By:  	/s/ Richard Ameny
 	 
	 	 	Name:  	Richard Ameny 	 
	 	 	Title:  	Vice President 	 



 









 






	 	 	 	 	 



[SIGNATURE PAGE TO CREDIT AGREEMENT]




	 	 	 	 	 
	 	KEYBANK NATIONAL ASSOCIATION

 	 
	 	By:  	/s/ Brian P. Fox
 	 
	 	 	Name:  	Brian P. Fox 	 
	 	 	Title:  	Vice President 	 
	 
	 	UNION BANK, N.A.

 	 
	 	By:  	/s/ Efrain Soto
 	 
	 	 	Name:  	Efrain Soto 	 
	 	 	Title:  	Vice President 	 



 









 






	 	 	 	 	 



SCHEDULE
1.1(A)


PRICING GRID—

VARIABLE PRICING AND FEES BASED ON DEBT/EBITDA

(PRICING EXPRESSED IN BASIS POINTS)




	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	Letter of	 	Revolving Credit	 	Revolving Credit
	Level	 	Debt/EBITDA Ratio	 	Credit Fee	 	Base Rate Spread	 	LIBOR Rate Spread
	I

	 	Less than 1.0 to 1.0
	 	 	275	 	 	 	175	 	 	 	275	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	II

	 	Greater than or
equal to 1.0 to 1.0
but less than 2.0
to 1.0
	 	 	300	 	 	 	200	 	 	 	300	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	III

	 	Greater than or
equal to 2.0 to 1.0
	 	 	325	 	 	 	225	 	 	 	325	 






     For purposes of determining the Applicable Margin and the Applicable Letter of Credit Fee
Rate:



     (a) Until delivery of the Compliance Certificate due to be delivered under Section 8.3.3
[Certificate of Borrower] for the fiscal quarter ending December 31, 2009, the Applicable Margin
and the Applicable Letter of Credit Rate shall be that associated with Level II of the pricing grid



     (b) The Applicable Margin and the Applicable Letter of Credit Fee Rate shall be recomputed as
of the end of each fiscal quarter ending after the Closing Date based on the Debt/EBITDA Ratio as
of such quarter end. Any increase or decrease in the Applicable Margin or the Applicable Letter of
Credit Fee Rate computed as of a quarter end shall be effective on the date on which the Compliance
Certificate evidencing such computation is due to be delivered under Section 8.3.3 [Certificate of
Borrower].



     (c) If, as a result of any restatement of or other adjustment to the financial statements of
the Borrower or for any other reason, the Borrower or the Lenders determine that (i) the
Debt/EBITDA Ratio as calculated by the Borrower as of any applicable date was inaccurate and (ii) a
proper calculation of the Debt/EBITDA Ratio would have resulted in higher pricing for such period,
the Borrower shall immediately and retroactively be obligated to pay to the Administrative Agent
for the account of the applicable Lenders, promptly on demand by the Administrative Agent (or,
after the occurrence of an actual or deemed entry of an order for relief



SCHEDULE 1.1(A) - 1 









 





with respect to the Borrower under the Bankruptcy Code of the United States, automatically and
without further action by the Administrative Agent, any Lender or the Issuing Lender), an amount
equal to the excess of the amount of interest and fees that should have been paid for such period
over the amount of interest and fees actually paid for such period. This paragraph shall not limit
the rights of the Administrative Agent, any Lender or the Issuing Lender, as the case may be, under
Section 2.9 [Letter of Credit Subfacility] or 4.3 [Interest After Default] or 9 [Default]. The
Borrower’s obligations under this paragraph shall survive the termination of the Commitments and
the repayment of all other Obligations hereunder.





SCHEDULE 1.1(A) - 2 











 





SCHEDULE 1.1(B)




COMMITMENTS OF LENDERS AND ADDRESSES FOR NOTICES




Page 1 of 2




Part 1 — Commitments of Lenders and Addresses for Notices to Lenders




	 	 	 	 	 	 	 	 	 	 	 
	 	 	Lender	 	Commitment	 	Ratable Share
	Name:

	 	PNC Bank, National Association	 	 	 	 	 	 	 	 
	Address:

	 	One PNC Plaza	 	 	 	 	 	 	 	 
	 

	 	249 Fifth Avenue	 	 	 	 	 	 	 	 
	 

	 	Pittsburgh, PA 15222	 	 	 	 	 	 	 	 
	Attention:

	 	Richard C. Munsick	 	 	 	 	 	 	 	 
	Telephone:

	 	(412) 762-4299
	 	$	24,000,000.00	 	 	 	24.000000000	%
	Telecopy:

	 	(412) 762-6484	 	 	 	 	 	 	 	 
	Email:richard.munsick@pncbank.com	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Name:

	 	Regions Bank	 	 	 	 	 	 	 	 
	Address:

	 	1111 West Mockingbird Lane	 	 	 	 	 	 	 	 
	 

	 	Dallas, TX 75247	 	 	 	 	 	 	 	 
	Attention:

	 	Brad Campbell	 	 	 	 	 	 	 	 
	Telephone:

	 	(214) 678-2578	 	 	 	 	 	 	 	 
	Telecopy:

	 	(214) 678-3956
	 	$	20,000,000.00	 	 	 	20.000000000	%
	Email:brad.campbell@regions.com	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Name:

	 	U.S. Bank National Association	 	 	 	 	 	 	 	 
	Address:

	 	One U.S. Bank Plaza	 	 	 	 	 	 	 	 
	 

	 	1420 Fifth Avenue, 10th Floor	 	 	 	 	 	 	 	 
	 

	 	Mail code: PD-WA-T10M	 	 	 	 	 	 	 	 
	 

	 	Seattle, WA 98101	 	 	 	 	 	 	 	 
	Attention:

	 	Richard Ameny
	 	$	20,000,000.00	 	 	 	20.000000000	%
	Telephone:

	 	(206) 587-5237	 	 	 	 	 	 	 	 
	Telecopy:

	 	(206) 344-3654	 	 	 	 	 	 	 	 
	Email:richard.ameny@usbank.com	 	 	 	 






SCHEDULE 1.1(B) — 1




 









 





	 	 	 	 	 	 	 	 	 	 	 
	 	 	Lender	 	Commitment	 	Ratable Share
	Name:

	 	Keybank National Association	 	 	 	 	 	 	 	 
	Address:

	 	127 Public Square	 	 	 	 	 	 	 	 
	 

	 	TRAM SL-MO-T12M	 	 	 	 	 	 	 	 
	 

	 	Cleveland, OH 44114	 	 	 	 	 	 	 	 
	Attention:

	 	Brian Fox	 	 	 	 	 	 	 	 
	Telephone:

	 	(216) 689-4599
	 	$	18,000,000.00	 	 	 	18.000000000	%
	Telecopy:

	 	(216) 689-4649	 	 	 	 	 	 	 	 
	Email:Brian_Fox@keybank.com	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Name:

	 	Union Bank, N.A.	 	 	 	 	 	 	 	 
	Address:

	 	Commercial Loan Operations	 	 	 	 	 	 	 	 
	 

	 	601 Potrero Grande Dr.	 	 	 	 	 	 	 	 
	 

	 	Monterey Park, CA 91754	 	 	 	 	 	 	 	 
	Attention:

	 	Maria Suncin	 	 	 	 	 	 	 	 
	Telephone:

	 	(323) 720-2870
	 	$	18,000,000.00	 	 	 	18.000000000	%
	Telecopy:

	 	(800) 446-9951	 	 	 	 	 	 	 	 
	     Total

	 	 	 	 	$100,000,000.00
	 	 	 	 100	%
	 

	 	 	 	 	 	 	 	 	 	 






SCHEDULE 1.1(B) — 2




 









 





SCHEDULE 1.1(B)




COMMITMENTS OF LENDERS AND ADDRESSES FOR NOTICES




Page 2 of 2




Part 2 — Addresses for Notices to Borrower:




ADMINISTRATIVE AGENT




	 	 	 
	Name:

	 	PNC Bank, National Association
	Address:

	 	One PNC Plaza
	 

	 	249 Fifth Avenue
	 

	 	Pittsburgh, Pennsylvania 15222-2707
	Attention:

	 	Richard C. Munsick
	Telephone:

	 	(412) 762-4299
	Telecopy:

	 	(412) 762-2571






With a Copy To:




Agency Services, PNC Bank, National Association




Mail Stop: P7-PFSC-04-I




Address: 500 First Avenue

Pittsburgh, PA 15219

Attention: Agency Services

Telephone: 412 768 0423

Telecopy: 412 762 8672




BORROWER:




Bob Carlton, CFO

The North American Coal Corporation

14785 Preston Road, Suite 1100

Dallas, Texas  75254-7891

Fax:  972/387-1051

bob.carlton@nacoal.com




With a Copy To:




Tom Koza, Secretary

The North American Coal Corporation

14785 Preston Road, Suite 1100

Dallas, Texas  75254-7891

Fax:  972/387-1031

tom.koza@nacoal.com