Document:

Exhibit 10.10

                              EMPLOYMENT AGREEMENT

         This EMPLOYMENT AGREEMENT ("Agreement") is entered into as of this 30th
day of September, by and among SMITH-MIDLAND CORPORATION, a Delaware corporation
(the "Company"), and RODNEY I. SMITH (the "Executive").

         WHEREAS, the Executive is currently employed as President and Chief
Executive Officer of the Company;

         WHEREAS, the parties hereto wish to enter into the arrangements set
forth herein with respect to the terms and conditions of the Executive's
continued employment with the Company from and after the date first written
above.

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

         1. Employment Agreement. On the terms and conditions set forth in this
Agreement, the Company agrees to employ the Executive and the Executive agrees
to be employed by the Company for the Employment Period set forth in Section 2
hereof and in the position and with the duties set forth in Section 3 hereof.
Terms used herein with initial capitalization are in some cases defined in
Section 21 below. This Agreement shall be effective as of the first date written
above (the "Effective Date"), and shall replace and supersede any employment
agreement between the Executive and the Company (the "Current Agreement").

         2. Term. Unless earlier terminated pursuant to Section 8, the term of
the Executive's employment hereunder shall commence on the Effective Date and
shall conclude on the fourth anniversary of the Effective Date (the "Employment
Period"); provided, however, that commencing on the date one year after the
Effective Date, and on each annual anniversary of the Effective Date thereafter,
the Employment Period shall automatically be extended for one additional year,
unless either party gives written notice, no less than 30 days prior to the
anniversary date, to the other party that it no longer wishes such automatic
extensions to continue (a "Notice of Non-Renewal").

         3. Position and Duties. The Executive shall serve as President and
Chief Executive Officer of the Company during the Employment Period, and shall
serve as a member of the Board during the Employment Period. As the President
and Chief Executive Officer of the Company, the Executive shall render
executive, policy and other management services to the Company of the type
customarily performed by persons serving in a similar capacity and as reasonably
determined by the Board with regard to the Executive's status and position
within the Company. It is also contemplated that the Executive will engage in
the development of new, and/or enhancement of existing, products or technologies
of the Company. The Executive shall devote the Executive's reasonable best
efforts to the performance of the Executive's duties hereunder and the
advancement of the business and affairs of the Company during the Employment
Period (provided that the Executive may devote time to managing his personal
investments and to charitable and community activities, and, with the consent of
the Board, take up other offices and positions during the Employment Period).

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         4. Place of Performance. During the Employment Period, the Executive's
primary place of employment and work location shall be Midland, Virginia, except
for reasonable travel on Company business and as otherwise consented to by the
Executive.

         5. Compensation.

         (a) Base Salary. The Company initially shall pay to Executive an annual
base salary (the "Base Salary") of $99,000. The Base Salary shall be reviewed by
the Board no less frequently than annually and may be increased (but not
decreased) at the discretion of the Board. If the Executive's Base Salary is
increased, the increased amount shall be the Base Salary for the remainder of
the Employment Period. The Base Salary shall be payable monthly or in such other
installments as shall be consistent with the Company's payroll procedures in
effect from time to time.

         (b) Royalties.

         (i) In addition to the Base Salary, commencing on the Effective Date,
the Company shall pay to the Executive an annual royalty fee (the "Royalty") of
$99,000. The Royalty shall be in consideration for the Executive's assignment,
and/or future obligation to assign, to the Company all of his rights, title and
interest in and to all of the Patents described in Section 5(b)(ii) hereof. The
Royalty shall be payable monthly. Payment of the Royalty shall continue for so
long as the Company is using the inventions underlying the non-expired Patents
and shall survive the Employment Term.

         (ii) The "Patents" shall include (A) all Patents owned by the Executive
for inventions created by the Executive subsequent to the Company's initial
public offering and on or before the Effective Date and used by the Company;
such Patents shall be assigned by the Executive to the Company reasonably
promptly after the Effective Date, and (B) all future Patents for inventions
created by the Executive during the Employment Period which shall be assigned by
the Executive to the Company upon the mutual determination by the Executive and
the Company that such inventions underlying the Patents are beneficial or
appropriate for use by the Company. The Executive shall take such actions, at
the cost of the Company, as reasonably requested by the Company to effectuate
the intent of this Section.

         (c) Bonus. During the Employment Period, the Company shall pay to the
Executive bonuses as follows (the "Bonus"): (i) an annual performance bonus in
an amount determined at the discretion of the Board for each calendar year and
(ii) a quarterly bonus in an amount ($27,000) equal to one-twentieth (1/20) of
the current outstanding principal balance of the loan made by the Company to the
Executive in the aggregate amount of $540,000 (the "Loan"), and the unpaid
interest accrued thereon during such quarter, and a cash amount which reimburses
the Executive for the federal, state and local taxes (including as a result of
the payment of this cash amount, but deducting any savings from deducting state
and local taxes for federal tax purposes) payable by the Executive as a result

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of the bonus payable pursuant to this subparagraph (ii). The payment of the
Bonuses that are equal to one-twentieth (1/20) of the Loan and the quarterly
interest thereon shall be paid in the form of foregiveness of such principal and
interest. Once the Loan has been fully repaid, no further Bonus under
subparagraph (ii) shall be payable.

         (d) Benefits. During the Employment Period, the Executive will be
entitled to all employee benefits and perquisites (including health, welfare,
life insurance, pension and incentive plans and other arrangements) made
available to similarly situated executives of the Company. Nothing contained in
this Agreement shall prevent the Company from terminating plans, changing
carriers or from effecting modifications in employee benefits coverage for the
Executive as long as such modifications are Company-wide modifications that
affect all similarly situated employees of the Company. The Company shall
reimburse the Executive for costs incurred by the Executive for medical or
dental expenses to the extent such expenses are not covered by the medical or
dental insurance offered by the Corporation.

         (e) Vacation; Holidays. During the Employment Period, the Executive
shall be entitled to all public holidays observed by the Company and to four (4)
weeks paid vacation per annum.

         (f) Withholding Taxes and Other Deductions. To the extent required by
law, the Company shall withhold from any payments due to the Executive under
this Agreement any applicable federal, state or local taxes and such other
deductions as are prescribed by law.

         6. Expenses. The Executive is expected and is authorized, subject to
the business expense policies as determined by the Board, to incur reasonable
expenses in the performance of his duties hereunder, including the costs of
entertainment, travel and similar business expenses. The Company shall promptly
reimburse the Executive for all such expenses upon periodic presentation by the
Executive of an accounting of such expenses.

         7. Confidentiality.

         (a) The Executive agrees to keep confidential, except as the Company
may otherwise consent in writing, and, except for the Company's benefit, not to
disclose or make any use of at any time either during or subsequent to his
employment, any trade secrets, confidential information, knowledge, data or
other information of the Company relating to products, processes, know-how,
techniques, methods, designs, formulas, test data, customer lists, business
plans, marketing plans and strategies, pricing strategies, or other subject
matter pertaining to any business of the Company or any of its affiliates, which
the Executive may produce, obtain or otherwise acquire during the course of his
employment, unless and to the extent that the aforementioned matters become
generally known to the public other than as a result of the Executive's acts or
omissions and except as required by law or a court of competent jurisdiction.
The Executive further agrees not to deliver, reproduce or in any way allow any
such trade secrets, confidential information, knowledge, data or other
information, or any documentation relating thereto, to be delivered to or used
by any third parties without specific direction or consent of a duly authorized
representative of the Company.

         (b) Enforcement. The Executive acknowledges that the restrictions
contained in this Section 7 are reasonable and necessary, in view of the nature
of the Company's business, in order to protect the legitimate interests of the

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Company, and that any violation thereof would result in irreparable injury to
the Company. Therefore, the Executive agrees that in the event of a breach or
threatened breach by the Executive of the provisions of this Section 7, the
Company shall be entitled to obtain from any court of competent jurisdiction,
preliminary or permanent injunctive relief restraining the Executive from
disclosing or using any such confidential information. Nothing herein shall be
construed as prohibiting the Company from pursuing any other remedies available
to it for such breach or threatened breach, including, without limitation,
recovery of damages from the Executive.

         8. Termination of Employment. Any termination of the Employment Period
by the Company or the Executive shall be communicated by written Notice of
Termination to the other party hereto in accordance with Section 11 hereof. For
purposes of this Agreement, a "Notice of Termination" shall mean a notice which
shall indicate the specific termination provision in this Agreement relied upon,
if any, and shall set forth in reasonable detail the facts and circumstances
claimed to provide a basis for termination of the Employment Period under the
provision so indicated. Termination of the Employment Period shall take effect
on the Date of Termination. The Employment Period shall be terminated under the
following circumstances:

         (a) Death. The Employment Period shall terminate upon the Executive's
death;

         (b) By the Company. The Company may terminate the Employment Period (i)
if the Executive shall have been unable to perform all of the Executive's duties
hereunder by reason of illness, physical or mental disability or other similar
incapacity, which inability shall continue for more than six consecutive months,
or any nine months in a twelve-month period (a "Disability"); or (ii) with or
without Cause;

         (c) By the Executive. The Executive may terminate the Employment Period
(i) at any time for Good Reason or without Good Reason; or (ii) within six (6)
months of his becoming aware of a Change of Control of the Company; or

         (d) Non-Renewal. The Employment Period may terminate pursuant to the
terms of Section 2.

         9. Compensation upon Termination.

         (a) Death. If the Employment Period terminates as a result of the
Executive's death, the Company shall promptly pay to the Executive's estate, or
as may be directed by the legal representatives of such estate, after the Date
of Termination as a lump sum payment an amount equal to one times the combined
Base Salary and Bonus paid to the Executive pursuant to Sections 5(a) and (c)
hereof during the immediately preceding full calendar year preceding the Date of
Termination, as well as any accrued but unpaid Base Salary and Bonus through the
Date of Termination, and all other unpaid amounts, if any, which the Executive
has accrued and is entitled to as of the Date of Termination including in
connection with any fringe benefits pursuant to Section 5(d) hereof. In
addition, upon the Date of Termination, the outstanding principal balance of the
Loan, and any accrued interest thereon, shall be forgiven in full, and the
Company shall make a cash payment to the Executive's estate equal to the

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federal, state and local taxes payable as a result of the forgiveness (including
as a result of this cash payment, but deducting any tax savings as a result of
deducting state and local taxes for federal tax purposes). The Company shall
have no further obligations to the Executive under this Agreement or otherwise
(other than pursuant to Section 5(b) hereof and any employee benefit plan and
any life insurance, death in service or other equivalent policy for the benefit
of the Executive).

         (b) Disability. If the Company terminates the Employment Period because
of the Executive's Disability, the Company shall promptly pay to the Executive
after the Date of Termination the Executive's Base Salary and Bonus pursuant to
Sections 5(a) and (c) hereof at the time and in the manner provided for herein
for a period of one (1) year commencing on the Date of Termination, any accrued
but unpaid Base Salary and Bonus through the Date of Termination, and all other
unpaid amounts, if any, which the Executive has accrued and is entitled to as of
the Date of Termination including in connection with any fringe benefits
pursuant to Section 5(d) hereof. In addition, upon the Date of Termination, the
outstanding principal balance of the Loan, and any accrued interest thereon,
shall be forgiven in full, and the Company shall make a cash payment to the
Executive equal to the federal, state and local tax payable as a result of the
forgiveness (including as a result of this cash payment, but deducting any tax
savings as a result of deducting state and local tax for federal tax purposes).
The Company shall have no further obligations to the Executive under this
Agreement or otherwise (other than pursuant to Section 5(b) hereof and any
employee benefit plan and any disability or other medical insurance policy for
the benefit of the Executive).

         (c) By the Company for Cause; By the Executive Without Good Reason. If
the Company terminates the Employment Period for Cause or if the Executive
terminates the Employment Period without Good Reason, the Company shall promptly
pay to the Executive after the Date of Termination any accrued but unpaid Base
Salary and Bonus pursuant to Sections 5(a) and (c) through the Date of
Termination and all other unpaid amounts, if any, which the Executive has
accrued and is entitled to as of the Date of Termination including in connection
with any fringe benefits pursuant to Section 5(d) hereof. The Company shall have
no further obligations to the Executive under this Agreement (other than
pursuant to Section 5(b) hereof).

         (d) By the Company Without Cause; By the Executive for Good Reason. If
the Company terminates the Employment Period other than for Cause, Disability or
death, or the Executive terminates the Employment Period for Good Reason, the
Company shall promptly pay to the Executive after the Date of Termination as a
lump sum payment an amount equal to three (3) times the combined Base Salary and
Bonus paid to the Executive pursuant to Sections 5(a) and (c) during the
immediately preceding full calendar year preceding the Date of Termination, as
well as any accrued but unpaid Base Salary and Bonus through the Date of
Termination, and all other unpaid amounts, if any, which the Executive has
accrued and is entitled to as of the Date of Termination. The Company shall also
continue to provide benefits pursuant to Section 5(d) hereof to the Executive
for a two year period commencing on the Date of Termination (or, to the extent
such benefits cannot be provided, the Company shall make a cash payment to the
Executive in an amount sufficient (on an after tax basis) to allow the Executive
to obtain comparable benefits for such period), unless and until the Executive
receives any such or similar benefits while employed in any capacity by any

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other employer during such two year period. In addition, all unvested options to
purchase Company stock and shares of restricted Company stock held by the
Executive shall become fully vested and, in the case of options, fully
exercisable on the date of Date of Termination, and the Executive shall be
entitled to exercise all such options for three years following the Date of
Termination. Other than as set forth herein, the Company shall have no further
obligations to the Executive under this Agreement or otherwise (except pursuant
to Section 5(b) hereof and any employee benefit plans and as otherwise set forth
in this Agreement).

         (e) Change of Control. If the Executive terminates the Employment
Period within six (6) months of his becoming aware of a Change of Control of the
Company, Executive shall have the right to immediately after the Date of
Termination receive as a lump sum payment an amount equal to three (3) times the
amount of the five year average of the Executive's combined total annual
compensation as reported by the Company for federal income tax purposes, which
includes the Base Salary and Bonus paid by the Company pursuant to Sections 5(a)
and (c) hereof, less one dollar ($1.00), and all other unpaid amounts, if any,
which the Executive has accrued and is entitled to as of the Date of
Termination. The Company shall also continue to provide benefits pursuant to
Section 5(d) hereof to the Executive for a two year period commencing on the
Date of Termination (or, to the extent such benefits cannot be provided, the
Company shall make a cash payment to the Executive in an amount sufficient (on
an after tax basis) to allow the Executive to obtain comparable benefits for
such period), unless and until the Executive receives any such or similar
benefits while employed in any capacity by any other employer in any capacity by
any other employer during such two year period. In addition, all unvested
options to purchase Company stock and shares of restricted Company stock held by
the Executive shall become fully vested and, in the case of options, fully
exercisable on the date of Date of Termination, and the Executive shall be
entitled to exercise all such options for three years following the Date of
Termination. Other than as set forth herein, the Company shall have no further
obligations to the Executive under this Agreement or otherwise (except pursuant
to Section 5(b) hereof and any employee benefit plans and as otherwise set forth
in this Agreement).

         (f) No Excise Tax. If the Executive is to receive any payment or
benefit from the Company pursuant to the Section 9 which would subject any of
the payments or benefits to the Executive to the excise tax imposed by Section
4999 (or any successor section) of the Internal Revenue Code of 1986, as amended
(the "Code"), the amount payable shall be reduced by the least amount necessary
to avoid such tax. The Company shall have no obligation hereunder to make any
payment or provide any benefit to Executive after the payment of the a required
severance payment which would subject any of such payments or benefits to the
excise tax imposed by Section 4999 of the Code.

         10. Noncompetition and Nonsolicitation.

         (a) Noncompetition. The Executive acknowledges that in the course of
his employment with the Company and its Affiliates, he has and will continue to
become familiar with the trade secrets of, and other confidential information
concerning, the Company and its Affiliates, that the Executive's services will
be of special, unique and extraordinary value to the Company and its Affiliates
and that the Company's ability to accomplish its purposes and to successfully
pursue its business plan and compete in the marketplace depends substantially on
the skills and expertise of the Executive. Therefore, and in further
consideration of the compensation being paid to the Executive hereunder, the

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Executive agrees that, during the Employment Period and for a period of one year
following Executive's termination of employment with the Company for any reason
(the "Restricted Period"), he shall not directly or indirectly own, manage,
control, participate in, consult with, render services for, or in any manner
engage in any business competing with the businesses of the Company or its
Affiliates, in any country where the Company or its Affiliates conducts
business; provided, however, that passive investments amounting to no more than
three percent of the voting equity of a business shall not be prohibited hereby.

         (b) Nonsolicitation. During the Restricted Period, the Executive shall
not directly or indirectly through another entity (i) induce or attempt to
induce any employee of the Company or any Affiliate to leave the employ of the
Company or such Affiliate, or in any way willfully interfere with the
relationship between the Company or any Affiliate and any employee thereof; or
(ii) induce or attempt to induce any customer, supplier, licensee or other
business relation of the Company or any Affiliate to cease doing business with
the Company or such Affiliate, or in any way interfere with the relationship
between any such customer, supplier, licensee or business relation and the
Company or any Affiliate.

         (c) Enforcement. If, at the time of enforcement of this Section 10, a
court holds that the restrictions stated herein are unreasonable under
circumstances then existing, the parties hereto agree that the maximum duration,
scope or geographical area reasonable under such circumstances shall be
substituted for the stated period, scope or area and that the court shall be
allowed to revise the restrictions contained herein to cover the maximum
duration, scope and area permitted by law. If the provisions of this Section 10
shall be deemed illegal by any jurisdiction, the provisions in this Section 10
shall be deemed ineffective within such jurisdiction. Because the Executive's
services are unique and because the Executive has access to confidential
information, the parties hereto agree that money damages would be an inadequate
remedy for any breach of any provision of this Agreement. Therefore, in the
event of a breach or threatened breach by the Executive of any provision of this
Agreement, the Company may, in addition to other rights and remedies existing in
its favor, apply to any court of competent jurisdiction for specific performance
and/or injunctive or other relief in order to enforce, or prevent any violations
of, the provisions hereof (without posting a bond or other security).

         11. Notices. All notices, demands, requests or other communications
required or permitted to be given or made hereunder shall be in writing and
shall be delivered, telecopied or mailed by first class registered or certified
mail, postage prepaid, addressed as follows:

         (a) If to the Company:

             Smith-Midland Corporation
             5119 Catlett Road
             Route 28, P.O. Box 300
             Midland, Virginia 22728
             Fax: (540) 439-1232
             Attention: Chief Financial Officer

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             With a copy to:

             Kaufman & Moomjian, LLC
             50 Charles Lindbergh Blvd., Suite 206
             Mitchel Field, New York 11553
             Fax: (516) 222-5110
             Attention: Gary T. Moomjian, Esq.

         (b) If to the Executive:

             Rodney I. Smith
             [______________]
             [______________]

         or, at the address on the books and records of the Company at the time
of such notice, or to such other address as may be designated by either party in
a notice to the other. Each notice, demand, request or other communication that
shall be given or made in the manner described above shall be deemed
sufficiently given or made for all purposes three days after it is deposited in
the U.S. mail, postage prepaid, or at such time as it is delivered to the
addressee (with the return receipt, the delivery receipt, the answer back or the
affidavit of messenger being deemed conclusive evidence of such delivery) or at
such time as delivery is refused by the addressee upon presentation.

         12. Severability. The invalidity or unenforceability of any one or more
provisions of this Agreement shall not affect the validity or enforceability of
the other provisions of this Agreement, which shall remain in full force and
effect.

         13. Survival. It is the express intention and agreement of the parties
hereto that the provisions of Sections 5(b), 7, 9, 10 and 11 hereof shall
survive the termination of employment of the Executive. In addition, all
obligations of the Company to make payments hereunder shall survive any
termination of this Agreement on the terms and conditions set forth herein.

         14. Assignment. The rights and obligations of the parties to this
Agreement shall not be assignable or delegable, except that (i) in the event of
the Executive's death, the personal representative or legatees or distributees
of the Executive's estate, as the case may be, shall have the right to receive
any amount owing and unpaid to the Executive hereunder; and (ii) the rights and
obligations of the Company hereunder shall be assignable and delegable in
connection with any subsequent merger, consolidation, sale of all or
substantially all of the assets of the Company and any similar event with
respect to any successor corporation.

         15. Binding Effect. Subject to any provisions hereof restricting
assignment, this Agreement shall be binding upon the parties hereto and shall
inure to the benefit of the parties and their respective heirs, devisees,
executors, administrators, legal representatives, successors and assigns.

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         16. Amendment; Waiver. This Agreement shall not be amended, altered or
modified except by an instrument in writing duly executed by the parties hereto.
Neither the waiver by either of the parties hereto of a breach of or a default
under any of the provisions of this Agreement, nor the failure of either of the
parties, on one or more occasions, to enforce any of the provisions of this
Agreement or to exercise any right or privilege hereunder, shall thereafter be
construed as a waiver of any subsequent breach or default of a similar nature,
or as a waiver of any such provisions, rights or privileges hereunder.

         17. Headings. Section and subsection headings contained in this
Agreement are inserted for convenience of reference only, shall not be deemed to
be a part of this Agreement for any purpose, and shall not in any way define or
affect the meaning, construction or scope of any of the provisions hereof.

         18. Governing Law. This Agreement, the rights and obligations of the
parties hereto, and any claims or disputes relating thereto, shall be governed
by and construed in accordance with the laws of the State of Virginia (but not
including the choice of law rules thereof).

         19. Entire Agreement. This Agreement constitutes the entire agreement
between the parties respecting the employment of the Executive and supersedes
the Current Agreement upon commencement of the Employment Period, there being no
representations, warranties or commitments between the parties except as set
forth herein.

         20. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be an original and all of which shall be
deemed to constitute one and the same instrument.

         21. Definitions

         "Affiliates" means any entity directly or indirectly controlling or
controlled by or under common control with the Company. For purposes of this
definition, "control" means the power to direct the management and policies of
such entity, whether through the ownership of voting securities, by contract or
otherwise; and the terms "controlling" and "controlled" have meaning correlative
to the foregoing.

         "Board" means the board of directors of the Company.

         "Cause" means (a) the willful and continued failure of the Executive to
perform substantially the Executive's duties (as contemplated by Section 3) with
the Company or any Affiliate company (other than any such failure resulting from
incapacity due to physical or mental illness or following the Executive's
delivery of a Notice of Termination for Good Reason), after a written demand for
substantial performance is delivered to the Executive by the Board that
specifically identifies the manner in which the Board believes that the
Executive has not substantially performed the Executive's duties, or

         (b) the willful engaging by the Executive in illegal conduct or gross
misconduct that is materially and demonstrably injurious to the Company.

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For purposes of this definition, no act, or failure to act, on the part of the
Executive shall be considered "willful" unless it is done, or omitted to be
done, by the Executive in bad faith or without reasonable belief that the
Executive's action or omission was in the best interests of the Company. Any
act, or failure to act, based upon authority given pursuant to a resolution duly
adopted by the Board or based upon the advice of counsel for the Company shall
be conclusively presumed to be done, or omitted to be done, by the Executive in
good faith and in the best interest of the Company. The cessation of employment
of the Executive shall not be deemed to be for Cause unless and until there
shall have been delivered to the Executive a copy of a resolution duly adopted
by the affirmative vote of not less than three-quarters of the entire membership
of the Board (excluding the Executive, if the Executive is a member of the
Board) at a meeting of the Board called and held for such purpose (after
reasonable notice is provided to the Executive and the Executive is given an
opportunity, together with counsel for the Executive, to be heard before the
Board), finding that, in the good faith opinion of the Board, the Executive is
guilty of the conduct described in (i) or (ii) above, and specifying the
particulars thereof in detail.

         "Change of Control" means:

         (a) The acquisition by any individual, entity or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934,
as amended (the "Exchange Act")) (a "Person") of beneficial ownership (within
the meaning of Rule 13d-3 promulgated under the Exchange Act) (or any successor
sections or rules to such Sections or Rule) of 20% or more of either (A) the
then-outstanding shares of common stock of the Company (the "Outstanding Company
Common Stock") or (B) the combined voting power of the then-outstanding voting
securities of the Company entitled to vote generally in the election of
directors (the "Outstanding Company Voting Securities"); provided, however,
that, for purposes of this Agreement, the following acquisitions shall not
constitute a Change of Control: (i) any acquisition directly from the Company,
(ii) any acquisition by the Company (unless a "reverse acquisition" of the
Company), (iii) any acquisition by any employee benefit plan (or related trust)
sponsored or maintained by the Company or any Affiliates or (iv) any acquisition
by any corporation pursuant to a transaction that complies with subparagraphs
(c)(i), (c)(ii) and (c)(iii).

         (b) Individuals who, as of the date hereof, constitute the Board (the
"Incumbent Board") cease for any reason to constitute at least a majority of the
Board; provided, however, that any individual becoming a director subsequent to
the date hereof whose election, or nomination for election by the Company's
shareholders, was approved by a vote of at least a majority of the directors
then comprising the Incumbent Board shall be considered as though such
individual were a member of the Incumbent Board, but excluding, for this
purpose, any such individual whose initial assumption of office occurs as a
result of an actual or threatened election contest with respect to the election
or removal of directors or other actual or threatened solicitation of proxies or
consents by or on behalf of a Person other than the Board.

         (c) Consummation of a reorganization, merger, statutory share exchange
or consolidation or similar corporate transaction involving the Company or any
of its subsidiaries, a sale or other disposition of all or substantially all of
the assets of the Company, or the acquisition of assets or stock of another
entity by the Company or any of its subsidiaries (each, a "Business
Combination"), in each case unless, following such Business Combination, (i) all
or substantially all of the individuals and entities that were the beneficial

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owners of the Outstanding Company Common Stock and the Outstanding Company
Voting Securities immediately prior to such Business Combination beneficially
own, directly or indirectly, more than 60% of the then-outstanding shares of
common stock and the combined voting power of the then-outstanding voting
securities entitled to vote generally in the election of directors, as the case
may be, of the corporation resulting from such Business Combination (including,
without limitation, a corporation that, as a result of such transaction, owns
the Company or all or substantially all of the Company's assets either directly
or through one or more subsidiaries) in substantially the same proportions as
their ownership immediately prior to such Business Combination of the
Outstanding Company Common Stock and the Outstanding Company Voting Securities,
as the case may be, (ii) no Person (excluding any corporation resulting from
such Business Combination or any employee benefit plan (or related trust) of the
Company or such corporation resulting from such Business Combination)
beneficially owns, directly or indirectly, 20% or more of, respectively, the
then-outstanding shares of common stock of the corporation resulting from such
Business Combination or the combined voting power of the then-outstanding voting
securities of such corporation, except to the extent that such ownership existed
prior to the Business Combination, and (iii) at least a majority of the members
of the board of directors of the corporation resulting from such Business
Combination were members of the Incumbent Board at the time of the execution of
the initial agreement or of the action of the Board providing for such Business
Combination; or

         (d) Approval by the shareholders of the Company of a complete
liquidation or dissolution of the Company.

         "Date of Termination" means (i) if the Executive's employment is
terminated by the Executive's death, the date of the Executive's death; (ii) if
the Executive's employment is terminated because of the Executive's Disability,
thirty days after Notice of Termination, provided that the Executive shall not
have returned to the performance of the Executive's duties on a full-time basis
during such thirty-day period; (iii) if the Executive's employment is terminated
by the Company for Cause, the date specified in the Notice of Termination; or
(iv) if the Executive's employment is terminated during the Employment Period
for any other reason, the date on which Notice of Termination is given.

         "Good Reason" means, in the absence of a written consent of the
Executive: (i) the assignment to the Executive (other than an isolated,
insubstantial or inadvertent assignment not occurring in bad faith) of any
duties inconsistent with, or material reduction in or material change of, the
Executive's position (including status, offices, titles and reporting
requirements), authority, duties or responsibilities as contemplated by Section
3 of this Agreement and which is not remedied by the Company within ten days
after receipt of notice thereof given by the Executive; (ii) any failure by the
Company to comply with any of the provisions of Section 5 of this Agreement,
other than an isolated, insubstantial or inadvertent failure not occurring in
bad faith and which is remedied by the Company within ten days after receipt of
notice thereof given by the Executive; (iii) the Company's requiring the
Executive to be based at any office or location more than thirty miles from that

                                       11
<PAGE>

identified in Section 4 hereof; or (iv) the Company's delivery of a Notice of
Non-Renewal to the Executive. Any good faith determination of Good Reason made
by the Executive shall be conclusive. The Executive's mental or physical
incapacity following the occurrence of an event described above in clauses (i)
through (iv) shall not affect the Executive's ability to terminate employment
for Good Reason.

                                       12
<PAGE>
         IN WITNESS WHEREOF, the undersigned have duly executed this Agreement,
or have caused this Agreement to be duly executed on their behalf, as of the day
and year first hereinabove written.

                             SMITH-MIDLAND CORPORATION

                             By: /s/ Rodney I. Smith
                                 -----------------------------------------------
                                   Name:       Rodney I. Smith
                                   Title:      President

                                    /s/  Rodney I Smith
                             ---------------------------------------------------
                                              RODNEY I. SMITH

                                       13
<PAGE>
                            Smith-Midland Corporation
                                                   P.O. Box 300
                             Midland, Virginia 22728
                                        (540) 439-3266 Metro (703) 323-5533
                               Fax (540) 439-1232

September 20, 2002

The undersigned members of the Compensation Committee of the Board of Directors
of Smith-Midland Corporation of Midland, Virginia, have reviewed and approved
the September 30, 2002, Employment Agreement of Rodney I. Smith, the company
President, and recommend its approval to the full Board of Smith- Midland. It is
duly noted that Mr. Smith has not received a raise in his base pay since 1996.

Wes Taylor, Vice President, Director            /s/ Wes Taylor
                                              ----------------------------------

Andy Kavounis, Director                         /s/ Andy Kavounis
                                              ----------------------------------
                                                                        10-11-02

                        Manufacturers of ERSI-SET(C) Precast Products

                                       14
<PAGE>
                            Smith-Midland Corporation
                                  P.O. Box 300
                             Midland, Virginia 22728
                       (540) 439-3266 Metro (703) 323-5533
                               Fax (540) 439-1232

September 20, 2002

The undersigned members of the Board of Directors of Smith-Midland Corporation
of Midland, Virginia, have received the recommendation of the Board of Directors
Compensation Committee regarding the September 30, 2002, Employment Contract of
Rodney I. Smith, President. It is duly noted that Mr. Smith has not received a
base pay raise since 1996.

Rodney I. Smith, President, Director              /s/ Rodney I. Smith
                                                --------------------------------

Wes Taylor, Vice President, Director              /s/ Wes Taylor
                                                --------------------------------

Ashley Smith, Vice President, Director            /s/ Ashley Smith
                                                --------------------------------

Andy Kavounis, Director                           /s/ Andy Kavounis
                                                --------------------------------
                                                                    10-11-02

                            Manufacturers of ERSI-SET(C) Precast Products

                                       15Exhibit 10.1

================================================================================

                                  $250,000,000

                      AMENDED AND RESTATED CREDIT AGREEMENT

                          Dated as of November 26, 2002

                                      among

                             MASSEY ENERGY COMPANY,

                                   as Borrower

                                       and

                  THE SUBSIDIARIES OF THE BORROWER PARTY HERETO

                                  as Guarantors

                                       and

                               CITICORP USA, INC.,

                  as Administrative Agent and Collateral Agent

                                       and

                         PNC BANK, NATIONAL ASSOCIATION,

                              as Syndication Agent

                      WACHOVIA BANK, NATIONAL ASSOCIATION,

                             as Documentation Agent

                                       and

                            THE LENDERS PARTY HERETO

                                Lead Arranged by

                            SALOMON SMITH BARNEY INC.

================================================================================

                           Weil, Gotshal & Manges LLP
                                767 Fifth Avenue
                          New York, New York 10153-0119

<PAGE>

<TABLE>
<S>                                                                                                             <C>
ARTICLE I             DEFINITIONS..............................................................................  1

         Section 1.01      Definitions.........................................................................  1

         Section 1.02      Accounting Terms and Determinations................................................. 18

         Section 1.03      Types of Borrowings................................................................. 18

         Section 1.04      Pricing Levels...................................................................... 18

         Section 1.05      Certain Terms....................................................................... 19

ARTICLE II            THE CREDITS.............................................................................. 19

         Section 2.01      Commitments to Lend................................................................. 19

         Section 2.02      Notice of Borrowings................................................................ 20

         Section 2.03      Notice to Lenders; Funding of Loans................................................. 20

         Section 2.04      Register; Optional Notes............................................................ 21

         Section 2.05      Voluntary Conversion or Continuation of Loans....................................... 22

         Section 2.06      Interest Rates...................................................................... 23

         Section 2.07      Unutilized Commitment Fees.......................................................... 23

         Section 2.08      Optional Termination or Reduction of Commitments.................................... 23

         Section 2.09      Mandatory Termination of Commitments................................................ 24

         Section 2.10      Optional Prepayments................................................................ 24

         Section 2.11      Mandatory Prepayments............................................................... 25

         Section 2.12      Payments and Computations........................................................... 25

         Section 2.13      Computation of Interest and Fees.................................................... 26

         Section 2.14      Place of Loans...................................................................... 26

ARTICLE III           CONDITIONS TO EFFECTIVENESS AND BORROWINGS............................................... 26

         Section 3.01      Conditions Precedent to Effectiveness............................................... 26

         Section 3.02      Conditions Precedent to Each Borrowing.............................................. 29

ARTICLE IV            REPRESENTATIONS AND WARRANTIES........................................................... 29

         Section 4.01      Corporate Existence and Power; Compliance with Law.................................. 29

         Section 4.02      Corporate, Limited Liability Company, Partnership
                           and Governmental Authorization; Contravention....................................... 30

         Section 4.03      Binding Effect...................................................................... 30

         Section 4.04      Ownership of Subsidiaries........................................................... 30

         Section 4.05      Financial Information............................................................... 31

         Section 4.06      Solvency............................................................................ 31

         Section 4.07      Litigation.......................................................................... 31

         Section 4.08      Compliance with ERISA............................................................... 31

         Section 4.09      Taxes............................................................................... 32
</TABLE>

                                        i

<PAGE>

<TABLE>
<S>                                                                                                             <C>
         Section 4.10      No Burdensome Restrictions; No Defaults............................................. 32

         Section 4.11      Investment Company Act; Public Utility Holding Company Act.......................... 32

         Section 4.12      Intellectual Property............................................................... 32

         Section 4.13      Use of Proceeds..................................................................... 33

         Section 4.14      Insurance........................................................................... 33

         Section 4.15      Labor Matters....................................................................... 33

         Section 4.16      Business of Borrower; Properties.................................................... 33

         Section 4.17      No Misleading Statements............................................................ 33

         Section 4.18      Environmental Matters............................................................... 33

ARTICLE V             COVENANTS................................................................................ 34

         Section 5.01      Information......................................................................... 34

         Section 5.02      Financial Covenants................................................................. 37

         Section 5.03      Affirmative Covenants............................................................... 37

         Section 5.04      Negative Covenants.................................................................. 42

ARTICLE VI            DEFAULTS................................................................................. 48

         Section 6.01      Events of Default................................................................... 48

         Section 6.02      Notice of Default................................................................... 50

ARTICLE VII           THE ADMINISTRATIVE AGENT AND COLLATERAL AGENT............................................ 50

         Section 7.01      Authorization and Action............................................................ 50

         Section 7.02      Agents' Reliance, Etc............................................................... 51

         Section 7.03      Citicorp and Affiliates............................................................. 51

         Section 7.04      Lender Credit Decision.............................................................. 51

         Section 7.05      Indemnification..................................................................... 52

         Section 7.06      Successor Administrative Agent...................................................... 52

         Section 7.07      Administrative Agent's Fee.......................................................... 52

         Section 7.08      Co-Agents........................................................................... 52

ARTICLE VIII          CHANGE IN CIRCUMSTANCES.................................................................. 53

         Section 8.01      Basis for Determining Interest Rate Inadequate or Unfair............................ 53

         Section 8.02      Illegality.......................................................................... 53

         Section 8.03      Increased Cost and Reduced Return................................................... 54

         Section 8.04      Substitution of Loans for Affected Euro-Dollar Loans................................ 55

         Section 8.05      Substitution of Lender.............................................................. 55

ARTICLE IX            GUARANTEE................................................................................ 56

         Section 9.01      Unconditional Guarantee............................................................. 56

         Section 9.02      Guarantee Absolute.................................................................. 56
</TABLE>

                                       ii

<PAGE>

<TABLE>
<S>                                                                                                             <C>
         Section 9.03      Waivers............................................................................. 58

         Section 9.04      Subrogation......................................................................... 58

         Section 9.05      Subordination....................................................................... 59

         Section 9.06      Default; Remedies................................................................... 59

         Section 9.07      Irrevocability...................................................................... 59

         Section 9.08      Setoff.............................................................................. 60

         Section 9.09      No Marshalling...................................................................... 60

         Section 9.10      Enforcement; Amendments; Waivers.................................................... 60

         Section 9.11      Successors and Assigns.............................................................. 60

         Section 9.12      Reliance............................................................................ 61

         Section 9.13      Survival............................................................................ 61

         Section 9.14      Limitation of Subsidiary Guaranty................................................... 61

         Section 9.15      Contribution........................................................................ 61

         Section 9.16      Authorization; Other Agreements..................................................... 61

         Section 9.17      Additional Guarantors............................................................... 63

         Section 9.18      Collateral.......................................................................... 63

         Section 9.19      Costs and Expenses.................................................................. 63

         Section 9.20      Waiver of Consequential Damages..................................................... 63

ARTICLE X             MISCELLANEOUS............................................................................ 63

         Section 10.01     Notices............................................................................. 63

         Section 10.02     No Waivers.......................................................................... 64

         Section 10.03     Expenses; Taxes; Indemnification.................................................... 64

         Section 10.04     Sharing of Set-Offs................................................................. 67

         Section 10.05     Amendments and Waivers.............................................................. 68

         Section 10.06     Successors and Assigns.............................................................. 68

         Section 10.07     Collateral.......................................................................... 70

         Section 10.08     New York Law........................................................................ 70

         Section 10.09     Submission to Jurisdiction; Service of Process...................................... 71

         Section 10.10     Waiver of Trial by Jury............................................................. 71

         Section 10.11     Counterparts........................................................................ 72

         Section 10.12     Confidentiality..................................................................... 72

         Section 10.13     Survival of Warranties.............................................................. 72

         Section 10.14     Severability........................................................................ 72

         Section 10.15     Captions............................................................................ 72
</TABLE>

                                       iii

<PAGE>

                                    EXHIBITS

         Exhibit A         Form of Collateral Sharing Agreement

         Exhibit B         Form of Assignment and Acceptance

         Exhibit C         Form of Pledge and Security Agreement

         Exhibit D         Form of Notice of Borrowing

         Exhibit E         Form of Note

         Exhibit F         Form of Notice of Conversion/Continuation

         Exhibit G         Guarantor Joinder Agreement

                                    SCHEDULES

         Schedule I              Lending Offices

         Schedule II             Commitments

         Schedule 1.01(a)        Material Real Property

         Schedule 1.01(b)        Westvaco and Eastman Coal Handling Facilities

         Schedule 4.04           Ownership of Subsidiaries

         Schedule 4.14           Insurance

         Schedule 4.15           Labor Matters

         Schedule 4.18           Environmental Matters

         Schedule 5.04(a)(ii)    Existing Debt

         Schedule 5.04(b)(ii)    Existing Liens

         Schedule 5.04(b)(iv)    Existing Letters of Credit

         Schedule 5.04(c)        Existing Investments

         Schedule 5.04(d)(x)     Permitted Sale and Leaseback Transactions

                                       iv

<PAGE>

                      AMENDED AND RESTATED CREDIT AGREEMENT

     This AMENDED AND RESTATED CREDIT AGREEMENT (this "Agreement") dated as of
November 26, 2002 among MASSEY ENERGY COMPANY (the "Borrower"), each domestic
Subsidiary of the Borrower listed on the signature pages hereof as Guarantors or
that becomes a party hereto pursuant to Section 9.17 hereof (individually
referred to herein as a "Guarantor" and collectively, on a joint and several
basis, as the "Guarantors"), the undersigned lenders (together with each lender
which becomes a Lender hereunder pursuant to Section 10.06 (collectively the
"Lenders")), CITICORP USA, INC., as administrative agent for the Lenders (in
such capacity "Administrative Agent"), and as collateral agent for the Secured
Parties (as defined below) (in such capacity, the "Collateral Agent"), PNC BANK,
NATIONAL ASSOCIATION, as syndication agent (the "Syndication Agent"), and
WACHOVIA BANK, NATIONAL ASSOCIATION, as documentation agent (the "Documentation
Agent"), amends and restates in its entirety the Existing Credit Agreement (as
defined below).

     WHEREAS, the Borrower is currently the borrower under a credit agreement
dated as of November 30, 2000, with A.T. Massey Coal Company, Inc., as
guarantor, Citibank, N.A., as administrative agent, PNC Bank, National
Association, as syndication agent, and Wachovia Bank, National Association, as
documentation agent (as amended prior to the date hereof, the "Existing Credit
Agreement");

     WHEREAS, Citibank, N.A. in its capacity as Administrative Agent has
assigned all of its rights and obligations under the Existing Credit Agreement
and the Existing Fee Letter (as defined below) to Citicorp USA, Inc.;

     WHEREAS, it is the intent of the parties hereto that this Agreement does
not constitute a novation of the rights, obligations and liabilities of the
respective parties (including the Obligations) existing under the Existing
Credit Agreement or evidence payment of all or any of such obligations and
liabilities and such rights, obligations and liabilities shall continue and
remain outstanding under this Agreement, and that this Agreement amends and
restates in its entirety the Existing Credit Agreement;

     WHEREAS, the Administrative Agent, the Collateral Agent and the
Administrative Agent under, and as defined in, the 364-Day Credit Agreement (as
defined below) intend to enter into a Collateral Sharing Agreement (the
"Collateral Sharing Agreement") in substantially the form of Exhibit A hereto,
providing, among other things, for the terms under which the Collateral (as
defined below) is to be shared among the Secured Parties (as defined below);

     WHEREAS, the approval of the Required Lenders under the Existing Credit
Agreement is required for the effectiveness of this Agreement; and

     NOW, THEREFORE, in consideration of the premises and the covenants and
agreements contained herein, the parties hereto hereby agree as follows:

                                    ARTICLE I

                                   DEFINITIONS

          Section 1.01 Definitions. The following terms, as used herein, have
the following meanings (such meanings to be equally applicable to both the
singular and plural forms of the terms defined):

<PAGE>

          "364-Day Credit Agreement" means the Amended and Restated 364-Day
     Credit Agreement, dated as of November 26, 2002, among the Borrower, the
     Guarantors, the lenders party thereto, the Administrative Agent and other
     agents party thereto.

          "364-Day Credit Agreement Lender" means a Lender (as defined in the
     364-Day Credit Agreement).

          "364-Day Loans" means Loans (as defined in the 364-Day Credit
     Agreement).

          "Administrative Agent" has the meaning assigned to it in the recitals
     hereto, provided, however, that for the purposes of Article VII (other than
     Section 7.01) and Article X (other than Section 10.05), it shall also
     include the Collateral Agent.

          "Affiliate" means, as to any Person, any other Person that, directly
     or indirectly, controls, is controlled by or is under common control with
     such Person. The term "control" (including the terms "controlled by" or
     "under common control with") means the possession, direct or indirect, of
     the power to vote 50% or more of the securities having ordinary voting
     power for the election of directors of such Person or to direct or cause
     the direction of the management and policies of such Person, whether
     through ownership of voting securities or by contract or otherwise.

          "Applicable Lending Office" means, with respect to each Lender, its
     Domestic Lending Office in the case of a Base Rate Loan, and its Eurodollar
     Lending Office in the case of a Eurodollar Rate Loan.

          "Applicable Margin" means, for any Type of Loan, an interest rate per
     annum equal at all times during each period set forth below to the interest
     rate set forth opposite such period and under such Type of Loan:

                   PERIOD             BASE RATE LOANS       EURODOLLAR LOANS
          ----------------------------------------------------------------------
              Level I Period               1.25%                  2.25%
          ----------------------------------------------------------------------
              Level II Period              1.50%                  2.50%
          ----------------------------------------------------------------------
              Level III Period             2.00%                  3.00%
          ----------------------------------------------------------------------
              Level IV Period              2.50%                  3.50%
          ----------------------------------------------------------------------

          "Applicable Unused Commitment Fee Rate" means a rate per annum equal
     at all times during each period set forth below to the rate set forth
     opposite such period:

                                        APPLICABLE UNUSED
                   PERIOD              COMMITMENT FEE RATE
          ----------------------------------------------------
              Level I Period                 0.50%
          ----------------------------------------------------
              Level II Period                0.50%
          ----------------------------------------------------
              Level III Period               0.50%
          ----------------------------------------------------
              Level IV Period                0.75%
          ----------------------------------------------------

          "Approved Deposit Account" has the meaning specified in the Pledge and
     Security Agreement.

                                        2

<PAGE>

          "Asset Sale" has the meaning set forth in Section 5.04(d).

          "Assignee" has the meaning set forth in Section 10.03(d).

          "Assignment and Acceptance" means an assignment and acceptance entered
     into by a Lender and an Eligible Assignee, and accepted by the
     Administrative Agent, in substantially the form of Exhibit B.

          "AT Guaranty" means the obligations of AT Massey under the Subsidiary
     Guaranty.

          "AT Massey" means A.T. Massey Coal Company, Inc.

          "Bankruptcy Code" means title 11, United States Code.

          "Base Rate" means, for any day, a rate per annum equal to the
     Applicable Margin for Base Rate Loans plus the higher of:

          (i) the rate of interest publicly announced by Citibank in New York
     City from time to time as its base rate; and

          (ii) the sum of one-half percent (1/2%) plus the Federal Funds Rate
     for such day.

          "Base Rate Loan" means a Loan to be made by a Lender pursuant to
     Section 2.01 as a Base Rate Loan in accordance with the applicable Notice
     of Borrowing or pursuant to Article VIII.

          "Borrower" has the meaning set forth in the preamble to this
     Agreement.

          "Borrowing" has the meaning set forth in Section 1.03.

          "Business Day" means a day of the year on which banks are not required
     or authorized to close in New York City and, if the applicable Business Day
     relates to notices, determinations, fundings and payments in connection
     with the Eurodollar Rate or any Eurodollar Rate Loans, a day on which
     dealings in Dollar deposits are also carried on in the London interbank
     market.

          "Capital Expenditures" means, for any Person for any period, the
     aggregate of amounts that would be reflected as additions to property,
     plant or equipment on a consolidated balance sheet of such Person and its
     Subsidiaries prepared in conformity with GAAP, excluding interest
     capitalized during construction and any capitalized non-cash liabilities
     assumed.

          "Capital Lease" means, with respect to any Person, any lease of, or
     other arrangement conveying the right to use, property by such Person as
     lessee that would be accounted for as a capital lease on a balance sheet of
     such Person prepared in conformity with GAAP.

          "Capital Lease Obligations" means, with respect to any Person, the
     capitalized amount of all obligations of such Person or any of its
     Subsidiaries under Capital Leases.

          "Cash Collateral Account" has the meaning specified in the Pledge and
     Security Agreement.

          "Cash Equivalents" means (a) securities issued or fully guaranteed or
     insured by the United States government or any agency thereof, (b)
     certificates of deposit, eurodollar time

                                        3

<PAGE>

     deposits, overnight bank deposits and bankers' acceptances of any
     commercial bank organized under the laws of the United States, any state
     thereof, the District of Columbia, any foreign bank, or its branches or
     agencies (fully protected against currency fluctuations) that, at the time
     of acquisition, are rated at least "A-1" by S&P or "P-1" by Moody's, (c)
     commercial paper of an issuer rated at least "A-1" by S&P or "P-1" by
     Moody's and (d) shares of any money market fund that (i) has at least 95%
     of its assets invested continuously in the types of investments referred to
     in clauses (a), (b) and (c) above, (ii) has net assets of not less than
     $500,000,000 and (iii) is rated at least "A-1" by S&P or "P-1" by Moody's;
     provided, however, that the maturities of all obligations of the type
     specified in clauses (a), (b) and (c) above shall not exceed 180 days.

          "Citibank" means Citibank, N.A.

          "Citicorp" means Citicorp USA, Inc.

          "Code" means the Internal Revenue Code of 1986, as amended, or any
     successor statute.

          "Collateral" means all property and interests in property and proceeds
     thereof now owned or hereafter acquired by any Loan Party in or upon which
     a Lien is granted under any Collateral Document.

          "Collateral Documents" means the Pledge and Security Agreement, the
     Mortgages, the Deposit Account Control Agreements, the Control Account
     Agreements and any other document executed and delivered by a Loan Party
     pursuant to this Agreement or any Collateral Document granting a Lien on
     any of its property to secure payment of the Secured Obligations.

          "Commitment" has the meaning set forth in Section 2.01.

          "Consolidated Debt" means at any date the total Debt of the Borrower
     and its Subsidiaries, determined on a consolidated basis as of such date.

          "Consolidated EBITDA" means, with respect to the Borrower and its
     Subsidiaries for any period, an amount equal to (a) Consolidated Net Income
     for such period plus (b) the sum of, in each case to the extent deducted in
     the calculation of such Consolidated Net Income but without duplication,
     (i) any income tax expense, (ii) Consolidated Interest Expense, (iii)
     losses from extraordinary items, (iv) depreciation, depletion, and
     amortization of intangibles or financing or acquisition costs, and (v) all
     other non-cash charges and non-cash losses for such period minus (c) the
     sum of, in each case to the extent added in the calculation of such
     Consolidated Net Income but without duplication, (i) any income tax
     benefit, (ii) interest income (excluding interest income already netted
     from the definition of Consolidated Interest Expense), (iii) gains from
     extraordinary items for such period, (iv) any aggregate net gain (but not
     any aggregate net loss) from the sale, exchange or other disposition of
     capital assets currently employed in the trade or business of the Borrower
     and its Subsidiaries, and (v) any other non-cash gains or non-cash items.

          "Consolidated Interest Coverage Ratio" means, with respect to the
     Borrower and its Subsidiaries for any period, the ratio of Consolidated
     EBITDA to Consolidated Interest Expense for such period.

          "Consolidated Interest Expense" means, for the Borrower and its
     Subsidiaries for any period, total interest expense (net of interest income
     from overnight deposits and deposits held as cash collateral for letters of
     credit) for such period determined on a consolidated basis in

                                        4

<PAGE>

     conformity with GAAP and including, in any event, interest capitalized
     during construction for such period.

          "Consolidated Net Income" means, for any period, the net income (or
     loss) of the Borrower and its Subsidiaries for such period, determined on a
     consolidated basis in conformity with GAAP.

          "Consolidated Tangible Net Worth" means at any date the stockholders'
     equity of the Borrower and its Subsidiaries less their Intangible Assets,
     all determined as of such date on a consolidated basis in conformity with
     GAAP. For purposes of this definition "Intangible Assets" means the amount
     (to the extent reflected in determining such consolidated stockholders'
     equity) of (i) all write-ups (other than write-ups resulting from foreign
     currency translations and write-ups of assets of a going concern business
     made within twelve months after the acquisition of such business) in the
     book value of any asset owned by the Borrower or a Subsidiary, and (ii) all
     unamortized debt discount and expense, unamortized deferred charges
     (excluding longwall-related deferred charges), goodwill, patents,
     trademarks, service marks, trade names, copyrights, organization expenses
     and other intangible items.

          "Constituent Documents" means, with respect to any Person, (a) the
     articles of incorporation, certificate of incorporation or certificate of
     formation (or the equivalent organizational documents) of such Person, (b)
     the by-laws, operating agreement (or the equivalent governing documents) of
     such Person and (c) any document setting forth the manner of election and
     duties of the directors or managing members of such Person (if any) and the
     designation, amount or relative rights, limitations and preferences of any
     class or series of such Person's Stock.

          "Contaminant" means any material, substance or waste that is
     classified, regulated or otherwise characterized under any Environmental
     Law as hazardous, toxic, a contaminant or a pollutant or by other words of
     similar meaning or regulatory effect, including any petroleum or
     petroleum-derived substance or waste, asbestos or polychlorinated
     biphenyls.

          "Contractual Obligation" of any Person means any obligation,
     agreement, undertaking or similar provision of any Security issued by such
     Person or of any agreement, undertaking, contract, lease, indenture,
     mortgage, deed of trust or other instrument (excluding a Loan Document) to
     which such Person is a party or by which it or any of its property is bound
     or to which any of its property is subject.

          "Control Account Agreement" has the meaning specified in the Pledge
     and Security Agreement.

          "Controlled Group" means all members of a controlled group of
     corporations and all trades or businesses (whether or not incorporated)
     under common control which, together with the Borrower, are treated as a
     single employer for federal income tax purposes under Section 4l4(b) or
     414(c) of the Code.

          "Convert," "Conversion" and "Converted" each refers to a conversion of
     a Loan of one Type into a Loan of another Type pursuant to Section 2.05.

          "Customary Permitted Liens" means, with respect to any Person, any of
     the following:

                                        5

<PAGE>

          (a)  Liens with respect to the payment of taxes, assessments or
               governmental charges or levies in each case that are not yet due
               and payable or that are being contested in good faith by
               appropriate proceedings and with respect to which adequate
               reserves or other appropriate provisions are being maintained to
               the extent required by GAAP;

          (b)  Liens of landlords arising by statute and liens of suppliers,
               mechanics, carriers, materialmen, warehousemen or workmen and
               other liens imposed by law or pursuant to customary reservations
               or retentions of title arising in the ordinary course of business
               for amounts not yet due and payable or that are being contested
               in good faith by appropriate proceedings and with respect to
               which adequate reserves or other appropriate provisions are being
               maintained to the extent required by GAAP;

          (c)  Liens incurred or deposits made in the ordinary course of
               business in connection with workers' compensation, unemployment
               insurance or other types of social security benefits or to secure
               the performance of bids, tenders, statutory obligations, sales,
               leases, contracts (other than for the repayment of borrowed
               money) and surety, appeal, customs, performance or
               return-of-money bonds and other similar obligations;

          (d)  any matters that are or would be shown on an accurate survey, any
               encumbrances arising by reason of zoning restrictions, any and
               all matters and exceptions to title that would be shown on a
               title insurance commitment or in a lawyer's title opinion
               (excluding monetary liens), including without limitation, any
               easements, licenses, defects or irregularities in title,
               reservations (including severances, leases or reservations of
               oil, gas, coal, minerals or water rights), covenants,
               rights-of-way, utility easements, building restrictions and other
               similar encumbrances on title to or on the use of real property
               not materially interfering with the ordinary conduct of the
               business conducted and proposed to be conducted at such real
               property;

          (e)  encumbrances arising under leases or subleases of property that
               do not, in the aggregate, interfere with the ordinary conduct of
               the business conducted and proposed to be conducted at such
               property;

          (f)  any interest of title of a lessor under, and liens arising from
               financing statements with respect to a lessor's rights in and to
               personal property leased to such Person in the ordinary course of
               such Person's business;

          (g)  normal customary rights of setoff in favor of banks;

          (h)  Liens of sellers of goods under Article 2 of the UCC; and

          (i)  Liens of a collection bank under Section 4-210 of the UCC.

          "Debt" of any Person means at any date, without duplication, (i) all
     indebtedness of such Person for borrowed money which would be classified as
     a liability of such Person in accordance with GAAP on such Person's balance
     sheet, (ii) all obligations of such Person evidenced by bonds, debentures,
     notes or other similar instruments (except for notes relating to
     self-insurance programs of the Borrower and/or its Subsidiaries which are
     not classified as current liabilities of the Borrower or any of its
     Subsidiaries) which would be classified as a liability of such Person in
     accordance with GAAP on such Person's balance sheet, (iii) all obligations
     of such Person to pay the deferred purchase price of property or services,
     except trade accounts payable arising in the

                                        6

<PAGE>

     ordinary course of business, (iv) the outstanding attributed principal
     portion of all obligations of such Person (a) as lessee under Capital
     Leases and (b) in respect of any financing obtained by such Person through
     an asset-backed securitization program, (v) all obligations of such Person
     to purchase securities (or other property) which arise out of or in
     connection with the sale of the same or substantially similar securities or
     property, which obligations or any portion thereof may, in accordance with
     their terms, become due on or before the Termination Date, (vi) all
     reimbursement and other obligations with respect to drafts or other
     drawings under letters of credit, bankers' acceptances, Guarantees, surety
     bonds, performance bonds, bid bonds and performance bonds (to the extent
     unreimbursed), (vii) all Debt of others secured by a Lien on any asset of
     such Person, whether or not such Debt is assumed by such Person, (viii) all
     Debt of others Guaranteed by such Person, and (ix) Production Payments to
     the extent the obligations of such Person with respect thereto would be
     classified as a liability of such Person in accordance with GAAP on such
     Person's balance sheet. The Debt of any Person shall include the Debt of
     any partnership or joint venture in which such Person is a general partner
     or a joint venturer, but only to the extent to which there is recourse to
     such Person for payment of such Debt. The Debt of any Person shall not
     include obligations of such Person relating to deposits made by others as
     collateral security for the payment or performance of Contractual
     Obligations and held by such Person in separate, segregated accounts.

          "Debt Issuance" means (i) the incurrence of Debt of the type specified
     in clause (i) or (ii) of the definition of "Debt" by the Borrower or any of
     its Subsidiaries and (ii) a Permitted Asset-Backed Financing.

          "Default" means any condition or event specified in Section 6.01 which
     with the giving of notice or lapse of time or both would, unless cured or
     waived, become an Event of Default.

          "Deposit Account" has the meaning specified in the Pledge and Security
     Agreement.

          "Deposit Account Bank" has the meaning specified in the Pledge and
     Security Agreement.

          "Deposit Account Control Agreement" has the meaning specified in the
     Pledge and Security Agreement.

          "Designating Lender" has the meaning set forth in Section 10.06(f).

          "Dollars" and the sign "$" each mean the lawful money of the United
     States of America.

          "Domestic Business Day" means any day except a Saturday, Sunday or
     other day on which commercial banks in New York City are authorized by law
     to close.

          "Domestic Lending Office" means, as to each Lender, its office located
     at its address set forth on the Schedule I hereof or such other office as
     such lender may hereafter designate as its Domestic Lending Office by
     notice to the Borrower and the Administrative Agent.

          "Domestic Subsidiary" means any Subsidiary of the Borrower organized
     under the laws of any state of the United States of America or the District
     of Columbia.

          "Effective Date" means November 26, 2002; provided that all the
     conditions in Section 3.01 and Section 3.02 shall have been satisfied or
     waived.

                                        7

<PAGE>

          "Eligible Assignee" means (i) a commercial bank organized under the
     laws of the United States, the District of Columbia, or any state thereof,
     and having a combined capital and surplus of at least $100,000,000; (ii) a
     commercial bank organized under the laws of any other country which is a
     member of the Organization for Economical Cooperation and Development (the
     "OECD"), or a political subdivision of any such country and having a
     combined capital and surplus of at least $100,000,000, provided that such
     bank is acting through a branch or agency located in the country in which
     it is organized or another country which is also a member of the OECD;
     (iii) any Person engaged in the business of lending and that is an
     Affiliate of a Lender or of a Person of which a Lender is a subsidiary;
     provided that such Person is not a competitor of the Borrower or any of its
     Subsidiaries; and (iv) any other Person approved by the Administrative
     Agent and the Borrower.

          "Environmental Laws" means any and all federal, state, local and
     foreign statutes, laws, regulations, ordinances, rules, judgments, orders,
     decrees, permits, concessions, grants, franchises, licenses, agreements or
     other governmental restrictions relating to the environment, to emissions,
     discharges or releases of Contaminants into the environment, including,
     without limitation, ambient air, surface water, groundwater, or land, or
     otherwise relating to the manufacture, processing, distribution, use,
     treatment, storage, disposal, transport or handling of Contaminants, or to
     Remedial Action.

          "Environmental Liabilities and Costs" means, with respect to any
     Person, all liabilities, obligations, responsibilities, Remedial Actions,
     losses, damages, punitive damages, consequential damages, treble damages,
     costs and expenses (including all fees, disbursements and expenses of
     counsel, experts and consultants and costs of investigation and feasibility
     studies), fines, penalties, sanctions and interest incurred as a result of
     any claim or demand by any other Person, whether based in contract, tort,
     implied or express warranty, strict liability, criminal or civil statute
     and whether arising under any Environmental Law, Permit, order or agreement
     with any Governmental Authority or other Person, in each case relating to
     any environmental, health or safety condition or to any Release or
     threatened Release and resulting from the past, present or future
     operations of, or ownership of property by, such Person or any of its
     Subsidiaries.

          "Environmental Lien" means any Lien in favor of any Governmental
     Authority for Environmental Liabilities and Costs.

          "Equity Issuance" means the issue or sale of any Stock of the Borrower
     or any Subsidiary of the Borrower to any Person other than the Borrower or
     any Subsidiary of the Borrower.

          "ERISA" means the Employee Retirement Income Security Act of 1974, as
     amended from time to time, and the regulations promulgated thereunder.

          "ERISA Affiliate" means any trade or business (whether or not
     incorporated) under common control or treated as a single employer with the
     Borrower or any of its Subsidiaries within the meaning of Section 414(b),
     (c), (m) or (o) of the Code.

          "ERISA Event" means (i) the occurrence of a reportable event, within
     the meaning of Section 4043 of ERISA, unless the 30-day notice requirement
     with respect thereto has been waived by the PBGC; (ii) the provision by the
     administrator of any Plan of a notice of intent to terminate such Plan
     pursuant to Section 4041(a)(2) of ERISA (including any such notice with
     respect to a plan amendment referred to in Section 4041(e) of ERISA); (iii)
     the cessation of operations at a facility by any member of the Controlled
     Group in the circumstances described in Section 4062(e) of ERISA; (iv) the
     withdrawal by any member of the Controlled Group from a

                                        8

<PAGE>

     Plan during a plan year for which it was a substantial employer, as defined
     in Section 4001(a)(2) of ERISA; (v) the failure by any member of the
     Controlled Group to make a payment to a Plan required under Section
     302(f)(1) of ERISA, which Section imposes a lien for failure to make
     required payments; (vi) the adoption of an amendment to a Plan requiring
     the provision of security to such Plan, pursuant to Section 307 of ERISA;
     or (vii) the institution by the PBGC of proceedings to terminate a Plan,
     pursuant to Section 4042 of ERISA, or the occurrence of any event or
     condition which, in the reasonable judgment of the Borrower, might
     constitute grounds under Section 4042 of ERISA for the termination of, or
     the appointment of a trustee to administer, a Plan.

          "Eurocurrency Liabilities" has the meaning assigned to that term in
     Regulation D of the Federal Reserve Board, as in effect from time to time.

          "Euro-Dollar Business Day" means any Domestic Business Day on which
     commercial banks are open for international business (including dealings in
     dollar deposits) in London.

          "Euro-Dollar Lending Office" means, as to each Lender, its office,
     branch or affiliate located at its address set forth on Schedule I hereof
     or such other office, branch or affiliate of such Lender as it may
     hereafter designate as its Euro-Dollar Lending Office by notice to the
     Borrower and the Administrative Agent.

          "Euro-Dollar Loan" means a Loan to be made by a Lender pursuant to
     Section 2.01 as a Euro-Dollar Loan in accordance with the applicable Notice
     of Borrowing.

          "Euro-Dollar Rate" means, for any Euro-Dollar Loan for any Interest
     Period, a rate per annum equal to the sum of the appropriate Applicable
     Margin plus the applicable LIBO Rate.

          "Euro-Dollar Reserve Percentage" of any Lender for the Interest Period
     for any Euro-Dollar Loan means the reserve percentage applicable during
     such Interest Period (or if more than one such percentage shall be so
     applicable, the daily average of such percentages for those days in such
     Interest Period during which any such percentage shall be so applicable)
     under regulations issued from time to time by the Board of Governors of the
     Federal Reserve System (or any successor) for determining the maximum
     reserve requirement (including, without limitation, any emergency,
     supplemental or other marginal reserve requirement) for such Lender with
     respect to liabilities or assets consisting of or including Eurocurrency
     Liabilities having a term equal to such Interest Period.

          "Event of Default" has the meaning set forth in Section 6.01.

          "Fair Market Value" means, with respect to any asset of the Borrower
     or any Subsidiary at any date, the open market cash purchase price that an
     informed and willing purchaser would pay for such asset in an arm's length
     transaction to a willing and informed owner under no compulsion to sell.

          "Federal Funds Rate" means, for any day (the "accrual date"), the rate
     per annum (rounded upward, if necessary, to the nearest 1/100th of 1%)
     equal to the weighted average of the rates on overnight Federal funds
     transactions with members of the Federal Reserve System arranged by Federal
     funds brokers on the accrual date, as published by the Federal Reserve Bank
     of New York on the Domestic Business Day next succeeding such day, provided
     that (i) if the accrual date is not a Domestic Business Day, the Federal
     Funds Rate for the accrual date shall be such rate on such transactions on

                                        9

<PAGE>

     the next preceding Domestic Business Day as so published on the next
     succeeding Domestic Business Day, and (ii) if no such rate is so published
     on such next succeeding Domestic Business Day, the Federal Funds Rate for
     the accrual date shall be the average rate quoted to each of the Reference
     Banks on the accrual date (or next preceding Domestic Business Day) on such
     transactions as determined by the Administrative Agent.

          "Federal Reserve Board" means the Board of Governors of the United
     States Federal Reserve System, or any successor thereto.

          "Fee Letters" shall mean (i) the letter dated as of October 23, 2000,
     addressed to the Borrower from Citibank and Salomon Smith Barney Inc. and
     accepted by the Borrower on October 25, 2000, with respect to certain fees
     to be paid from time to time to Citibank (which later assigned all of its
     rights and obligations thereunder to Citicorp) and Salomon Smith Barney
     Inc. (the "Existing Fee Letter") and (ii) the letter dated as of November
     __, 2002, addressed to the Borrower from the Administrative Agent and
     Salomon Smith Barney Inc. and accepted by the Borrower on November __,
     2002, with respect to certain fees to be paid from time to time to the
     Administrative Agent and Salomon Smith Barney Inc.

          "Financial Statements" means the financial statements of the Borrower
     and its Subsidiaries delivered in accordance with Section 4.05 and Section
     5.01.

          "Fiscal Quarter" means each of the three month periods ending on March
     31, June 30, September 30 and December 31.

          "Fiscal Year" means the twelve month period ending on December 31.

          "GAAP" means generally accepted accounting principles consistent with
     those applied in the preparation of the financial statements referred to in
     Section 4.05(a). The parties hereto acknowledge that generally accepted
     accounting principles may permit the Borrower to make certain elections or
     may otherwise change from time to time (such changed accounting principles
     being referred to herein as the "New GAAP"). The Borrower agrees that in
     the event the Borrower adopts the New GAAP, the Borrower shall promptly
     thereafter notify the Administrative Agent of such adoption and furnish to
     the Administrative Agent such explanations and/or reconciling statements,
     if any, as the Administrative Agent or any Lender shall reasonably request.

          "Governmental Authority" means any nation or government, any state or
     other political subdivision thereof and any entity exercising executive,
     legislative, judicial, regulatory or administrative functions of or
     pertaining to government.

          "Guarantee" by any Person means any obligation, contingent or
     otherwise, of such Person directly or indirectly guaranteeing any Debt of
     any other Person and, without limiting the generality of the foregoing, any
     obligation, direct or indirect, contingent or otherwise, of such Person (i)
     to purchase or pay (or advance or supply funds for the purchase or payment
     of) such Debt (whether arising by virtue of partnership arrangements, by
     agreement to keep-well, to purchase assets, goods, securities or services,
     to take-or-pay, or to maintain financial statement conditions or otherwise)
     or (ii) entered into for the purpose of assuring in any other manner the
     obligee of such Debt of the payment thereof or to protect such obligee
     against loss in respect thereof (in whole or in part); provided that the
     term Guarantee shall not include endorsements for collection or deposit in
     the ordinary course of business. The term "Guarantee" used as a verb has a
     corresponding meaning.

                                       10

<PAGE>

          "Guarantied Parties" means the Lenders, the Administrative Agent and
     any other beneficiary of the Subsidiary Guaranty pursuant to Article IX
     herein.

          "Guarantor" and "Guarantors" have the meanings set forth in the
     preamble hereof.

          "Harman Case" means post trial proceedings, including appeals, with
     respect to the August 1, 2002 jury verdict in favor of Harman Mining Corp.,
     et al., against the Borrower.

          "Hedging Contracts" means all interest rate swap agreements, interest
     rate cap agreements, interest rate collar agreements and interest rate
     insurance, foreign exchange contracts, currency swap or option agreements,
     forward contracts, commodity swap, purchase or option agreements, other
     commodity price hedging arrangements, and all other similar agreements or
     arrangements designed to alter the risks of any Person arising from
     fluctuations in interest rates, currency values or commodity prices.

          "Interest Period" means, with respect to each Euro-Dollar Borrowing,
     the period commencing on the date of such Borrowing and ending
     approximately one, two, three or six months thereafter, or, if available by
     all of the Lenders, ending nine months thereafter, as the Borrower may
     elect in the applicable Notice of Borrowing; provided that:

          (a)  any Interest Period which would otherwise end on a day which is
               not a Euro-Dollar Business Day shall be extended to the next
               succeeding Euro-Dollar Business Day unless such Euro-Dollar
               Business Day falls in another calendar month, in which case such
               Interest Period shall end on the immediately preceding
               Euro-Dollar Business Day;

          (b)  any Interest Period which begins on the last Euro-Dollar Business
               Day of a calendar month (or on a day for which there is no
               numerically corresponding day in the calendar month at the end of
               such Interest Period) shall, subject to clause (c) below, end on
               the last Euro-Dollar Business Day of a calendar month; and

          (c)  the Borrower shall not elect any Interest Period that would
               otherwise extend beyond the Termination Date.

          "Inventory" has the meaning specified in the Pledge and Security
     Agreement.

          "Investment" means, with respect to any Person, (a) any purchase or
     other acquisition by such Person of (i) any Security issued by, (ii) a
     beneficial interest in any Security issued by, or (iii) any other equity
     ownership interest in, any other Person, (b) any purchase by such Person of
     all or a significant part of the assets of a business conducted by any
     other Person, or all or substantially all of the assets constituting the
     business of a division, branch or other unit operation of any other Person
     (other than an acquisition of assets constituting a Capital Expenditure),
     (c) any loan, advance (other than deposits with financial institutions
     available for withdrawal on demand, prepaid expenses (including deferred
     longwall panel costs), prepaid royalties, accounts receivable and similar
     items made or incurred in the ordinary course of business) or capital
     contribution by such Person to any other Person, including all Debt of any
     other Person to such Person arising from a sale of property by such Person
     other than in the ordinary course of its business, and (d) any Guarantee
     incurred by such Person in respect of Debt of any other Person.

                                       11

<PAGE>

          "Involuntary Disposition" means (a) any loss of or damage to property
     of the Borrower or any of its Subsidiaries on or after the date of this
     Agreement or (b) any taking of property of the Borrower or any of its
     Subsidiaries by any Governmental Authority.

          "Lender" means each lender listed on the signature pages hereof and
     each Eligible Assignee that shall become a party hereto pursuant to Section
     10.06.

          "Lending Office" means, as to any Lender, its Domestic Lending Office
     or its Euro-Dollar Lending Office, as the context may require.

          "Level I Period" has the meaning set forth in Section 1.04.

          "Level II Period" has the meaning set forth in Section 1.04.

          "Level III Period" has the meaning set forth in Section 1.04.

          "Level IV Period" has the meaning set forth in Section 1.04.

          "LIBO Rate" means, for the Interest Period for each Euro-Dollar Loan
     comprising part of the same Borrowing, an interest rate per annum (rounded
     upward, if necessary, to the nearest whole multiple of 1/100 of 1%) that
     appears on the Dow Jones Markets (Telerate) page 3750 (or such other
     comparable page as may, in the opinion of the Administrative Agent, replace
     such page for the purpose of displaying such rate) with maturities
     comparable to such Interest Period at approximately 11:00 A.M. (London
     time) two Euro-Dollar Business Days prior to the first day of such Interest
     Period. In the event that such a rate does not appear on page 3750 of the
     Dow Jones Telerate Screen, the LIBO Rate shall be the average (rounded
     upwards, if necessary, to the nearest 1/100 or 1%) of the rates per annum
     at which dollar deposits in immediately available funds are offered to each
     of the Reference Banks in the London interbank market as at or about 11:00
     A.M. (New York City time) two (2) Euro-Dollar Business Days prior to the
     beginning on such Interest Period in an amount substantially equal to such
     Reference Bank's Euro-Dollar Loan comprising part of such Borrowing, in
     each case, to be outstanding during such Interest Period and for a period
     equal to such Interest Period.

          "Lien" means, with respect to any asset, any mortgage, lien, pledge,
     charge, security interest or encumbrance of any kind in respect of such
     asset. For the purposes of this Agreement, the Borrower or any Subsidiary
     shall be deemed to own subject to a Lien on any asset which it has acquired
     or holds subject to the interest of a vendor or lessor under any
     conditional sale agreement, Capital Lease or other title retention
     agreement relating to such asset.

          "Loan" means a Base Rate Loan or a Euro-Dollar Loan made by a Lender
     pursuant to Section 2.01. "Loans" means Base Rate Loans or Euro-Dollar
     Loans or any combination of the foregoing.

          "Loan Documents" means, collectively, this Agreement, the Notes (if
     any), the Subsidiary Guaranty, the Fee Letters, the Collateral Documents
     and each certificate, agreement or document executed by a Loan Party and
     delivered to the Administrative Agent or any Lender in connection with or
     pursuant to any of the foregoing, and all amendments thereto and
     substitutions and replacements therefor and modifications thereof.

          "Loan Party" means each of the Borrower, each Guarantor and each
     Domestic Subsidiary of the Borrower that executes and delivers a Loan
     Document.

                                       12

<PAGE>

          "Material Adverse Change" means any material and adverse change in the
     business, condition (financial or otherwise) or results of operations or
     prospects of the Borrower and its Subsidiaries (taken as a whole).

          "Material Adverse Effect" means an effect that results in or causes a
     material adverse effect (i) on the business, condition (financial or
     otherwise), results of operations or prospects of the Borrower and its
     Subsidiaries, taken as a whole, which could reasonably be expected to
     materially and adversely affect the ability of the Borrower or the
     Guarantors to perform their respective obligations under the Loan Documents
     at any time up to and including the Termination Date, or (ii) on the
     legality, validity or enforceability of this Agreement or any of the other
     Loan Documents.

          "Material Plan" has the meaning set forth in Section 6.01(g).

          "Material Real Property" means those preparation plants identified on
     Schedule 1.01(a) hereto.

          "Moody's" means Moody's Investors Service, Inc., or its successors.

          "Mortgages" means the mortgages, deeds of trust or other real estate
     security documents made or required herein to be made by the Borrower or
     any other Loan Party.

          "Multiemployer Plan" has the meaning set forth in Sections 4201 et
     seq. of ERISA.

          "Net Cash Proceeds" means proceeds received by the Borrower or any of
     its Subsidiaries after the Effective Date in cash or Cash Equivalents from
     any (a) Asset Sale, other than an Asset Sale permitted under clauses (i)
     through (v), (vii) and (viii) of Section 5.04(d), net of (i) the reasonable
     cash costs of sale, assignment or other disposition, (ii) taxes paid or
     reasonably estimated to be payable as a result thereof and (iii) any amount
     required to be paid or prepaid on Debt (other than the Obligations) secured
     by the assets subject to such Asset Sale; provided, however, that evidence
     of each of (i), (ii) and (iii) above is provided to the Administrative
     Agent in form and substance satisfactory to it, (b) Property Loss Event or
     (c)(i) Equity Issuance (other than any such issuance of common Stock of the
     Borrower occurring in the ordinary course of business to any director,
     member of the management or employee of the Borrower or its Subsidiaries in
     connection with an employee incentive plan) or (ii) any Debt Issuance
     (other than Debt permitted under clauses (i) through (vii) of Section
     5.04(a), in each case net of brokers' and advisors' fees and other costs
     incurred in connection with such transaction; provided, however, that in
     the case of this clause (c), evidence of such costs is provided to the
     Administrative Agent in form and substance reasonably satisfactory to it.

          "Note" has the meaning set forth in Section 2.04(c).

          "Notice of Borrowing" has the meaning set forth in Section 2.02.

          "Obligations" means the Loans and all other amounts, obligations,
     covenants and duties owing by the Borrower to the Administrative Agent, any
     Lender, any Affiliate of any of them or any Indemnitee, of every type and
     description (whether by reason of a loan, guaranty, indemnification, or
     otherwise), present or future, arising under this Agreement, any other Loan
     Document, whether direct or indirect (including those acquired by
     assignment), absolute or contingent, due or to become due, now existing or
     hereafter arising and however acquired and whether or not evidenced by any
     note, guaranty or other instrument or for the payment of money,

                                       13

<PAGE>

     including all fees, interest, charges, expenses, attorneys' fees and
     disbursements, and other sums chargeable to the Borrower under this
     Agreement, or any other Loan Document.

          "Other Taxes" has the meaning set forth in Section 10.03(b).

          "PBGC" means the Pension Benefit Guaranty Corporation or any entity
     succeeding to any or all of its functions under ERISA.

          "Permit" means any permit, approval, authorization, license, variance
     or permission required from a Governmental Authority under an applicable
     Requirement of Law.

          "Permitted Asset-Backed Financing" means a financing of not more than
     $150,000,000 in the aggregate principal amount at any one time outstanding
     obtained by the Borrower or any of its Subsidiaries through an asset-backed
     securitization program provided by an arranger selected by the Borrower or
     the relevant Subsidiary and reasonably acceptable to the Administrative
     Agent.

          "Permitted Joint Venture" means a Person:

          (a)  that is a corporation, limited liability company, limited
               partnership, joint venture or similar limited liability legal
               entity hereafter formed or entered into by the Borrower or any of
               its Subsidiaries with another Person in order to conduct a common
               venture or enterprise;

          (b)  that is engaged in the same business (or any business or
               activities which are substantially similar, related or incidental
               thereto) as the Borrower or such Subsidiary; and

          (c)  in respect of which the maximum amount of all obligations (in
               each case whether contingent or otherwise), including any
               contractually binding commitment to make future capital
               contributions, assumed by any Loan Party in respect thereof can
               be quantified.

          "Person" means an individual, a corporation, a partnership, a limited
     liability company, an association, a trust or any other entity or
     organization, including a government or political subdivision or an agency
     or instrumentality thereof.

          "Plan" means at any time an employee pension benefit plan which is
     covered by Title IV of ERISA or subject to the minimum funding standards
     under Section 412 of the Code and is either (i) maintained by the Borrower
     or any subsidiary for employees of the Borrower or any Subsidiary or (ii)
     maintained pursuant to a collective bargaining agreement or any other
     arrangement under which more than one employer, at least one of which is
     not a member of the Controlled Group, makes contributions and to which the
     Borrower or any Subsidiary is then making or accruing an obligation to make
     contributions or has within the preceding five plan years made
     contributions.

          "Pledge and Security Agreement" means an agreement, in substantially
     the form of Exhibit C (Form of Pledge and Security Agreement), executed by
     the Borrower and each Guarantor.

          "Pledged Notes" has the meaning specified in the Pledge and Security
     Agreement.

                                       14

<PAGE>

          "Pledged Stock" has the meaning specified in the Pledge and Security
     Agreement.

          "Power Mountain Preparation Plant and Reserves" means the preparation
     plant and related property owned by Borrower's subsidiary Power Mountain
     Coal Company, and the land and reserves owned by Borrower's subsidiaries
     Boone East Development Co. and Demeter Land Company, all affiliated with
     the Nicholas Energy Resource Group and located in Nicholas County, West
     Virginia.

          "Production Payment" means any arrangement providing for the sale,
     transfer or other disposition of (a) minerals (including coal and
     hydrocarbons) until the transferee thereof shall realize therefrom a
     specified amount of money (however determined) or a specified amount of
     such minerals (however determined) or (b) any interest in minerals
     (including coal and hydrocarbons) of the character commonly referred to as
     a "production payment".

          "Property Loss Event" means (a) any loss of or damage to property of
     the Borrower or any of its Subsidiaries on or after the date of this
     Agreement that results in the receipt by such Person of proceeds of
     insurance (excluding, in any event, proceeds of business interruption and
     liability insurance) in excess of $5,000,000 individually or $10,000,000 in
     the aggregate or (b) any taking of property of the Borrower or any of its
     Subsidiaries by any Governmental Authority that results in the receipt by
     such Person of a compensation payment in respect thereof in excess of
     $5,000,000 individually or $10,000,000 in the aggregate.

          "Projections" means those quarterly financial projections to be
     delivered to the Lenders by the Borrower.

          "Public Debt" means the notes issued by the Borrower pursuant to the
     Indenture, dated as of February 18, 1997, between Fluor Corp. and Bankers
     Trust Company, as Trustee, as amended by the First Supplemental Indenture,
     dated as of February 9, 2001.

          "Reference Banks" means Citibank and certain other Lenders to be
     determined by the Administrative Agent, with the approval of the Borrower.

          "Register" shall have the meaning set forth in Section 2.04(a).

          "Regulation U" means Regulation U of the Board of Governors of the
     Federal Reserve System, as in effect from time to time.

          "Reinvestment Deferred Amount" means, with respect to any Reinvestment
     Event, the aggregate Net Cash Proceeds received by any Loan Party in
     connection therewith that are not initially applied to prepay the Loans
     pursuant to Section 2.11(b) as a result of the delivery of a Reinvestment
     Notice.

          "Reinvestment Event" has the meaning set forth in Section 2.09(b).

          "Reinvestment Notice" means a written notice executed by a Responsible
     Officer of the Borrower stating that no Default or Event of Default has
     occurred and is continuing and that the Borrower (directly or indirectly
     through one of its Subsidiaries) intends and expects to use all or a
     specified portion of the Net Cash Proceeds of a Property Loss Event to
     effect repairs or purchase replacement assets.

                                       15

<PAGE>

          "Reinvestment Prepayment Amount" means, with respect to any
     Reinvestment Event, the Reinvestment Deferred Amount relating thereto less
     any amount expended or required to be expended pursuant to a Contractual
     Obligation entered into prior to the relevant Reinvestment Prepayment Date
     to acquire replacement assets useful in the Borrower's business or, in the
     case of a Property Loss Event, to effect repairs or purchase replacement
     assets.

          "Reinvestment Prepayment Date" means, with respect to any Reinvestment
     Event, the earlier of (a) the date occurring 180 days after such
     Reinvestment Event and (b) the date that is five Domestic Business Days
     after the date on which the Borrower shall have notified the Administrative
     Agent of the Borrower's determination not to effect repairs or purchase
     replacement assets with all or any portion of the relevant Reinvestment
     Deferred Amount.

          "Release" means, with respect to any Person, any release, spill,
     emission, leaking, pumping, injection, deposit, disposal, discharge,
     dispersal, leaching or migration, in each case, of any Contaminant into the
     environment or into or out of any property owned by such Person, including
     the movement of Contaminants through or in the air, soil, surface water,
     ground water or property.

          "Remedial Action" means all actions required to (a) clean up, remove,
     treat or in any other way address the Release of any Contaminant into the
     environment, (b) prevent the Release or threat of Release or minimize the
     further Release so that a Contaminant does not migrate or endanger or
     threaten to endanger public health or the environment or (c) perform
     pre-remedial studies and investigations and post-remedial monitoring and
     care.

          "Required Lenders" means at any time at least four (4) Lenders holding
     at least 50% of the aggregate unpaid principal amount of the Loans or, if
     no such Loans shall be outstanding, having at least 50% of the aggregate
     amount of the Commitments.

          "Requirement of Law" means, with respect to any Person, the common law
     and all federal, state, local and foreign laws, rules and regulations,
     orders, judgments, decrees and other legal requirements or determinations
     of any Governmental Authority or arbitrator, applicable to or binding upon
     such Person or any of its property or to which such Person or any of its
     property is subject.

          "Responsible Officer" means, with respect to any Person, any of the
     principal executive officers, managing members or general partners of such
     Person but, in any event, with respect to financial matters, the chief
     financial officer, treasurer or controller of such Person.

          "Restricted Payment" means (a) any dividend, distribution or any other
     payment whether direct or indirect, on account of any Stock or Stock
     Equivalents of the Borrower or any of its Subsidiaries now or hereafter
     outstanding and (b) any redemption, retirement, sinking fund or similar
     payment, purchase or other acquisition for value, direct or indirect, of
     any Stock or Stock Equivalents of the Borrower or any of its Subsidiaries
     now or hereafter outstanding.

          "Secured Obligations" means, (a) in the case of the Borrower, (i) the
     Obligations and (ii) the Obligations (as defined in the 364-Day Credit
     Agreement), and, (b) in the case of any other Loan Party, (i) the
     obligations of such Loan Party under the Subsidiary Guaranty and the other
     Loan Documents to which it is a party and (ii) the obligations of such Loan
     Party under the Subsidiary Guaranty (as defined in the 364-Day Credit
     Agreement) and the other Loan Documents (as defined in the 364-Day Credit
     Agreement) to which it is a party.

                                       16

<PAGE>

          "Secured Parties" means the Lenders, the Administrative Agent, the
     364-Day Credit Agreement Lenders, the Administrative Agent under, and as
     defined in, the 364-Day Credit Agreement, and any other holder of any
     Secured Obligation.

          "Security" means any Stock, Stock Equivalent, voting trust
     certificate, bond, debenture, note or other evidence of Debt, whether
     secured, unsecured, convertible or subordinated, or any certificate of
     interest, share or participation in, any temporary or interim certificate
     for the purchase or acquisition of, or any right to subscribe to, purchase
     or acquire, any of the foregoing, but shall not include any evidence of the
     Obligations.

          "S&P" means Standard and Poor's Ratings Group, a division of
     McGraw-Hill Incorporated, or its successors.

          "Share" means, with respect to each Lender, a fraction the numerator
     of which is such Lender's Commitment and the denominator of which is the
     aggregate amount of the Commitments (or, at any time after the Termination
     Date, a fraction the numerator of which is the principal amount of such
     Lender's Obligations and the denominator of which is the aggregate
     principal amount of all the Obligations).

          "Solvent" means, with respect to any Person, that the value of the
     assets of such Person (at fair value) is, on the date of determination,
     greater than the total amount of liabilities (including contingent and
     unliquidated liabilities) of such Person as of such date and that, as of
     such date, such Person is able to pay all liabilities of such Person as
     such liabilities mature and does not have unreasonably small capital. In
     computing the amount of contingent or unliquidated liabilities at any time,
     such liabilities shall be computed at the amount that, 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.

          "Special Purpose Financing Subsidiary" has the meaning set forth in
     Section 5.04(b)(ix).

          "SPV" has the meaning set forth in Section 10.06(f)(i).

          "Stock" means shares of capital stock (whether denominated as common
     stock or preferred stock) or other equivalents (regardless of how
     designated) of or in a corporation or equivalent entity, whether voting or
     non-voting.

          "Stock Equivalents" means all securities convertible into or
     exchangeable for Stock and all warrants, options or other rights to
     purchase or subscribe for any Stock, whether or not presently convertible,
     exchangeable or exercisable.

          "Subsidiary" means any corporation or other entity of which securities
     or other ownership interests having ordinary voting power to elect a
     majority of the board of directors or other persons performing similar
     functions are at the time directly or indirectly owned or controlled by the
     Borrower or one or more Subsidiaries, or by the Borrower and one or more
     Subsidiaries.

          "Subsidiary Guaranty" has the meaning set forth in Section 9.01.

          "Taxes" shall have the meaning set forth in Section 10.03(b).

                                       17

<PAGE>

          "Termination Date" means the earlier of (i) November 25, 2003, or (ii)
     the date on which the Commitments shall have been reduced to zero pursuant
     to Section 2.08, Section 2.09 or Section 6.01.

          "Type" means, with reference to a Loan, a Base Rate Loan or a
     Euro-Dollar Loan.

          "UCC" has the meaning specified in the Pledge and Security Agreement.

          "Voting Stock" means Stock of any Person having ordinary power to vote
     in the election of members of the board of directors, managers, trustees or
     other controlling Persons, of such Person (irrespective of whether, at the
     time, Stock of any other class or classes of such entity shall have or
     might have voting power by reason of the happening of any contingency).

          "Westvaco and Eastman Coal Handling Facilities" mean those coal
     handling facilities described on Schedule 1.01(b).

          "Wholly-Owned Subsidiary" means, in respect of any Person, any
     Subsidiary of such Person, all of the Stock of which (other than director's
     qualifying shares, as may be required by law) is owned by such Person,
     either directly or indirectly through one or more Wholly-Owned Subsidiaries
     of such Person.

          "Withdrawal Liability" has the meaning set forth in Sections 4201 et
     seq. of ERISA.

          Section 1.02 Accounting Terms and Determinations. Unless otherwise
specified herein, all accounting terms used herein shall be interpreted, all
accounting determinations hereunder shall be made, and all financial statements
required to be delivered hereunder shall be prepared in accordance with GAAP.

          Section 1.03 Types of Borrowings. The term "Borrowing" denotes the
aggregation of Loans of one or more Lenders to be made to the Borrower pursuant
to Article II on a single date and for a single Interest Period. Borrowings are
classified for purposes of this Agreement by reference to the pricing of Loans
comprising such Borrowing (e.g., a "Euro-Dollar Borrowing" is a Borrowing
comprised of Euro-Dollar Loans and a "Base Rate Borrowing" is a Borrowing
comprised of Base Rate Loans).

          Section 1.04 Pricing Levels. For purposes of this Agreement, the
following terms have the following meanings, subject to the concluding paragraph
of this Section 1.04:

          "Level I Period" means a period during which the long-term senior
     unsecured debt (or, if the Borrower's senior secured debt is rated by S&P
     or Moody's, the senior secured debt) rating of the Borrower is equal to or
     better than (i) BBB- by S&P and (ii) Baa3 by Moody's.

          "Level II Period" means a period (other than a Level I Period) during
     which the long-term senior unsecured debt (or, if the Borrower's senior
     secured debt is rated by S&P or Moody's, the senior secured debt) rating of
     the Borrower of the Borrower is equal to or better than (i) BB+ by S&P and
     (ii) Ba1 by Moody's.

          "Level III Period" means a period (other than a Level I Period or a
     Level II Period) during which the long-term senior unsecured debt (or, if
     the Borrower's senior secured debt is rated by S&P or Moody's, the senior
     secured debt) rating of the Borrower is equal to or better than (i) BB by
     S&P and (ii) Ba2 by Moody's.

                                       18

<PAGE>

          "Level IV Period" means any period which is not a Level I Period, a
     Level II Period or a Level III Period.

     If, however, at any date the Borrower's long-term senior unsecured debt
(or, if the Borrower's senior secured debt is rated by S&P or Moody's, the
senior secured debt) is not rated by both S&P and Moody's, then a Level IV
Period shall apply.

     The credit ratings to be used for purposes of this Section 1.04 are those
assigned to the long-term senior unsecured debt (or, if the Borrower's senior
secured debt is rated by S&P or Moody's, the senior secured debt) of the
Borrower without third-party credit enhancement. Any rating assigned to any
other debt of the Borrower shall be disregarded. The rating in effect at any
date is that in effect at the close of business on such date.

          Section 1.05 Certain Terms.

          (a)  The words "herein," "hereof" and "hereunder" and similar words
refer to this Agreement as a whole, and not to any particular Article, Section,
subsection or clause in, this Agreement.

          (b)  References in this Agreement to an Exhibit, Schedule, Article,
Section, subsection or clause refer to the appropriate Exhibit or Schedule to,
or Article, Section, subsection or clause in this Agreement.

          (c)  Each agreement defined in this Article I shall include all
appendices, exhibits and schedules thereto. If the prior written consent of the
Required Lenders is required hereunder for an amendment, restatement, supplement
or other modification to any such agreement and such consent is not obtained,
references in this Agreement to such agreement shall be to such agreement as so
amended, restated, supplemented or modified.

          (d)  References in this Agreement to any statute shall be to such
statute as amended or modified and in effect at the time any such reference is
operative.

          (e)  The term "including" when used in any Loan Document means
"including without limitation" except when used in the computation of time
periods.

          (f)  The terms "Lender" and "Administrative Agent" include their
respective successors.

                                   ARTICLE II

                                   THE CREDITS

          Section 2.01 Commitments to Lend. During the period from and including
the Effective Date, to but not including the Termination Date, each Lender
severally agrees, on the terms and conditions set forth in this Agreement, to
lend to the Borrower pursuant to this Section 2.01 from time to time amounts
such that (i) the aggregate principal amount of Loans by such Lender at any one
time outstanding shall not exceed the amount set forth opposite such Lender's
name on Schedule II hereof or, if such Lender has entered into any Assignment
and Acceptance as set forth in the recorded Assignment and Acceptance, as such
amount may be reduced pursuant to Section 2.08 or Section 2.09 or assigned
pursuant to Section 10.06 (such Lender's "Commitment") and (ii) the aggregate
principal amount of Loans by all of the Lenders at any one time outstanding
shall not exceed the aggregate amount of all of their Commitments. Each
Borrowing under this Section 2.01 shall be in an aggregate principal amount of
$10,000,000 or any larger multiple of $1,000,000 (except that any such Borrowing
may be in the

                                       19

<PAGE>

aggregate amount of the unused portion of the Commitments of all of the Lenders)
and shall be made from the several Lenders in accordance with their respective
Shares. Amounts required to be repaid pursuant to Section 2.09 shall not be
reborrowed, and amounts repaid pursuant to Section 8.02 shall not be reborrowed
except as provided therein. Except as otherwise provided in this Agreement, the
Borrower may borrow under this Section 2.01, repay, or, to the extent permitted
by Section 2.10, prepay Loans and reborrow at any time prior to but not
including the Termination Date under this Section 2.01.

          Section 2.02 Notice of Borrowings.

          (a)  The Borrower shall give the Administrative Agent notice in the
form of Exhibit D (a "Notice of Borrowing") by telecopier, confirmed immediately
in writing, not later than (x) 11:00 A.M. (New York City time) on the date of
each Base Rate Borrowing, and (y) 12:00 noon (New York City time) on the third
Euro-Dollar Business Day before each Euro-Dollar Borrowing, specifying:

               (i)       the date of such Borrowing, which shall be a Domestic
          Business Day in the case of a Base Rate Borrowing or a Euro-Dollar
          Business Day in the case of a Euro-Dollar Borrowing;

               (ii)      the aggregate amount of such Borrowing;

               (iii)     whether the Loans comprising such Borrowing are to be
          Base Rate Loans or Euro-Dollar Loans;

               (iv)      in the case of a Euro-Dollar Borrowing, the duration of
          the Interest Period applicable thereto, subject to the provisions of
          the definition of Interest Period; and

               (v)       the Borrower's long-term senior unsecured debt (or, if
          the Borrower's senior secured debt is rated by S&P or Moody's, the
          senior secured debt) ratings from S&P and Moody's in effect on the
          date of such Borrowing.

          (b) Anything in subsection (a) above to the contrary notwithstanding,

               (i)       the Borrower may not select a Euro-Dollar Loan for any
          Borrowing or with respect to the Conversion or continuance of any
          Borrowing if the aggregate amount of such Borrowing or such Conversion
          or continuance is less than $5,000,000; and

               (ii)      there shall be no more than five Interest Periods
          relating to Borrowings consisting of Euro-Dollar Loans outstanding at
          any time.

          Section 2.03 Notice to Lenders; Funding of Loans.

          (a) Upon receipt of a Notice of Borrowing, the Administrative Agent
shall promptly notify each Lender of the contents thereof and of such Lender's
Share of such Borrowing.

          (b) Not later than 2:00 P.M. (New York City time) on the date of each
Borrowing, each Lender shall (except as provided in subsection (c) of this
Section) make available its Share of such Borrowing, in Federal or other funds
immediately available in New York City, to the Administrative Agent at its
address specified in or pursuant to Section 10.01. Unless the Administrative
Agent determines that any applicable condition specified in Article III has not
been satisfied, the Administrative

                                       20

<PAGE>

Agent will make the funds so received from the Lenders promptly available to the
Borrower at the Administrative Agent's aforesaid address.

          (c) If any Lender makes a new Loan hereunder on a day on which the
Borrower is to repay all or any part of an outstanding Loan from such Lender,
such Lender shall apply the proceeds of its new Loan to make such repayment and
only an amount equal to the difference (if any) between the amount being
borrowed and the amount being repaid shall be made available by such Lender to
the Administrative Agent as provided in subsection (b), or remitted by the
Borrower to the Administrative Agent as provided in Section 2.12, as the case
may be.

          (d) Except as specifically provided in Section 8.01 to the contrary,
each Notice of Borrowing shall be irrevocable and binding on the Borrower. In
the case of any Borrowing which the related Notice of Borrowing specifies is to
be comprised of Euro-Dollar Loans, the Borrower shall indemnify each Lender
against any loss, cost or expense incurred by such Lender as a result of any
failure to fulfill on or before the date specified in such Notice of Borrowing
for such Borrowing the applicable condition set forth in Article III, including,
without limitation, any loss (including loss of anticipated profits), cost or
expense incurred by reason of the liquidation or reemployment of deposits or
other funds acquired by such Lender to fund the Loan to be made by such Lender
as part of such Borrowing when such Loan, as a result of such failure, is not
made on such date.

          (e) Unless the Administrative Agent shall have received notice from a
Lender prior to the date of any Borrowing that such Lender will not make
available to the Administrative Agent such Lender's Share of such Borrowing,
which failure may constitute a breach of such Lender's obligations under this
Agreement, the Administrative Agent may assume that such Lender has made such
portion available to the Administrative Agent on the date of such Borrowing in
accordance with subsection (b) of this Section 2.03 and the Administrative Agent
may, in reliance upon such assumption, make available to the Borrower on such
date a corresponding amount. If and to the extent that such Lender shall not
have so made such share available to the Administrative Agent, such Lender and
the Borrower severally agree to repay to the Administrative Agent forthwith on
demand such corresponding amount together with interest thereon, for each day
from the date such amount is made available to the Borrower until the date such
amount is repaid to the Administrative Agent, at (i) in the case of the
Borrower, the interest rate applicable at the time to Loans comprising such
Borrowing and (ii) in the case of such Lender, the Federal Funds Rate. If such
Lender shall repay to the Administrative Agent such corresponding amount, such
amount so repaid shall constitute such Lender's Loan as part of such Borrowing
for purposes of this Agreement.

          (f) The failure of any Lender to make the Loan to be made by it as
part of any Borrowing shall not relieve any other Lender of its obligation, if
any, hereunder to make its Loan on the date of such Borrowing, but no Lender
shall be responsible for the failure of any other Lender to make the Loan to be
made by such other Lender on the date of any Borrowing.

          Section 2.04 Register; Optional Notes.

          (a) The Administrative Agent shall maintain a register for the
recordation of the names and addresses of the Lenders and the Commitment of and
the principal amount of the Loans owing to each Lender from time to time (the
"Register") and shall retain a copy of each assignment delivered to and accepted
by it. The entries in the Register shall be conclusive and binding for all
purposes, absent manifest error, and the Borrower, the Administrative Agent, and
the Lenders may treat each Person whose name is recorded in the Register as a
Lender hereunder for all purposes of this Agreement. The Register shall be
available for inspection by the Borrower or any Lender at any reasonable time
and from time to time upon reasonable prior notice.

                                       21

<PAGE>

          (b) The Register maintained by the Administrative Agent shall include
a control account and a subsidiary account for each Lender, in which accounts
(taken together) shall be recorded (i) the date, amount and tenor, as
applicable, of each Borrowing, the type of Borrowing and the Interest Period
applicable thereto, (ii) the terms of each Assignment and Acceptance delivered
to and accepted by it, (iii) the amount of any principal or interest due and
payable or to become due and payable from the Borrower to each Lender hereunder,
and (iv) the amount of any sum received by the Administrative Agent from the
Borrower hereunder and each Lender's share thereof.

          (c) Each Lender shall maintain in accordance with its usual practice
an account or accounts evidencing the indebtedness of the Borrower to such
Lender resulting from Loans owing to such Lender from time to time, including
the amounts of principal and interest payable and paid to such Lender from time
to time hereunder. The Borrower agrees that upon notice by any Lender to the
Borrower (with a copy of such notice to the Administrative Agent) to the effect
that a promissory note or other evidence of indebtedness is required or
appropriate in order for such Lender to evidence (whether for purposes of
pledge, enforcement, or otherwise) the Base Rate Loans or Euro-Dollar Loans
owing to, or to be made by, such Lender, the Borrower shall promptly execute and
deliver to such Lender a Note in the form of Exhibit E (each a "Note";
collectively, the "Notes"), registered in the name of such Lender, in a
principal amount equal to the aggregate principal amount of the Commitment of
such Lender; provided, however, that the execution and delivery of such Notes
shall not be a condition precedent to making of any Borrowing under this
Agreement.

          Section 2.05 Voluntary Conversion or Continuation of Loans.

          (a) The Borrower may on any Domestic Business Day, upon notice given
to the Administrative Agent not later than 12:00 noon (New York City time) on
the third Euro-Dollar Business Day prior to the date of the proposed conversion
or continuance (a "Notice of Conversion/Continuation"), in substantially the
form of Exhibit F, and subject to the provisions of Section 2.02(b) and Article
VIII, (1) Convert all Loans of one Type comprising the same Borrowing into Loans
of another Type and (2) upon the expiration of any Interest Period applicable to
Loans which are Euro-Dollar Loans, continue all (or, subject to Section 2.02(b)
and Article VIII, any portion of) such Loans as Euro-Dollar Rate Loans and the
succeeding Interest Period(s) of such continued Loans shall commence on the last
day of the Interest Period of the Loans to be continued; provided, however, that
any Conversion of any Euro-Dollar Loans into Base Rate Loans shall be made on,
and only on, the last day of an Interest Period for such Euro-Dollar Loans
unless the Borrower simultaneously pays all amounts required to be paid pursuant
to Section 10.03(d). Each such Notice of Conversion/Continuation shall, within
the restrictions specified above, specify (i) the date of such continuation or
Conversion, (ii) the Loans (or, subject to Section 2.02(b), any portion thereof)
to be continued or Converted, (iii) if such continuation is of, or such
Conversion is into, Euro-Dollar Loans, the duration of the Interest Period for
each such Loan, and (iv) in the case of a continuation of or a Conversion into a
Euro-Dollar Loan, that no Event of Default has occurred and is continuing.

          (b) If upon the expiration of the then existing Interest Period
applicable to any Loan which is a Euro-Dollar Loan, the Borrower shall not have
delivered a Notice of Conversion/Continuation in accordance with this Section
2.05, then such Loan shall upon such expiration automatically be Converted to a
Base Rate Loan.

          (c) After the occurrence of and during the continuance of an Event of
Default, the Borrower may not elect to have a Loan be made or continued as, or
Converted into, a Euro-Dollar Loan after the expiration of any Interest Period
then in effect for that Loan and any Euro-Dollar Loans then in effect shall
automatically be converted to a Base Rate Loan at the expiration of the then
existing Interest Period applicable to any such Euro-Dollar Rate Loan.

                                       22

<PAGE>

          Section 2.06 Interest Rates.

          (a) Each Base Rate Loan shall bear interest on the outstanding
principal amount thereof, for each day from the date such Loan is made until it
becomes due, at a rate per annum equal to the Base Rate for such day. Such
interest shall be payable in arrears quarterly on the last day of each March,
June, September and December during such period and on such date as such Base
Rate Loan shall be Converted or paid in full.

          (b)  (i) Each Euro-Dollar Loan shall bear interest on the outstanding
          principal amount thereof, for the Interest Period applicable thereto,
          at a rate per annum equal to the applicable Euro-Dollar Rate. Such
          interest shall be payable for each Interest Period on the last day
          thereof and, if such Interest Period is longer than three months, at
          intervals of three months after the first day thereof.

               (ii) The Borrower shall pay to each Lender additional interest on
          the unpaid principal amount of each Euro-Dollar Loan of such Lender,
          from the date of such Loan until such principal amount is paid in
          full, at an interest rate per annum equal at all times to the
          remainder (rounded upwards, if necessary, to the next higher 1/100 of
          1%) obtained by subtracting (i) the LIBO Rate for the Interest Period
          for such Loan, from (ii) the rate obtained by dividing such LIBO Rate
          by a percentage equal to 100% minus the Euro-Dollar Reserve Percentage
          of such Lender for such Interest Period, payable on each date on which
          interest is payable on such Loan. Such additional interest shall be
          determined by such Lender and notified to the Borrower through the
          Administrative Agent.

          (c) Notwithstanding the rates of interest specified in this Section
2.06 or elsewhere herein, effective immediately upon the occurrence of an Event
of Default, and for as long thereafter as such Event of Default shall be
continuing, the principal balance of all Loans shall bear interest, payable on
demand, for each day from and including the date payment thereof was due, to but
excluding the date of actual payment, at a rate per annum equal to the sum of 2%
plus the higher of (i) the applicable interest rate then in effect for such day
or (ii) the Base Rate for such day.

          (d) The Administrative Agent shall determine each interest rate
applicable (pursuant to this Agreement) to the Loans hereunder. The
Administrative Agent shall give prompt notice to the Borrower and the Lender by
telecopier of each rate of interest so determined, and its determination thereof
shall be conclusive in the absence of manifest error.

          Section 2.07 Unutilized Commitment Fees. The Borrower shall pay to the
Administrative Agent, for the account of the Lenders in accordance with their
respective Shares, an unused commitment fee at the Applicable Unused Commitment
Fee Rate on the daily average aggregate amount by which the Commitments exceed
the outstanding principal amount of Loans. Such unused commitment fee shall
accrue from and including the Effective Date or, in the case of any Lender that
becomes party hereto in accordance with Section 10.06, from the effective date
specified in the Assignment and Acceptance pursuant to which it became a Lender,
to but excluding the Termination Date, and shall be payable (i) quarterly in
arrears on each March 31, June 30, September 30 and December 31 prior to the
Termination Date and (ii) on the Termination Date.

          Section 2.08 Optional Termination or Reduction of Commitments. The
Borrower may, upon at least three Domestic Business Days' prior notice to the
Administrative Agent, terminate in whole or reduce in part the unused portions
of the respective Commitments of the Lenders in accordance

                                       23

<PAGE>

with their respective Shares; provided, however, that each partial reduction
shall be in an aggregate amount of not less than $2,000,000 or an integral
multiple of $500,000 in excess thereof, and provided, further, that any such
termination or commitment reduction shall be applied first, to the termination
of, or the reduction of Commitments (as defined in the 364-Day Credit Agreement)
under, the 364-Day Credit Agreement, and then, to the termination of, or the
reduction of Commitments under, this Agreement. The Lenders shall have no
obligation to reinstate or increase any Commitment amounts terminated or reduced
pursuant to this Section 2.08.

          Section 2.09 Mandatory Termination of Commitments.

          (a) The Commitments shall terminate on the Termination Date, and any
Loans then outstanding (together with accrued interest thereon) shall be due and
payable on such date. The aggregate outstanding principal amount of the Loans
shall at no time exceed the aggregate of the Commitments. If on any date on
which the Commitments are reduced the aggregate outstanding principal amount of
the Loans exceeds the aggregate of the Commitments as so reduced, then the
Borrower shall be obligated to repay (together with accrued interest to the date
of repayment) on such date a principal amount of the Loans equal to such excess.

          (b) The then current Commitments shall be reduced on each date on
which a prepayment of Loans is made pursuant to Section 2.11(a) (other than any
prepayment arising from an Asset Sale made pursuant to Section 5.04(d)(ix) or
from any financing permitted under Section 5.04(a)(ix) secured by Liens on
either of the Westvaco and Eastman Coal Handling Facilities) or would be
required to be made had the outstanding Loans equaled the Commitments then in
effect, in each case in the amount of such prepayment (or deemed prepayment)
(and the Commitment of each Lender shall be reduced by its Share of such
amount); provided, however, that, if such repayment was made from the Net Cash
Proceeds of (i) a Property Loss Event in respect of which the Borrower has
delivered a Reinvestment Notice to the Administrative Agent (a "Reinvestment
Event"), the Commitments shall not be reduced by such prepayment to the extent
of the Reinvestment Deferred Amount of such Reinvestment Event until the
Reinvestment Prepayment Date corresponding thereto and, on such Reinvestment
Prepayment Date, the Commitments shall be reduced only to the extent of the
Reinvestment Prepayment Amount applicable to such Reinvestment Event, if any,
(ii) a Permitted Asset-Backed Financing, the Commitments shall only be reduced
by (A) 25% of the initial Net Cash Proceeds received in respect of any such
financing and (B) 25% of any additional Net Cash Proceeds received from any
subsequent increase in the principal amount of such financing, provided, that
the aggregate amount of such additional Net Cash Proceeds received since the
last prepayment in respect of such financing equals, or is greater than,
$2,500,000, and (iii) an Asset Sale pursuant to Section 5.04(d)(x), the
Commitments shall only be reduced by 25% of the Net Cash Proceeds received in
respect of any such Asset Sale.

          Section 2.10 Optional Prepayments.

          (a) The Borrower may, upon same day's notice to the Administrative
Agent, prepay any Base Rate Loan in whole at any time, or from time to time in
part in amounts aggregating $2,000,000 or any larger multiple of $500,000, by
paying the principal amount to be prepaid together with accrued interest thereon
to the date of prepayment; provided, however, that any such prepayment shall be
applied first, to prepay Base Rate Loans under the 364-Day Credit Agreement, and
then, to prepay Base Rate Loans under this Agreement.

          (b) The Borrower may, upon at least two Euro-Dollar Business Days'
notice to the Administrative Agent, prepay the Euro-Dollar Loans comprising any
Borrowing in whole at any time, or from time to time in part in amounts
aggregating $2,000,000 or any larger multiple of $500,000, by paying the sum of
(i) the principal amount to be prepaid together with accrued interest thereon to
the date

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<PAGE>

of prepayment, plus (ii) all amounts required to be paid pursuant to Section
10.03(d); provided, however, that any such prepayment shall be applied first, to
prepay Euro-Dollar Loans under the 364-Day Credit Agreement, and then, to prepay
Euro-Dollar Loans under this Agreement

          (c) Upon receipt of a notice of prepayment pursuant to this Section
2.10, the Administrative Agent shall promptly notify each Lender of the contents
thereof and of such Lender's Share of such prepayment and such notice shall not
thereafter be revocable by the Borrower. Each optional prepayment shall be
applied to prepay the Loans of the several Lenders included in such Borrowing in
accordance with their respective Shares.

          Section 2.11 Mandatory Prepayments.

          (a) Within one Business Day after receipt by the Borrower or any of
its Subsidiaries of Net Cash Proceeds arising from an Asset Sale, Property Loss
Event, Debt Issuance or Equity Issuance, the Borrower shall prepay the Loans in
an amount equal to 100% of such Net Cash Proceeds. Any such mandatory prepayment
shall be applied in accordance with clause (b) below.

          (b) Subject to the provisions of Section 2.12, any prepayments made by
the Borrower required to be applied in accordance with this clause (b) shall be
applied first, to repay the outstanding principal balance of the 364-Day Loans
and then, to repay the outstanding principal balance of the Loans under this
Agreement. All repayments of Loans required to be made pursuant to this clause
(b) shall result in a permanent reduction of the Commitments to the extent
provided in Section 2.09(b).

          Section 2.12 Payments and Computations

          (a) The Borrower shall make each payment of principal of and interest
on the Loans, and of additional compensation hereunder, not later than 3:00 P.M.
(New York City time) on the date when due, in federal or other immediately
available funds, without set-off, counterclaim or deduction of any kind, to the
Administrative Agent at its address referred to in Section 10.01. Whenever any
payment of fees or principal of or interest on the Base Rate Loans, or of
additional compensation, shall be due on a day which is not a Domestic Business
Day, the date for payment thereof shall be extended to the next succeeding
Domestic Business Day, and such extension of time shall in such case be included
in the computation of payment of interest or additional compensation. Whenever
any payment of principal of or interest on the Euro-Dollar Loans shall be due on
a day which is not a Euro-Dollar Business Day, the date for payment thereof
shall be extended to the next succeeding Euro-Dollar Business Day unless such
Euro-Dollar Business Day falls in another calendar month, in which case the date
for payment thereof shall be the next preceding Euro-Dollar Business Day. If the
date for any payment of principal is extended by operation of law or otherwise,
interest thereon shall be payable for such extended time. Upon its acceptance of
an Assignment and Acceptance and recording of the information contained therein
in the Register pursuant to Section 2.04(b), from and after the effective date
specified in such Assignment and Acceptance, the Administrative Agent shall make
all payments hereunder in respect of the interest assigned thereby to the Lender
assignee thereunder, and the parties to such Assignment and Acceptance shall
make all appropriate adjustments in such payments for periods prior to such
effective date directly between themselves.

          (b) Except for payments and other amounts received by the
Administrative Agent and applied in accordance with the provisions of clause (c)
below (or required to be applied in accordance with Section 2.11(b)), all
payments and any other amounts received by the Administrative Agent from or for
the benefit of the Borrower shall be applied as follows: first, to pay the
principal of, and interest on, any portions of the 364-Day Loans the
Administrative Agent may have advanced pursuant to the express provisions of the
364-Day Credit Agreement on behalf of any 364-Day Credit Agreement Lender, for

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<PAGE>

which the Administrative Agent has not then been reimbursed by such 364-Day
Credit Agreement Lender or the Borrower, second, to pay the principal of, and
interest on, any portions of the Loans the Administrative Agent may have
advanced pursuant to the express provisions of this Agreement on behalf of any
Lender, for which the Administrative Agent has not then been reimbursed by such
Lender or the Borrower, third, to pay all other Secured Obligations then due and
payable under the 364-Day Credit Agreement, fourth, to pay all other Secured
Obligations then due and payable under this Agreement, and then, as the Borrower
so designates. Payments in respect of the Loans received by the Administrative
Agent shall be distributed to each Lender in accordance with such Lender's Share
of the Commitments; and all payments of fees and all other payments in respect
of any other Obligation shall be allocated among such of the Lenders as are
entitled thereto and, for such payments allocated to the Lenders, in proportion
to their respective Shares.

          (c) The Borrower hereby irrevocably waives the right to direct the
application of any and all payments in respect of the Secured Obligations and
any proceeds of Collateral after the occurrence and during the continuance of an
Event of Default and agrees that, notwithstanding the provisions of Section
2.11(b) and clause (b) above, the Administrative Agent may, and, upon either (A)
the written direction of the Required Lenders or (B) the acceleration of the
Obligations pursuant to Section 6.01, shall apply all payments in respect of any
Secured Obligations and all funds on deposit in any Cash Collateral Account and
all other proceeds of Collateral in the order provided for in the Collateral
Sharing Agreement.

          Section 2.13 Computation of Interest and Fees. Interest based on the
Base Rate (unless computed by reference to the Federal Funds Rate) shall be
computed on the basis of a year of 365 days (or 366 days in a leap year) and
paid for the actual number of days elapsed (including the first day but
excluding the last day). All other interest hereunder (including the Base Rate
if computed by reference to the Federal Funds Rate) shall be computed on the
basis of a year of 360 days and paid for the actual number of days elapsed
(including the first day but excluding the last day). All fees hereunder shall
be computed on the basis of a year of 360 days and 30 day months (including the
first day but excluding the last day).

          Section 2.14 Place of Loans. All Loans shall be disbursed and be
payable at the office of the Administrative Agent, at its address set forth in
Section 10.01.

                                   ARTICLE III

                   CONDITIONS TO EFFECTIVENESS AND BORROWINGS

          Section 3.01 Conditions Precedent to Effectiveness. The effectiveness
of the Agreement is subject to the satisfaction or due waiver in accordance with
Section 10.05 of each of the following conditions precedent:

          (a) Certain Documents. The Administrative Agent shall have received on
or prior to the Effective Date each of the following, each dated the Effective
Date unless otherwise indicated or agreed to by the Administrative Agent, in
form and substance satisfactory to the Administrative Agent and in sufficient
copies for each Lender:

               (i)       this Agreement, duly executed and delivered by the
          Borrower and each Domestic Subsidiary and, for the account of each
          Lender requesting the same, a Note or Notes of the Borrower conforming
          to the requirements set forth herein;

               (ii)      the Pledge and Security Agreement, duly executed by the
          Borrower and each Guarantor, together with each of the following:

                                       26

<PAGE>

                         (1)  evidence satisfactory to the Administrative Agent
               that, upon the filing and recording of instruments delivered on
               or prior to the Effective Date, the Collateral Agent (for the
               benefit of the Secured Parties) shall have a valid and perfected
               first priority security interest (subject to Customary Permitted
               Liens and certain existing Liens identified on Schedule
               5.04(b)(ii)) in all Collateral (other than the Material Real
               Properties (which will be provided post-closing pursuant to
               Section 5.03(j)), including (x) such documents duly executed by
               each Loan Party as the Administrative Agent may request with
               respect to the perfection of its security interests in the
               Collateral (including financing statements under the UCC, patent,
               trademark and copyright security agreements suitable for filing
               with the Patent and Trademark Office or the Copyright Office, as
               the case may be, and other applicable documents under the laws of
               any jurisdiction with respect to the perfection of the Collateral
               Agent's Liens created by the Pledge and Security Agreement) and
               the payment of all filing and recording fees and taxes related
               thereto and (y) copies of UCC search reports as of a recent date
               listing all effective financing statements that name each Loan
               Party as debtor, together with copies of such financing
               statements, none of which shall cover the Collateral except for
               those that shall be terminated on the Effective Date or are
               otherwise permitted hereunder;

                         (2)  share certificates representing all of the
               certificated Pledged Stock being pledged pursuant to such Pledge
               and Security Agreement and stock powers for such share
               certificates executed in blank; and

                         (3)  all instruments representing any Pledged Notes
               being pledged pursuant to such Pledge and Security Agreement duly
               endorsed in favor of the Collateral Agent or in blank;

               (iii)     the Collateral Sharing Agreement, duly executed by the
          Administrative Agent, the Collateral Agent and the Administrative
          Agent under, and as defined in, the 364-Day Credit Agreement;

               (iv)      a copy of the Borrower's Certificate of Incorporation,
          certified as of a recent date by the Secretary of State of the State
          of Delaware and good standing certificates for the Borrower from the
          Secretary of State of the State of Delaware and the Virginia State
          Corporation Commission;

               (v)       a copy of each Guarantors' Articles of Incorporation,
          certified as of a recent date by the Secretary of State of the state
          of organization of such Guarantor and a good standing certificate for
          each Guarantor from the Secretary of State of the state of
          organization of such Guarantor;

               (vi)      an opinion of (A) Hunton & Williams, counsel for the
          Borrower, dated as of the Effective Date, and (B) counsel to the Loan
          Parties in New York, Delaware, Virginia and West Virginia, in each
          case addressed to the Administrative Agent and the Lenders and
          addressing such other matters as any Lender through the Administrative
          Agent may reasonably request;

               (vii)     an opinion of the General Counsel of the Borrower,
          dated as of the Effective Date;

                                       27

<PAGE>

               (viii)    an opinion of counsel from Weil, Gotshal & Manges LLP,
          counsel for the Administrative Agent, dated as of the date hereof;

               (ix)      a certificate of the Secretary or an Assistant
          Secretary of each Loan Party certifying (A) the names and true
          signatures of each officer of such Loan Party that has been authorized
          to execute and deliver any Loan Document or other document required
          hereunder to be executed and delivered by or on behalf of such Loan
          Party, (B) the by-laws (or equivalent Constituent Document) of such
          Loan Party as in effect on the date of such certification, (C) the
          resolutions of such Loan Party's Board of Directors (or equivalent
          governing body) approving and authorizing the execution, delivery and
          performance of this Agreement and the other Loan Documents to which it
          is a party and (D) that there have been no changes in the certificate
          of incorporation (or equivalent Constituent Document) of such Loan
          Party from the certificate of incorporation (or equivalent Constituent
          Document) delivered pursuant to clauses (iii) and (v) above;

               (x)       a compliance certificate with respect to the financial
          covenants contained in Section 5.02 executed by the Borrower's chief
          financial officer, in form and substance satisfactory to the
          Administrative Agent;

               (xi)      a certificate of an authorized officer of the Borrower
          to the effect that since October 31, 2001 there has been no Material
          Adverse Change;

               (xii)     a revocation by an authorized officer of the Borrower
          of the Borrower's November 6, 2002 election to convert the outstanding
          Loans to term loans;

               (xiii)    evidence satisfactory to the Administrative Agent that
          the insurance policies required by Section 5.03(e) and any Collateral
          Document are in full force and effect, together with endorsements
          naming the Collateral Agent, on behalf of the Secured Parties, as an
          additional insured or loss payee under all insurance policies existing
          on the Effective Date with respect to the properties of the Borrower
          and its Subsidiaries; and

               (xiv)     such other certificates, documents, agreements and
          information respecting any Loan Party as any Lender through the
          Administrative Agent may reasonably request.

          (b) Fee and Expenses Paid. There shall have been paid to the
Administrative Agent, for the account of the Administrative Agent and the
Lenders, as applicable, all fees and expenses (including reasonable fees and
expenses of counsel) due and payable on or before the Effective Date (including
all such fees described in the Fee Letters).

          (c) Consents, Etc. Each of the Borrower and its Subsidiaries shall
have received all consents and authorizations required pursuant to any material
Contractual Obligation with any other Person and shall have obtained all Permits
of, and effected all notices to and filings with, any Governmental Authority, in
each case, as may be necessary to allow each of the Borrower and its
Subsidiaries lawfully (i) to execute, deliver and perform, in all material
respects, their respective obligations hereunder and under the Loan Documents to
which each of them, respectively, is, or shall be, a party and each other
agreement or instrument to be executed and delivered by each of them,
respectively, pursuant thereto or in connection therewith and (ii) to create and
perfect the Liens on the Collateral to be owned by each of them in the manner
and for the purpose contemplated by the Loan Documents.

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<PAGE>

          Section 3.02 Conditions Precedent to Each Borrowing . The obligation
of each Lender to make a Loan on the occasion of a Borrowing (including the
initial Borrowing) shall be subject to the further conditions precedent that:

          (a) Notice of Borrowing. The Administrative Agent shall have received
a Notice of Borrowing with respect thereto in accordance with Section 2.02.

          (b) Representations and Warranties. On the date of such Borrowing the
following statements shall be true (and each of the giving of the Notice of
Borrowing, and the acceptance by the Borrower of the proceeds of such Borrowing
shall constitute a representation and warranty by the Borrower that on the date
of such Borrowing such statements are true):

               (i)       except to the extent provided below, each of the
          representations and warranties of the Borrower contained in Article IV
          are true and correct in all material respects on and as of the date of
          such Borrowing, before and after giving effect to such Borrowing and
          to the application of the proceeds therefrom, as though made on and as
          of such date, except to the extent that any such representation or
          warranty expressly relates only to an earlier date, in which case such
          representation or warranty is correct as of such earlier date; and

               (ii)      no event has occurred and is continuing, or would
          result from such Borrowing or from the application of the proceeds
          therefrom, which constitutes a Default or Event of Default.

          (c) No Legal Impediments. The making of the Loans on such date does
not violate any Requirement of Law on the date of or immediately following such
Loan and is not enjoined, temporarily, preliminarily or permanently.

          (d) Margin Stock. After applying the proceeds of such Borrowing, not
more than 25% of the value (as determined by any reasonable method permitted by
Regulation U) of the Borrower's assets subject to the provisions of Section
5.04(g) shall be represented by "margin stock" (as defined in Regulation U).

                                   ARTICLE IV

                         REPRESENTATIONS AND WARRANTIES

     The Borrower represents and warrants that:

          Section 4.01 Corporate Existence and Power; Compliance with Law.

          (a) Each of the Borrower and its Subsidiaries (i) is a corporation,
limited liability company or partnership duly organized, validly existing and in
good standing under the laws of the jurisdiction of its organization, and has
all corporate, limited liability company or partnership powers and all material
governmental licenses, authorizations, consents and approvals required to carry
on its business as now conducted, (ii) is duly qualified to do business as a
foreign corporation, limited liability company or partnership and in good
standing under the laws of each jurisdiction where such qualification is
necessary, except where the failure to be so qualified or in good standing would
not, in the aggregate, have a Material Adverse Effect, and (iii) has all
requisite power and authority and the legal right to own,

                                       29

<PAGE>

pledge, mortgage and operate its properties, to lease the property it operates
under lease and to conduct its business as now conducted.

          (b) Each of the Borrower and its Subsidiaries (i) is in compliance
with its Constituent Documents and (ii) is in compliance with all applicable
Requirements of Law except where the failure to be in compliance would not in
the aggregate have a Material Adverse Effect and (iii) has all necessary
permits, licenses, consents or approvals from or by, has made all necessary
filings with, and has given all necessary notices to, each Governmental
Authority having jurisdiction, to the extent required for such ownership,
operation and conduct, except for licenses, permits, consents, approvals or
filings which can be obtained or made by the taking of ministerial action to
secure the grant or transfer thereof or the failure to obtain or make would not
in the aggregate have a Material Adverse Effect.

          Section 4.02 Corporate, Limited Liability Company, Partnership and
Governmental Authorization; Contravention. The execution, delivery and
performance by the Borrower and the Guarantors of this Agreement and by the
Borrower of the Notes and the consummation of the transactions contemplated
thereby (i) are within the Borrower's and Guarantors' corporate, limited
liability company or partnership power, as applicable, (ii) have been, or at the
time of delivery thereof pursuant to Article III (Conditions to Effectiveness
and Borrowings) duly authorized by all necessary corporate, limited liability
company or partnership action, including the consent of shareholders where
required, (iii) do not require the consent of, authorization by, approval of,
notice to, or filing or registration with, any Governmental Authority or any
other Person, other than those that have been or will be, prior to the Effective
Date, obtained or made and, with respect to the Collateral, filings required to
perfect the Liens created by the Collateral Documents, and (iv) do not and will
not contravene or constitute a default under any provision of Requirement of Law
(including Regulations T, U and X of the Federal Reserve Board), or of the
Constituent Documents of the Borrower or the Guarantors, as applicable, or of
any Contractual Obligation, judgment, injunction, order or decree binding upon
the Borrower or the Guarantors or result in the creation or imposition of any
Lien on any asset of the Borrower or any of its Subsidiaries, other than those
in favor of the Secured Parties pursuant to the Collateral Documents.

          Section 4.03 Binding Effect. This Agreement has been, and each of the
other Loan Documents will have been upon delivery thereof pursuant to the terms
of this Agreement, duly executed and delivered by each Loan Party party thereto.
This Agreement is, and the other Loan Documents will be, when delivered
hereunder, the legal, valid and binding obligation of each Loan Party party
thereto, enforceable against such Loan Party in accordance with its terms,
subject to applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and similar laws affecting creditors' rights and
remedies generally, and subject, as to enforceability to general principles of
equity, including principles of commercial reasonableness, good faith and fair
dealing (regardless of whether enforcement is sought in a proceeding at law or
in equity).

          Section 4.04 Ownership of Subsidiaries. Set forth on Schedule 4.04
(Ownership of Subsidiaries) is a complete and accurate list showing, as of the
Effective Date, all Subsidiaries of the Borrower and, as to each such
Subsidiary, the jurisdiction of its organization, the number of shares of each
class of Stock authorized (if applicable), the number outstanding on the
Effective Date and the number and percentage of the outstanding shares of each
such class owned (directly or indirectly) by the Borrower. No Stock or any
Subsidiary of the Borrower is subject to any outstanding option, warrant, right
of conversion or purchase of any similar right. All of the outstanding Stock of
each Subsidiary of the Borrower owned (directly or indirectly) by the Borrower
has been validly issued, is fully paid and non-assessable (to the extent
applicable) and is owned by the Borrower or a Subsidiary of the Borrower, free
and clear of all Liens (other than the Lien in favor of the Secured Parties
created pursuant to the Pledge and Security Agreement), options, warrants,
rights of conversion or purchase or any similar rights.

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<PAGE>

Neither the Borrower nor any such Subsidiary is a party to, or has knowledge of,
any agreement restricting the transfer or hypothecation of any Stock of any such
Subsidiary, other than the Loan Documents. The Borrower does not own or hold,
directly or indirectly, any Stock of any Person other than such Subsidiaries and
Investments permitted by Section 5.04(c).

          Section 4.05 Financial Information

          (a) The consolidated balance sheets of the Borrower and its
Subsidiaries as of October 31, 2001 and as of September 30, 2002 and the related
consolidated statements of earnings and of cash flow for the fiscal year and
nine months then ended, a copy of which has been delivered to each of the
Lenders, each fairly present, in conformity with GAAP, the consolidated
financial position of the Borrower and its Subsidiaries as of such date and
their consolidated results of operations and changes in financial position for
the period then ended.

          (b) The Projections have been prepared by the Borrower in light of the
past operations of its business, and reflect quarterly projections for the
quarterly periods the subject thereof. The Projections are based upon estimates
and assumptions stated therein, all of which the Borrower believes to be
reasonable and fair in light of current conditions and current facts known to
the Borrower and, as of the date thereof, reflect the Borrower's good faith and
reasonable estimates of the future financial performance of the Borrower and its
Subsidiaries and of the other information projected therein for the periods set
forth therein.

          (c) There exists no Material Adverse Change since October 31, 2001.

          Section 4.06 Solvency. Both before and after giving effect to (a) the
Loans to be made or extended on the Effective Date or such other date as Loans
requested hereunder are made, (b) the disbursement of the proceeds of such Loans
pursuant to the instructions of the Borrower, and (c) the payment and accrual of
all transaction costs in connection with the foregoing, the Borrower is Solvent.

          Section 4.07 Litigation. There is no action, suit or proceeding
pending or to the knowledge of the Borrower threatened against or affecting the
Borrower or any of its Subsidiaries before any court or arbitrator or any
Governmental Authority which, if adversely determined, would have a Material
Adverse Effect.

          Section 4.08 Compliance with ERISA.

          (a) The Borrower and its Subsidiaries have fulfilled their obligations
under the minimum funding standards of ERISA, including, without limitation, the
obligations under Section 302(e) of ERISA, with respect to each Plan and are in
compliance in all material respects with the presently applicable provisions of
ERISA, noncompliance with which could reasonably be expected to have a Material
Adverse Effect;

          (b) No ERISA Event which might result in liability of any member of
the Controlled Group in excess of $15,000,000 (other than for premiums payable
under Title IV of ERISA) has occurred or is reasonably expected to occur with
respect to any Plan;

          (c) Schedule B (Actuarial Information) to the most recently completed
annual report prior to the Effective Date (Form 5500 Series) for each Plan,
which report has been filed with the Internal Revenue Service by any member of
the Controlled Group, copies of which have been furnished to the Administrative
Agent, is complete and, to the best knowledge of the Borrower, accurate, and
since the

                                       31

<PAGE>

date of such Schedule B there has been no material adverse change in the funding
status of any such Plan; and

          (d) No member of the Controlled Group has incurred any Withdrawal
Liability to any Multiemployer Plan which has not been satisfied or which is or
might be in excess of $15,000,000.

          Section 4.09 Taxes. The Borrower and its Subsidiaries have filed all
United States Federal income tax returns and all other material tax returns
which are required to be filed by them and have paid all taxes due pursuant to
such returns or pursuant to any assessment received by the Borrower or any
Subsidiary other than any such taxes or assessments being presently contested in
good faith and other than where the failure to so file or pay would not have a
Material Adverse Effect. The charges, accruals and reserves on the books of the
Borrower and its Subsidiaries in respect of taxes or other governmental charges
are, in the opinion of the Borrower, adequate.

          Section 4.10 No Burdensome Restrictions; No Defaults

          (a) Neither the Borrower nor any of its Subsidiaries (i) is a party to
any Contractual Obligation the compliance with one or more of which would have,
in the aggregate, a Material Adverse Effect or the performance of which by any
thereof, either unconditionally or upon the happening of an event, would result
in the creation of a Lien (other than a Lien permitted under Section 5.04(b) on
the assets of any thereof or (ii) is subject to one or more charter or
corporate, limited liability company or partnership restrictions that would, in
the aggregate, have a Material Adverse Effect.

          (b) Neither the Borrower nor any of its Subsidiaries is in default
under or with respect to any Contractual Obligation owed by it and, to the
knowledge of the Borrower, no other party is in default under or with respect to
any Contractual Obligation owed to any Loan Party or to any Subsidiary of a Loan
Party, other than, in either case, those defaults that, in the aggregate, would
not have a Material Adverse Effect.

          (c) No Default or Event of Default has occurred and is continuing.

          (d) To the knowledge of the Borrower, there are no Requirements of Law
applicable to any Loan Party or any Subsidiary of any Loan Party the compliance
with which by such Loan Party or such Subsidiary, as the case may be, would, in
the aggregate, have a Material Adverse Effect.

          Section 4.11 Investment Company Act; Public Utility Holding Company
Act. Neither the Borrower nor any of its Subsidiaries is (a) an "investment
company" or an "affiliated person" of, or "promoter" or "principal underwriter"
for, an "investment company," as such terms are defined in the Investment
Company Act of 1940, as amended or (b) a "holding company," or an "affiliate" or
a "holding company" or a "subsidiary company" of a "holding company," as each
such term is defined and used in the Public Utility Holding Company Act of 1935,
as amended.

          Section 4.12 Intellectual Property. The Borrower and its Subsidiaries
own or license or otherwise have the right to use all licenses, permits,
patents, patent applications, trademarks, trademark applications, service marks,
trade names, copyrights, copyright applications, franchises, authorizations and
other intellectual property rights (including all Intellectual Property as
defined in the Pledge and Security Agreement), except for those the failure to
own or have such right to use would not have a Material Adverse Effect, that are
necessary for the operations of their respective businesses, without, to the
Borrower's knowledge, infringement upon or conflict with the rights of any other
Person with respect thereto, including all trade names associated with any
private label brands of the Borrower or any of its Subsidiaries. To the
Borrower's knowledge, no slogan or other advertising device, product, process,

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<PAGE>

method, substance, part or component, or other material now employed, or now
contemplated to be employed, by the Borrower or any of its Subsidiaries
infringes upon or conflicts with any rights owned by any other Person, and no
claim or litigation regarding any of the foregoing is pending or threatened
(except infringements, conflicts, claims or litigation that, in the aggregate,
would not have a Material Adverse Effect).

          Section 4.13 Use of Proceeds. The proceeds of the Loans are being used
by the Borrower solely (a) for the payment of transaction costs, fees and
expenses incurred in connection with this Agreement and the transactions
contemplated hereby and (b) for working capital and general corporate purposes.

          Section 4.14 Insurance. All policies of insurance of any kind or
nature maintained by the Borrower or any of its Subsidiaries, including policies
of life, fire, theft, product liability, public liability, property damage,
other casualty, employee fidelity, workers' compensation and employee health and
welfare insurance, are described on Schedule 4.14 attached hereto.

          Section 4.15 Labor Matters

          (a) There are no strikes, work stoppages, slowdowns or lockouts
pending or threatened against or involving the Borrower or any of its
Subsidiaries, other than those that, in the aggregate, would not have a Material
Adverse Effect.

          (b) There are no unfair labor practices, grievances or complaints
pending, or, to the Borrower's knowledge, threatened, against or involving the
Borrower or any of its Subsidiaries, nor are there any arbitrations or
grievances threatened involving the Borrower or any of its Subsidiaries, other
than those that, in the aggregate, would not have a Material Adverse Effect.

          (c) Except as set forth on Schedule 4.15 (Labor Matters), as of the
Effective Date, there is no collective bargaining agreement covering any
employee of the Borrower or its Subsidiaries.

          Section 4.16 Business of Borrower; Properties. The Borrower is not
engaged in the business of extending credit for the purpose of purchasing or
carrying margin stock (within the meaning of Regulation U issued by the Board of
Governors of the Federal Reserve System), and no proceeds of any Loan will be
used to purchase or carry any margin stock or to extend credit to others for the
purpose of purchasing or carrying any margin stock. The Borrower and its
Subsidiaries have good title to or valid leasehold estates in their respective
properties and assets as reflected in the most recent financial statements
delivered pursuant to Section 5.01, except for assets disposed of since the date
thereof.

          Section 4.17 No Misleading Statements. Neither any of the financial
statements of the Borrower referenced in Section 4.05(a) nor any other document
furnished in connection with clauses (a),(b),(c), (d), (e),(h),(i) and (l) of
Section 5.01 (but excluding any such document or portion thereof containing
financial projections or other forward looking statements) by the Borrower or
any Subsidiary to the Administrative Agent or any Lender in connection with this
Agreement contained any misstatement of material fact or omitted to state a
material fact necessary to make the statements contained therein not misleading.

          Section 4.18 Environmental Matters.

          (a) Except as disclosed prior to the Effective Date in the Borrower's
filings with the Securities and Exchange Commission, the operations of the
Borrower and each of its Subsidiaries have been and are in compliance with all

                                       33

<PAGE>

Environmental Laws, including obtaining and complying with all required
environmental, health and safety Permits, other than non-compliances that, in
the aggregate, would not reasonably be likely to have a Material Adverse Effect.

          (b) Except as disclosed prior to the Effective Date in the Borrower's
filings with the Securities and Exchange Commission, none of the Borrower or any
of its Subsidiaries or any real property currently or, to the knowledge of the
Borrower, previously owned, operated or leased by or for the Borrower or any of
its Subsidiaries is subject to any pending or, to the knowledge of the Borrower,
threatened, claim, order, agreement, notice of violation, notice of potential
liability or is the subject of any pending or threatened proceeding or
governmental investigation under or pursuant to Environmental Laws other than
those that, in the aggregate, would not reasonably be likely to have a Material
Adverse Effect.

          (c) Except as disclosed on Schedule 4.18 (Environmental Matters), none
of the Borrower or any of its Subsidiaries is a treatment, storage or disposal
facility requiring a Permit under the Resource Conservation and Recovery Act, 42
U.S.C. ss. 6901 et seq., the regulations thereunder, or any state analog.

          (d) There are no facts, circumstances or conditions arising out of or
relating to the operations or ownership of the Borrower, or of real property
owned, operated or leased by the Borrower or any of its Subsidiaries, likely to
have a Material Adverse Effect that are not specifically included in the
financial information furnished to the Lenders.

          (e) Except as disclosed on Schedule 4.18(Environmental Matters), as of
the date hereof, no Environmental Lien has attached to any property of the
Borrower or any of its Subsidiaries and, to the knowledge of the Borrower, no
facts, circumstances or conditions exist that could reasonably be expected to
result in any such Lien attaching to any such property which would take
preference or priority over any Lien in favor of the Collateral Agent securing
the Secured Obligations.

                                    ARTICLE V

                                    COVENANTS

     The Borrower and each Guarantor agrees that, so long as any Lender has any
Obligation or any Commitment remains outstanding and, in each case, unless the
Required Lenders otherwise consent in writing:

          Section 5.01 Information. The Borrower will deliver to each of the
Lenders:

          (a) as soon as available and in any event within 100 days after the
end of each fiscal year of the Borrower, a consolidated balance sheet of the
Borrower and its Subsidiaries as of the end of such fiscal year and the related
consolidated statements of earnings and cash flow for such fiscal year, setting
forth in each case in comparative form the figures for the previous fiscal year,
all reported on in a manner acceptable to the Securities and Exchange Commission
by Ernst & Young LLP or other independent public accountants of nationally
recognized standing;

          (b) as soon as available and in any event within 55 days after the end
of each of the first three quarters of each fiscal year of the Borrower, an
unaudited consolidated balance sheet of the Borrower and its Subsidiaries as of
the end of such quarter and the related consolidated statements of earnings and
cash flow for such quarter and for the portion of the Borrower's fiscal year
ended at the end of such quarter, as set forth in the Borrower's quarterly
report for the fiscal quarter then ended as filed with the Securities and
Exchange Commission on Form 10-Q, all certified (subject to normal year-end

                                       34

<PAGE>

adjustments) as to fairness of presentation, GAAP and consistency by the chief
financial officer or the chief accounting officer of the Borrower;

          (c) as soon as available and in any event within 30 days after the
start of each fiscal quarter of the Borrower, a consolidated budget and forecast
of the Borrower and its Subsidiaries as of the start of such fiscal quarter for
such fiscal quarter;

          (d) simultaneously with the delivery of each set of financial
statements referred to in clauses (a) and (b) above, a certificate of the chief
financial officer, the treasurer or the chief accounting officer of the Borrower
(i) setting forth in reasonable detail the calculations required to establish
whether the Borrower was in compliance with the requirements of Section 5.02 on
the date of such financial statements, (ii) stating whether any Default exists
on the date of such certificate and, if any Default then exists, setting forth
the details thereof and the action which the Borrower is taking or proposes to
take with respect thereto, (iii) describing the parties, subject matter, and
nature and amount of relief granted to the prevailing party in any litigation or
proceeding in which a final judgment or order which is either for the payment of
money in an amount equal to or exceeding $20,000,000 or which grants any
non-monetary relief to the prevailing party therein was rendered against the
Borrower or any Subsidiary (whether or not satisfied or stayed) during the
fiscal quarter ended on the date of such certificate, and (iv) setting forth the
Borrower's long-term senior unsecured debt (or, if the Borrower's senior secured
debt is rated by S&P or Moody's, the senior secured debt) ratings from S&P and
Moody's in effect on the date of such financial statements;

          (e) simultaneously with the delivery of each set of financial
statements referred to in clause (a) above, an annual statement of the firm of
independent public accountants which reported on such statements (i) to the
effect that nothing has come to their attention to cause them to believe that
any Default existed on the date of such statements and (ii) confirming the
calculations set forth in the officer's certificate delivered simultaneously
therewith pursuant to clause (d) above;

          (f) forthwith upon knowledge of the occurrence of any Default or Event
of Default, a certificate of the chief financial officer, the treasurer or the
chief accounting officer of the Borrower setting forth the details thereof and
the action which the Borrower is taking or proposes to take with respect
thereto;

          (g) Promptly after the commencement thereof, the Borrower shall give
the Administrative Agent written notice of the commencement of all actions,
suits and proceedings before any domestic or foreign Governmental Authority or
arbitrator, affecting the Borrower or any of its Subsidiaries that (i) seeks
injunctive or similar relief or (ii) in the reasonable judgment of the Borrower
or such Subsidiary, exposes the Borrower or such Subsidiary to liability (other
than Environmental Liabilities and Costs) in an amount aggregating $5,000,000 or
more for any group of such actions, suits and proceedings arising from any
single event or series of related events or that, if adversely determined, would
have a Material Adverse Effect.

          (h) The Borrower shall provide the Administrative Agent promptly and
in any event within 10 days after the Borrower or any Subsidiary obtaining
knowledge of any of the following, written notice of each of the following:

               (i)       that any Loan Party is or may be liable to any Person
          as a result of a Release or threatened Release that could reasonably
          be expected to subject the Loan Parties collectively to Environmental
          Liabilities and Costs of $10,000,000 or more prior to the Termination
          Date;

                                       35

<PAGE>

               (ii)      the receipt by any Loan Party of notification that any
          real or personal property of such Loan Party is subject to any
          Environmental Lien, or the discovery of action by a Governmental
          Authority that is reasonably expected to result in an Environmental
          Lien, that could take preference or priority over any lien in favor of
          the Collateral Agent securing the Secured Obligations;

               (iii)     the receipt by any Loan Party of any notice of
          violation of or potential liability under, or knowledge by such Loan
          Party that there exists a condition that could reasonably be expected
          to result in a violation of or liability under, any Environmental Law
          (except reclamation requirements under the Surface Mining Control and
          Reclamation Act), except for violations and liabilities the
          consequence of which, in the aggregate, would not be reasonably likely
          to subject the Loan Parties collectively to Environmental Liabilities
          and Costs of $10,000,000 or more;

               (iv)      the commencement of any judicial or administrative
          proceeding or investigation alleging a violation of or liability under
          any Environmental Law, that, if adversely determined, would have a
          reasonable likelihood of subjecting the Loan Parties collectively to
          Environmental Liabilities and Costs of $10,000,000 or more prior to
          the Termination Date for any group of such judicial or administrative
          proceedings or investigations arising from any single event or series
          of related events; and

               (v)       any proposed action by any Loan Party or any of its
          Subsidiaries or any proposed change in Environmental Laws that has a
          reasonable likelihood of requiring the Loan Parties to obtain
          additional environmental, health or safety Permits or make additional
          capital improvements to obtain compliance with Environmental Laws that
          would cost $5,000,000 or more or subject the Loan Parties to
          additional Environmental Liabilities and Costs of $5,000,000 or more
          prior to the Termination Date.

          (i) promptly upon the mailing thereof to the shareholders of the
Borrower generally, copies of all financial statements, reports and proxy
statements so mailed;

          (j) promptly upon the filing thereof, copies of (i) all registration
statements (other than the exhibits thereto and any registration statements on
Form S-8 or its equivalent) and reports on Forms 10-K, 10-Q and 8-K (or their
equivalents) which the Borrower or any Subsidiary shall have filed with the
Securities and Exchange Commission, and (ii) all other reports which the
Borrower or any Subsidiary shall have filed with the Securities and Exchange
Commission or any national securities exchange, unless the Borrower or such
Subsidiary is not permitted to provide copies thereof to the Lenders pursuant to
applicable laws or regulations;

          (k) if and when any member of the Controlled Group (i) gives or is
required to give notice to the PBGC of any "reportable event" (as defined in
Section 4043 of ERISA) with respect to any Plans which might constitute grounds
for a termination of such Plan under Title IV of ERISA, or knows that the plan
administrator of any Plan has given or is required to give notice of any such
reportable event, a copy of the notice of such reportable event given or
required to be given to the PBGC; (ii) receives notice of complete or partial
withdrawal liability in excess of $15,000,000 under Title IV of ERISA, a copy of
such notice; or (iii) receives notice from the PBGC under Title IV of ERISA of
an intent to terminate or appoint a trustee to administer any Plan, a copy of
such notice;

          (l) promptly upon the Borrower's obtaining knowledge thereof, notice
of any withdrawal or change or proposed withdrawal or change in the long-term
senior unsecured debt (or, if the

                                       36

<PAGE>

Borrower's senior secured debt is rated by S&P or Moody's, the senior secured
debt) rating of the Borrower assigned by S&P or Moody's; and

          (m) from time to time such additional information regarding the
financial position or business of the Borrower or any Subsidiary as the
Administrative Agent, at the reasonable request of any Lender, may request.

          Section 5.02 Financial Covenants.

          (a) The Borrower shall maintain a ratio of Consolidated Debt to
Consolidated EBITDA, as determined on a rolling four quarter basis, of not more
than 3.5 to 1.0.

          (b) The Borrower shall maintain a Consolidated Interest Coverage
Ratio, as determined on the last day of each fiscal quarter, for the four fiscal
quarters ending on such day, of not less than 4.25 to 1.0.

          (c) The Borrower shall maintain during each fiscal quarter a
Consolidated Tangible Net Worth of not less than the sum of (i) $700,000,000
plus (ii) for each fiscal quarter after October 31, 2000, 25% of Consolidated
Net Income, if positive, for each such fiscal quarter.

          (d) The Borrower shall not make or incur, or permit to be made or
incurred, Capital Expenditures during the period from October 1, 2002 through
November 25, 2003, to be, in the aggregate, in excess of the maximum amount of
$148,000,000, provided, however, that, in any event, up to $15,000,000 may be
used to acquire, construct and/or operate certain coal handling or management
facilities without being included in the calculation of Capital Expenditures
incurred.

          Section 5.03 Affirmative Covenants.

          (a) Preservation of Corporate Existence, Etc. The Borrower will
preserve, renew and keep in full force and effect, and will cause each Loan
Party to preserve, renew and keep in full force and effect, their respective
corporate, limited liability company or partnership existence and their
respective rights, privileges and franchises necessary or desirable in the
normal conduct of business; provided that nothing in this Section 5.03(a) shall
prevent the Borrower or any Loan Party from (i) merging into, consolidating
with, or selling, leasing or otherwise transferring all of its assets to the
Borrower or a Subsidiary or into, with or to any Person in accordance with
Section 5.04(d) and Section 5.04(g), or (ii) abandoning or disposing of any of
its property or abandoning or terminating any right or franchise if (A) such
abandonment, disposition or termination does not violate any other provision of
this Agreement and (B) all such abandonments, dispositions and terminations do
not in the aggregate have a Material Adverse Effect.

          (b) Compliance with Laws, Etc. The Borrower will comply, and cause
each Subsidiary to comply, in all material respects with all Requirements of Law
(including, without limitation, ERISA, Environmental Laws and the rules and
regulations thereunder), except where failure to so comply would not have a
Material Adverse Effect.

          (c) Conduct of Business The Borrower will not, and will not permit any
of its Subsidiaries to, engage in any business other than the businesses engaged
in by the Borrower or such Subsidiaries on the date hereof and any business or
activities which are substantially similar, related or incidental thereto,
except to the extent otherwise permitted hereunder.

                                       37

<PAGE>

          (d) Payment of Taxes, Etc. The Borrower will pay, and will cause each
Subsidiary to pay, before the same become delinquent, all taxes, assessments and
governmental charges imposed upon it or any of its properties, except where the
same may be contested in good faith by appropriate proceedings, or where any
failure to so pay would not have a Material Adverse Effect, and the Borrower
will maintain, and will cause each Subsidiary to maintain, in accordance with
GAAP, appropriate reserves for the accrual of the same.

          (e) Maintenance of Properties and Insurance. The Borrower will keep,
and will cause each Subsidiary to maintain and preserve (i) all material items
of property necessary in its business in good working order and condition,
ordinary wear and tear and damage from casualty and condemnation excepted, (ii)
all material rights, permits, licenses, approvals and privileges (including all
Permits) used or necessary in the conduct of its business as then being
conducted and (iii) all registered patents, trademarks, trade names, copyrights
and service marks necessary in the conduct of its business as then being
conducted. The Borrower will maintain, and will cause each Subsidiary to
maintain, with financially sound and reputable insurance companies, insurance on
all their real and personal property in at least such amounts and against at
least such risks as are usually insured against by companies of established
repute engaged in the same or similar business as the Borrower or such
Subsidiary and owning similar assets ("Industry Standards"), except where such
risks are covered by self insurance so long as the amount of such self insurance
and the risks covered thereby are consistent with Industry Standards or the
Borrower's and such Subsidiary's past practices as they exist on the Effective
Date. The Borrower will promptly furnish to the Lenders such information as to
insurance carried or self insurance maintained as may be reasonably requested in
writing by the Administrative Agent on behalf of any Lender. The Borrower will
cause all insurance covered under this paragraph (e) to name the Collateral
Agent on behalf of the Secured Parties as additional insured or loss payee, as
appropriate, and to provide that no cancellation or material change in coverage
shall be effective until after 30 days' written notice thereof to the Collateral
Agent.

          (f) Keeping of Records; Inspection of Property, Books and Records. The
Borrower will keep, and will cause each Subsidiary to keep, proper books of
record and account in accordance with GAAP consistently applied; and will
permit, and will cause each Subsidiary to permit, the Administrative Agent,
Collateral Agent, and any of the Lenders, or any agents or representatives of
the Administrative Agent, Collateral Agent and any Lender, at the such
Administrative Agent's, Collateral Agent's or Lender's expense, to visit and
inspect any of their respective properties, to examine any of their respective
books and records and (subject to Section 10.12) to discuss their respective
affairs, finances and accounts with any of their respective officers, directors,
employees and independent public accountants, all at such times and as often as
may reasonably be desired, in each case upon reasonable notice and during normal
business hours.

          (g) Application of Proceeds. The Borrower shall use the entire amount
of the proceeds of the Loans as provided in Section 4.13. None of such proceeds
will be used in violation of any applicable Requirement of Law.

          (h) Environmental. The Borrower shall, and shall cause all of its
Subsidiaries to, comply in all material respects with Environmental Laws and,
without limiting the foregoing, the Borrower shall, at its sole cost and
expense, upon receipt of any notification or otherwise obtaining knowledge of
any Release or other event that has any reasonable likelihood of the Borrower
and its Subsidiaries incurring Environmental Liabilities and Costs in excess of
$10,000,000 in the aggregate, take such Remedial Action and undertake such
investigation or other action as required by Environmental Laws or as any
Governmental Authority requires or as is appropriate and consistent with good
business practice to address the Release or event and otherwise ensure
compliance with Environmental Laws.

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<PAGE>

          (i) Additional Collateral and Guaranties To the extent not delivered
to the Administrative Agent on or before the Effective Date, the Borrower agrees
to do promptly each of the following:

               (i)       execute and deliver, and cause its Domestic
          Subsidiaries, to execute and deliver, to the Administrative Agent such
          supplements, amendments and joinders to the Collateral Documents as
          the Administrative Agent deems necessary or advisable in order to
          grant to the Collateral Agent, for the benefit of the Secured Parties,
          a perfected first priority security interest in the Stock and Stock
          Equivalents and other debt Securities of any Loan Party or Subsidiary
          thereof that are owned by such Loan Party or such Subsidiary and
          requested to be pledged by the Administrative Agent; provided,
          however, that, unless otherwise agreed by the Borrower and the
          Administrative Agent, in no event shall any Loan Party be required to
          pledge in excess of 65% of the outstanding Voting Stock of any
          Subsidiary of any Loan Party that is not a Domestic Subsidiary or,
          unless such Stock is otherwise held by the Borrower or any other
          Guarantor, any of the Stock of any Subsidiary of such Subsidiary; and
          provided, further, that, unless otherwise agreed by the Borrower and
          the Administrative Agent, in no event shall any Subsidiary of any Loan
          Party that is not a Domestic Subsidiary be required to guaranty the
          payment of the Obligations or grant a security interest in any of its
          assets to secure the Secured Obligations;

               (ii)      deliver to the Collateral Agent the certificates (if
          any) representing such Stock and Stock Equivalents and other debt
          Securities, together with (i) in the case of such certificated Stock
          and Stock Equivalents, undated stock powers endorsed in blank and (ii)
          in the case of such certificated debt Securities, endorsed in blank,
          in each case executed and delivered by a Responsible Officer of such
          Loan Party or such Subsidiary thereof, as the case may be;

               (iii)     in the case of any Wholly-Owned Subsidiary of any Loan
          Party that is a Domestic Subsidiary, cause such Wholly-Owned
          Subsidiary (i) to execute a supplement, amendment or joinder or
          otherwise become a party to this Agreement as a Guarantor and the
          applicable Collateral Documents and (ii) to take such actions
          necessary or advisable to grant to the Collateral Agent for the
          benefit of the Secured Parties a perfected security interest in the
          Collateral described in the Collateral Documents with respect to such
          Wholly-Owned Subsidiary, including the filing of UCC financing
          statements in such jurisdictions as may be required by the Collateral
          Documents or by law or as may be reasonably requested by the
          Administrative Agent or the Collateral Agent; and

               (iv)      if requested by the Administrative Agent, deliver to
          the Administrative Agent legal opinions relating to the matters
          described above, which opinions shall be in form and substance, and
          from counsel, reasonably satisfactory to the Administrative Agent.

Notwithstanding anything in Section 5.03(j) or this Section 5.03(i) to the
contrary, (x) no Special Purpose Financing Subsidiary shall be required to grant
a Lien on any of its assets as security for the Secured Obligations, (y) no Loan
Party shall be required to pledge the Stock of any Special Purpose Financing
Subsidiary if the terms of the applicable Permitted Asset-Backed Financing
prohibit the pledge of such Stock (it being understood that the Borrower shall
use reasonable efforts to avoid such prohibition in connection with its
negotiation of the terms of such Permitted Asset-Backed Financing) and (z) the
maximum amount of Secured Obligations that shall be secured by any portion of
the Collateral that constitutes Principal Property (as defined in the Indenture
dated as of February 18, 1997 between Fluor

                                       39

<PAGE>

Corporation and Bankers Trust Company, as trustee), shall be limited to the
maximum amount necessary to avoid triggering the equal and ratable sharing
provisions thereunder.

          (j) Other Post-Closing Deliveries

               (i)       Material Real Property Documents. The Administrative
Agent shall have received each of the following, each in form and substance
reasonably satisfactory to the Administrative Agent and in sufficient copies for
each Lender:

                         (A)  With respect to any portion of any Material Real
          Property (other than the Power Mountain Preparation Plant) where the
          surface of such portion is owned in fee simple, on or prior to
          February 28, 2003 (or such later date as agreed to by the
          Administrative Agent), the Administrative Agent shall have received
          with respect to such portions of the Material Real Properties: (1)
          Mortgages (except as may be agreed to by the Administrative Agent),
          (2) copies of deeds or other evidence acceptable to the Administrative
          Agent proving fee ownership thereof, (3) copies of maps or plats of
          current as-built surveys and surveyor's certificate therefor and, if
          available, zoning letters and certificates of occupancy, each
          reasonably satisfactory in form and substance to the Administrative
          Agent and (4) in each state in which any such Mortgage is to be
          recorded, legal opinions in form and substance and from counsel
          reasonably satisfactory to the Administrative Agent (x) as to the
          status of title (which may, in any event, be subject to Customary
          Permitted Liens which Borrower shall have no obligation to correct or
          cure) and (y) as to the enforceability of the Lien of the Mortgage
          (collectively, the "Local Counsel Opinions").

                         (B)  With respect to any Material Real Property, other
          than those covered by Section 5.03(j)(i)(A) (each a "Leased Material
          Real Property" and collectively the "Leased Material Real
          Properties"), to the extent that the applicable lease of a particular
          Leased Material Real Property expressly gives such Loan Party the
          right to grant a Mortgage on the Loan Party's leasehold interest in
          the Leased Material Real Property without the landlord's consent, then
          on or prior to February 28, 2003 (or such later date as agreed to by
          the Administrative Agent), the Administrative Agent shall have
          received: (1) Mortgages for such Loan Party's leasehold interest in
          the Leased Material Real Properties (except as may be agreed to by the
          Administrative Agent), (2) copies of the applicable lease of such
          Leased Material Real Property, (3) copies of any existing maps or
          plats of survey therefor and (4) the Local Counsel Opinions pertaining
          to such Mortgages.

                         (C)  With respect to each Leased Material Real Property
          for which the applicable lease requires the landlord's consent in
          order for the Loan Party to assign its leasehold interest or grant a
          Mortgage on the Loan Party's leasehold interest in such Leased
          Material Real Property, on or prior to December 15, 2002 the
          applicable Loan Party shall request the landlord's consent to the
          granting by the Loan Party of a Mortgage on its leasehold interest.
          Thereafter, the Loan Party shall use commercially reasonable efforts
          to obtain the landlord's written consent on or prior to January 31,
          2003 (or such later date as agreed to by the Administrative Agent);
          provided, however, that commercially reasonable efforts shall not be
          deemed to include the payment by the Loan Party to such landlord of
          any sums not otherwise required to be paid to the landlord under the
          applicable lease. In the event that prior to such date a Loan Party
          receives the written consent of its landlord to the granting of a
          Mortgage, then within sixty (60) days after receipt of such written
          consent, the Administrative Agent shall have received: (1)

                                       40

<PAGE>

          Mortgages for such Loan Party's leasehold interest in the Leased
          Material Real Properties (except as may be agreed to by the
          Administrative Agent), (2) copies of the applicable lease of such
          Leased Material Real Property, (3) copies of any existing maps or
          plats of survey therefor and (4) the Local Counsel Opinions pertaining
          to such Mortgages. In the event that a Loan Party is unable to obtain
          written consent from a particular landlord on or before February 28,
          2003, notwithstanding the Loan Party's commercially reasonable
          efforts, then the Borrower's obligations under this Section
          5.03(j)(i)(C) with respect to that particular Leased Material Real
          Property shall be deemed satisfied and no further deliveries shall be
          required hereunder.

                         (D)  In the event that any applicable lease required to
          be delivered pursuant to Sections (B) or (C) above is not in
          recordable form, then on or prior to December 15, 2002 the applicable
          Loan Party shall request the applicable landlord to re-execute such
          lease or a memorandum of such lease with such Loan Party in recordable
          form, and thereafter shall use commercially reasonable efforts in
          order that the landlord re-execute such lease or such memorandum with
          such Loan Party in recordable form on or prior to January 31, 2003 (or
          such later date as agreed to by the Administrative Agent); provided,
          however, that commercially reasonable efforts shall not be deemed to
          include the payment by the Loan Party to such landlord of any sums not
          otherwise required to be paid to the landlord under the applicable
          lease. In the event that prior to such date any lease is so
          re-executed or any memorandum is so executed in recordable form, then
          within two Business Days of receipt of such re-executed lease or
          executed memorandum by such Loan Party, the Administrative Agent shall
          have received a copy of such re-executed lease or such memorandum. In
          the event that a Loan Party is unable to obtain such re-executed lease
          or such memorandum from a particular landlord on or before February
          28, 2003, notwithstanding the Loan Party's commercially reasonable
          efforts, then the Borrower's obligations under this Section
          5.03(j)(i)(D) with respect to that particular Leased Material Real
          Property shall be deemed satisfied and no further deliveries shall be
          required hereunder.

               (ii)      Power Mountain Preparation Plant. Within sixty (60)
days (or such later date as agreed to by the Administrative Agent) after
determining that Liens on the Power Mountain Plant and Reserves will not, or
will no longer be, used to secure an appeal bond for the Harman Case, then, the
Administrative Agent shall have received the following with respect to the Power
Mountain Preparation Plant, but not with respect to the land and reserves
associated therewith: (1) A Mortgage, (2) copies of deeds or other evidence
acceptable to the Administrative Agent proving fee ownership thereof, (3) copies
of maps or plats of current as-built surveys and surveyor's certificate therefor
and, if available, zoning letters and certificates of occupancy, in each
reasonably satisfactory in form and substance to the Administrative Agent and
(4) the Local Counsel Opinions pertaining to such Mortgage.

               (iii)     Account Agreements. On or prior to January 31, 2003 (or
such later date as agreed to by the Administrative Agent), the Administrative
Agent shall have received each of the following, each in form and substance
reasonably satisfactory to the Administrative Agent and in sufficient copies for
each Lender:

                         (A)  Deposit Account Control Agreements from all
          Deposit Account Banks; and

                         (B)  Control Account Agreements from (1) all securities
          intermediaries with respect to all securities accounts and securities
          entitlements of the Borrower and each Guarantor and (2) all futures
          commission agents and clearing houses

                                       41

<PAGE>

          with respect to all commodities contracts and commodities accounts
          held by the Borrower and each Guarantor;

          Section 5.04 Negative Covenants.

          (a) Debt. None of the Loan parties shall, or shall permit any of their
respective Subsidiaries to, directly or indirectly create, incur, assume or
otherwise become or remain directly or indirectly liable with respect to any
Debt except for the following:

               (i)       the Secured Obligations;

               (ii)      Debt existing on the date of this Agreement and
          disclosed on Schedule 5.04(a)(ii) (Existing Debt);

               (iii)     Guaranty Obligations incurred by the Borrower or any
          Guarantor in respect of Debt of the Borrower or any Guarantor that is
          permitted by this Section 5.04(a);

               (iv)      Capital Lease Obligations and purchase money Debt
          incurred by the Borrower or a Subsidiary of the Borrower to finance
          the acquisition of fixed assets; provided, however, that the Capital
          Expenditure related thereto is otherwise permitted by Section 5.02(d)
          and that the aggregate outstanding principal amount of all such
          Capital Lease Obligations and purchase money Debt shall not exceed
          $10,000,000 at any time;

               (v)       Renewals, extensions, refinancings and refundings of
          Debt permitted by clause (ii) (other than with respect to the Public
          Debt) or (iv) above or this clause (v); provided, however, that any
          such renewal, extension, refinancing or refunding is in an aggregate
          principal amount not greater than the principal amount of, and is on
          terms no less favorable to the Borrower or such Subsidiary, including
          as to weighted average maturity, than the Debt being renewed,
          extended, refinanced or refunded;

               (vi)      Debt arising from intercompany loans permitted under
          Section 5.04(c) (Investments);

               (vii)     Debt arising under any performance or surety bond
          entered into in the ordinary course of business;

               (viii)    Debt arising from a Permitted Asset-Backed Financing;
          provided, that the Net Cash Proceeds of such Debt are applied to the
          Obligations in accordance with Section 2.11(a).; and

               (ix)      Debt incurred in connection with the Westvaco and
          Eastman Coal Handling Facilities, provided, that the aggregate amount
          of such Debt shall not exceed 90% of the Fair Market Value of such
          facilities or, in the case of the Eastman Coal Handling Facility, the
          cost of the construction thereof, if higher; and provided, further,
          that the Net Cash Proceeds of such Debt are applied to the Obligations
          in accordance with Section 2.11(a).

          (b) Liens, Etc.. None of the Loan Parties shall, or shall permit any
of their respective Subsidiaries to, create or suffer to exist, any Lien upon or
with respect to any of their respective properties

                                       42

<PAGE>

or assets, whether now owned or hereafter acquired, or assign, or permit any of
their respective Subsidiaries to assign, any right to receive income, except for
the following:

               (i)       Liens created pursuant to the Loan Documents;

               (ii)      Liens existing on the date of this Agreement and
          disclosed on Schedule 5.04(b)(ii) (Existing Liens);

               (iii)     Liens on the Power Mountain Preparation Plant and
          Reserves to secure an appeal bond for the Harman Case and Liens on the
          Westvaco and Eastman Coal Handling Facilities;

               (iv)      (A) Liens on cash and Cash Equivalents securing, or
          required to secure, the issuance of certain letters of credit
          outstanding on the Effective Date, as more specifically listed on
          Schedule 5.04(b)(iv) (Existing Letters of Credit), which cash and Cash
          Equivalents shall not exceed $31,600,000 in the aggregate, (B) Liens
          on cash and Cash Equivalents required to secure workers compensation,
          appeal rights, construction contracts with respect to permitted
          Capital Expenditures, sales support and reclamation or similar
          obligations, which cash and Cash Equivalents shall not exceed
          $29,000,000 in the aggregate, and (C) Liens on cash and Cash
          Equivalents to secure the appeal of the Harman Case, but only to the
          extent that Liens on the Power Mountain Preparation Plant and Reserves
          are not used (or are not sufficient) as such security therefor, which
          cash and Cash Equivalents shall not exceed $70,000,000;

               (v)       Customary Permitted Liens of the Borrower and the
          Borrower's Subsidiaries;

               (vi)      purchase money Liens granted by the Borrower or any
          Subsidiary of the Borrower (including the interest of a lessor under a
          Capital Lease and purchase money Liens to which any property is
          subject at the time, on or after the date hereof, of the Borrower's or
          such Subsidiary's acquisition thereof) securing Debt permitted under
          Section 5.04(a)(iv) and limited in each case to the property purchased
          with the proceeds of such purchase money Debt or subject to such
          Capital Lease;

               (vii)     any Lien securing the renewal, extension, refinancing
          or refunding of any Debt secured by any Lien permitted by clause (ii)
          (iii), (iv) or (vi) above, (viii) or (ix) below or this clause (vii)
          without any change in the assets subject to such Lien and to the
          extent such renewal, extension, refinancing or refunding is permitted
          by Section 5.04(a);

               (viii)    Liens in favor of lessors securing operating leases
          permitted hereunder;

               (ix)      Liens on the assets of one or more special purpose
          Subsidiaries of the Loan Parties established for the purpose of
          Permitted Asset-Backed Financings (each, a "Special Purpose Financing
          Subsidiary"), which Liens are created or deemed to exist in connection
          with such Permitted Asset-Backed Financing (including any related
          filings or any financing statements); provided that the aggregate
          attributed principal amount secured by all such Liens shall not exceed
          $150,000,000 at any time; and

               (x)       Liens not otherwise permitted by the foregoing clauses
          of this Section 5.04(b) securing obligations or other liabilities
          (other than Debt) of any Loan Party;

                                       43

<PAGE>

          provided, however, that the aggregate outstanding amount of all such
          obligations and liabilities shall not exceed $5,000,000 at any time.

          (c) Investments. None of the Loan Parties shall, or shall permit any
of their respective Subsidiaries to, directly or indirectly make or maintain any
Investment except for the following:

               (i)       Investments existing on the date of this Agreement and
          disclosed on Schedule 5.04(c) (Existing Investments);

               (ii)      Investments in cash and Cash Equivalents held in a
          Deposit Account or a Control Account with respect to which the
          Administrative Agent for the benefit of the Secured Parties has a
          first priority perfected Lien;

               (iii)     Investments in accounts, payment intangibles and
          chattel paper (each as defined in the UCC), notes receivable and
          similar items arising, made or acquired in the ordinary course of
          business;

               (iv)      Investments received in settlement of amounts due to
          the Borrower or any Subsidiary of the Borrower effected in the
          ordinary course of business;

               (v)       Investments by (A) the Borrower in any Guarantor or by
          any Guarantor in the Borrower or any other Guarantor, (B) a Subsidiary
          of the Borrower that is not a Guarantor in the Borrower or any other
          Subsidiary of the Borrower or in a Permitted Joint Venture; provided,
          however, that the aggregate outstanding amount of all Investments
          permitted pursuant to this clause (C) shall not exceed $10,000,000 at
          any time;

               (vi)      Investments constituting Guaranty Obligations permitted
          by Section 5.04(a); and

               (vii)     Investments not otherwise permitted hereby; provided,
          however, that the aggregate outstanding amount of all such Investments
          shall not exceed $5,000,000 at any time.

          (d) Sale of Assets The Borrower shall not, nor shall it permit any of
its respective Subsidiaries to, sell, convey, transfer, lease or otherwise
dispose of, any of their respective assets or any interest therein (including
the sale or factoring at maturity or collection of any accounts) to any Person,
or permit or suffer any other Person to acquire any interest in any of their
respective assets or, in the case of any Subsidiary, issue or sell any shares of
such Subsidiary's Stock or Stock Equivalent (any such disposition being an
"Asset Sale"), except for the following:

               (i)       the sale or disposition of inventory in the ordinary
          course of business;

               (ii)      the sale or disposition of equipment that has become
          obsolete or is replaced in the ordinary course of business;

               (iii)     the lease or sublease of real property or coal, oil or
          gas reserves not constituting a sale and leaseback, to the extent not
          otherwise prohibited by this Agreement;

                                       44

<PAGE>

               (iv)      assignments and licenses of intellectual property of
          the Borrower and its Subsidiaries in the ordinary course of business;

               (v)       any Asset Sale to the Borrower or any Guarantor;

               (vi)      any sale of accounts, payment intangibles and related
          collateral pursuant to a Permitted Asset-Backed Financing; provided,
          that the Net Cash Proceeds of such financing are applied to the
          Obligations in accordance with Section 2.11(a);

               (vii)     any Involuntary Dispositions;

               (viii)    the sale of non-strategic coal reserves of up to
          $3,000,000 during any Fiscal Year and exchanges of reserves in the
          ordinary course of business; (ix) any Asset Sale relating to the
          Westvaco and Eastman Coal Handling Facilities; provided, that the Net
          Cash Proceeds of such sale are applied to the Obligations in
          accordance with Section 2.11(a);

               (x)       any Asset Sale for Fair Market Value for all or any
          portion of the assets on Schedule 5.04(d)(x) in connection with a sale
          and leaseback transaction; provided, that the Net Cash Proceeds of
          such sale are applied to the Obligations in accordance with Section
          2.11(a); and

               (xi)      as long as no Default or Event of Default is continuing
          or would result therefrom, any other Asset Sale for Fair Market Value,
          payable in cash upon such sale; provided, however, that with respect
          to any such Asset Sale pursuant to this clause (xi), (i) the aggregate
          consideration received during any Fiscal Year for all such Asset Sales
          shall not exceed $5,000,000 and (ii) all Net Cash Proceeds of such
          Asset Sale are applied as set forth in, and to the extent required by,
          Section 2.11.

          (e) Restricted Payments. The Borrower shall not, and shall not permit
any of its Subsidiaries to, directly or indirectly, declare, order, pay, make or
set apart any sum for any Restricted Payment except for the following:

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

               (ii)      dividends declared and paid on the common Stock of the
          Borrower and payable only in common Stock of the Borrower; and

               (iii)     as long as no Default or Event of Default is continuing
          or would result therefrom, cash dividends declared and paid on the
          Common Stock of the Borrower not in excess of $0.16 per share in any
          Fiscal Year, provided, that in no case shall such amount exceed
          $13,000,000 in such Fiscal Year.

          (f) Prepayment and Cancellation of Debt

               (i)       The Borrower shall not, nor shall it permit any of its
          respective Subsidiaries to, cancel any claim or Debt owed to any of
          them except in the ordinary course of business consistent with past
          practice.

                                       45

<PAGE>

               (ii)      The Borrower shall not, and shall not permit any of its
          Subsidiaries to, (a) prepay, redeem, purchase, defease or otherwise
          satisfy prior to the scheduled maturity thereof in any manner, or make
          any payment in violation of any subordination terms of, any Debt;
          provided, however, that the Borrower may (i) repurchase outstanding
          Public Debt, the aggregate purchase price of which does not exceed
          $19,500,000, (ii) prepay the Secured Obligations in accordance with
          the terms of this Agreement and the 364-Day Credit Agreement, (iii)
          make regularly scheduled or otherwise required repayments or
          redemptions of existing Debt, (iv) prepay any Debt payable to the
          Borrower by any of its Subsidiaries and (v) renew, extend, refinance
          and refund Debt, so long as such renewal, extension, refinancing or
          refunding is permitted under Section 5.04(a)(v).

          (g) Restriction on Fundamental Changes. The Borrower shall not, nor
shall it permit any of its Subsidiaries to, (i) merge with any Person, (ii)
consolidate with any Person, (iii) acquire all or substantially all of the Stock
or Stock Equivalents of any Person, (iv) acquire all or substantially all of the
assets of any Person or all or substantially all of the assets constituting the
business of a division, branch or other unit operation of any Person, (v) other
than in connection with a Permitted Joint Venture, the investment in which is
permitted in Section 5.04(c)(v)(C), enter into any joint venture or partnership
with any Person or (vi) acquire or create any Subsidiary unless, after giving
effect to such creation or acquisition, (A) such Subsidiary is a Wholly-Owned
Subsidiary of the Borrower and the Borrower is in compliance with Section
5.03(i) or (B) such subsidiary is acquired or created in connection with a
Permitted Joint Venture and the Investment in such Subsidiary is permitted under
Section 5.04(c)(v)(C).

          (h) Change in Nature of Business. The Borrower shall not, and shall
not permit any of its Subsidiaries to, make any material change in the nature or
conduct of its business as carried on at the date hereof.

          (i) Transactions with Affiliates. The Borrower shall not, and shall
not permit any of its Subsidiaries to, except as otherwise expressly permitted
herein, do any of the following: (a) make any Investment in an Affiliate of the
Borrower that is not a Subsidiary of the Borrower, (b) transfer, sell, lease,
assign or otherwise dispose of any asset to any Affiliate of the Borrower that
is not a Subsidiary of the Borrower, (c) merge into or consolidate with or
purchase or acquire assets from any Affiliate of the Borrower that is not a
Subsidiary of the Borrower, (d) repay any Debt to any Affiliate of the Borrower
that is not a Subsidiary of the Borrower or (e) enter into any other transaction
directly or indirectly with or for the benefit of any Affiliate of the Borrower
that is not a Guarantor (including guaranties and assumptions of obligations of
any such Affiliate), except for (i) transactions in the ordinary course of
business on a basis no less favorable to the Borrower or such Guarantor as would
be obtained in a comparable arm's length transaction with a Person not an
Affiliate and (ii) salaries and other director or employee compensation to
officers or directors of the Borrower or any of its Subsidiaries commensurate
with current compensation levels.

          (j) Limitations on Restrictions on Subsidiary Distributions; No New
Negative Pledge. Except pursuant to the Loan Documents and any agreements
governing purchase money Debt or Capital Lease Obligations permitted by Section
5.04(a)(ii), (iv) or (v) (in which latter case, any prohibition or limitation
shall only be effective against the assets financed thereby), the Borrower shall
not, and shall not permit any of its Subsidiaries to, (a) agree to enter into or
suffer to exist or become effective any consensual encumbrance or restriction of
any kind on the ability of such Subsidiary to pay dividends or make any other
distribution or transfer of funds or assets or make loans or advances to or
other Investments in, or pay any Debt owed to, the Borrower or any other
Subsidiary of the Borrower or (b) enter into or suffer to exist or become
effective any agreement prohibiting or limiting the ability of the Borrower or
any Subsidiary to create, incur, assume or suffer to exist any Lien upon any of
its property,

                                       46

<PAGE>

assets or revenues, whether now owned or hereafter acquired, to secure the
Obligations, including any agreement requiring any other Debt or Contractual
Obligation to be equally and ratably secured with the Obligations.

          (k) Modification of Constituent Documents. The Borrower shall not, nor
shall it permit any of its Subsidiaries to, change its capital structure
(including in the terms of its outstanding Stock) or otherwise amend its
Constituent Documents, except for changes and amendments that do not materially
affect the rights and privileges of the Borrower or any of its Subsidiaries and
do not materially affect the interests of the Administrative Agent and the
Lenders under the Loan Documents or in the Collateral.

          (l) Modification of Public Debt Agreements and the 364-Day Credit
Agreement. The Borrower shall not, nor shall it permit any of its Subsidiaries
to, change or amend the terms of any Public Debt (or any indenture or agreement
or other material document entered into in connection therewith) or the 364-Day
Credit Agreement (or any agreement or other material document entered into in
connection therewith) if the effect of such amendment is to (a) increase the
interest rate on such Public Debt or 364-Day Credit Agreement, (b) change the
dates upon which payments of principal or interest are due on such Public Debt
or 364-Day Credit Agreement other than to extend such dates, (c) change any
default or event of default other than to delete or make less restrictive any
default provision therein, or add any covenant with respect to such Public Debt
or 364-Day Credit Agreement, (d) change the redemption or prepayment provisions
of such Public Debt other than to extend the dates therefor or to reduce the
premiums payable in connection therewith, or change the prepayment provisions of
such 364-Day Credit Agreement other than to extend the dates therefor or (e)
change or amend any other term if such change or amendment would materially
increase the obligations of the obligor or confer additional material rights to
the holder of such Public Debt or 364-Day Credit Agreement Lenders in a manner
adverse to the Borrower, any of its Subsidiaries, the Administrative Agent or
any Lender.

          (m) Accounting Changes; Fiscal Year. The Borrower shall not, nor shall
it permit any of its Subsidiaries to, change its (a) accounting treatment and
reporting practices or tax reporting treatment, except as required by GAAP or
any Requirement of Law and disclosed to the Lenders and the Administrative Agent
or (b) Fiscal Year.

          (n) Margin Regulations. The Borrower shall not, and shall not permit
any of its Subsidiaries to, use all or any portion of the proceeds of any credit
extended hereunder to purchase or carry margin stock (within the meaning of
Regulation U of the Federal Reserve Board) in contravention of Regulation U of
the Federal Reserve Board.

          (o) Hedging Contracts. The Borrower will not, and will not permit any
of its Subsidiaries to, enter into any Hedging Contract solely for speculative
purposes or other than for the purpose of hedging risks associated with the
businesses of the Borrower and its Subsidiaries, as done in the ordinary course
of such businesses.

          (p) Compliance with ERISA. The Borrower shall not cause or permit to
occur, and shall not permit any of its Subsidiaries or ERISA Affiliates to cause
or permit to occur, (a) an event that could result in the imposition of a Lien
under Section 412 of the Code or Section 302 or 4068 of ERISA or (b) ERISA
Events that would have a Material Adverse Effect in the aggregate.

                                       47

<PAGE>

                                   ARTICLE VI

                                    DEFAULTS

          Section 6.01 Events of Default. If one or more of the following events
("Events of Default") shall have occurred and be continuing:

          (a) the Borrower shall fail to pay when due any principal of any Loan
or shall fail to pay within 3 Domestic Business Days of the date due any
interest on any Loan, any fee under any of the Loan Documents or any other
Obligation; or

          (b) any Loan Party shall fail to observe or perform any term, covenant
or agreement contained in Section 5.01, Section 5.02, Section 5.03(j) and
Section 5.04 ; or

          (c) any Loan Party shall fail to observe or perform any term, covenant
or agreement contained in this Agreement or in any other Loan Document (other
than those covered by clause (a) or (b) above) for 30 days after the earlier of
(A) the date on which a Responsible Officer of the Borrower becomes aware of
such failure and (B) written notice thereof has been given to the Borrower by
the Administrative Agent at the request of any Lender; or

          (d) any representation, warranty, certification or statement made by
the Borrower in this Agreement or in any certificate, financial statement or
other document delivered pursuant to this Agreement shall prove to have been
incorrect in any material respect when made (or deemed made); or

          (e) (i) the Borrower or any of its Subsidiaries shall fail to make any
payment on any Debt of the Borrower or any such Subsidiary (other than the
Obligations) or any Guarantee in respect of Debt of any other Person, and, in
each case, such failure relates to Debt having a principal amount of $20,000,000
or more, when the same becomes due and payable (whether by scheduled maturity,
required prepayment, acceleration, demand or otherwise), (ii) any other event
shall occur or condition shall exist under any agreement or instrument relating
to any such Debt, if the effect of such event or condition is to accelerate, or
to permit the acceleration of, the maturity of such Debt or (iii) any such Debt
shall become or be declared to be due and payable, or required to be prepaid or
repurchased (other than by a regularly scheduled required prepayment), prior to
the stated maturity thereof; or

          (f) (i) the Borrower or any of the Guarantors shall admit in writing
its inability to pay its debts generally or shall make a general assignment for
the benefit of creditors, (ii) any proceeding shall be instituted by or against
the Borrower or any of the Guarantors seeking to adjudicate it a bankrupt or
insolvent, or seeking liquidation, winding up, reorganization, arrangement,
adjustment, protection, relief or composition of it or its debts, under any
Requirement of Law relating to bankruptcy, insolvency or reorganization or
relief of debtors, or seeking the entry of an order for relief or the
appointment of a custodian, receiver, trustee or other similar official for it
or for any substantial part of its property; provided, however, that, in the
case of any such proceedings instituted against the Borrower or any of the
Guarantors (but not instituted by the Borrower or any of the Guarantors), either
such proceedings shall remain undismissed or unstayed for a period of 30 days or
more or any action sought in such proceedings shall occur or (iii) the Borrower
or any of the Guarantors shall take any corporate, limited liability company or
partnership action to authorize any action set forth in clauses (i) and (ii)
above; or

                                       48

<PAGE>

          (g) any member of the Controlled Group shall:

               (i)       fail to pay when due an amount or amounts aggregating
          in excess of $15,000,000 which it shall have become liable to pay to
          the PBGC or to a Plan under Title IV of ERISA except where the failure
          to so pay would not have a Material Adverse Effect; or notice of
          intent to terminate a Plan or Plans which would have a Material
          Adverse Effect (collectively, a "Material Plan") shall be filed under
          Title IV of ERISA by any member of the Controlled Group, any plan
          administrator or any combination of the foregoing; or the PBGC shall
          institute proceedings under Title IV of ERISA to terminate or to cause
          a trustee to be appointed to administer any Material Plan or a
          proceeding shall be instituted by a fiduciary of any Material Plan
          against any member of the Controlled Group to enforce Section 515 of
          ERISA and such proceeding shall not have been dismissed within 30 days
          thereafter; or a condition shall exist by reason of which the PBGC
          would be entitled to obtain a decree adjudicating that any Material
          Plan must be terminated; or

               (ii)      have been notified by the sponsor of a Multiemployer
          Plan that it has incurred an aggregate Withdrawal Liability for all
          years to such Multiemployer Plan in an amount that, when aggregated
          with all other amounts then required to be paid to Multiemployer Plans
          by the Controlled Group as Withdrawal Liability (determined as of the
          date of such notification), exceeds $15,000,000 and it is reasonably
          likely that all amounts then required to be paid to Multiemployer
          Plans by the Controlled Group as Withdrawal Liability will exceed
          $15,000,000; or

               (iii)     have been notified by the sponsor of a Multiemployer
          Plan that such Multiemployer Plan is in reorganization or is being
          terminated, within the meaning of Title IV of ERISA, and it is
          reasonably likely that as a result of such reorganization or
          termination the aggregate annual contributions of the Controlled Group
          to all Multiemployer Plans that are then in reorganization or being
          terminated have been or will be increased over the amounts contributed
          to such Multiemployer Plans for the plan year of such Multiemployer
          Plan immediately preceding the plan year in which the reorganization
          or termination occurs by an amount exceeding $15,000,000; or

          (h) to the extent not insured against, a final judgment or order (or
other similar proceeding) for the payment of money in excess of $20,000,000
shall be rendered against the any Loan Party or any Subsidiary and either (i)
enforcement proceedings shall have been commenced by any creditor upon such
judgment or order or (ii) such judgment or order shall continue unsatisfied and
unstayed by reason of a pending appeal or otherwise for a period of 30
consecutive days; or

          (i) (i) any Person or group of Persons (within the meaning of Section
13 or 14 of the Securities Exchange Act of 1934, as amended) shall have acquired
beneficial ownership (within the meaning of Rule 13d-3 promulgated by the
Securities and Exchange Commission under said Act) of 35% or more of the
outstanding shares of common stock of the Borrower; or (ii) at any time during
any period of twelve consecutive calendar months a majority of the Board of
Directors of the Borrower shall not consist of individuals who were either
directors of the Borrower on the first day of such period ("original directors")
or appointed as or nominated to be directors either (A) by individuals including
a majority of those of the original directors who have not, prior to such
appointment or nomination, resigned or died, or (B) by a duly constituted
committee of the Board of Directors a majority of which consists of the original
directors; or (ii) any Guarantor shall cease to be a direct, Wholly-Owned
Subsidiary of the Borrower other than in accordance with the terms of Section
5.04(d) or Section 5.04(g); or

                                       49

<PAGE>

          (j) any provision of any Collateral Document or Article IX hereof
shall for any reason cease to be valid and binding, or enforceable against, any
Loan Party thereto, or any Loan Party shall so state in writing; or

          (k) all or any substantial parts of the property of the Borrower and
its Subsidiaries (taken as a whole) shall be condemned, seized or otherwise
appropriated, or custody or control of such property shall be assumed, by any
court or governmental agency of competent jurisdiction, and such property shall
be retained for a period of thirty (30) days, which condemnation, seizure or
other appropriation could reasonably be expected to have a Material Adverse
Effect at any time up to and including the Termination Date; or

          (l) any Collateral Document shall for any reason fail or cease to
create a valid Lien on any Collateral purported to be covered thereby or, except
as permitted by the Loan Documents, such Lien shall fail or cease to be a
perfected and first priority Lien or any Loan Party shall so state in writing;
or

          (m) one or more of the Borrower and its Subsidiaries shall have
entered into one or more consent or settlement decrees or agreements or similar
arrangements with a Governmental Authority or one or more judgments, orders,
decrees or similar actions shall have been entered against one or more of the
Borrower and its Subsidiaries based on or arising from the violation of or
pursuant to any Environmental Law, or the generation, storage, transportation,
treatment, disposal or Release of any Contaminant and, in connection with all
the foregoing, the Borrower and its Subsidiaries are likely to incur
Environmental Liabilities and Costs that in the aggregate would have a Material
Adverse Effect in the aggregate;

then, and in every such event, the Administrative Agent shall (i) if requested
by at least four (4) Lenders having at least 50% in aggregate amount of the
Commitments, by notice to the Borrower terminate the Commitments and they shall
thereupon terminate, and (ii) if requested by at least four (4) Lenders holding
at least 50% in aggregate principal amount of the Loans, by notice to the
Borrower declare the Loans (together with accrued interest thereon and all other
amounts payable under this Agreement, the Loans or the Notes) to be, and the
Loans shall thereupon become, immediately due and payable, without presentment,
demand, protest or other notice of any kind, all of which are hereby expressly
waived by the Borrower; provided that with respect to the events described in
clause (f) above with respect to the Borrower or the Guarantors, without any
notice to the Borrower or the Guarantors, as applicable, or any other act by the
Administrative Agent or the Lenders, the Commitments shall thereupon terminate
and the Loans (together with accrued interest thereon and all other amounts
payable under this Agreement, the Loans or the Notes) shall automatically become
immediately due and payable, without presentment, demand, protest or other
notice of any kind, all of which are hereby expressly waived by the Borrower. In
addition to the remedies set forth above, and subject to the terms of the
Collateral Sharing Agreement, the Collateral Agent may exercise any remedies
provided for by the Collateral Documents in accordance with the terms thereof or
any other remedies provided by applicable law.

          Section 6.02 Notice of Default. The Administrative Agent shall give
notice to the Borrower under Section 6.01(c) promptly upon being requested to do
so by any Lender and shall thereupon notify all the Lenders thereof.

                                  ARTICLE VII

                  THE ADMINISTRATIVE AGENT AND COLLATERAL AGENT

          Section 7.01 Authorization and Action. Each Lender hereby appoints and
authorizes Citicorp to act as the Administrative Agent and Citibank to act as
the Collateral Agent under this

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Agreement and authorizes the Administrative Agent and Collateral Agent to take
such action as agents on its behalf and to exercise such powers under this
Agreement as are delegated to the Administrative Agent and Collateral Agent by
the terms hereof, together with such powers as are reasonably incidental thereto
(including, without limitation, their entering into, and acting pursuant to the
terms of, the Collateral Sharing Agreement). As to any matters not expressly
provided for by the Loan Documents (including, without limitation, enforcement
or collection of the Loans and other amounts owing hereunder), the
Administrative Agent and Collateral Agent shall not be required to exercise any
discretion or take any action; provided, however, that the Administrative Agent
and Collateral Agent shall not be required to take any action which exposes them
to personal liability or which is contrary to any of the Loan Documents or
applicable law. Each of the Administrative Agent and Collateral Agent agree to
give to each Lender prompt notice of each notice given to it by the Borrower
pursuant to the terms of the Loan Documents.

          Section 7.02 Agents' Reliance, Etc.. Neither the Administrative Agent
nor any of their respective directors, officers, agents or employees shall be
liable for any action taken or omitted to be taken by it or them under or in
connection with any of the Loan Documents, except for their own gross negligence
or willful misconduct. Without limitation of the generality of the foregoing,
the Administrative Agent: (i) may treat the Lender that made any Advance as the
payee thereof until the Administrative Agent receives and accepts an Assignment
and Acceptance entered into by such Lender, as assignor, and an Eligible
Assignee, as assignee as provided in Section 10.06, (ii) may consult with legal
counsel (including counsel for the Borrower), independent public accountants and
other experts selected by it and shall not be liable for any action taken or
omitted to be taken in good faith by it in accordance with the advice of such
counsel, accountants or experts; (iii) make no warranty or representation to any
Lender and shall not be responsible to any Lender for any statements, warranties
or representations (whether written or oral) made in or in connection with any
of the Loan Documents; (iv) shall not have any duty to ascertain or to inquire
as to the performance or observance of any of the terms, covenants or conditions
of any of the Loan Documents on the part of the Borrower or to inspect the
property (including the books and records) of the Borrower; (v) shall not be
responsible to any Lender for the due execution, legality, validity,
enforceability, genuineness, sufficiency or value of any of the Loan Documents
or any other instrument or document furnished pursuant hereto; and (vi) shall
incur no liability under or in respect of any of the Loan Documents by acting
upon any notice, consent, certificate or other instrument or writing (which may
be by telecopier) believed by it to be genuine and signed or sent by the proper
party or parties.

          Section 7.03 Citicorp and Affiliates. With respect to its respective
Commitment and the respective Loans made by it, Citicorp shall have the same
rights and powers under this Agreement as any other Lender and may exercise the
same as though it were not an agent; and the term "Lender" or "Lenders" shall,
unless otherwise expressly indicated, include Citicorp respectively in its
individual capacity. Citicorp and its Affiliates may accept deposits from, lend
money to, act as trustee under indentures of, acquire equity interests in and
generally engage in any kind of commercial banking, investment banking, trust,
financial advisory, underwriting or other business with, the Borrower, any of
its Subsidiaries and other Affiliates and any Person who may do business with or
own securities of the Borrower or any such Subsidiary or Affiliate, all as if
Citicorp was not an Agent and without any duty to account therefor, or provide
notice thereof, to the Lenders. The Lenders acknowledge that, pursuant to such
activities, Citicorp and its Affiliates may receive information regarding the
Borrower or its Affiliates (including information that may be subject to
confidentiality obligations in favor of the Borrower or an Affiliate) and
acknowledge that the Administrative Agent shall not be under any obligation to
provide such information to them.

          Section 7.04 Lender Credit Decision. Each Lender acknowledges that it
has, independently and without reliance upon any Agent or any other Lender and
based on the financial

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<PAGE>

statements referred to, and the representations and warranties contained, in
Article IV and such other documents and information as it has deemed
appropriate, made its own credit analysis and decision to enter into this
Agreement. Each Lender also acknowledges that it will, independently and without
reliance upon the Administrative Agent or any other Lender and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under this
Agreement.

          Section 7.05 Indemnification. The Lenders agree to indemnify the
Administrative Agent (to the extent not reimbursed by the Borrower), ratably
according to the respective principal amounts of the Loans then held by each of
them (or if no such Loans are at the time outstanding or if any such Loans are
held by Persons which are not Lenders, in accordance with their respective
Shares), from and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind or nature whatsoever which may be imposed on, incurred by, or asserted
against Administrative Agent in any way relating to or arising out of any of the
Loan Documents or any action taken or omitted by such Administrative Agent under
any of the Loan Documents; provided that no Lender shall be liable for any
portion of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements resulting from Administrative
Agent's gross negligence or willful misconduct. Without limitation of the
foregoing, each Lender agrees to reimburse Administrative Agent promptly upon
demand for its ratable share of any reasonable out-of-pocket expenses (including
counsel fees) incurred by the Administrative Agent in connection with the
preparation, execution, delivery, administration, syndication, modification,
amendment or enforcement (whether through negotiations, legal proceedings or
otherwise) of, or legal advice in respect of rights or responsibilities under,
the Loan Documents, to the extent that the Administrative Agent is not
reimbursed for such expenses by the Borrower.

          Section 7.06 Successor Administrative Agent. The Administrative Agent
may resign at any time by giving written notice thereof to the Lenders and the
Borrower. Upon any such resignation, then the retiring Administrative Agent may,
on behalf of the Lenders, appoint a successor Administrative Agent which shall
be a commercial bank organized under the laws of the United States of America or
of any State thereof or any Bank and, in each case having a combined capital and
surplus of at least $50,000,000 (and so long as no Event of Default has occurred
and is continuing, that is reasonably acceptable to the Borrower). Upon the
acceptance of any appointment as Administrative Agent hereunder by a successor
Administrative Agent, such successor Administrative Agent shall thereupon
succeed to and become vested with all the rights, powers, privileges and duties
of the retiring Administrative Agent, and the retiring Administrative Agent
shall be discharged from its duties and obligations under the Loan Documents.
After any retiring Administrative Agent's resignation hereunder as
Administrative Agent, the provisions of this Article VII shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was
Administrative Agent under the Loan Documents.

          Section 7.07 Administrative Agent's Fee. The Borrower shall pay to the
Administrative Agent for its own account fees in the amounts and at the times
heretofore or hereafter agreed upon between the Borrower and the Administrative
Agent.

          Section 7.08 Co-Agents. None of the Lenders or other Persons
identified on the facing page or signature pages of this Agreement or elsewhere
herein as a "Co-Agent" or "Syndication Agent" or "Documentation Agent" or
"Arranger" shall have any right, power, obligation, liability, responsibility or
duty under this Agreement other than those applicable to all Lenders as such.
Without limiting the foregoing, none of the Lenders or other Persons so
identified as a "Co-Agent" or "Syndication Agent" or "Documentation Agent" or
"Arranger" shall have or be deemed to have any fiduciary relationship with any
Lender. Each Lender acknowledges that it has not relied, and will not

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<PAGE>

rely, on any of the Lenders so identified in deciding to enter into this
Agreement or in taking or not taking action hereunder.

                                  ARTICLE VIII

                             CHANGE IN CIRCUMSTANCES

          Section 8.01 Basis for Determining Interest Rate Inadequate or Unfair.

          (a) If on or prior to the first day of any Interest Period for any
Borrowing of Euro-Dollar Loans, Lenders having 50% or more of the aggregate
amount of the Commitments advise the Administrative Agent that the LIBO Rate as
determined by the Administrative Agent will not adequately and fairly reflect
the cost to such Lenders of funding their Euro-Dollar Loans for such Interest
Period, the Administrative Agent shall forthwith give notice thereof to the
Borrower and the Lenders (which notice may be telephonic), whereupon the
obligations of the Lenders to make Euro-Dollar Loans shall be suspended until
the Administrative Agent notifies the Borrower that the circumstances giving
rise to such suspension no longer exists. Unless the Borrower, at its option,
notifies the Administrative Agent at least one Domestic Business Day before the
date of a Borrowing of Euro-Dollar Loans for which a Notice of Borrowing has
previously been given that it elects not to borrow on such date, such Borrowing
shall instead be made as a Base Rate Borrowing, and the Loans comprising such
Borrowing shall bear interest for each day from and including the first day, to
but excluding the last day, of the Interest Period applicable thereto at the
Base Rate.

          (b) If Dow Jones Markets Telerate Page 3750 is unavailable and fewer
than two Reference Banks furnish timely information to the Administrative Agent
for determining the Euro-Dollar Rate for any Euro-Dollar Loan,

               (i)       the Administrative Agent shall forthwith notify the
          Borrower and the Lenders that the interest rate cannot be determined
          for such Euro-Dollar Loans,

               (ii) with respect to Euro-Dollar Loans, each such Loan will
          automatically, on the last day of the then existing Interest Period
          therefor, be prepaid by the Borrower or be automatically Converted
          into a Base Rate Loan (or if such Loan is then a Base Rate Loan, will
          continue as a Base Rate Loan), and

               (iii) the obligation of the Lenders to make Euro-Dollar Loans, or
          to Convert Loans into Euro-Dollar Loans shall be suspended until the
          Administrative Agent shall notify the Borrower and the Lenders that
          the circumstances causing such suspension no longer exist.

          Section 8.02 Illegality. If, after the date of this Agreement, the
adoption of any applicable law, rule or regulation, or any change therein, or
any change in the interpretation or administration thereof by any governmental
authority, central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by any Lender (or its Euro-Dollar Lending
Office) with any request or directive (whether or not having the force of law)
of any such authority, central bank or comparable agency shall make it unlawful
or impossible for any Lender (or its Euro-Dollar Lending Office) to make,
maintain or fund its Euro-Dollar Loans and such Lender shall so notify the
Administrative Agent, the Administrative Agent shall forthwith give notice
thereof to the other Lenders and the Borrower, whereupon until such Lender
notifies the Borrower and the Administrative Agent that the circumstances giving
rise to such suspension no longer exist, the obligation of such Lender to make
or continue Euro-

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<PAGE>

Dollar Loans or to Convert all or any portion of Base Rate Loans to Euro-Dollar
Loans shall be suspended. Before giving any notice to the Administrative Agent
pursuant to this Section 8.02, such Lender shall designate a different
Euro-Dollar Lending Office if such designation will avoid the need for giving
such notice and will not, in the judgment of such Lender, be otherwise
disadvantageous to such Lender. If such Lender shall determine that it may not
lawfully continue to maintain and fund any of its outstanding Euro-Dollar Loans
to maturity and shall so specify in such notice, the Borrower shall immediately
prepay in full the then outstanding principal amount of each such Euro-Dollar
Loan, together with accrued interest thereon. Concurrently with prepaying each
such Euro-Dollar Loan, the Borrower may elect to borrow a Base Rate Loan in an
equal principal amount from such Lender (on which interest and principal shall
be payable contemporaneously with the related Euro-Dollar Loans of the other
Lenders), and such Lender shall make such a Base Rate Loan.

          Section 8.03 Increased Cost and Reduced Return.

          (a) If, on or after the date hereof, in the case of any Loan or any
obligation to make Loans, the adoption of any applicable law, rule or
regulation, or any change therein, or any change in the interpretation or
administration thereof by any governmental authority, central bank or comparable
agency charged with the interpretation or administration thereof, or compliance
by any Lender (or its Lending Office) with any request or directive (whether or
not having the force of law) of any such authority, central bank or comparable
agency:

               (i)       shall subject any Lender (or its Lending Office) to any
          tax, duty or other charge with respect to its Euro-Dollar Loans, its
          Notes or its obligation to make Euro-Dollar Loans, or shall change the
          basis of taxation of payments to any Lender (or its Lending Office) of
          the principal of or interest on its Euro-Dollar Loans or any other
          amounts due under this Agreement in respect of its Euro-Dollar Loans
          or its obligation to make Euro-Dollar Loans (except for changes in the
          rates of taxes excluded from the definition of Taxes set forth in
          Section 10.03(b)(i); or

               (ii)      shall impose, modify or deem applicable any reserve,
          special deposit or similar requirement (including, without limitation,
          any such requirement imposed by the Board of Governors of the Federal
          Reserve System, but excluding with respect to any Euro-Dollar Loan any
          such requirement included in an applicable Euro-Dollar Reserve
          Percentage) against assets of, deposits with or for the account of, or
          credit extended by, any Lender (or its Lending Office) or shall impose
          on any Lender (or its Lending Office) or the London interbank market
          any other condition affecting its Euro-Dollar Loans, its Notes or its
          obligation to make Euro-Dollar Loans;

and the result of any of the foregoing is to increase the cost to such Lender
(or its Lending Office) of making or maintaining any Euro-Dollar Loan, or to
reduce the amount of any sum received or receivable by such Lender (or its
Lending Office) under this Agreement or under its Notes with respect thereto, by
an amount deemed by such Lender to be material, then, within 15 days after
demand by such Lender (with a copy to the Administrative Agent), the Borrower
shall pay to such Lender such additional amount or amounts as will compensate
such Lender for such increased cost or reduction.

          (b) If after the date hereof, any Lender shall have determined that
the adoption of any applicable law, rule or regulation regarding capital
adequacy, or any change therein, or any change in the interpretation or
administration thereof by any governmental authority, central bank or comparable
agency charged with the interpretation or administration thereof, or compliance
by any Lender (or its Lending Office) with any request or directive regarding
capital adequacy (whether or not having the force of law) of any such authority,
central bank or comparable agency, have or would have the effect of reducing the
rate of return on such Lender's capital as a consequence of its obligations
hereunder to a

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<PAGE>

level below that which such Lender could have achieved but for such adoption,
change or compliance (taking into consideration such Lender's policies with
respect to capital adequacy) by an amount deemed by such Lender to be material,
then from time to time, within 15 days after demand by such Lender (with a copy
to the Administrative Agent), the Borrower shall pay to such Lender such
additional amount or amounts as will compensate such Lender for such reduction.

          (c) Each Lender will promptly notify the Borrower and the
Administrative Agent of any event of which it has knowledge, occurring after the
date hereof, which will entitle such Lender to compensation pursuant to this
Section 8.03, or any payment or indemnification under Section 10.03(b) and will
designate a different Lending Office if such designation will avoid the need
for, or reduce the amount of, such compensation, payment or indemnification and
will not, in the judgment of such Lender, be otherwise disadvantageous to such
Lender; provided that nothing in this Section 8.03 shall affect or postpone any
of the rights of a Lender under, or obligations of the Borrower pursuant to, the
provisions of this Section 8.03 or Section 10.03(b) hereof. A certificate of any
Lender claiming compensation under this Section 8.03 and setting forth the
additional amount or amounts to be paid to it hereunder shall be conclusive in
the absence of manifest error; provided that the determinations set forth in
such certificate are made reasonably and in good faith. In determining such
amount, such Lender may use any reasonable averaging and attribution methods. If
any Lender demands compensation from the Borrower under this Section 8.03 more
than 180 days after such Lender had knowledge of the occurrence of the event
giving rise to such claim for compensation, the Borrower shall not be obligated
to reimburse such Lender for amounts incurred as a result of the occurrence of
such event more than 180 days prior to the date on which the Lender made such
demand (provided that if the event giving rise to claim for compensation or
indemnification is retroactive, then such 180 day period shall be extended to
include the period of retroactive effect).

          Section 8.04 Substitution of Loans for Affected Euro-Dollar Loans. If
(i) the obligation of any Lender to make Euro-Dollar Loans has been suspended
pursuant to Section 8.02 or (ii) any Lender has demanded compensation under
Section 8.03(a) and the Borrower shall, by at least five Euro-Dollar Business
Days' prior notice to such Lender through the Administrative Agent, have elected
that the provisions of this Section shall apply to such Lender, then, unless and
until such Lender notifies the Borrower that the circumstances giving rise to
such suspension or demand for compensation no longer apply:

          (a) all Loans which would otherwise be made by such Lender as
Euro-Dollar Loans shall be made instead as Base Rate Loans (on which interest
and principal shall be payable contemporaneously with the related Euro-Dollar
Loans of the other Lenders); and

          (b) after each of its Euro-Dollar Loans has been repaid, all payments
of principal which would otherwise be applied to repay such Euro-Dollar Loans
shall be applied to repay its Base Rate Loans, instead.

          Section 8.05 Substitution of Lender. If (i) the obligation of any
Lender to make Euro-Dollar Loans has been suspended pursuant to Section 8.02 or
(ii) any Lender has demanded compensation under Section 8.03 or payment or
indemnification under Section 10.03(b), the Borrower shall have the right, with
the assistance of the Administrative Agent, to seek a mutually satisfactory
substitute lender or lenders (which may be one or more of the Lenders) to
purchase the Loans and assume the Commitment of such Lender; provided that (i)
no default or Event of Default has occurred and is continuing, (ii) the Borrower
has satisfied all of its obligations under this Agreement with respect to such
Lender and (iii) if such substitute lender is not an existing Lender, the
Borrower has paid to the Administrative Agent a $3,500 administration fee.

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<PAGE>

                                   ARTICLE IX

                                    GUARANTEE

          Section 9.01 Unconditional Guarantee.

          (a) For valuable consideration, receipt whereof is hereby
acknowledged, and to induce each Lender to make Loans to the Borrower and to
induce the Administrative Agent to act hereunder, each Guarantor hereby
unconditionally and irrevocably guarantees, as primary obligor and not merely as
surety, to each Guarantied Party (such guaranty, together with the terms of this
Article IX, the "Subsidiary Guaranty") the full and punctual payment when due,
whether at stated maturity or earlier, by acceleration, mandatory prepayment or
otherwise in accordance herewith or any other Loan Document, of all the
Obligations, whether or not from time to time reduced or extinguished or
hereafter increased or incurred, whether or not recovery may be or hereafter may
become barred by any statute of limitations, whether or not enforceable as
against the Borrower, whether now or hereafter existing, and whether due or to
become due, including principal, interest (including interest at the contract
rate applicable upon default accrued or accruing after the commencement of any
proceeding under the Bankruptcy Code, whether or not such interest is an allowed
claim in such proceeding), fees and costs of collection. This Subsidiary
Guaranty constitutes a guaranty of payment and not of collection. Without
limiting the generality of the foregoing, each Guarantor's liability shall
extend to all amounts that constitute part of the Obligations and would be owed
by the Borrower to the Administrative Agent or any other Lender under this
Agreement but for the fact that they are unenforceable or not allowable due to
the existence of a bankruptcy, reorganization or similar proceeding involving
the Borrower.

          (b) Each Guarantor further agrees that, if (i) any payment made by the
Borrower or any other person and applied to the Obligations is at any time
annulled, avoided, set aside, rescinded, invalidated, declared to be fraudulent
or preferential or otherwise required to be refunded or repaid, or (ii) the
proceeds of Collateral are required to be returned by any Guarantied Party to
the Borrower, its estate, trustee, receiver or any other party, including any
Guarantor, under any bankruptcy law, equitable cause or any other Requirement of
Law, then, to the extent of such payment or repayment, any such Guarantor's
liability hereunder (and any Lien or other Collateral securing such liability)
shall be and remain in full force and effect, as fully as if such payment had
never been made. If, prior to any of the foregoing, this Subsidiary Guaranty
shall have been cancelled or surrendered (and if any Lien or other Collateral
securing such Guarantor's liability hereunder shall have been released or
terminated by virtue of such cancellation or surrender), this Subsidiary
Guaranty (and such Lien or other Collateral) shall be reinstated in full force
and effect, and such prior cancellation or surrender shall not diminish,
release, discharge, impair or otherwise affect the obligations of any such
Guarantor in respect of the amount of such payment (or any Lien or other
Collateral securing such obligation).

          Section 9.02 Guarantee Absolute. Each Guarantor guarantees that the
Obligations will be paid strictly in accordance with the terms of this
Agreement, regardless of any law, regulation or order now or hereafter in effect
in any jurisdiction affecting any of such terms or the rights of any Guarantied
Party or the Administrative Agent with respect thereto. The obligations of each
Guarantor under this Article IX are independent of the Obligations, and a
separate action or actions may be brought and prosecuted against such Guarantor
to enforce this Article IX, irrespective of whether any action is brought
against the Borrower or whether the Borrower is joined in any such action or
actions. Each Guarantor hereby waives any defense of a surety or guarantor or
any other obligor on any obligations arising in connection with or in respect of
any of the following and hereby agrees that its obligations under this
Subsidiary Guaranty are absolute and unconditional and shall not be discharged
or otherwise affected as a result of any of the following:

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<PAGE>

          (a) the invalidity or unenforceability of any of the Borrower's
Obligations or any security for, or other guaranty of the Obligations or any
part of them, or the lack of perfection or continuing perfection or failure of
priority of any security for the Obligations or any part of them;

          (b) the absence of any attempt to collect the Obligations or any part
of them from the Borrower or other action to enforce the same;

          (c) failure by any Guarantied Party to take any steps to perfect and
maintain any Lien on, or to preserve any rights to, any Collateral;

          (d) any Guarantied Party's election, in any proceeding instituted
under chapter 11 of the Bankruptcy Code, of the application of Section
1111(b)(2) of the Bankruptcy Code;

          (e) any borrowing or grant of a Lien by the Borrower, as
debtor-in-possession, or extension of credit, under Section 364 of the
Bankruptcy Code;

          (f) the disallowance, under Section 502 of the Bankruptcy Code, of all
or any portion of any Guarantied Party's claim (or claims) for repayment of the
Obligations;

          (g) any use of cash collateral under Section 363 of the Bankruptcy
Code;

          (h) any agreement or stipulation as to the provision of adequate
protection in any bankruptcy proceeding;

          (i) the avoidance of any Lien in favor of the Guarantied Parties or
any of them for any reason;

          (j) any bankruptcy, insolvency, reorganization, arrangement,
readjustment of debt, liquidation or dissolution proceeding commenced by or
against the Borrower, any Guarantor or any of the Borrower's other Subsidiaries,
including any discharge of, or bar or stay against collecting, any Obligation
(or any part of them or interest thereon) in or as a result of any such
proceeding;

          (k) failure by any Guarantied Party to file or enforce a claim against
the Borrower or its estate in any bankruptcy or insolvency case or proceeding;

          (l) any action taken by any Guarantied Party if such action is
authorized hereby;

          (m) any election following the occurrence of an Event of Default by
any Guarantied Party to proceed separately against the personal property
Collateral in accordance with such Guarantied Party's rights under the UCC or,
if the Collateral consists of both personal and real property, to proceed
against such personal and real property in accordance with such Guarantied
Party's rights with respect to such real property; or

          (n) any other circumstance that might otherwise constitute a legal or
equitable discharge or defense of a surety or guarantor or any other obligor on
any obligations, other than the payment in full of the Obligations.

                                       57

<PAGE>

          Section 9.03 Waivers.

          (a) Each Guarantor hereby expressly waives promptness, diligence,
notice of acceptance, presentment, demand for payment or performance and protest
and notice of protest, notice of acceptance and any other notice in respect of
the Obligations or any part of them, and any defense arising by reason of any
disability or other defense of the Borrower. Each Guarantor shall not, until the
Obligations are irrevocably paid in full and the Commitments have been
terminated, assert any claim or counterclaim it may have against the Borrower or
set off any of its obligations to the Borrower against any obligations of the
Borrower to it. In connection with the foregoing, each Guarantor covenants that
its obligations hereunder shall not be discharged, except by complete
performance. Without limitation, each Guarantor waives the provisions of
Sections 49-25 and 49-26 of the Virginia Code, as amended, and comparable
provisions in other states of formation, respectively, relating to the rights of
a guarantor to require a creditor to sue and the effect of failure of a creditor
to act thereon.

          (b) Each Guarantor hereby waives any right to revoke this Subsidiary
Guaranty, and acknowledges that this Subsidiary Guaranty is continuing in nature
and applies to all Obligations, whether existing now or in the future.

          (c) Each Guarantor acknowledges that it will receive substantial
direct and indirect benefits from the financing arrangements contemplated herein
and that the waivers set forth in this Article IX are knowingly made in
contemplation of such benefits.

          Section 9.04 Subrogation. The Guarantors will not exercise any rights
that they may now or hereafter acquire against the Borrower or any other insider
guarantor that arise from the existence, payment, performance or enforcement of
the Obligations under this Agreement, including, without limitation, any right
of subrogation, reimbursement, exoneration, contribution or indemnification and
any right to participate in any claim or remedy of the Administrative Agent or
any other Lender against the Borrower or any other insider guarantor or any
collateral, whether or not such claim, remedy or right arises in equity or under
contract, statute or common law, including, without limitation, the right to
take or receive from the Borrower or any other insider guarantor, directly or
indirectly, in cash or other property or by set-off or in any other manner,
payment or security on account of such claim, remedy or right, unless and until
all of the Obligations and all other amounts payable under this Subsidiary
Guaranty shall have been paid in full in cash and the Commitments shall have
expired or terminated. If any amount shall be paid to any Guarantor in violation
of the preceding sentence at any time prior to the later of the payment in full
in cash of the Obligations and all other amounts payable under this Subsidiary
Guaranty and the Termination Date, such amount shall be held in trust for the
benefit of the Administrative Agent and the other Lenders and shall forthwith be
paid to the Administrative Agent to be credited and applied to the Obligations
and all other amounts payable under this Subsidiary Guaranty, whether matured or
unmatured, in accordance with the terms of this Agreement, or to be held as
collateral for any Obligations or other amounts payable under this Subsidiary
Guaranty thereafter arising. If (i) any Guarantor shall make payment to the
Administrative Agent or any other Lender of all or any part of the Obligations,
(ii) all the Obligations and all other amounts payable under this Subsidiary
Guaranty shall be paid in full in cash and (iii) the Termination Date shall have
occurred, the Administrative Agent and the other Lenders will, at such
Guarantor's request and expense, execute and deliver to such Guarantor
appropriate documents, without recourse and without representation or warranty,
necessary to evidence the transfer by subrogation to such Guarantor of an
interest in the Obligations resulting from such payment by such Guarantor. Each
Guarantor acknowledges that it will receive direct and indirect benefits from
the financing arrangements contemplated by this Agreement and that the waiver
set forth in this section is knowingly made in contemplation of such benefits.

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<PAGE>

          Section 9.05 Subordination. Each Guarantor hereby agrees that any Debt
of the Borrower now or hereafter owing to any Guarantor, whether heretofore, now
or hereafter created (the "Guarantor Subordinated Debt"), is hereby subordinated
to all of the Obligations and that, except as permitted under Section 5.04(f) of
the Credit Agreement, the Guarantor Subordinated Debt shall not be paid in whole
or in part until the Obligations have been paid in full and this Subsidiary
Guaranty is terminated and of no further force or effect. No Guarantor shall
accept any payment of or on account of any Guarantor Subordinated Debt at any
time in contravention of the foregoing. Upon the occurrence and during the
continuance of an Event of Default, the Borrower shall pay to the Administrative
Agent any payment of all or any part of the Guarantor Subordinated Debt and any
amount so paid to the Administrative Agent shall be applied to payment of the
Obligations as provided in Section 2.12(c) of the Credit Agreement. Each payment
on the Guarantor Subordinated Debt received in violation of any of the
provisions hereof shall be deemed to have been received by such Guarantor as
trustee for the Guarantied Parties and shall be paid over to the Administrative
Agent immediately on account of the Obligations, but without otherwise affecting
in any manner such Guarantor's liability hereof. Each Guarantor agrees to file
all claims against the Borrower in any bankruptcy or other proceeding in which
the filing of claims is required by law in respect of any Guarantor Subordinated
Debt, and the Administrative Agent shall be entitled to all of such Guarantor's
rights thereunder. If for any reason a Guarantor fails to file such claim at
least ten Domestic Business Days prior to the last date on which such claim
should be filed, such Guarantor hereby irrevocably appoints the Administrative
Agent as its true and lawful attorney-in-fact and is hereby authorized to act as
attorney-in-fact in such Guarantor's name to file such claim or, in the
Administrative Agent's discretion, to assign such claim to and cause proof of
claim to be filed in the name of the Administrative Agent or its nominee. In all
such cases, whether in administration, bankruptcy or otherwise, the person or
persons authorized to pay such claim shall pay to the Administrative Agent the
full amount payable on the claim in the proceeding, and, to the full extent
necessary for that purpose, each Guarantor hereby assigns to the Administrative
Agent all of such Guarantor's rights to any payments or distributions to which
such Guarantor otherwise would be entitled. If the amount so paid is greater
than such Guarantor's liability hereunder, the Administrative Agent shall pay
the excess amount to the party entitled thereto. In addition, each Guarantor
hereby irrevocably appoints the Administrative Agent as its attorney-in-fact to
exercise all of such Guarantor's voting rights in connection with any bankruptcy
proceeding or any plan for the reorganization of the Borrower.

          Section 9.06 Default; Remedies. The obligations of each Guarantor
hereunder are independent of and separate from the Obligations. If any
Obligation is not paid when due, or upon any Event of Default hereunder or upon
any default by the Borrower as provided in any other instrument or document
evidencing all or any part of the Obligations, the Administrative Agent may, at
its sole election, proceed directly and at once, without notice, against any
Guarantor to collect and recover the full amount or any portion of the
Obligations then due, without first proceeding against the Borrower or any other
guarantor of the Obligations, or against any Collateral under the Loan Documents
or joining the Borrower or any other guarantor in any proceeding against any
Guarantor. At any time after maturity of the Obligations, the Administrative
Agent may (unless the Obligations have been irrevocably paid in full), without
notice to any Guarantor and regardless of the acceptance of any Collateral for
the payment hereof, appropriate and apply toward the payment of the Obligations
(a) any indebtedness due or to become due from any Guarantied Party to such
Guarantor and (b) any moneys, credits or other property belonging to such
Guarantor at any time held by or coming into the possession of any Guarantied
Party or any of its respective Affiliates.

          Section 9.07 Irrevocability. With respect to each Guarantor, this
Subsidiary Guaranty shall be irrevocable as to the Obligations (or any part
thereof) until (i) the Commitments have been terminated and all monetary
Obligations then outstanding have been irrevocably repaid in cash or (ii) the
sale or other disposition of such Guarantor (or all or substantially all of the
assets thereof) permitted by this Agreement (or permitted pursuant to a waiver
or consent of a transaction otherwise

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prohibited by this Agreement). Upon such cancellation and at the written request
of any Guarantor or its successors or assigns, and at the cost and expense of
such Guarantor or its successors or assigns, the Administrative Agent shall
execute in a timely manner a satisfaction of this Subsidiary Guaranty and such
instruments, documents or agreements as are necessary or desirable to evidence
the termination of this Subsidiary Guaranty.

          Section 9.08 Setoff. Upon the occurrence and during the continuance of
an Event of Default, each Guarantied Party and each Affiliate of a Guarantied
Party may, without notice to any Guarantor and regardless of the acceptance of
any security or collateral for the payment hereof, appropriate and apply toward
the payment of all or any part of the Obligations (a) any indebtedness due or to
become due from such Guarantied Party or Affiliate to such Guarantor and (b) any
moneys, credits or other property belonging to such Guarantor, at any time held
by, or coming into, the possession of such Guarantied Party or Affiliate.

          Section 9.09 No Marshalling. Each Guarantor consents and agrees that
no Guarantied Party or Person acting for or on behalf of any Guarantied Party
shall be under any obligation to marshal any assets in favor of any Guarantor or
against or in payment of any or all of the Obligations.

          Section 9.10 Enforcement; Amendments; Waivers. No delay on the part of
any Guarantied Party in the exercise of any right or remedy arising under this
Subsidiary Guaranty, the Credit Agreement, any other Loan Document or otherwise
with respect to all or any part of the Obligations, the Collateral or any other
guaranty of or security for all or any part of the Obligations shall operate as
a waiver thereof, and no single or partial exercise by any such Person of any
such right or remedy shall preclude any further exercise thereof. No
modification or waiver of any provision of this Subsidiary Guaranty shall be
binding upon any Guarantied Party, except as expressly set forth in a writing
duly signed and delivered by the party making such modification or waiver.
Failure by any Guarantied Party at any time or times hereafter to require strict
performance by the Borrower, any Guarantor, any other guarantor of all or any
part of the Obligations or any other Person of any provision, warranty, term or
condition contained in any Loan Document now or at any time hereafter executed
by any such Persons and delivered to any Guarantied Party shall not waive,
affect or diminish any right of any Guarantied Party at any time or times
hereafter to demand strict performance thereof and such right shall not be
deemed to have been waived by any act or knowledge of any Guarantied Party, or
its respective agents, officers or employees, unless such waiver is contained in
an instrument in writing, directed and delivered to the Borrower or such
Guarantor, as applicable, specifying such waiver, and is signed by the party or
parties necessary to give such waiver under the Credit Agreement. No waiver of
any Event of Default by any Guarantied Party shall operate as a waiver of any
other Event of Default or the same Event of Default on a future occasion, and no
action by any Guarantied Party permitted hereunder shall in any way affect or
impair any Guarantied Party's rights and remedies or the obligations of any
Guarantor under this Subsidiary Guaranty. Any determination by a court of
competent jurisdiction of the amount of any principal or interest owing by the
Borrower to a Guarantied Party shall be conclusive and binding on each Guarantor
irrespective of whether such Guarantor was a party to the suit or action in
which such determination was made.

          Section 9.11 Successors and Assigns. This Subsidiary Guaranty shall be
binding upon each Guarantor and upon the successors and assigns of such
Guarantor and shall inure to the benefit of the Guarantied Parties and their
respective successors and assigns; all references herein to the Borrower and to
the Guarantors shall be deemed to include their respective successors and
assigns. The successors and assigns of the Guarantors and the Borrower shall
include, without limitation, their respective receivers, trustees and
debtors-in-possession. All references to the singular shall be deemed to include
the plural where the context so requires.

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          Section 9.12 Reliance. Each Guarantor hereby assumes responsibility
for keeping itself informed of the financial condition of the Borrower and any
endorser and other guarantor of all or any part of the Obligations, and of all
other circumstances bearing upon the risk of nonpayment of the Obligations, or
any part thereof, that diligent inquiry would reveal, and each Guarantor hereby
agrees that no Guarantied Party shall have any duty to advise any Guarantor of
information known to it regarding such condition or any such circumstances. In
the event any Guarantied Party, in its sole discretion, undertakes at any time
or from time to time to provide any such information to any Guarantor, such
Guarantied Party shall be under no obligation (a) to undertake any investigation
not a part of its regular business routine, (b) to disclose any information that
such Guarantied Party, pursuant to accepted or reasonable commercial finance or
banking practices, wishes to maintain confidential or (c) to make any other or
future disclosures of such information or any other information to any
Guarantor.

          Section 9.13 Survival. This Subsidiary Guaranty is a continuing
guarantee and shall (a) remain in full force and effect until payment in full
(after the Termination Date) of the Obligations and all other amounts payable
under this Subsidiary Guaranty, (b) be binding upon the Guarantors, their
successors and assigns, (c) inure to the benefit of and be enforceable by each
Lender (including each assignee Lender pursuant to Section 10.06) and the
Administrative Agent and their respective successors, transferees and assigns
and (d) shall be reinstated if at any time any payment to a Lender or the
Administrative Agent hereunder is required to be restored by such Lender or the
Administrative Agent. Without limiting the generality of the foregoing clause
(c), each Lender may assign or otherwise transfer its interest in any Loan to
any other person or entity, and such other person or entity shall thereupon
become vested with all the rights in respect thereof granted to such Lender
herein or otherwise.

          Section 9.14 Limitation of Subsidiary Guaranty. Any term or provision
of this Subsidiary Guaranty or any other Loan Document to the contrary
notwithstanding, the maximum aggregate amount of the Obligations for which any
Guarantor shall be liable shall not exceed the maximum amount for which such
Guarantor can be liable without rendering this Subsidiary Guaranty or any other
Loan Document, as it relates to such Guarantor, subject to avoidance under
applicable law relating to fraudulent conveyance or fraudulent transfer
(including section 548 of the Bankruptcy Code or any applicable provisions of
comparable state law) (collectively, "Fraudulent Transfer Laws"), in each case
after giving effect (a) to all other liabilities of such Guarantor, contingent
or otherwise, that are relevant under such Fraudulent Transfer Laws
(specifically excluding, however, any liabilities of such Guarantor in respect
of intercompany Debt to the Borrower to the extent that such Debt would be
discharged in an amount equal to the amount paid by the Guarantor hereunder) and
(b) to the value as assets of such Guarantor (as determined under the applicable
provisions of such Fraudulent Transfer Laws) of any rights to subrogation,
contribution, reimbursement, indemnity or similar rights held by such Guarantor
pursuant to (i) applicable law or (ii) any agreement, if any, providing for an
equitable allocation among such Guarantor and other Subsidiaries or Affiliates
of the Borrower of obligations arising under this Subsidiary Guaranty or other
guaranties of the Obligations by such parties.

          Section 9.15 Contribution. To the extent that any Guarantor shall be
required hereunder to pay a portion of the Obligations exceeding the greater of
(a) the amount of the economic benefit actually received by such Guarantor from
the Loans and (b) the amount such Guarantor would otherwise have paid if such
Guarantor had paid the aggregate amount of the Obligations (excluding the amount
thereof repaid by the Borrower) in the same proportion as such Guarantor's net
worth at the date enforcement is sought hereunder bears to the aggregate net
worth of all the Guarantors at the date enforcement is sought hereunder, then
such Guarantor shall be reimbursed by such other Guarantors for the amount of
such excess, pro rata, based on the respective net worths of such other
Guarantors at the date enforcement hereunder is sought.

          Section 9.16 Authorization; Other Agreements

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     The Guarantied Parties are hereby authorized, without notice to, or demand
upon, any Guarantor, which notice and demand requirements each are expressly
waived hereby, and without discharging or otherwise affecting the obligations of
any Guarantor hereunder (which obligations shall remain absolute and
unconditional notwithstanding any such action or omission to act), from time to
time, to do each of the following:

          (a) supplement, renew, extend, accelerate or otherwise change the time
for payment of, or other terms relating to, the Obligations, or any part of
them, or otherwise modify, amend or change the terms of any promissory note or
other agreement, document or instrument (including the other Loan Documents) now
or hereafter executed by the Borrower and delivered to the Guarantied Parties or
any of them, including any increase or decrease of principal or the rate of
interest thereon;

          (b) waive or otherwise consent to noncompliance with any provision of
any instrument evidencing the Obligations, or any part thereof, or any other
instrument or agreement in respect of the Obligations (including the other Loan
Documents) now or hereafter executed by the Borrower and delivered to the
Guarantied Parties or any of them;

          (c) accept partial payments on the Obligations;

          (d) receive, take and hold additional security or collateral for the
payment of the Obligations or any part of them and exchange, enforce, waive,
substitute, liquidate, terminate, abandon, fail to perfect, subordinate,
transfer, otherwise alter and release any such additional security or
collateral;

          (e) settle, release, compromise, collect or otherwise liquidate the
Obligations or accept, substitute, release, exchange or otherwise alter, affect
or impair any security or collateral for the Obligations or any part of them or
any other guaranty therefor, in any manner;

          (f) add, release or substitute any one or more other guarantors,
makers or endorsers of the Obligations or any part of them and otherwise deal
with the Borrower or any other guarantor, maker or endorser;

          (g) apply to the Obligations any payment or recovery (x) from the
Borrower, from any other guarantor, maker or endorser of the Obligations or any
part of them or (y) from any Guarantor in such order as provided herein, in each
case whether such Obligations are secured or unsecured or guaranteed or not
guaranteed by others;

          (h) apply to the Obligations any payment or recovery from any
Guarantor of the Obligations or any sum realized from security furnished by such
Guarantor upon its indebtedness or obligations to the Guarantied Parties or any
of them, in each case whether or not such indebtedness or obligations relate to
the Obligations; and

          (i) refund at any time any payment received by any Guarantied Party in
respect of any Obligation, and payment to such Guarantied Party of the amount so
refunded shall be fully guaranteed hereby even though prior thereto this
Subsidiary Guaranty shall have been cancelled or surrendered (or any release or
termination of any Collateral by virtue thereof), and such prior cancellation or
surrender shall not diminish, release, discharge, impair or otherwise affect the
obligations of any Guarantor hereunder in respect of the amount so refunded (and
any Collateral so released or terminated shall be reinstated with respect to
such obligations);

even if any right of reimbursement or subrogation or other right or remedy of
any Guarantor is extinguished, affected or impaired by any of the foregoing
(including any election of remedies by reason

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of any judicial, non-judicial or other proceeding in respect of the Obligations
that impairs any subrogation, reimbursement or other right of such Guarantor).

          Section 9.17 Additional Guarantors. Each of the Loan Parties agrees
that, if, pursuant to Section 5.03(i), the Borrower shall be required to cause
any Domestic Subsidiary that is not a Guarantor to become a Guarantor hereunder,
or if for any reason the Borrower desires any such Subsidiary to become a
Guarantor hereunder, such Subsidiary shall execute and deliver to the
Administrative Agent a Guarantor Joinder Agreement in substantially the form of
Exhibit G (Guarantor Joinder Agreement) attached hereto and shall thereafter for
all purposes be a party hereto and have the same rights, benefits and
obligations as a Guarantor party hereto on the Effective Date.

          Section 9.18 Collateral. Each Guarantor hereby acknowledges and agrees
that its obligations under this Subsidiary Guaranty are secured pursuant to the
terms and provisions of the Collateral Documents executed by it in favor of the
Collateral Agent, for the benefit of the Secured Parties, and covenants that it
shall not grant any Lien with respect to its property in favor, or for the
benefit, of any Person other than the Collateral Agent, for the benefit of the
Secured Parties or as permitted under this Agreement.

          Section 9.19 Costs and Expenses. Each Guarantor agrees to pay or
reimburse the Administrative Agent and each of the other Guarantied Parties upon
demand for all out-of-pocket costs and expenses, including reasonable attorneys'
fees (including allocated costs of internal counsel and costs of settlement),
incurred by the Administrative Agent and such other Guarantied Parties in
enforcing this Subsidiary Guaranty or any security therefor or exercising or
enforcing any other right or remedy available in connection herewith or
therewith.

          Section 9.20 Waiver of Consequential Damages. EACH GUARANTOR HEREBY
IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE MAXIMUM EXTENT NOT PROHIBITED BY
LAW, ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER ANY SPECIAL, EXEMPLARY, PUNITIVE
OR CONSEQUENTIAL DAMAGE IN ANY LEGAL ACTION OR PROCEEDING IN RESPECT OF THIS
SUBSIDIARY GUARANTY OR ANY OTHER LOAN DOCUMENT.

                                   ARTICLE X

                                  MISCELLANEOUS

          Section 10.01 Notices. All notices, requests and other communications
to any party hereunder shall be in writing (including telecopy or similar
writing) and mailed, telecopied, emailed or delivered, if to the Borrower or the
Guarantors, at 4 North 4th Street, Richmond, Virginia, 23219, Attn: President,
telecopier no. (804) 788-1870, with a copy to Eberley Davis, General Counsel,
telecopier no. (304) 926-3236, email address: eberley.davis@masseyenergyco.com;
if to an Additional Lender, at its Domestic Lending Office specified in Schedule
I hereto; if to any other Lender, at its Domestic Lending Office specified in
the Assignment and Acceptance pursuant to which it became a Lender; and if to
the Administrative Agent or Collateral Agent, at its address at Two Penns Way,
Suite 200, New Castle, Delaware, 19720, Attn: Cristian O. Garcia, telecopier no.
212-994-0961, email address: cristian.o.garcia@citigroup.com; or such other
address, telecopy number or email address as such party may hereafter specify
for the purpose by notice to the Administrative Agent and the Borrower. Each
such notice, request or other communication shall be effective (i) if given by
mail, 72 hours after such communication is deposited in the mails with first
class postage prepaid, addressed as aforesaid, (ii) if given by telecopy or
email, when such telecopy or email has been received by the addressee thereof,
or (iii) if given by any other means, when delivered at the address specified in
this Section 10.01; provided

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that notices to the Administrative Agent under Article II or Article VIII shall
not be effective until received.

          Section 10.02 No Waivers. No failure or delay by the Administrative
Agent or any Lender in exercising any right, power or privilege hereunder or
under any Note shall operate as a waiver thereof nor shall any single or partial
exercise thereof preclude any other or further exercise thereof or the exercise
of any other right, power or privilege. The rights and remedies herein provided
shall be cumulative and not exclusive of any rights or remedies provided by law.

          Section 10.03 Expenses; Taxes; Indemnification.

          (a) Expenses. The Borrower agrees to pay on demand:

               (i)       all costs and expenses (including, without limitation,
          counsel fees and expenses) incurred by the Administrative Agent and
          Salomon Smith Barney Inc. (other than costs and expenses which are
          covered by subparagraph (ii) immediately following) in connection with
          the preparation, negotiation, execution and delivery of this Agreement
          and the other Loan Documents delivered concurrently therewith; and

               (ii)      all costs and expenses, if any (including, without
          limitation, counsel fees and expenses), (A) incurred by the
          Administrative Agent in connection with any and all amendments to,
          replacements for or modifications of any of the Loan Documents, in
          each case either initiated by the Borrower or provided for in this
          Agreement, (B) incurred by the Administrative Agent in connection with
          any and all waivers of rights or remedies, or granting of any consent,
          by the Administrative Agent under the Loan Documents, (C) incurred by
          the Administrative Agent or any Lender in connection with the
          enforcement of the Loan Documents and the other documents to be
          delivered under the Loan Documents, or any of the rights or remedies
          of the Administrative Agent or any Lender thereunder, including,
          without limitation, the fees and expenses of counsel incurred in any
          out-of-court workout or in any bankruptcy case, and (D) incurred by
          the Administrative Agent or any Lender in connection with
          investigation of any Default or alleged Default under any of the Loan
          Documents, together with any collection and other enforcement measures
          or proceedings resulting from any Event of Default; provided, however,
          that with respect to clauses (C) and (D) of this Section
          10.03(a)(ii),such counsel fees and expenses shall be limited to the
          counsel fees and expenses of not more than one law firm retained by
          the Administrative Agent, and not more than one additional law firm
          retained by the Lenders, as a group.

          (b) Taxes.

               (i)       Any and all payments by the Borrower hereunder shall be
          made, in accordance with Section 2.12, free and clear of and without
          deduction for any and all present or future taxes, levies, imposts,
          deductions, charges or withholdings, and all liabilities with respect
          thereto, excluding, in the case of each Lender and the Administrative
          Agent, (A) taxes imposed on its income, and franchise taxes imposed on
          it, by the jurisdiction under the laws of which such Lender or the
          Administrative Agent (as the case may be) is organized or any
          political subdivision thereof or in which its principal office is
          located, (B) taxes imposed on its income, and franchise taxes imposed
          on it, by the jurisdiction of such Lender's applicable Lending Office
          or any political subdivision thereof, (C) taxes imposed upon or
          measured by the overall net income of such Lender by the United States
          of America or any political subdivision or taxing

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<PAGE>

          authority thereof or therein, and (D) United States income taxes
          imposed under any law (including without limitation any statute,
          treaty, ruling, determination or regulation) in effect on the date
          hereof in the case of each Lender listed on the signature pages hereof
          and on the effective date of the assignment pursuant to which it
          became a Lender in the case of each other Lender (all such
          non-excluded taxes, levies, imposts, deductions, charges, withholdings
          and liabilities being hereinafter referred to as "Taxes"). If the
          Borrower shall be required by law to deduct any Taxes from or in
          respect of any sum payable hereunder to any Lender or the
          Administrative Agent, (x) the sum payable shall be increased as may be
          necessary so that after making all required deductions (including
          deductions applicable to additional sums payable under this Section
          10.03(b), such Lender or the Administrative Agent (as the case may be)
          receives an amount equal to the sum it would have received had no such
          deductions been made, (y) the Borrower shall make such deductions and
          (z) the Borrower shall pay the full amount deducted to the relevant
          Governmental Authority in accordance with applicable law.

               (ii)      In addition, the Borrower agrees to pay any present or
          future stamp or documentary taxes or any other excise or property
          taxes, charges or similar levies which arise from the execution,
          delivery or registration of, or otherwise similarly with respect to,
          this Agreement (hereinafter referred to as "Other Taxes").

               (iii)     The Borrower will indemnify each Lender and the
          Administrative Agent 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 (b)) and the Borrower
          will indemnify each Lender and the Administrative Agent for the full
          amount of Taxes or Other Taxes imposed by any jurisdiction on amounts
          payable under this (b) in each case paid by such Lender or the
          Administrative Agent (as the case may be) and any liability (including
          penalties, interest and expenses) arising therefrom or with respect
          thereto (except to the extent arising from the failure of such Lender
          or the Administrative Agent to make any filing or payment within such
          person's control), whether or not such Taxes or Other Taxes were
          correctly or legally asserted. This indemnification shall be made
          within 30 days from the date such Lender or the Administrative Agent
          (as the case may be) makes written demand therefor. Such demand shall
          be made no later than 180 days after the earlier of (A) the date on
          which such Lender or the Administrative Agent pays such Taxes or Other
          Taxes or (B) the date on which the relevant Governmental Authority
          makes written demand for payment of such Taxes or Other Taxes.

               (iv)      Within 30 days after the date of any payment of Taxes,
          the Borrower will furnish to the Administrative Agent, at its address
          referred to in Section 10.01, an original or a copy of an official
          receipt (if any) or other evidence of the Borrower's payment thereof.

               (v)       Each Lender organized under the laws of a jurisdiction
          outside the United States (each, a "Non-U.S. Lender"), on or prior to
          the date of its execution and delivery of this Agreement in the case
          of each Lender and on the date of the Assignment and Acceptance
          pursuant to which it becomes a Lender in the case of each other
          Lender, and from time to time thereafter if requested in writing by
          the Borrower (but only so long as such Lender remains lawfully able to
          do so), shall provide the Borrower with Internal Revenue Service Form
          W-8BEN or W-8ECI, as appropriate, or any successor form prescribed by
          the Internal Revenue Service, to establish that such Lender is not
          subject to United States withholding tax with respect to any payments
          to such Lender payable under this Agreement (or, in the case of a
          Non-U.S. Lender that is not a bank for purposes of

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          Section 881(c) of the Code, such other documentation as may be
          reasonably necessary to establish that interest payable to such Lender
          is exempt from United States withholding tax as portfolio interest).
          If the form provided by a Lender at the time such Lender first becomes
          a party to this Agreement indicates a United States interest
          withholding tax rate in excess of zero, withholding tax at such rate
          shall be considered excluded from "Taxes" as defined in Section
          10.03(b)(i).

               (vi)      For any period with respect to which a Lender has
          failed to provide the Borrower with the appropriate form described in
          Section 10.03(b)(v) (other than if such failure is due to a change in
          law occurring subsequent to the date on which a form originally was
          required to be provided, or if such form otherwise is not required
          under the first sentence of subsection (v) above), such Lender shall
          not be entitled to indemnification under (b) with respect to Taxes
          imposed by the United States or any political subdivision thereof;
          provided, however, that should a Lender become subject to Taxes
          because of its failure to deliver a form required to be delivered
          hereunder, the Borrower shall, at the expense of such Lender, take
          such steps as the Lender shall reasonably request to assist the Lender
          to recover such Taxes.

               (vii)     If a Lender or the Administrative Agent actually
          receives a refund or actually realizes the benefit of a credit or
          reduction in respect of any Taxes or Other Taxes for which it has
          received an indemnity payment from the Borrower, such Lender or the
          Administrative Agent shall within 45 days from the date of such
          receipt or realization pay over the amount of such refund, credit or
          reduction to the Borrower (but only to the extent of indemnity
          payments made or other amounts paid by the Borrower under this (b)
          with respect to such Taxes or Other Taxes), net of all reasonable
          out-of-pocket expenses of such Lender or the Administrative Agent and
          without interest (other than interest paid by the relevant
          Governmental Authority with respect to such refund, credit or
          reduction), provided that the Borrower (upon written request of such
          Lender or the Administrative Agent) agrees to repay the amount paid
          over to the Borrower to such Lender or the Administrative Agent in the
          event such Lender or the Administrative Agent is required to repay
          such refund, credit or reduction to such Governmental Authority.
          Nothing in this paragraph shall require any Lender or the
          Administrative Agent to make available to the Borrower any tax return
          or other information that the Lender or the Administrative Agent deems
          to be confidential or proprietary.

               (viii) The Borrower shall not be required to indemnify any Lender
          (including, for purposes of this paragraph, any participant or other
          transferee of any rights of a Lender) or the Administrative Agent, or
          to pay any other amount to any Lender or the Administrative Agent, in
          respect of any Taxes pursuant to this (b) to the extent that such
          Taxes were applicable on the date such Lender or Administrative Agent
          became a party to this Agreement or, with respect to payments to a new
          Lending Office, the date such Lender designated such Lending Office;
          provided, however, that the preceding clause shall not apply (A) to
          any Lender or new Lending Office that becomes a Lender or Lending
          Office as a result of an assignment or designation made at the request
          of the Borrower or (B) to the extent the indemnity payment or other
          amount does not exceed the indemnity payment or other amount that the
          Lender making the assignment, or making the designation of such new
          Lending Office, would have been entitled to receive in the absence of
          such assignment or designation.

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               (ix)      Without prejudice to the survival of any other
          agreement of the Borrower hereunder, the agreements and obligations of
          the Borrower contained in this (b)shall survive the payment in full of
          principal and interest hereunder.

          (c) Indemnification. The Borrower agrees to indemnify the
Administrative Agent and each Lender and their respective Affiliates, and the
officers, directors, employees, agents and advisors of each of the foregoing
(collectively, the "Indemnitees"), and hold each Indemnitee harmless from and
against any and all liabilities, damages, costs and expenses of any kind
(including, without limitation, the reasonable fees and disbursements of counsel
for any Indemnitee in connection with any investigative, administrative or
judicial proceeding, whether or not such Indemnitee shall be designated a party
thereto) which may be incurred by such Indemnitee arising out of this Agreement
or any of the other Loan Documents or any actual or proposed use of proceeds of
Loans hereunder; provided that no Indemnitee shall have the right to be
indemnified hereunder for its own gross negligence or willful misconduct as
determined by a court of competent jurisdiction.

          (d) Prepayment of Euro-Dollar Loans. If any payment of principal of
any Euro-Dollar Loans is made other than on the last day of the Interest Period
for such Loan, as a result of a payment pursuant to Section 2.10(b)or
acceleration of the maturity of the Loans pursuant to Section 6.01 or for any
other reason, or if any Lender shall be forced to sell, assign or transfer any
of its interest hereunder or any Borrowing pursuant to Section 10.06(a) due to
the substitution of such Lender pursuant to Section 8.05, the Borrower shall,
upon demand by any Lender or any bank or other entity (an "Assignee") to which
any Lender has sold, assigned, transferred or granted any participation in any
of its interest hereunder or any Borrowing pursuant to Section 10.06(a) (with a
copy of such demand to the Administrative Agent), pay to the Administrative
Agent for the account of such Lender or Assignee any amounts required to
compensate such Lender or Assignee for any additional losses, costs or expenses
which it may reasonably incur as a result of such payment, including, without
limitation, any loss (including loss of anticipated profits), cost or expense
incurred by reason of the liquidation or reemployment of deposits or other funds
acquired by any Lender or Assignee to fund or maintain such Loan.

          (e) Survival. The obligations of the Borrower under this Section 10.03
shall survive the termination of this Agreement, the termination of the
Commitment of any Lender hereunder and payment of the Loans.

          Section 10.04 Sharing of Set-Offs. Each Lender agrees that if it
shall, by exercising any right of set-off or counterclaim or otherwise, receive
payment of a proportion of the aggregate amount of principal and interest due
with respect to any Loan held by it which is greater than the proportion
received by any other Lender in respect of the aggregate amount of principal and
interest due with respect to any Loan held by such other Lender, the Lender
receiving such proportionately greater payment shall purchase such
participations in the Loans held by the other Lenders, and such other
adjustments shall be made, as may be required so that all such payments of
principal and interest with respect to the Loans held by the Lenders shall be
shared by the Lenders pro rata; provided that nothing in this Section 10.04
shall impair the right of any Lender to exercise any right of set-off or
counterclaim it may have and to apply the amount subject to such exercise to the
payment of indebtedness of the Borrower other than its indebtedness under the
Loans. The Borrower agrees, to the fullest extent it may effectively do so under
applicable law, that any holder of a participation in a Loan, whether or not
acquired pursuant to the foregoing arrangements, may exercise rights of set-off
or counterclaim and other rights with respect to such participation as fully as
if such holder of a participation were a direct creditor of the Borrower in the
amount of such participation. If under any applicable bankruptcy, insolvency or
other similar law, any Lender receives a secured claim in lieu of a set-off to
which this Section 10.04 would apply, such Lender shall, to the extent
practicable, exercise its rights in respect of such secured claim in a manner
consistent with the rights of the Lenders entitled under this Section 10.04 to
share in the

                                       67

<PAGE>

benefits of any recovery on such secured claim. The Borrower hereby authorizes
Citicorp, in accordance with the provisions of this Section 10.04, to so set-off
and apply any and all such deposits held and other indebtedness owing by
Citicorp to or for the credit or the account of the Borrower and hereby
authorizes Citicorp to permit such set-off and application by Citicorp.

          Section 10.05 Amendments and Waivers. Any provision of this Agreement
or the Notes may be amended or waived if, but only if, such amendment or waiver
is in writing and is signed by the Borrower and the Required Lenders (and, if
the rights or duties of the Administrative Agent are affected thereby, by the
Administrative Agent); provided that no such amendment, waiver or modification
shall, unless signed by all the Lenders affected thereby, (i) increase the
Commitment of any Lender or increase the aggregate amount of the Commitments or
subject any Lender to any additional obligation, (ii) reduce the principal of or
rate of interest on any Loan or any fees hereunder, (iii) postpone the date
fixed for any payment of principal of or interest on any loan or any fees
hereunder, (iv) release the Borrower from its payment Obligations or release AT
Massey from its obligations under the AT Guaranty (except as permitted by
Section 5.04(g)), (v) amend this Section 10.05, or (vi) change the percentage of
the Commitments or of the aggregate unpaid principal amount of the Loans, or the
number of Lenders, which shall be required for the Lenders or any of them to
take any action under this Section 10.05 or any other provision of this
Agreement.

          Section 10.06 Successors and Assigns.

          (a) This Agreement shall become effective on the Effective Date and
thereafter this Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns, except that the
Borrower and the Guarantors shall not have the right to assign their respective
rights hereunder or any interest herein, except in connection with a fundamental
change permitted by Section 5.04(g). On the Effective Date, the Existing Credit
Agreement shall be amended and restated in its entirety by this Agreement and
the Existing Credit Agreement shall thereafter be of no further force and effect
except as to evidence the incurrence by the Borrower of the Obligations
thereunder and of AT Massey of its obligations as a guarantor thereunder. The
terms and conditions of this Agreement and the rights and remedies of the
respective parties under this Agreement and the other Loan Documents, shall
apply to all of the Obligations incurred under the Existing Credit Agreement and
the Notes issued in connection therewith. It is expressly understood and agreed
by the parties hereto that this Agreement is in no way intended to constitute a
novation of the obligations and liabilities existing under the Existing Credit
Agreement or evidence payment of all or any of such obligations and liabilities.
All references to the Existing Credit Agreement (or to any amendment or any
amendment and restatement thereof) in the Loan Documents shall be deemed to
refer to this Agreement.

          (b) Each Lender may assign to one or more Eligible Assignees all or a
portion of its rights and obligations under this Agreement and the other Loan
Documents (with the consent of the Administrative Agent and, as long as no Event
of Default is continuing, the Borrower (such consent not to be unreasonably
withheld) including, without limitation, all or a portion of its Commitment and
the Loans owing to it and the Notes held by it); provided, however, that (A)
each such assignment shall be of a constant, and not a varying, percentage of
all rights and obligations under this Agreement and the other Loan Documents,
(B) the amount of the Commitment of the assigning Lender being assigned pursuant
to each such assignment shall in no event be less than $5,000,000 and shall be
an integral multiple of $1,000,000, (C) upon notice to the Borrower and the
Administrative Agent by the assigning Lender, the consent of the Borrower and
the Administrative Agent shall not be required with respect to any such
assignment by any Lender to a Lender or an Affiliate of such Lender (subject to
the proviso in clause (iii) of the definition of "Eligible Assignee"), (D) the
parties to each such assignment shall

                                       68

<PAGE>

execute and deliver to the Administrative Agent, for its acceptance and
recording in the Register, an Assignment and Acceptance, in substantially the
form of Exhibit B hereto, and (E) the parties to each such assignment shall
execute and deliver to the Administrative Agent any Note or Notes subject to
such assignment and the assigning Lender shall pay or cause to be paid to the
Administrative Agent (except in the case of an assignment to an Affiliate of
such Lender) a processing and recordation fee of $3,500. From and after the
effective date of any such assignment (1) the Assignee thereunder shall be a
party hereto and, to the extent that rights and obligations hereunder have been
assigned to it pursuant to such assignment, have the rights and obligations of a
Lender hereunder, and (2) the Lender assignor thereunder shall, to the extent
that rights and obligations hereunder have been assigned by it pursuant to such
assignment, relinquish its rights and be released from its obligations under
this Agreement (and, in the case of an assignment at covering all or the
remaining portion of an assigning Lender's rights and obligations under this
Agreement, such Lender shall cease to be a party hereto).

               (i)       Subject to Section 10.06(d), a Lender may at any time
          grant participations to one or more banks or other entities in or to
          all or any part of its rights and obligations under this Agreement or
          any Borrowings hereunder, and to the extent of any such participation
          (unless otherwise stated therein and except as provided below) the
          purchaser of such participation shall, to the fullest extent permitted
          by law, have the same rights and benefits hereunder and under such
          Borrowings as it would have if it were such Lender hereunder;
          provided, however, that the Borrower and the Administrative Agent
          shall be entitled to continue to deal solely with the granting Lender
          regarding notices, payments, payment instructions and any other
          matters arising pursuant to this Agreement. Any agreement pursuant to
          which any Lender may grant such a participating interest shall provide
          that such Lender shall retain the sole right and responsibility to
          enforce the obligations of the Borrower hereunder, including, without
          limitation, the right to approve any amendment, modification or waiver
          of any provision of this Agreement; provided that such participation
          agreement may provide that such Lender will not agree to any
          modification, amendment or waiver of this Agreement described in
          clause (i), (ii) or (iii) of Section 10.05 without the consent of the
          participant.

          (c) The Administrative Agent and the Borrower may, for all purposes of
this Agreement, treat any Lender as the holder of any Note issued to it (and
owner of the Loans evidenced thereby) until written notice of assignment,
participation or other transfer shall have been received by them.

          (d) No Assignee, participant or other transferee (including any SPV)
of any Lender's rights shall be entitled to receive any greater payment under
Section 8.03 than such Lender would have been entitled to receive with respect
to the rights transferred, unless such transfer is made (i) with the Borrower's
prior written consent (which consent shall not be unreasonably withheld) or by
reason of the provisions of Section 8.02 or Section 8.03 requiring such Lender
to designate a different Lending Office under certain circumstances, or (ii) at
a time when the circumstances giving rise to such greater payment did not exist.

          (e) Notwithstanding any other provision set forth in this Agreement,
any Lender may at any time create a security interest in all or any portion of
its rights under this Agreement and the other Loan Documents (including, without
limitation, the Loans owing to it and the Note or Notes held by it) in favor of
any Federal Reserve Bank in accordance with Regulation A of the Board of
Governors of the Federal Reserve System.

                                       69

<PAGE>

          (f)  (i) Notwithstanding anything to the contrary contained herein,
any Lender (a "Designating Lender") may grant to one or more special purpose
funding vehicles (each, an "SPV"), identified as such in writing from time to
time by the Designating Lender to the Administrative Agent and the Borrower, the
option to provide to the Borrower all or any part of any Loan that such
Designating Lender would otherwise be obligated to make to the Borrower pursuant
to this Agreement; provided that (1) nothing herein shall constitute a
commitment by any SPV to make any Loan, (2) if an SPV elects not to exercise
such option or otherwise fails to provide all or any part of such Loan, the
Designating Lender shall be obligated to make such Loan pursuant to the terms
hereof and (3) the Designating Lender shall remain liable for any indemnity or
other payment obligation with respect to its Commitment hereunder. The making of
a Loan by an SPV hereunder shall utilize the Commitment of the Designating
Lender to the same extent, and as if, such Loan were made by such Designating
Lender;

               (ii)      As to any Loans or portion thereof made by it, each SPV
          shall have all the rights that a Lender making such Loans or portion
          thereof would have had under this Agreement; provided, however, that
          each SPV shall have granted to its Designating Lender an irrevocable
          power of attorney to deliver and receive all communications and
          notices under this Agreement (and any related documents) and to
          exercise on such SPV's behalf, all of such SPV's voting rights under
          this Agreement. No additional Note shall be required to evidence the
          Loans or portion thereof made by an SPV; and the related Designating
          Lender shall be deemed to hold its Note (if any) as agent for such SPV
          to the extent of the Loans or portion thereof funded by such SPV. In
          addition, any payments for the account of any SPV shall be paid to its
          Designating Lender as agent for such SPV;

               (iii)     Each party hereto hereby agrees that no SPV shall be
          liable for any indemnity or payment under this Agreement for which a
          Lender would otherwise be liable; if an SPV, but for the operation of
          this sentence, would have liability for any such indemnity or payment,
          the Designating Lender shall be liable;

               (iv)      In addition, notwithstanding anything to the contrary
          contained in this Section 10.06(f) or otherwise in this Agreement, any
          SPV may (1) at any time and without paying any processing fee
          therefor, assign or participate all or a portion of its interest in
          any Loans to the Designating Lender or to any financial institutions
          providing liquidity and/or credit support to or for the account of
          such SPV to support the funding or maintenance of Loans; provided that
          the Designating Lender in the event of an assignment or participation
          to any other financial institution shall remain liable for any
          indemnity or other payment obligation with respect to its Commitment,
          and shall be obligated to make such Loan pursuant to the terms hereof
          and of its Commitment and (2) disclose on a confidential basis any
          non-public information relating to its Loans to any rating agency,
          commercial paper dealer or provider of any surety, guarantee or credit
          or liquidity enhancements to such SPV.

          Section 10.07 Collateral. Each of the Lenders represents to the
Administrative Agent and each of the other Lenders that it in good faith is not
relying upon any "margin stock" (as defined in Regulation U) as collateral in
the extension or maintenance of the credit provided for in this Agreement.

          Section 10.08 New York Law. This Agreement and each Note shall be
construed in accordance with and governed by the law of the State of New York.

                                       70

<PAGE>

          Section 10.09 Submission to Jurisdiction; Service of Process

          (a) Any legal action or proceeding with respect to this Agreement or
any other Loan Document may be brought in the courts of the State of New York or
of the United States of America for the Southern District of New York, and, by
execution and delivery of this Agreement, the Borrower and each Guarantor hereby
accepts for itself and in respect of its property, generally and
unconditionally, the jurisdiction of the aforesaid courts. The parties hereto
hereby irrevocably waive any objection, including any objection to the laying of
venue or based on the grounds of forum non conveniens, that any of them may now
or hereafter have to the bringing of any such action or proceeding in such
respective jurisdictions.

          (b) The Borrower and each Loan Party hereby irrevocably consent to the
service of any and all legal process, summons, notices and documents in any
suit, action or proceeding brought in the United States of America arising out
of or in connection with this Agreement or any other Loan Document by the
mailing (by registered or certified mail, postage prepaid) or delivering of a
copy of such process to the Borrower at its address specified in Section 10.01
and to Eberley Davis, General Counsel, Massey Energy Company, 315 70th Street,
S.E., Charleston, WV 25304. The Borrower and each Loan Party agree 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.

          (c) Nothing contained in this Section 10.09 shall affect the right of
the Administrative Agent or any Lender to serve process in any other manner
permitted by law or commence legal proceedings or otherwise proceed against the
Borrower or any other Loan Party in any other jurisdiction.

          (d) If for the purposes of obtaining judgment in any court it is
necessary to convert a sum due hereunder in Dollars into another currency, the
parties hereto agree, to the fullest extent that they may effectively do so,
that the rate of exchange used shall be that at which in accordance with normal
banking procedures the Administrative Agent could purchase Dollars with such
other currency at the spot rate of exchange quoted by the Administrative Agent
at 11:00 a.m. (New York time) on the Domestic Business Day preceding that on
which final judgment is given, for the purchase of Dollars, for delivery two
Domestic Business Days thereafter.

          Section 10.10 Waiver of Trial by Jury. THE BORROWER, THE GUARANTORS,
THE LENDERS, THE ADMINISTRATIVE AGENT AND, BY ITS ACCEPTANCE OF THE BENEFITS
HEREOF, OTHER LENDERS EACH HEREBY AGREES TO WAIVE ITS RESPECTIVE RIGHTS TO A
JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS
AGREEMENT OR ANY LOAN DOCUMENT. The scope of this waiver is intended to be
all-encompassing of any and all disputes that may be filed in any court and that
relate to the subject matter of this transaction, including without limitation
contract claims, tort claims, breach of duty claims and all other common law and
statutory claims. The Borrower, the Lenders, the Administrative Agent and, by
its acceptance of the benefits hereof, other Lenders each (i) acknowledges that
this waiver is a material inducement for the Borrower, the Lenders and the
Administrative Agent to enter into a business relationship, that the Borrower,
the Lenders and the Administrative Agent have already relied on this waiver in
entering into this Agreement or accepting the benefits thereof, as the case may
be, and that each will continue to rely on this waiver in their related future
dealings and (ii) further warrants and represents that each has reviewed this
waiver with its legal counsel, and that each knowingly and voluntarily waives
its jury trial rights following consultation with legal counsel. THIS WAIVER IS
IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING,
AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS
OR MODIFICATIONS TO THIS AGREEMENT. In the event of litigation, this Agreement
may be filed as a written consent to a trial by the court.

                                       71

<PAGE>

          Section 10.11 Counterparts. This Agreement may be signed in any number
of counterparts, each of which shall be an original, with the same effect as if
the signatures thereto and hereto were upon the same instrument.

          Section 10.12 Confidentiality. In accordance with normal procedures
regarding proprietary information supplied by customers, each of the Lenders
agrees to keep confidential information relating to the Borrower or any
Subsidiary received pursuant to or in connection with this Agreement and the
transactions contemplated hereby; provided that nothing herein shall be
construed to prevent the Administrative Agent or any Lender from disclosing such
information (i) upon the order of any court or administrative agency, (ii) upon
the request or demand of any regulatory agency or authority having jurisdiction
over the Administrative Agent or such Lender, (iii) which has been publicly
disclosed, (iv) which has been lawfully obtained by any of the Lenders from a
Person other than the Borrower, any Subsidiary, the Administrative Agent or any
other Lender, (v) to any participant in or assignee of, or prospective
participant in or assignee of, all or any part of the rights and obligations of
the Administrative Agent or such Lender under this Agreement or any Borrowings
hereunder (provided that such participant or assignee, or prospective
participant or assignee, agrees to comply with the confidentiality requirements
set forth in this Section 10.12), (vi) to the Administrative Agent's or such
Lender's independent auditors or outside legal counsel, or (vii) to its
Affiliates.

          Section 10.13 Survival of Warranties. All agreements, representations
and warranties made in this Agreement shall survive the execution and delivery
of this Agreement and any increase in the Commitments under this Agreement.

          Section 10.14 Severability. In case any provision in or obligation
under this Agreement shall be invalid, illegal or unenforceable in any
jurisdiction, the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired thereby.

          Section 10.15 Captions. All Section headings are inserted for
convenience of reference only and shall not be used in any way to modify, limit,
construe or otherwise affect this Agreement.

                                       72

<PAGE>

     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
                                   MASSEY ENERGY COMPANY, as Borrower

                                   By: /s/ Baxter F. Phillips, Jr.
                                      ----------------------------------
                                      Name: Baxter F. Phillips, Jr.
                                      Title: Vice President

                                   HOPKINS CREEK COAL COMPANY
                                   JOBONER COAL COMPANY
                                   RUSSELL FORK COAL COMPANY
                                   T.C.H. COAL CO.,
                                   as Guarantors

                                   By: /s/ Baxter F. Phillips, Jr.
                                      ----------------------------------
                                      Name: Baxter F. Phillips, Jr.
                                      Title: President

                                   MASSEY COAL SERVICES, INC.
                                   A.T. MASSEY COAL COMPANY, INC.
                                   as Guarantors

                                   By: /s/ Baxter F. Phillips, Jr.
                                      ----------------------------------
                                      Name: Baxter F. Phillips, Jr.
                                      Title: Vice President

             SIGNATURE PAGE TO AMENDED AND RESTATED CREDIT AGREEMENT

<PAGE>

                                   APPALACHIAN CAPITAL MANAGEMENT CORP.
                                   BIG SANDY VENTURE CAPITAL CORP.
                                   BLUE RIDGE VENTRURE CAPITAL CORP.
                                   BLUESTONE VENTURE CAPITAL CORP.
                                   CAPSTAN MINING COMPANY
                                   CENTRAL PENN ENERGY COMPANY, INC.
                                   CONTINUITY VENTURE CAPITAL CORP.
                                   DRIH CORPORATION
                                   FEATS VENTURE CAPITAL CORP.
                                   HADEN FARMS, INC.
                                   MARSHALL VENTURE CAPITAL CORP.
                                   MASSEY CAPITAL MANAGEMENT CORP.
                                   MASSEY COAL CAPITAL CORP.
                                   MASSEY COAL SALES COMPANY, INC.
                                   MASSEY CONSULTING SERVICES, INC.
                                   MASSEY NEW ERA CAPITAL CORP.
                                   MENEFEE LAND COMPANY, INC.
                                   MONONGAHELA VENTURE CAPITAL CORP.
                                   NEW MARKET LAND COMPANY
                                   NEW MASSEY CAPITAL CORP.
                                   NEW RIVER CAPITAL COMPANY
                                   PREFERRED MANAGEMENT CAPITAL CORP.
                                   PROGRESSIVE VENTURE CAPITAL CORP.
                                   RAWL SALES VENTURE CAPITAL CORP.
                                   SCARLET DEVELOPMENT COMPANY
                                   SHENANDOANH CAPITAL MANAGEMENT CORP.
                                   SPM CAPITAL MANAGEMENT CORP.
                                   SPROUSE CREEK VENTURE CAPITAL CORP.
                                   ST. ALBANS CAPITAL MANAGEMENT CORP.
                                   SUN COAL COMPANY, INC.,
                                   as Guarantors

                                   By: /s/ Stanley C. Suboleski
                                      ----------------------------------
                                      Name: Stanley C. Suboleski
                                      Title: President

                                   LAUREN LAND COMPANY
                                   SC COAL CORPORATION
                                   as Guarantors

                                   By: /s/ Stanley C. Suboleski
                                      ----------------------------------
                                      Name: Stanley C. Suboleski
                                      Title Vice President

             SIGNATURE PAGE TO AMENDED AND RESTATED CREDIT AGREEMENT

<PAGE>

                                   GREYEAGLE COAL COMPANY
                                   TENNESSEE CONSOLIDATED COAL COMPANY
                                   TENESSEE ENERGY CORP.
                                   THUNDER MINING COMPANY,
                                   as Guarantors

                                   By: /s/ Michael D. Bauersachs
                                      ----------------------------------
                                      Name: Michael D. Bauersachs
                                      Title: President

             SIGNATURE PAGE TO AMENDED AND RESTATED CREDIT AGREEMENT

<PAGE>

                                   ALEX ENERGY, INC.
                                   GREEN VALLEY COAL COMPANY
                                   MAJESTIC MINING, INC.
                                   NICCO CORPORATION
                                   PEERLESS EAGLE COAL CO.,
                                   as Guarantors

                                   By: /s/ David C. Hughart
                                      ----------------------------------
                                      Name: David C. Hughart
                                      Title: President

             SIGNATURE PAGE TO AMENDED AND RESTATED CREDIT AGREEMENT

<PAGE>

                                   ARACOMA COAL COMPANY, INC.
                                   LOGAN COUNTY MINE SERVICES, INC.,
                                   as Guarantors

                                   By: /s/ Dwayne Francisco
                                      ----------------------------------
                                      Name: Dwayne Francisco
                                      Title: President

             SIGNATURE PAGE TO AMENDED AND RESTATED CREDIT AGREEMENT

<PAGE>

                                   BANDMILL COAL CORPORATION
                                   HIGHLAND MINING COMPANY,
                                   as Guarantors

                                   By: /s/ Eric D. Salyer
                                      ----------------------------------
                                      Name: Eric D. Salyer
                                      Title: President

             SIGNATURE PAGE TO AMENDED AND RESTATED CREDIT AGREEMENT

<PAGE>

                                   BANDYTOWN COAL CORPORATION
                                   BIG BEAR MINING COMPANY
                                   CABINAWA MINING COMPANY
                                   DOUGLAS POCAHONTAS COAL CORPORATION
                                   EAGLE ENERGY, INC.
                                   ROBINSON-PHILLIPS COAL COMPANY
                                   ROCKRIDGE COAL COMPANY
                                   SHANNON-POCAHONT AS COAL CORPORATION
                                   TOWN CREEK COAL COMPANY
                                   WYOMAC COAL COMPANY, INC.,
                                   as Guarantors

                                   By: /s/ Lloyd C. Adams
                                      ----------------------------------
                                      Name: Lloyd C. Adams
                                      Title: President

             SIGNATURE PAGE TO AMENDED AND RESTATED CREDIT AGREEMENT

<PAGE>

                                   BARNABUS LAND COMPANY
                                   DEHUE COAL COMPANY,
                                   as Guarantors

                                   By: /s/ Harold Osborne
                                      ----------------------------------
                                      Name: Harold Osborne
                                      Title: President

             SIGNATURE PAGE TO AMENDED AND RESTATED CREDIT AGREEMENT

<PAGE>

                                   BELFRY COAL CORPORATION
                                   NEW RIDGE MINING COMPANY
                                   SIDNEY COAL COMPANY, INC.,
                                   as Guarantors

                                   By: /s/ Sidney R. Young, III
                                      ----------------------------------
                                      Name: Sidney R. Young, III
                                      Title: President

             SIGNATURE PAGE TO AMENDED AND RESTATED CREDIT AGREEMENT

<PAGE>

                                   BLACK KING MINE DEVELOPMENT CO.
                                   BOONE EAST DEVELOPMENT CO.
                                   BOONE WEST DEVLOPMENT CO.
                                   CENTRAL WEST VIRGINIA ENERGY COMPANY
                                   CERES LAND COMPANY
                                   DEMETER LAND COMPANY
                                   LAXARE, INC.
                                   RAVEN RESOURCES, INC.,
                                   as Guarantor

                                   By: /s/ R. Freal Mize
                                      ----------------------------------
                                      Name: R. Freal Mize
                                      Title: President

                                   NEW RIVER ENERGY CORPORATION
                                   as Guarantors

                                   By: /s/ R. Freal Mize
                                      ----------------------------------
                                      Name: R. Freal Mize
                                      Title: Vice President

             SIGNATURE PAGE TO AMENDED AND RESTATED CREDIT AGREEMENT

<PAGE>

                                   BEN CREEK COAL COMPANY,
                                   as Guarantor

                                   By: /s/ Bruce A. Johnson
                                      ----------------------------------
                                      Name: Bruce A. Johnson
                                      Title: President

             SIGNATURE PAGE TO AMENDED AND RESTATED CREDIT AGREEMENT

<PAGE>

                                   BOONE ENERGY COMPANY
                                   MARFORK COAL COMPANY, INC.,
                                   as Guarantors

                                   By: /s/ Johnny R. Jones
                                      ----------------------------------
                                      Name: Johnny R. Jones
                                      Title: President

             SIGNATURE PAGE TO AMENDED AND RESTATED CREDIT AGREEMENT

<PAGE>

                                   CLEAR FORK COAL COMPANY
                                   ELK RUN COAL COMPANY, INC.,
                                   as Guarantors

                                   By: /s/ Larry Ward
                                      ----------------------------------
                                      Name: Larry Ward
                                      Title: President

             SIGNATURE PAGE TO AMENDED AND RESTATED CREDIT AGREEMENT

<PAGE>

                                   CRYSTAL FUELS COMPANY,
                                   as Guarantor

                                   By: /s/ George E. Dotson
                                      ----------------------------------
                                      Name: George E. Dotson
                                      Title: President

             SIGNATURE PAGE TO AMENDED AND RESTATED CREDIT AGREEMENT

<PAGE>

                                   DELBARTON MINING COMPANY
                                   SUPPORT MINING COMPANY,
                                   as Guarantors

                                   By: /s/ Andrew F. Ashurst
                                      ----------------------------------
                                      Name: Andrew F. Ashurst
                                      Title: President

             SIGNATURE PAGE TO AMENDED AND RESTATED CREDIT AGREEMENT

<PAGE>

                                   DUNCAN FORK COAL COMPANY
                                   DUCHESS COAL COMPANY
                                   HAZY RIDGE COAL COMPANY
                                   JACKS BRANCH COAL COMPANY
                                   LICK BRANCH COAL COMPANY
                                   MINE MAINTENANCE, INC.
                                   PETER CAVE MINING COMPANY
                                   RUM CREEK SYNFUEL COMPANY
                                   TRACE CREEK COAL COMPANY,
                                   as Guarantors

                                   By: /s/ Danny C. Cox
                                      ----------------------------------
                                      Name: Danny C. Cox
                                      Title: President

             SIGNATURE PAGE TO AMENDED AND RESTATED CREDIT AGREEMENT

<PAGE>

                                   FOOTHILLS COAL COMPANY,
                                   as Guarantor

                                   By: /s/ John Christopher Adkins
                                      ----------------------------------
                                      Name: John Christopher Adkins
                                      Title: President

             SIGNATURE PAGE TO AMENDED AND RESTATED CREDIT AGREEMENT

<PAGE>

                                   KANAWHA ENERGY COMPANY,
                                   as Guarantor

                                   By: /s/ Randy Cunningham
                                      ----------------------------------
                                      Name: Randy Cunningham
                                      Title: President

             SIGNATURE PAGE TO AMENDED AND RESTATED CREDIT AGREEMENT

<PAGE>

                                   STIRRAT COAL COMPANY,
                                   as Guarantor

                                   By: /s/ Dwain P. Harris
                                      ----------------------------------
                                      Name: Dwain P. Harris
                                      Title: President

             SIGNATURE PAGE TO AMENDED AND RESTATED CREDIT AGREEMENT

<PAGE>

                                   GOALS COAL COMPANY
                                   WILLIAMS MOUNTAIN COAL COMPANY
                                   as Guarantors

                                   By: /s/ Michael A. Milam
                                      ----------------------------------
                                      Name: Michael A. Milam
                                      Title: President

             SIGNATURE PAGE TO AMENDED AND RESTATED CREDIT AGREEMENT

<PAGE>

                                   INDEPENDENCE COAL COMPANY, INC.,
                                   as Guarantors

                                   By: /s/ Mark A. Clemens
                                      ----------------------------------
                                      Name: Mark A. Clemens
                                      Title: President

             SIGNATURE PAGE TO AMENDED AND RESTATED CREDIT AGREEMENT

<PAGE>

                                   KNOX CREEK COAL CORPORATION,
                                   as Guarantor

                                   By: /s/ David P. Kramer
                                      ----------------------------------
                                      Name: David P. Kramer
                                      Title: President

             SIGNATURE PAGE TO AMENDED AND RESTATED CREDIT AGREEMENT

<PAGE>

                                   LONG FORK COAL COMPANY,
                                   as Guarantor

                                   By: /s/ Mitch McKinney
                                      ----------------------------------
                                      Name: Mitch McKinney
                                      Title: President

             SIGNATURE PAGE TO AMENDED AND RESTATED CREDIT AGREEMENT

<PAGE>

                                   LYNN BRANCH COAL COMPANY, INC.
                                   ROAD FORK DEVELOPMENT COMPANY, INC.
                                   SPARTAN MINING COMPANY
                                   STONE MINING COMPANY
                                   SYCAMORE FUELS, INC.
                                   VANTAGE MINING COMPANY,
                                   as Guarantors

                                   By: /s/ Michael G. Smith
                                      --------------------------------
                                      Name: Michael G. Smith
                                      Title: President

             SIGNATURE PAGE TO AMENDED AND RESTATED CREDIT AGREEMENT

<PAGE>

                                   MARTIN COUNTY COAL CORPORATION
                                   PILGRIM MINING COMPANY, INC.,
                                   as Guarantors

                                   By: /s/ Hiram Mahon
                                      --------------------------------
                                      Name: Hiram Mahon
                                      Title: President

             SIGNATURE PAGE TO AMENDED AND RESTATED CREDIT AGREEMENT

<PAGE>

                                   NICHOLAS ENERGY COMPANY,
                                   as Guarantor

                                   By: /s/ Mike Snelling
                                      --------------------------------
                                      Name: Mike Snelling
                                      Title: President

             SIGNATURE PAGE TO AMENDED AND RESTATED CREDIT AGREEMENT

<PAGE>

                                   OMAR MINING COMPANY,
                                   as Guarantor

                                   By: /s/ Mitchell McKinley Kalos
                                      --------------------------------
                                      Name: Mitchell McKinley Kalos
                                      Title: President

             SIGNATURE PAGE TO AMENDED AND RESTATED CREDIT AGREEMENT

<PAGE>

                                   POWER MOUNTAIN COAL COMPANY,
                                   as Guarantor

                                   By: /s/ James S. Smith
                                      --------------------------------
                                      Name: James S. Smith
                                      Title: President

             SIGNATURE PAGE TO AMENDED AND RESTATED CREDIT AGREEMENT

<PAGE>

                                   RAWL SALES & PROCESSING CO.,
                                   as Guarantor

                                   By: /s/ Macs Hall
                                      --------------------------------
                                      Name: Macs Hall
                                      Title: President

             SIGNATURE PAGE TO AMENDED AND RESTATED CREDIT AGREEMENT

<PAGE>

                                   RUM CREEK COAL SALES, INC.,
                                   as Guarantor

                                   By: /s/ Richard Zigmond
                                      --------------------------------
                                      Name: Richard Zigmond
                                      Title: President

             SIGNATURE PAGE TO AMENDED AND RESTATED CREDIT AGREEMENT

<PAGE>

                                   PERFORMANCE COAL COMPANY,
                                   as Guarantor

                                   By: /s/ Bill M. Potter
                                      --------------------------------
                                      Name: Bill M. Potter
                                      Title: President

             SIGNATURE PAGE TO AMENDED AND RESTATED CREDIT AGREEMENT

<PAGE>

                                   WHITE BUCK COAL COMPANY,
                                   as Guarantor

                                   By: /s/ Larry M. Roop
                                      --------------------------------
                                      Name: Larry M. Roop
                                      Title: President

             SIGNATURE PAGE TO AMENDED AND RESTATED CREDIT AGREEMENT

<PAGE>

                                   M & B COAL COMPANY,
                                   as Guarantor
                                   BY: WYOMAC COAL COMPANY, INC.

                                   By: /s/ Lloyd C. Adams
                                      --------------------------------
                                      Name: Lloyd C. Adams
                                      Title: President

                                   M & B COAL COMPANY,
                                   as Guarantor
                                   BY: TOWN CREEK COAL COMPANY

                                   By: /s/ Lloyd C. Adams
                                      --------------------------------
                                      Name: Lloyd C. Adams
                                      Title: President

             SIGNATURE PAGE TO AMENDED AND RESTATED CREDIT AGREEMENT

<PAGE>

                                   SHANNON-PORAHONTAS MINING CO.,
                                   as Guarantor
                                   BY: SHANNON-POCAHONTAS COAL
                                   CORPORATION

                                   By: /s/ Lloyd C. Adams
                                      --------------------------------
                                      Name: Lloyd C. Adams
                                      Title: President

                                   SHANNON-POCAHONTAS MINING CO.,
                                   as Guarantor
                                   BY: OMAR MINING COMPANY

                                   By: /s/ Mitchell McKinley Kalos
                                      --------------------------
                                      Name: Mitchell McKinley Kalos
                                      Title: President

             SIGNATURE PAGE TO AMENDED AND RESTATED CREDIT AGREEMENT

<PAGE>

                                   CITICORP USA, INC., as Administrative Agent
                                   and as a Lender

                                   By: /s/ Raymond G. Dunning
                                      --------------------------------
                                      Name: RAYMOND G. DUNNING
                                      Title: MANAGING DIRECTOR

                                   By: /s/ Daniel J. Miller
                                      --------------------------------
                                      Name: Daniel J. Miller
                                      Title: Vice President

         Signature Page to Amended and Restated Massey Credit Agreement

<PAGE>

                                   PNC BANK, NATIONAL ASSOCIATION, as
                                   Syndication Agent and as a Lender

                                   By: /s/ R. Kane Kiester
                                      --------------------------------
                                      Name: R. Kane Kiester
                                      Title: Assistant Vice President

                                   By:
                                      --------------------------------
                                      Name:
                                      Title:

         Signature Page to Amended and Restated Massey Credit Agreement

<PAGE>

                                   WACHOVIA BANK, NATIONAL ASSOCIATION, as
                                   Documentation Agent and as a Lender

                                   By: /s/ David L. Driggers
                                      --------------------------------
                                      Name: David L. Driggers
                                      Title: Managing Director

                                   By:
                                      --------------------------------
                                      Name:
                                      Title:

         Signature Page to Amended and Restated Massey Credit Agreement

<PAGE>

                                   WESTLB AG, as a Lender

                                   By: /s/ R. Guerin
                                      --------------------------------
                                      Name: RODERICK GUERIN
                                      Title: DIRECTOR

                                      /s/ Bran A. Kaskovic
                                      BRAN A. KASKOVIC
                                      FINANCIAL SOLUTIONS GROUP
                                      GLOBAL SPECIALIZED FINANCE
                                      WESTLB AG

         Signature Page to Amended and Restated Massey Credit Agreement

<PAGE>

                                   BANK ONE, NA, as a Lender

                                   By:
                                      --------------------------------
                                      Name:
                                      Title:

         Signature Page to Amended and Restated Massey Credit Agreement

<PAGE>

                                   THE ROYAL BANK OF SCOTLAND PLC, as a
                                   Lender

                                   By: /s/ D Williams
                                      -----------------------------
                                      Name: D? Williams
                                      Title: The Royal Bank of Scotland

         Signature Page to Amended and Restated Massey Credit Agreement

<PAGE>

                                   BRANCH BANKING AND TRUST COMPANY, as a
                                   Lender

                                   By: /s/ James Stallings
                                      --------------------------------
                                      Name: James Stallings
                                      Title: Vice President

         Signature Page to Amended and Restated Massey Credit Agreement

<PAGE>

                                   THE BANK OF NEW YORK, as a Lender

                                   By: /s/ Craig J. Anderson
                                      --------------------------------
                                      Name: Craig J. Anderson
                                      Title: Vice President

         Signature Page to Amended and Restated Massey Credit Agreement

<PAGE>

                                   DRESDNER BANK LATEINAMERIKA AG, Miami
                                   Agency as a Lender

                                   By: /s/ Andreas Thomas
                                      --------------------------------
                                      Name: Andreas Thomas
                                      Title: Vice President

                                   By: /s/ Michael Londono
                                      --------------------------------
                                      Name: Michael Londono
                                      Title: Assistant Vice President

         Signature Page to Amended and Restated Massey Credit Agreement

<PAGE>

                                   AUSTRALIA AND NEW ZEALAND BANKING
                                   GROUP LIMITED, as a Lender

                                   By: /s/ John W. Wade
                                      --------------------------------
                                      Name: John W. Wade
                                      Title: Director - Global Structured
                                             Finance

         Signature Page to Amended and Restated Massey Credit Agreement

<PAGE>

                                   MELLON BANK N.A., as a Lender

                                   By: /s/ William M. Feathers
                                      --------------------------------
                                      Name: William M. Feathers
                                      Title: Vice President

         Signature Page to Amended and Restated Massey Credit Agreement

<PAGE>

                                   BANK HAPOALIM, as a Lender

                                   By:
                                      --------------------------------
                                      Name:
                                      Title:

         Signature Page to Amended and Restated Massey Credit Agreement

<PAGE>

                                   SCHEDULE I

                           APPLICABLE LENDING OFFICES

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------------------------
Bank                                      Domestic Lending Office                     Euro-Dollar Lending Office
-----------------------------------------------------------------------------------------------------------------------------------
<S>                                       <C>                                         <C>
Citicorp USA, Inc.                        Citicorp USA, Inc.                          Citicorp USA, Inc.
                                          Two Penns Way, Suite 200                    Two Penns Way, Suite 200
                                          New Castle, DE  19720                       New Castle, DE  19720
                                          Attn:  Tim Card                             Attn:  Tim Card
                                          Telephone:        302-894-6016              Telephone:        302-894-6016
                                          Fax:              302-894-6120              Fax:              302-894-6120
-----------------------------------------------------------------------------------------------------------------------------------
PNC Bank, National Association            PNC Bank, N.A.                              PNC Bank, N.A.
                                          One PNC Plaza, 3rd Floor                    One PNC Plaza, 3rd Floor
                                          249  Fifth Avenue                           249  Fifth Avenue
                                          Pittsburgh, PA  19222-2707                  Pittsburgh, PA  19222-2707
                                          Attn:  Brett Schweikle                      Attn:  Brett Schweikle
                                          Telephone:        412-762-2604              Telephone:        412-762-2604
                                          Fax:              412-762-2571              Fax:              412-762-2571
-----------------------------------------------------------------------------------------------------------------------------------
WestLB AG                                 WestLB AG, New York Branch                  WestLB AG, New York Branch
                                          1211 Avenue of the Americas                 1211 Avenue of the Americas
                                          New York, NY  10036                         New York, NY  10036
                                          Attn:  Transaction Management               Attn:  Transaction Management
                                             Department                                  Department
                                          Telephone:        212-597-1412              Telephone:        212-597-1412
                                          Fax:              212-921-5947              Fax:              212-921-5947
-----------------------------------------------------------------------------------------------------------------------------------
Bank One, NA                              Bank One, N.A.                              Bank One, N.A.
                                          2 Bank One Plaza, Suite IL1-0634            2 Bank One Plaza, Suite IL1-0634
                                          Chicago, IL  60670                          Chicago, IL  60670
                                          Attn:  Brenda De Los Reyes                  Attn:  Brenda De Los Reyes
                                          Telephone:        312-732-5901              Telephone:        312-732-5901
                                          Fax:              312-732-4840              Fax:              312-732-4840
-----------------------------------------------------------------------------------------------------------------------------------
The Royal Bank of Scotland plc
-----------------------------------------------------------------------------------------------------------------------------------
Branch Banking and Trust Company          Branch Banking & Trust Co.                  Branch Banking & Trust Co.
                                          200 West Second Street                      200 West Second Street
                                          Winston-Salem, NC  27101                    Winston-Salem, NC  27101
                                          Attn:  Bank Loan Syndications               Attn:  Bank Loan Syndications
                                          Telephone:                                  Telephone:
                                          Fax:                                        Fax:
-----------------------------------------------------------------------------------------------------------------------------------
The Bank of New York                      The Bank of New York                        The Bank of New York
                                          101 Barclay Street                          101 Barclay Street
                                          New York, NY  10286                         New York, NY  10286
                                          Attn:  Bill Barbiero                        Attn:  Bill Barbiero
                                          Telephone:                                  Telephone:
                                          Fax:                                        Fax:
-----------------------------------------------------------------------------------------------------------------------------------
</TABLE>

<PAGE>

<TABLE>
<S>                                       <C>                                         <C>
Dresdner Bank Lateinamerika AG            Dresdner Bank Lateinamerika AG, Miami       Dresdner Bank Lateinamerika AG, Miami Agency
                                          Agency                                      801 Brickell Avenue
                                          801 Brickell Avenue                         Miami FL 33131
                                          Miami FL 33131                              Attn.: Frank Bornemann
                                          Attn.: Frank Bornemann                      Tele.: 305-810-3797
                                          Tele.: 305-810-3797                         Fax:  305-810-4056
                                          Fax:  305-810-4056
-----------------------------------------------------------------------------------------------------------------------------------
Wachovia Bank, N.A.                       Wachovia Bank, N.A.                         Wachovia Bank, N.A.
                                          1021 East Cary Street                       1021 East Cary Street
                                          Richmond, VA  23261                         Richmond, VA  23261
                                          Attn:  Oliver L. Way                        Attn:  Oliver L. Way
                                          Telephone:        804-697-6736              Telephone:        804-697-6736
                                          Fax:              804-697-7370              Fax:              804-697-7370
-----------------------------------------------------------------------------------------------------------------------------------
Australia and New Zealand Banking Group   Australia and New Zealand                   Australia and New Zealand
Limited                                      Banking Group Limited                       Banking Group Limited
                                          1177 Avenue of the Americas                 1177 Avenue of the Americas
                                          New York, NY  10036-2798                    New York, NY  10036-2798
                                          Attn:  Peter Gray/David Giacalone           Attn:  Doreen Klingenbeck and
                                          Telephone:        212-801-9739                 Tessie Amante
                                          Fax:              212-556-4839/4814         Telephone:        212-801-9726
                                                                                      Fax:              212-556-4826
-----------------------------------------------------------------------------------------------------------------------------------
Mellon Bank, N.A.                         Mellon Bank, N.A                            Mellon Bank, N.A
                                          Loan Administration                         Loan Administration
                                          Three Mellon Bank Center                    Three Mellon Bank Center
                                          Room 1203                                   Room 1203
                                          Pittsburgh, PA 15259-0003                   Pittsburgh, PA 15259-0003
                                          Attention:  Roxanne L. Gray                 Attention:  Roxanne L. Gray
                                          Telephone:  412-234-4769                    Telephone:  412-234-4769
                                          Fax:  412-209-6125                          Fax:  412-209-6125
                                          email: gray.rl@mellon.com                   email: gray.rl@mellon.com

                                          Wiring:                                     Wiring:
                                          Mellon Bank, N.A.                           Mellon Bank, N.A.
                                          ABA: 043000261                              ABA: 043000261
                                          Credit: CLAS                                Credit: CLAS
                                          Acct: 990873800                             Acct: 990873800
                                          Ref: Massey Energy                          Ref: Massey Energy
-----------------------------------------------------------------------------------------------------------------------------------
Bank Hapoalim
-----------------------------------------------------------------------------------------------------------------------------------
</TABLE>

<PAGE>

                                   Schedule II

                                   COMMITMENTS

     ------------------------------------------------------------------
                       LENDER                               COMMITMENT
     ------------------------------------------------------------------
     Wachovia Bank, National Association                    $46,875,000
     ------------------------------------------------------------------
     Citicorp USA, Inc.                                     $29,687,500
     ------------------------------------------------------------------
     PNC Bank, National Association                         $31,250,000
     ------------------------------------------------------------------
     WestLB AG                                              $23,437,500
     ------------------------------------------------------------------
     Bank One, N.A.                                         $23,437,500
     ------------------------------------------------------------------
     The Royal Bank of Scotland plc                         $23,437,500
     ------------------------------------------------------------------
     Branch Banking and Trust Company                       $12,500,000
     ------------------------------------------------------------------
     The Bank of New York                                   $12,500,000
     ------------------------------------------------------------------
     Dresdner Bank Lateinamerika AG                         $12,500,000
     ------------------------------------------------------------------
     Australia and New Zealand Banking Group Limited        $12,500,000
     ------------------------------------------------------------------
     Mellon Bank, N.A.                                      $12,500,000
     ------------------------------------------------------------------
     Bank Hapoalim                                          $ 9,375,000
     ------------------------------------------------------------------

<PAGE>

                                    EXHIBIT A

                      FORM OF COLLATERAL SHARING AGREEMENT

                                       A-1

<PAGE>

                                    EXHIBIT B

                        FORM OF ASSIGNMENT AND ACCEPTANCE

                        Dated as of _______________, ____

     Reference is made to that certain Amended and Restated Credit Agreement,
dated as of November 26, 2002 as amended, modified or supplemented to the date
hereof (the "Credit Agreement"), among Massey Energy Company (the "Borrower"),
the Guarantor, the Lenders party thereto, and Citicorp USA, Inc., as
Administrative Agent (the "Administrative Agent") and the other parties thereto.
Terms defined in the Credit Agreement are used herein with same meaning.

     ________________ (the "Assignor") and ______________ (the "Assignee") agree
as follows:

     1.   The Assignor hereby sells and assigns to the Assignee, and the
Assignee hereby purchases and assumes from the Assignor, without recourse, that
interest in and to all of the Assignor's rights and obligations under the Credit
Agreement as of the date hereof which represents the percentage interest
specified in Section 1 of Schedule 1 of the outstanding rights and obligations
of all Lenders under the Credit Agreement, including, without limitation, such
interest in the Assignor's Commitment and in all outstanding Loans owing to the
Assignor. After giving effect to such sale and assignment, the Assignee's
Commitment and the aggregate principal amount of Loans outstanding on the date
hereof and owing to the Assignee will be as set forth in Section 2 of Schedule
1.

     2.   The Assignor (i) represents and warrants that it is the legal and
beneficial owner of the interest being assigned by it hereunder and that such
interest is free and clear of any adverse claim; (ii) makes no representation or
warranty (except as provided in clause (i) above) and assumes no responsibility
with respect to any statements, warranties or representations made in or in
connection with the Credit Agreement or any other instrument or document
furnished pursuant thereto or with respect to the execution, legality, validity,
enforceability, genuineness, sufficiency or value of the Credit Agreement or any
other instrument or document furnished pursuant thereto; and (iii) makes no
representation or warranty and assumes no responsibility with respect to the
financial condition of the Borrower, any guarantor or any other person or the
performance or observance by the Borrower, any guarantor or any other party of
any of its obligations under the Credit Agreement or any other instrument or
document furnished pursuant thereto.

     3.   The Assignee (i) confirms and agrees that it has received a copy of
the Credit Agreement, any amendments or waivers thereto and any other documents
furnished pursuant thereto, which in each case have been requested by it,
together with copies of any financial statements requested by it, and that it
has, independently and without reliance on the Assignor, the Administrative
Agent or any other Agent or Lender and based on such documents and information
as it has deemed appropriate, made its own credit analysis and decision to enter
into this Assignment and Acceptance and agrees that it shall have no recourse
against the Assignor with respect to any matters relating thereto; (ii) agrees
that it will, independently and without reliance upon the Assignor, any
Administrative Agent or any other Agent or Lender and based on such documents
and information as it shall deem appropriate at the time, continue to make its
own credit decisions in taking or not taking action under the Credit Agreement
and any other documents or instruments furnished pursuant thereto; (iii)
appoints and authorizes the Administrative Agent to take such action as agent on
its behalf and to exercise such powers under the Credit Agreement as are
delegated to the Administrative Agent, by the terms thereof, together with such
powers as are reasonably incidental thereto; (iv) confirms that it is an
Eligible Assignee; (v) agrees that it will perform in accordance with their
terms all of the obligations which by the terms of the Credit Agreement are

                                       B-1

<PAGE>

required to be performed by it as a Lender; and (vi) specifies as its Domestic
Lending Office and Euro-Dollar Lending Office and address for notices the
respective offices previously notified to the Administrative Agent pursuant to
the Credit Agreement; and (vii) attaches the forms prescribed by the Internal
Revenue Service of the United States certifying as to the Assignee's status for
the purposes of determining exemption from United States withholding taxes with
respect to all payments to be made to the Assignee under the Credit Agreement or
such other documents as are reasonably necessary to indicate that all such
payments are subject to withholding taxes at a rate reduced by any applicable
tax treaty.

     4.   Following the execution of this Assignment and Acceptance by the
Assignor and the Assignee, the Assignor will deliver this Assignment and
Acceptance to the Administrative Agent for acceptance and recording. The
effective date for this Assignment and Acceptance shall be the date of
acceptance hereof by the Administrative Agent unless otherwise specified on
Schedule 1 hereto (the "Assignment Effective Date").

     5.   Upon such acceptance and recording by the Administrative Agent, as of
the Assignment Effective Date, (i) the Assignee shall be a party to the Credit
Agreement and, to the extent provided in the Credit Agreement and in this
Assignment and Acceptance, have the rights and obligations of a Lender
thereunder and (ii) the Assignor shall, to the extent provided in the Credit
Agreement and in this Assignment and Acceptance, relinquish its rights and be
released from its obligations under the Credit Agreement and the other
instruments and documents furnished pursuant thereto. The Assignee hereby
acknowledges that the other parties to the Credit Agreement are intended
third-party beneficiaries of this Assignment and Acceptance insofar as, after
giving effect to this Assignment and Acceptance, the Assignee shall have the
obligations of a Lender thereunder.

     6.   Upon such acceptance and recording by the Administrative Agent, from
and after the Assignment Effective Date, the Administrative Agent shall make all
payments under the Credit Agreement in respect of the interest assigned hereby
(including, without limitation, all payments of principal, interest and fees
with respect thereto) to the Assignee. The Assignor and Assignee shall make all
appropriate adjustments in payments under the Credit Agreement for periods prior
to the Assignment Effective Date directly between themselves.

     7.   This Assignment and Acceptance shall be governed by, and construed in
accordance with, the laws of the State of New York.

     8.   This Assignment and Acceptance may be executed in any number of
counterparts and by different parties on separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute but one and the same instrument.

     IN WITNESS WHEREOF, the parties hereto have caused this Assignment and
Acceptance to be executed by their respective officers thereunto duly
authorized, as of the date first above written, such execution being made on
Schedule 1 hereto.

                [Remainder of this page intentionally left blank]

                                       B-2

<PAGE>

                                   SCHEDULE 1
                                       TO
                            ASSIGNMENT AND ACCEPTANCE
                         Dated as of ____________, 20___

     Section 1

       Percentage interest                                  ______%
       (as percentage of total
          Credit Agreement Loans/
          Commitments of all Lenders)

      Section 2

       Assignee's Commitment                                $_______________

       Aggregate Outstanding Principal

              Amount of Loans Owing to Assignee             $_______________

      Section 3

       Assignment Effective Date:                           __________, 20___

                                                     --------------------,
                                                     as Assignor

                                                     By
                                                       ----------------------

                                                       Title:
                                                             ----------------

                                                     --------------------,
                                                     as Assignee

                                                     By
                                                       ----------------------

                                                       Title:
                                                             ----------------

                [Remainder of this page intentionally left blank]

                                       B-3

<PAGE>

Accepted this _______ day of

_____________, ____

Citicorp USA, Inc., as Administrative Agent

By
  -----------------------------
Name:
Title:

Consented to this _______ day of

_____________, ____

Massey Energy Company, as Borrower

By
  -----------------------------
Name:
Title:

                                       B-4

<PAGE>

                                    EXHIBIT C

                      FORM OF PLEDGE AND SECURITY AGREEMENT

                                       C-1

<PAGE>

                                    EXHIBIT D

                           FORM OF NOTICE OF BORROWING

Citicorp USA, Inc., as Administrative Agent
Two Penns Way, Suite 200
New Castle, Delaware 19720
       Attention:

Ladies and Gentlemen:

     The undersigned, Massey Energy Company, refers to the Amended and Restated
Credit Agreement, dated as of November 26, 2002 (the "Credit Agreement", the
terms defined therein being used herein as therein defined), among the
undersigned, the Guarantor, certain Lenders parties thereto, Citicorp USA, Inc.,
as Administrative Agent for said Lenders, and PNC Bank, National Association, as
Syndication Agent and Wachovia Bank, National Association, as Documentation
Agent, and hereby gives you notice pursuant to Section 2.02 of the Credit
Agreement that the undersigned hereby requests a Borrowing under the Credit
Agreement, and in that connection sets forth below the information relating to
such Borrowing (the "Proposed Borrowing") as required by Section 2.02 and
Article III of the Credit Agreement:

          (i)   The [Domestic] [Euro-Dollar] Business Day of the Proposed
     Borrowing is _________________________, 20___.

          (ii)  The type of Loans comprising the Proposed Borrowing are [Base
     Rate Loans] [Euro-Dollar Loans].

          (iii) The aggregate amount of the Proposed Borrowing is $___________.

          (iv)  The Interest Period for each Euro-Dollar Borrowing made as part
     of the Proposed Borrowing is ____ month[s].

          (v)   The undersigned's long-term senior unsecured debt (or, if the
     Borrower's senior secured debt is rated by S&P or Moody's, the senior
     secured debt) ratings in effect on the date hereof are: S&P: ______
     Moody's: _____.

     Further, the undersigned hereby certifies that the following is, to the
best of the undersigned's knowledge, true, correct and complete:

          A.    Immediately after the Proposed Borrowing, the aggregate
     outstanding principal amount of the Loans will not exceed the aggregate
     amount of the Commitments;

          B.    Immediately after the Proposed Borrowing, no event shall have
     occurred and be continuing, or would result from such Proposed Borrowing or
     from the application of the proceeds therefrom, which constitutes an Event
     of Default;

          C.    except to the extent provided below, the representations and
     warranties of the Borrower contained in Article IV of the Credit Agreement
     (other than in Section 4.05(c) of the Credit Agreement) are true and
     correct in all material respects on and as of the date hereof, before and
     after giving effect to the Proposed Borrowing and to the application of the
     proceeds therefrom, as though made on and as the date hereof, except to the
     extent that any such

                                       D-1

<PAGE>

     representation or warranty expressly relates only to an earlier date, in
     which case they were correct as of such earlier date; provided that the
     representation contained in Section 4.05(c) of the Credit Agreement need
     only be true and correct on the Effective Date; and

          D.    After applying the proceeds of such Borrowing, not more than 25%
     of the value (as determined by any reasonable method permitted by
     Regulation U) of the Borrower's assets subject to the provisions of Section
     5.04(b) and Section 5.04(g) of the Credit Agreement shall be represented by
     "margin stock" (as defined in Regulation U).

                                             Very truly yours,

                                             MASSEY ENERGY COMPANY

                                             By:
                                                --------------------------------
                                                Name:
                                                Title:

                                       D-2

<PAGE>

                                    EXHIBIT E

                             FORM OF PROMISSORY NOTE

                                 (3 Year Credit)

U.S.$_______________                                          New York, New York

                                                              ____________, 2002

     For value received, MASSEY ENERGY COMPANY, a Delaware corporation (the
"Borrower"), promises to pay to (the "Lender") or its registered assigns, for
the account of its Applicable Lending Office, the unpaid principal amount of
each Loan made by the Lender to the Borrower pursuant to the Credit Agreement
referred to below on the last day of the Interest Period relating to such Loan.
The Borrower promises to pay interest on the unpaid principal amount of each
such Loan on the dates and at the rate or rates provided for in the Credit
Agreement. All such payments of principal and interest shall be made in lawful
money of the United States in Federal or other immediately available funds at
the office of Citicorp USA, Inc., Two Penns Way, Suite 200, New Castle,
Delaware, 19720.

     All Loans made by the Lender, the respective maturities thereof and all
repayments of the principal thereof shall be recorded by the Lender and, prior
to any transfer hereof, endorsed by the Lender on the schedule attached hereto,
or on a continuation of such schedule attached to and made a part hereof;
provided that the failure of the Lender to make any such recordation or
endorsement shall not affect the obligations of the Borrower hereunder or under
the Credit Agreement.

     The note is one of the Notes referred to in the Amended and Restated Credit
Agreement dated as of November 26, 2002 among the Borrower, the Guarantor, the
Lenders listed on the signature pages thereof, Citicorp USA, Inc., as
Administrative Agent, PNC Bank, National Association, as Syndication Agent, and
Wachovia Bank, National Association, as Documentation Agent, (as the same may be
amended from time to time, the "Credit Agreement"). Terms defined in the Credit
Agreement are used herein with the same meanings.

     Reference is made to the Credit Agreement for provisions for the prepayment
hereof and the acceleration of the maturity hereof.

                                             MASSEY ENERGY COMPANY

                                             By:
                                                --------------------------------
                                                Name:
                                                Title:

                                       E-1

<PAGE>

                         LOANS AND PAYMENTS OF PRINCIPAL

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------------
                                 Amount
                                   of          Amount of Principal                             Notation
           Date                   Loan                Repaid            Maturity Date          Made By
--------------------------------------------------------------------------------------------------------------
<S>                              <C>           <C>                      <C>                    <C>

</TABLE>

                                       E-2

<PAGE>

                                    EXHIBIT F

                    FORM OF NOTICE OF CONVERSION/CONTINUATION

     Pursuant to that certain Amended and Restated Credit Agreement dated as of
November 26, 2002, as amended, supplemented or otherwise modified to the date
hereof (said Amended and Restated Credit Agreement, as so amended, supplemented
or otherwise modified, being the "Credit Agreement", the terms defined therein
and not otherwise defined herein being used herein as therein defined), by and
among Massey Energy Company, a Delaware corporation, as Borrower, the Guarantor,
the financial institutions listed therein as Lenders, Citicorp USA, Inc., as
Administrative Agent and the other agents and parties thereto, this represents
the Borrower's request to convert or continue Loans as follows:

     1.   Date of conversion/continuation: __________________, _______

     2.   Amount of Loans being converted/continued: $___________________

     3.   Nature of conversion/continuation:

                [   ] a. Conversion of Base Rate Loans to Euro-Dollar Loans
                [   ] b. Conversion of Euro-Dollar Rate Loans to Base Rate Loans
                [   ] c. Continuation of Euro-Dollar Rate Loans as such

     4.   If Loans are being continued as or converted to Euro-Dollar Rate
          Loans, the duration of the new Interest Period that commences on the
          Conversion/ continuation date: _______________ month(s)

     In the case of a Conversion to or Continuation of Euro-Dollar Rate Loans,
the undersigned officer, to the best of his or her knowledge, and the Borrower
certify that no Event of Default has occurred and is continuing under the Credit
Agreement.

DATED:                                       MASSEY ENERGY COMPANY
      ----------------

                                             By:
                                                ------------------------------
                                             Title:
                                                   ---------------------------

                                       F-1

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