exv10w6






Exhibit 10.6




AMENDED AND RESTATED CONTINUING

AGREEMENT OF GUARANTY AND SURETYSHIP




     This Amended and Restated Continuing Agreement of Guaranty and Suretyship (the “Guaranty”),
dated as of this 26th day of June, 2008, is jointly and severally given by each of the undersigned
and each of the other Persons which become Guarantors hereunder from time to time (each a
“Guarantor” and collectively the “Guarantors”) in favor of PNC Bank, National Association, as agent
for the Banks (the “Agent”) in connection with that Amended and Restated Credit Agreement, dated as
of the date hereof, by and among Westmoreland Mining LLC, a Delaware limited liability company (the
“Borrower”), the Guarantors now or hereafter party thereto, the Agent, and the Banks now or
hereafter party thereto (the “Banks”) (as amended, restated, modified, or supplemented from time to
time hereafter, the “Credit Agreement”). Capitalized terms not otherwise defined herein shall have
the respective meanings ascribed to them by the Credit Agreement.



     1. Guarantied Obligations. To induce the Agent and the Banks to make loans and grant
other financial accommodations to the Borrower under the Credit Agreement, each Guarantor hereby
jointly and severally, unconditionally and irrevocably guaranties to the Agent and each Bank and
each Affiliate of each Bank and the Collateral Agent on behalf of the Banks, and becomes surety, as
though it was a primary obligor for, the full and punctual payment and performance when due
(whether on demand, at stated maturity, by acceleration, or otherwise and including any amounts
which would become due but for the operation of an automatic stay under the federal bankruptcy code
of the United States or any similar laws of any country or jurisdiction) of (i) all Obligations,
including, without limiting the generality of the foregoing, all obligations (including any
interest or currency swap, future, option or other interest rate protection or similar agreements
(collectively, “Bank-Provided Interest Rate Hedges”)), liabilities, and indebtedness from time to
time of the Borrower or any other Guarantor to the Agent or any of the Banks or any Affiliate of
any Bank under or in connection with the Credit Agreement or any other Loan Document, whether for
principal, interest, fees, indemnities, expenses, or otherwise, and all refinancings or refundings
thereof, whether such obligations, liabilities, or indebtedness are direct or indirect, secured or
unsecured, joint or several, absolute or contingent, due or to become due, whether for payment or
performance, now existing or hereafter arising (and including obligations, liabilities, and
indebtedness arising or accruing after the commencement of any bankruptcy, insolvency,
reorganization, or similar proceeding with respect to the Borrower or any Guarantor or which would
have arisen or accrued but for the commencement of such proceeding (including, without limitation,
interest after default), even if the claim for such obligation, liability, or indebtedness is not
enforceable or allowable in such proceeding, and including all Obligations, liabilities, and
indebtedness arising from any extensions of credit under or in connection with the Loan Documents
from time to time, regardless whether any such extensions of credit are in excess of the amount
committed under or contemplated by the Loan Documents or are made in circumstances in which any
condition to extension of credit is not satisfied) (ii) any obligation or liability of any of the
Loan Parties arising out of overdrafts on deposits or other accounts or out of electronic funds
(whether by wire transfer or through automated clearing houses or otherwise) or out of the return
of unpaid, or other failure of the Agent or any Bank to receive final payment for, any check, item,
instrument, payment order or other deposit or credit to a deposit or
other account, or out of the Agent’s or any



 









 







Bank’s non-receipt of or inability to collect funds or otherwise not being made
whole in connection with depository or other similar arrangements, and (iii) any amendments,
extensions, renewals and increases of or to any of the foregoing (all of the foregoing obligations,
liabilities and indebtedness are referred to herein collectively as the “Guarantied Obligations”
and each as a “Guarantied Obligation”). Without limitation of the foregoing, any of the Guarantied
Obligations shall be and remain Guarantied Obligations entitled to the benefit of this Guaranty if
the Agent, the Collateral Agent or any of the Banks (or any one or more assignees or transferees
thereof) from time to time assign or otherwise transfer all or any portion of their respective
rights and obligations under the Notes, the Credit Agreement or the other Loan Documents, or any
other Guarantied Obligations, to any other Person in accordance therewith. In furtherance of the
foregoing, each Guarantor jointly and severally agrees as follows.



     2. Guaranty. Each Guarantor hereby jointly and severally promises to pay and perform
all such Guarantied Obligations immediately upon demand of the Agent, the Collateral Agent and the
Banks or any one or more of them. All payments made hereunder shall be made by each Guarantor in
immediately available funds in United States Dollars and shall be made without setoff,
counterclaim, withholding, or other deduction of any nature.



     3. Obligations Absolute. The obligations of the Guarantors hereunder shall not be
discharged or impaired or otherwise diminished by any failure, default, omission, or delay, willful
or otherwise, by any Bank, the Agent, the Collateral Agent or Borrower or any other obligor on any
of the Guarantied Obligations, or by any other act or thing or omission or delay to do any other
act or thing which may or might in any manner or to any extent vary the risk of any Guarantor or
would otherwise operate as a discharge of any Guarantor as a matter of law or equity. Each of the
Guarantors agree that the Guarantied Obligations will be paid and performed strictly in accordance
with the terms of the Loan Documents. Without limiting the generality of the foregoing, each
Guarantor hereby consents to, at any time and from time to time, and the joint and several
obligations of each Guarantor hereunder shall not be diminished, terminated, or otherwise similarly
affected by any of the following:



     (a) Any lack of genuineness, legality, validity, enforceability or allowability (in a
bankruptcy, insolvency, reorganization or similar proceeding, or otherwise), or any avoidance or
subordination, in whole or in part, of any Loan Document or any of the Guarantied Obligations and
regardless of any law, regulation or order now or hereafter in effect in any jurisdiction affecting
any of the Guarantied Obligations, any of the terms of the Loan Documents, or any rights of the
Agent, the Collateral Agent or the Banks or any other Person with respect thereto;



     (b) Any increase, decrease, or change in the amount, nature, type or purpose of any of the
Guarantied Obligations (whether or not contemplated by the Loan Documents as presently
constituted); any change in the time, manner, method, or place of payment or performance of, or in
any other term of, any of the Guarantied Obligations; any execution or delivery of any additional
Loan Documents; or any amendment, modification or supplement to, or refinancing or refunding of,
any Loan Document or any of the Guarantied Obligations;



     (c) Any failure to assert any breach of or default under any Loan Document or any of the
Guarantied Obligations; any extensions of credit in excess of the amount committed under or



- 2 -









 




contemplated by the Loan Documents, or in circumstances in which any condition to such
extensions of credit has not been satisfied; any other exercise or non-exercise, or any other
failure, omission, breach, default, delay, or wrongful action in connection with any exercise or
non-exercise, of any right or remedy against the Borrower or any other Person under or in
connection with any Loan Document or any of the Guarantied Obligations; any refusal of payment or
performance of any of the Guarantied Obligations, whether or not with any reservation of rights
against any Guarantor; or any application of collections (including but not limited to collections
resulting from realization upon any direct or indirect security for the Guarantied Obligations) to
other obligations, if any, not entitled to the benefits of this Guaranty, in preference to
Guarantied Obligations entitled to the benefits of this Guaranty, or if any collections are applied
to Guarantied Obligations, any application to particular Guarantied Obligations;




     (d) Any taking, exchange, amendment, modification, waiver, supplement, termination,
subordination, compromise, release, surrender, loss, or impairment of, or any failure to protect,
perfect, or preserve the value of, or any enforcement of, realization upon, or exercise of rights,
or remedies under or in connection with, or any failure, omission, breach, default, delay, or
wrongful action by the Agent, the Collateral Agent or the Banks, or any of them, or any other
Person in connection with the enforcement of, realization upon, or exercise of rights or remedies
under or in connection with, or, any other action or inaction by any of the Agent, the Collateral
Agent or the Banks, or any of them, or any other Person in respect of, any direct or indirect
security for any of the Guarantied Obligations. As used in this Guaranty, “direct or indirect
security” for the Guarantied Obligations, and similar phrases, includes any collateral security,
guaranty, suretyship, letter of credit, capital maintenance agreement, put option, subordination
agreement, or other right or arrangement of any nature providing direct or indirect assurance of
payment or performance of any of the Guarantied Obligations, made by or on behalf of any Person;



     (e) Any merger, consolidation, liquidation, dissolution, winding-up, charter revocation of
charter or other organizational document, or forfeiture, or other change in, restructuring or
termination of the corporate, limited liability or other structure or existence of, the Borrower,
any Guarantor or any other Person; any bankruptcy, insolvency, reorganization or similar proceeding
with respect to the Borrower, any Guarantor or any other Person; or any action taken or election
made by the Agent, the Collateral Agent or the Banks, or any of them (including but not limited to
any election under Section 1111(b)(2) of the United States Bankruptcy Code or any comparable law of
any jurisdiction), the Borrower, any Guarantor or any other Person in connection with any such
proceeding;



     (f) Any defense, setoff, or counterclaim which may at any time be available to or be asserted
by the Borrower, any Guarantor or any other Person with respect to any Loan Document or any of the
Guarantied Obligations; or any discharge by operation of law or release of the Borrower, any
Guarantor or any other Person from the performance or observance of any Loan Document or any of the
Guarantied Obligations; and



     (g) Any other event or circumstance, whether similar or dissimilar to the foregoing, and
whether known or unknown, which might otherwise constitute a defense available to, or



- 3 -









 




limit the liability of, any Guarantor, a guarantor or a surety, excepting only full, strict, and
indefeasible payment and performance of the Guarantied Obligations in full.




     Each Guarantor acknowledges, consents, and agrees that new Guarantors may join in this
Guaranty pursuant to Section 11.17 [Joinder of Guarantors; Additional Security Agreements] of the
Credit Agreement and each Guarantor affirms that its obligations shall continue hereunder
undiminished.



     4. Waivers, etc. Each of the Guarantors hereby waives any defense to or limitation on
its obligations under this Guaranty arising out of or based on any event or circumstance referred
to in Section 3 hereof. Without limitation and to the fullest extent permitted by applicable law,
each Guarantor waives each of the following:



     (a) All notices, disclosures and demand of any nature which otherwise might be required from
time to time to preserve intact any rights against any Guarantor, including the following: any
notice of any event or circumstance described in Section 3 hereof; any notice required by any law,
regulation or order now or hereafter in effect in any jurisdiction; any notice of nonpayment,
nonperformance, dishonor, or protest under any Loan Document or any of the Guarantied Obligations;
any notice of the incurrence of any Guarantied Obligation; any notice of any default or any failure
on the part of the Borrower, any Guarantor or any other Person to comply with any Loan Document or
any of the Guarantied Obligations or any direct or indirect security for any of the Guarantied
Obligations; and any notice of any information pertaining to the business, operations, condition
(financial or otherwise) or prospects of the Borrower, any Guarantor or any other Person;



     (b) Any right to any marshalling of assets, any right to the filing, subject to the provisions
of Section 6 below, of any claim against the Borrower, any Guarantor or any other Person in the
event of any bankruptcy, insolvency, reorganization or similar proceeding, or to the exercise,
subject to the provisions of Section 6 below, against the Borrower, any Guarantor or any other
Person of any other right or remedy under or in connection with any Loan Document or any of the
Guarantied Obligations or any direct or indirect security for any of the Guarantied Obligations;
(except for, following the indefeasible payment and performance in full of the Guaranteed
Obligations, the filing of claims, or the exercise of rights and remedies under or the exercise of
rights and remedies under or in connection with the Loan Documents, against other Loan Parties, in
each case, as and to the extent permitted by Section 6) any requirement of promptness or diligence
on the part of the Agent, the Collateral Agent or the Banks, or any of them, or any other Person;
any requirement to exhaust any remedies under or in connection with, or to mitigate the damages
resulting from default under, any Loan Document or any of the Guarantied Obligations or any direct
or indirect security for any of the Guarantied Obligations; any benefit of any statute of
limitations; and any requirement of acceptance of this Guaranty or any other Loan Document, and any
requirement that any Guarantor receive notice of any such acceptance;



     (c) Any defense or other right arising by reason of any law now or hereafter in effect in any
jurisdiction pertaining to election of remedies (including but not limited to anti-deficiency laws,
“one action” laws or the like), or by reason of any election of remedies or other action or



- 4 -









 




inaction by the Agent, the Collateral
Agent or the Banks, or any of them (including but not
limited to commencement or completion of any judicial proceeding or nonjudicial sale or other
action in respect of collateral security for any of the Guarantied Obligations), which results in
denial or impairment of the right of the Agent, the Collateral Agent or the Banks, or any of them,
to seek a deficiency against the Borrower, any Guarantor or any other Person or which otherwise
discharges or impairs any of the Guarantied Obligations; and




     (d) Any and all defenses it may now or hereafter have based on principles of suretyship,
impairment of collateral, or the like.



     5. Reinstatement. This Guaranty is a continuing obligation of the Guarantors and shall
remain in full force and effect notwithstanding that no Guarantied Obligations may be outstanding
from time to time and notwithstanding any other event or circumstance. Upon termination of all
Commitments and expiration or cancellation of all Letters of Credit and indefeasible payment in
full of all Guarantied Obligations, this Guaranty shall terminate; provided, however, that this
Guaranty shall continue to be effective or be reinstated, as the case may be, any time any payment
of any of the Guarantied Obligations is rescinded, recouped, avoided, or must otherwise be returned
or released by the Collateral Agent, any Bank or Agent upon or during the insolvency, bankruptcy,
or reorganization of, or any similar proceeding affecting, Borrower or for any other reason
whatsoever, all as though such payment had not been made and was due and owing.



     6. Subrogation. No Guarantor shall exercise any rights against Borrower or any other
Guarantor arising in connection with the Guarantied Obligations (including rights of subrogation,
contribution, and the like) until the Guarantied Obligations have been indefeasibly paid in full
and all Commitments have been terminated and all Letters of Credit have expired or been terminated.
If any amount shall be paid to any Guarantor by or on behalf of Borrower or any other Guarantor by
virtue of any right of subrogation, contribution, or the like, such amount shall be deemed to have
been paid to such Guarantor for the benefit of, and shall be held in trust for the benefit of, the
Agent, the Collateral Agent and the Banks and shall forthwith be paid to the Agent to be credited
and applied against the Guarantied Obligations, whether matured or unmatured, in accordance with
the terms of the Credit Agreement.



     7. No Stay. Without limitation of any other provision of this Guaranty, if any
declaration of default or acceleration or other exercise or condition to exercise of rights or
remedies under or with respect to any Guarantied Obligation shall at any time be stayed, enjoined,
or prevented for any reason (including but not limited to stay or injunction resulting from the
pendency against the Borrower, any Guarantor or any other Person of a bankruptcy, insolvency,
reorganization or similar proceeding), the Guarantors agree that, for the purposes of this Guaranty
and their obligations hereunder, the Guarantied Obligations shall be deemed to have been declared
in default or accelerated, and such other exercise or conditions to exercise shall be deemed to
have been taken or met, and, to the full extent permitted by law, such stay, injunction or other
impediment shall not be applicable to any Guarantor’s obligations hereunder.




- 5 -









 





     8. Taxes.



     (a) No Deductions. All payments and collections made by or from any Guarantor
hereunder or under any of the other Loan Documents or any Bank-Provided Interest Rate Hedges
shall be made or received free and clear of and without deduction for any present or future taxes,
levies, imposts, deductions, charges, or withholdings, and all liabilities with respect thereto,
excluding taxes imposed on the net income of the Agent or any Bank and all income and franchise
taxes of the United States applicable to the Agent or any Bank (all such non-excluded taxes,
levies, imposts, deductions, charges, withholdings, and liabilities being hereinafter referred to
as “Taxes”). If any Guarantor shall be required by law to deduct any Taxes from or in respect of
any sum payable hereunder or under any of the other Loan Documents or any Bank-Provided Interest
Rate Hedges, (i) the sum payable or collectible shall be increased as may be necessary so that
after making all required deductions (including deductions applicable to additional sums payable or
collectible under this Subsection (a)) the Agent or such Bank, as the case may be, receives an
amount equal to the sum it would have received had no such deductions been made, (ii) such
Guarantor shall make such deductions and (iii) such Guarantor shall timely pay the full amount
deducted to the relevant tax authority or other authority in accordance with applicable Law.




     (b) Stamp Taxes. In addition, each Guarantor agrees to pay any and all present and
future stamp or documentary taxes or any other excise or property taxes, charges, or similar levies
which arise from any payment or collection made hereunder or from the execution, delivery, or
registration of, or otherwise with respect to, any of the Loan Documents or any Bank-Provided
Interest Rate Hedges (hereinafter referred to as “Other Taxes”).



     (c) Indemnification for Taxes Paid by any Bank. Each Guarantor shall indemnify each
Bank for the full amount of Taxes or Other Taxes (including, without limitation, any Taxes or Other
Taxes imposed by any jurisdiction on amounts payable under this Subsection) paid by any Bank and
any liability (including penalties, interest, and expenses) arising therefrom or with respect
thereto, whether or not such Taxes or Other Taxes were correctly or legally asserted. This
indemnification shall be made within thirty (30) days from the date a Bank makes written demand
therefor.



     (d) Certificate. Within thirty (30) days after the date of any payment of any Taxes
or Other Taxes by any Guarantor, such Guarantor shall furnish to each Bank, the original or a
certified copy of a receipt evidencing payment thereof. If no Taxes are payable in respect of any
payment by such Guarantor, such Guarantor shall, if so requested by a Bank, provide a certificate
of an officer of such Guarantor to that effect.



     (e) If for the purposes of obtaining judgment in any court it is necessary to convert a sum
due under any of the Loan Documents in any currency (the “Original Currency”) into another currency
(the “Other Currency”), each Guarantor hereby agrees, to the fullest extent permitted by law, that
the rate of exchange used shall be that at which in accordance with normal banking procedures each
Bank could purchase the Original Currency with the Other Currency after any premium and costs of
exchange on the Business Day preceding that on which final judgment is given.




- 6 -









 





     (f) The obligation of each Guarantor in respect of any sum due from such Guarantor to any Bank
under any of the Loan Documents shall, notwithstanding any judgment in an Other Currency, whether
pursuant to a judgment or otherwise, be discharged only to the extent that, on the business day
(being a day on which it is open for business at its principal office in the United
States) following receipt by any Bank of any sum adjudged to be so due in such Other Currency,
such Bank may in accordance with normal banking procedures purchase the Original Currency with such
Other Currency. If the amount of the Original Currency so purchased is less than the sum
originally due to such Bank in the Original Currency, each Guarantor agrees, as a separate
obligation and notwithstanding any such judgment or payment, to indemnify such Bank against such
loss.




     (g) Without prejudice to the survival of any other agreement or any Guarantor hereunder, the
agreements and obligations of each Guarantor contained in clauses (a) through (f) directly above
shall survive the payment in full of principal and interest under any Note and the termination of
the Credit Agreement.



     9. Notices. Each Guarantor agrees that all notices, statements, requests, demands and
other communications under this Guaranty shall be given to such Guarantor at the address set forth
on a Schedule to, or in a Guarantor Joinder given under, the Credit Agreement and in the manner
provided in Section 11.6 [Notices] of the Credit Agreement. The Agent, the Collateral Agent and
the Banks may rely on any notice (whether or not made in a manner contemplated by this Guaranty)
purportedly made by or on behalf of a Guarantor, and the Agent, the Collateral Agent and the Banks
shall have no duty to verify the identity or authority of the Person giving such notice.



     10. Counterparts; Telecopy Signatures. This Guaranty may be executed in any number of
counterparts, each of which, when so executed, shall be deemed an original, but all such
counterparts shall constitute but one and the same instrument. Each Guarantor acknowledges and
agrees that a telecopy transmission to Agent or any Bank of signature pages hereof purporting to be
signed on behalf of any Guarantor shall constitute effective and binding execution and delivery
hereof by such Guarantor.



     11. Setoff, Default Payments by Borrower.



     (a) In the event that at any time any obligation of the Guarantors now or hereafter existing
under this Guaranty shall have become due and payable, the Agent and the Banks, or any of them,
shall have the right from time to time, without notice to any Guarantor, to set off against and
apply to such due and payable amount any obligation of any nature of any Bank or the Agent, or any
subsidiary or affiliate of any Bank or Agent, to any Guarantor, including but not limited to all
deposits (whether time or demand, general or special, provisionally credited or finally credited,
however evidenced) now or hereafter maintained by any Guarantor with the Agent or any Bank or any
subsidiary or affiliate thereof. Such right shall be absolute and unconditional in all
circumstances and, without limitation, shall exist whether or not the Agent, the Collateral Agent
or the Banks, or any of them, shall have given any notice or made any demand under this Guaranty or
under such obligation to the Guarantor, whether such obligation to the Guarantor is absolute or
contingent, matured or unmatured (it being agreed that the Agent and the Banks, or



- 7 -









 




any of them, may
deem such obligation to be then due and payable at the time of such setoff), and regardless of the
existence or adequacy of any collateral, guaranty, or other direct or indirect security or right or
remedy available to the Agent, the Collateral Agent or any of the Banks. The rights of the Agent
and the Banks under this Section are in addition to such other rights and remedies (including,
without limitation, other rights of setoff and banker’s lien)
which the Agent and the Banks, or any of them, may have, and nothing in this Guaranty or in any
other Loan Document shall be deemed a waiver of or restriction on the right of setoff or banker’s
lien of the Agent and the Banks, or any of them. Each of the Guarantors hereby agree that, to the
fullest extent permitted by law, any affiliate or subsidiary of the Agent or any of the Banks and
any holder of a participation in any obligation of any Guarantor under this Guaranty, shall have
the same rights of setoff as the Agent and the Banks as provided in this Section (regardless
whether such affiliate or participant otherwise would be deemed a creditor of the Guarantor).




     (b) Upon the occurrence and during the continuation of any default under any Guarantied
Obligation, if any amount shall be paid to any Guarantor by or for the account of Borrower, such
amount shall be held in trust for the benefit of each Bank and Agent and shall forthwith be paid to
the Agent to be credited and applied to the Guarantied Obligations when due and payable.



     12. Construction. The section and other headings contained in this Guaranty are for
reference purposes only and shall not affect interpretation of this Guaranty in any respect. This
Guaranty has been fully negotiated between the applicable parties, each party having the benefit of
legal counsel, and accordingly neither any doctrine of construction of guaranties or suretyships in
favor of the guarantor or surety, nor any doctrine of construction of ambiguities in agreement or
instruments against the party controlling the drafting thereof, shall apply to this Guaranty.



     13. Successors and Assigns. This Guaranty shall be binding upon each Guarantor, its
successors and assigns, and shall inure to the benefit of and be enforceable by the Agent and the
Banks, or any of them, and their successors and permitted assigns; provided, however, that no
Guarantor may assign or transfer any of its rights or obligations hereunder or any interest herein
and any such purported assignment or transfer shall be null and void. Without limitation of the
foregoing, the Agent, the Collateral Agent and the Banks, or any of them (and any successive
assignee or transferee), from time to time may assign or otherwise transfer all or any portion of
its rights or obligations under the Loan Documents (including all or any portion of any commitment
to extend credit), or any other Guarantied Obligations, to any other person, in accordance with the
Credit Agreement and such Guarantied Obligations (including any Guarantied Obligations resulting
from extension of credit by such other Person under or in connection with the Loan Documents) shall
be and remain Guarantied Obligations entitled to the benefit of this Guaranty, and to the extent of
its interest in such Guarantied Obligations such other Person shall be vested with all the benefits
in respect thereof granted to the Agent and the Banks in this Guaranty or otherwise.




- 8 -









 





     14. Governing Law; Submission to Jurisdiction; Waiver of Jury Trial.



     (a) This Guaranty shall be governed by, construed, and enforced in accordance with the
internal laws of the Commonwealth of Pennsylvania, without regard to its conflict of laws
principles.



     (b) EACH GUARANTOR HEREBY IRREVOCABLY SUBMITS TO THE NONEXCLUSIVE JURISDICTION OF THE COURTS
OF THE COMMONWEALTH OF
PENNSYLVANIA AND OF THE UNITED STATES DISTRICT COURT OF THE WESTERN DISTRICT OF PENNSYLVANIA, AND
WAIVES PERSONAL SERVICE OF ANY AND ALL PROCESS UPON IT AND CONSENTS THAT ALL SUCH SERVICE OF
PROCESS BE MADE BY CERTIFIED OR REGISTERED MAIL DIRECTED TO THE GUARANTORS AT THE ADDRESS OR
ADDRESSES PROVIDED FOR IN SECTION 11.6 [NOTICES] OF THE CREDIT AGREEMENT AND SERVICE SO MADE SHALL
BE DEEMED TO BE COMPLETED UPON ACTUAL RECEIPT THEREOF.




     (c) EACH GUARANTOR HEREBY IRREVOCABLY WAIVES ANY OBJECTION TO JURISDICTION AND VENUE OF ANY
ACTION INSTITUTED AGAINST IT AS PROVIDED HEREIN AND AGREES NOT TO ASSERT ANY DEFENSE BASED ON LACK
OF JURISDICTION OR VENUE.



     (d) EACH GUARANTOR HEREBY IRREVOCABLY WAIVES TRIAL BY JURY IN ANY ACTION, SUIT, PROCEEDING OR
COUNTERCLAIM OF ANY KIND ARISING OUT OF OR RELATED TO THIS GUARANTY, THE CREDIT AGREEMENT, ANY
OTHER LOAN DOCUMENT OR THE COLLATERAL TO THE FULLEST EXTENT PERMITTED BY LAW.



     15. Severability; Modification to Conform to Law.



     (a) It is the intention of the parties that this Guaranty be enforceable to the fullest extent
permissible under applicable Law, but that the unenforceability (or modification to conform to such
Law) of any provision or provisions hereof shall not render unenforceable, or impair, the remainder
hereof. If any provision in this Guaranty shall be held invalid or unenforceable in whole or in
part in any jurisdiction, this Guaranty shall, as to such jurisdiction, be deemed amended to modify
or delete, as necessary, the offending provision or provisions and to alter the bounds thereof in
order to render it or them valid and enforceable to the maximum extent permitted by applicable Law,
without in any manner affecting the validity or enforceability of such provision or provisions in
any other jurisdiction or the remaining provisions hereof in any jurisdiction and without
invalidating the remaining provisions hereof.



     (b) Without limitation of the preceding Subsection (a), to the extent that applicable Law
(including applicable Laws pertaining to fraudulent conveyance or fraudulent or preferential
transfer) otherwise would render the full amount of the Guarantor’s obligations hereunder invalid,
voidable, or unenforceable on account of the amount of a Guarantor’s aggregate liability under this
Guaranty, then, notwithstanding any other provision of this Guaranty to the contrary, the aggregate
amount of such liability shall, without any further action by the Agent or any of the




- 9 -









 





Banks or
such Guarantor or any other Person, be automatically limited and reduced to the highest amount which is
valid and enforceable as determined in such action or proceeding, which (without limiting the
generality of the foregoing) may be an amount which is equal to the greater of:




     (A) the fair consideration actually received by such Guarantor under the terms
and as a result of the Loan Documents and the value of the benefits described in
Section 18 (b) hereof, including (and to the extent not inconsistent
with applicable federal and state laws affecting the enforceability of
guaranties) distributions, commitments, and advances made to or for the benefit of
such Guarantor with the proceeds of any credit extended under the Loan Documents, or




     (B) the excess of (1) the amount of the fair value of the assets of such
Guarantor as of the date of this Guaranty as determined in accordance with
applicable federal and state laws governing determinations of the insolvency of
debtors as in effect on the date hereof, over (2) the amount of all liabilities of
such Guarantor as of the date of this Guaranty, also as determined on the basis of
applicable federal and state laws governing the insolvency of debtors as in effect
on the date hereof.



     (c) Notwithstanding anything to the contrary in this Section or elsewhere in this Guaranty,
this Guaranty shall be presumptively valid and enforceable to its full extent in accordance with
its terms, as if this Section (and references elsewhere in this Guaranty to enforceability to the
fullest extent permitted by law) were not a part of this Guaranty, and in any related litigation
the burden of proof shall be on the party asserting the invalidity or unenforceability of any
provision hereof or asserting any limitation on any Guarantor’s obligations hereunder as to each
element of such assertion.



     16. Additional Guarantors. At any time after the initial execution and delivery of
this Guaranty to the Agent, the Collateral Agent and the Banks, additional Persons may become
parties to this Guaranty and thereby acquire the duties and rights of being Guarantors hereunder by
executing and delivering to the Agent, the Collateral Agent and the Banks a Guarantor Joinder
pursuant to the Credit Agreement. No notice of the addition of any Guarantor shall be required to
be given to any pre-existing Guarantor and each Guarantor hereby consents thereto.



     17. Joint and Several Obligations. Each of the obligations of each and every
Guarantor under this Guaranty are joint and several with the obligations of the other Guarantors,
and each Guarantor hereby waives to the full extent permitted by Law any defense it may otherwise
have to the payment and performance of the Obligations that its liability hereunder is limited and
not joint and several. Each Guarantor acknowledges and agrees that the foregoing waivers and those
set forth below serve as a material inducement to the agreement of the Agent and the Banks to make
the Loans, and that the Agent and the Banks are relying on each specific waiver and all such
waivers in entering into this Guaranty. The undertakings of each Guarantor hereunder secure the
obligations of itself and the other Guarantors. The Agent and the Banks, or any of them, may, in
their sole discretion, elect to enforce or cause the Collateral Agent to enforce this Guaranty
against any Guarantor without any duty or responsibility to pursue any



- 10 -









 





other Guarantor and such an
election by the Agent and the Banks, or any of them, shall not be a defense to any action the Agent
and the Banks, or any of them, may elect to take against any Guarantor. Each of the Banks and
Agent hereby reserves all rights against each Guarantor.



     18. Receipt of Credit Agreement, Other Loan Documents, Benefits.



     (a) Each Guarantor hereby acknowledges that it has received a copy of the Credit Agreement and
the other Loan Documents and each Guarantor certifies that the representations and warranties made
therein with respect to such Guarantor are true and correct. Further, each
Guarantor acknowledges and agrees to perform, comply with, and be bound by all of the
provisions of the Credit Agreement and the other Loan Documents.




     (b) Each Guarantor hereby acknowledges, represents, and warrants that it receives synergistic
benefits by virtue of its affiliation with Borrower and the other Guarantors and that it will
receive direct and indirect benefits from the financing arrangements contemplated by the Credit
Agreement and that such benefits, together with the rights of contribution and subrogation that may
arise in connection herewith are a reasonably equivalent exchange of value in return for providing
this Guaranty.



     19. Miscellaneous.



     (a) Generality of Certain Terms. As used in this Guaranty, the terms “hereof,”
“herein,” and terms of similar import refer to this Guaranty as a whole and not to any particular
term or provision; the term “including,” as used herein, is not a term of limitation and means
“including without limitation.”



     (b) Amendments, Waivers. No amendment to or waiver of any provision of this Guaranty,
and no consent to any departure by any Guarantor herefrom, shall in any event be effective unless
in a writing manually signed by or on behalf of the Agent and the Banks. Any such waiver or
consent shall be effective only in the specific instance and for the specific purpose for which
given. No delay or failure of the Agent, the Collateral Agent or the Banks, or any of them, in
exercising any right or remedy under this Guaranty shall operate as a waiver thereof; nor shall any
single or partial exercise of any such right or remedy preclude any other or further exercise
thereof or the exercise of any other right or remedy. The rights and remedies of the Agent, the
Collateral Agent and the Banks under this Guaranty are cumulative and not exclusive of any other
rights or remedies available hereunder, under any other agreement or instrument, by law, or
otherwise.



     (c) Telecommunications. Each Bank, the Collateral Agent and Agent shall be entitled to
rely on the authority of any individual making any telecopy or telephonic notice, request, or
signature without the necessity of receipt of any verification thereof.



     (d) Expenses. Each Guarantor unconditionally agrees to pay all reasonable costs and
expenses, including reasonable attorney’s fees incurred by the Agent, the Collateral Agent or any
of the Banks in enforcing this Guaranty against any Guarantor and each Guarantor shall pay and
indemnify each Bank the Collateral Agent and Agent for, and hold it harmless from and against,





- 11 -









 





any
and all obligations, liabilities, losses, damages, costs, expenses (including disbursements and
reasonable legal fees of counsel to any Bank , the Collateral Agent or Agent), penalties,
judgments, suits, actions, claims, and disbursements imposed on, asserted against, or incurred by
any Bank, the Collateral Agent or Agent (A) relating to the preparation, negotiation, execution,
administration, or enforcement of or collection under this Guaranty or any document, instrument, or
agreement relating to any of the Obligations, including in any bankruptcy, insolvency, or similar
proceeding in any jurisdiction or political subdivision thereof; (B) relating to any amendment,
modification, waiver, or consent hereunder or relating to any telecopy or telephonic or electronic
transmission purporting to be by any Guarantor or the Borrower; (C) in any way relating to or
arising out of this Guaranty, or any document, instrument, or agreement relating to
any of the Guarantied Obligations, or any action taken or omitted to be taken by the
Collateral Agent, any Bank or Agent hereunder, and including those arising directly or indirectly
from the violation or asserted violation by any Guarantor or the Borrower, the Collateral Agent or
Agent or any Bank of any law, rule, regulation, judgment, order, or the like of any jurisdiction or
political subdivision thereof (including those relating to environmental protection, health, labor,
importing, exporting, or safety) and regardless whether asserted by any governmental entity or any
other Person except for any which arises out of the gross negligence or willful misconduct of the
Collateral Agent, the Agent or any Bank.




     (e) Prior Understandings. This Guaranty, the Credit Agreement and the other Loan
Documents constitute the entire agreement of the parties hereto with respect to the subject matter
hereof and supersede any and all other prior and contemporaneous understandings and agreements.



     (f) Survival. All representations and warranties of the Guarantors made in connection
with this Guaranty shall survive, and shall not be waived by, the execution and delivery of this
Guaranty, any investigation by or knowledge of the Agent, the Collateral Agent and the Banks, or
any of them, any extension of credit, or any other event or circumstance whatsoever.



     20. No Novation. This Guaranty amends and restates the Continuing Agreement of
Guaranty and Suretyship dated April 27, 2001 (the “Original Guaranty”) and this Guaranty is not
intended to constitute, nor does it constitute, an interruption, suspension of continuity,
satisfaction, discharge of prior duties, novation, or termination of the indebtedness, liabilities,
expenses, or obligations under the Original Guaranty.



[SIGNATURE PAGE FOLLOWS]





- 12 -









 








[SIGNATURE PAGE 1 OF 1
OF AMENDED AND RESTATED CONTINUING

AGREEMENT OF GUARANTY AND SURETYSHIP]




     IN WITNESS WHEREOF, each Guarantor intending to be legally bound, has executed this Guaranty
as of the date first above written with the intention that this Guaranty shall constitute a sealed
instrument.



	 	 	 	 	 
	 	WESTERN ENERGY COMPANY

 	 
	 	By:  	                /s/ Douglas P. Kathol
 	 [Seal] 
	 	Name:  	Douglas P. Kathol 	 
	 	Title:  	Vice President 	 
	 
	 	DAKOTA WESTMORELAND CORPORATION

 	 
	 	By:  	             /s/ Douglas P. Kathol
 	 [Seal] 
	 	Name:  	Douglas P. Kathol 	 
	 	Title:  	Vice President 	 
	 
	 	WESTMORELAND SAVAGE CORPORATION

 	 
	 	By:  	             /s/ Douglas P. Kathol
 	 [Seal] 
	 	Name:  	Douglas P. Kathol 	 
	 	Title:  	Vice President