Document:

Exhibit 10.1

 

 

October 15, 2008

 

Mr. Bradford T. Smith

Executive Vice President

Laboratory Corporation of America Holdings

430 South Spring Street

Burlington, North Carolina 27215

 

Dear Brad:

 

This letter agreement confirms that the Company has requested that you provide additional services following the termination of your employment as Executive Vice President to assist the Company during a transition period. This will also confirm that you have expressed a willingness to provide those services subject to the terms and conditions set forth below:

 

	
             
 	
            1)
 	
            Employment:
 

Effective December 31, 2008 (the “Effective Date”), by mutual agreement, you will retire as Executive Vice President of Laboratory Corporation of America Holdings (the “Company”). As of the Effective Date, the Company agrees to engage you to serve as a consultant to the Company in a non-employee capacity, and you agree to serve the Company, during the Term, and subject to the terms and conditions, set forth in this Letter Agreement.  Nothing herein shall affect your service as a member of the Board of Directors (the “Board”) or, at the pleasure of the Board, as the Vice-Chairman thereof.

 

	
             
 	
            2)
 	
            Term:
 

The term of the transition assistance period shall begin on January 1, 2009 and continue for a period of one year, and then month-to-month thereafter. You shall remain on the Board for the remainder of your current term which runs until the 2009 Annual Shareholder Meeting.

 

	
             
 	
            3)
 	
            Duties:
 

Your duties shall include assisting the successors to your responsibilities during the transition assistance period; providing consulting advice and assistance; providing input and guidance in licensing and business development matters including as appropriate participating in meetings, introductions, and visits; and other matters as mutually agreed with me.

 

	
             
 	
            3)
 	
            Time Commitment:
 

You would be expected to spend an average (6-8) days per month providing transition assistance.

 

	
             
 	
            4)
 	
            Office Expense Reimbursement:
 

The Company would provide office and administrative support during the term of the transition assistance as needed to carryout the duties hereunder.

 

	
             
 	
            5)
 	
            Travel and Entertainment Expenses: 
 

You shall be reimbursed for reasonable business expenses, including travel and entertainment expenses, incurred in connection with your performing services to the Company during the term of the transition assistance. The Company’s normal reimbursement policies will apply to these reimbursements.

 

	
             
 	
            6)
 	
            Compensation:
 

In addition to the compensation you may receive as a member of the Board of Directors, you shall receive $7,500 per month for the consulting services provided in connection with the Agreement. In addition, for purposes of determining your total retirement benefits under the Company’s Retirement Plan and Pension Equalization Plan, your pension benefit shall be calculated assuming an unreduced benefit at age 55.

 

	
             
 	
            7)
 	
            Transition Plan: 
 

This Agreement is intended to be independent and in addition to the Senior Executive Transition Plan Agreement and shall not amend or modify that Agreement which shall remain in full force and effect.

 

	
             
 	
            8)
 	
            Termination:
 

Either party may terminate this Agreement upon 30 days prior written notice after the sixth month of the term of this Agreement has been completed. This Agreement will terminate on your death or your disability, which means your incapacity due to physical or mental illness such that you are unable to perform the essential functions of your duties under this Agreement; provided, however, that if your death or disability occurs in the first twelve months of the term of this Agreement, the Company will continue to pay the compensation provided in this Agreement to you or to your estate for the remainder of the twelve month period.

 

The Company very much appreciates your agreement to continue to provide the transition assistance outlined above to help assure a smooth and successful transition. Would you please sign a copy of this letter in the space provided below to indicate your agreement to the terms and conditions set forth above.

 

	
             
 	
            Very truly yours,
 

 

 

	
             
 	
            /s/ David P. King
 

	
             
 	
            David P. King
 

	
             
 	
            Chief Executive Officer
 

 

 

AGREED AND ACCEPTED:

 

	
            /s/ Bradford T. Smith  
 

Bradford T. Smithex10_1.htm

    Exhibit
      10.1

     

    

      

      ______________________________________________________

      

      

      

      

      LOAN
        AGREEMENT

      

      Dated
        as
        of

      October
        9, 2008

      

      AMONG

      

      DENLY
        ACI
        PARTNERS, LTD. AND

      THE
        VON
        WAADEN 2004 REVOCABLE TRUST

      (Lenders)

      

      AND

      

      AMERICA
        WEST RESOURCES, INC.

      (Borrower)

      

      

      

      

      _____________________________________________________

      

      

      
        
          
            980722v4

          

          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      TABLE
        OF
        CONTENTS

      

      Page

      

      
        	
                Section
                  1  

              	
                General
                  Terms [INSERT PAGE
                  NUMBER]

              

      

      
        	
                1.1  

              	
                Certain
                  Definitions  [INSERT PAGE NUMBER]
                  

              

      

      
        	
                1.2  

              	
                Other
                  Documents;
                  Accounting Terms  [INSERT PAGE
                  NUMBER] 

              

      

      
        	
                1.3  

              	
                Use
                  of
                  Pronouns  [INSERT PAGE NUMBER]
                  

              

      

      
        	
                1.4  

              	
                Amendments,
                  Etc. [INSERT PAGE
                  NUMBER]

              

      

      
        	
                Section
                  2  

              	
                The
                  Loans 
                  [INSERT PAGE NUMBER]
                  

              

      

      
        	
                2.1  

              	
                Term
                  Loans  [INSERT PAGE NUMBER]
                  

              

      

      
        	
                2.2  

              	
                Use
                  of
                  Proceeds  [INSERT PAGE NUMBER]
                  

              

      

      
        	
                2.3  

              	
                Interest
                  Accrual  [INSERT PAGE NUMBER]
                  

              

      

      
        	
                2.4  

              	
                Default
                  Interest  [INSERT PAGE NUMBER]
                  

              

      

      
        	
                2.5  

              	
                Accounts
                  Stated  [INSERT PAGE NUMBER]
                  

              

      

      
        	
                Section
                  3  

              	
                Representations
                  And
                  Warranties  [INSERT PAGE NUMBER]
                  

              

      

      
        	
                3.1  

              	
                Authority,
                  Etc.  [INSERT PAGE NUMBER]
                  

              

      

      
        	
                3.2  

              	
                Financial
                  Condition  [INSERT PAGE NUMBER]
                  

              

      

      
        	
                3.3  

              	
                Debt,
                  Liens,
                  Liabilities  [INSERT PAGE NUMBER]
                  

              

      

      
        	
                3.4  

              	
                No
                  Default  [INSERT PAGE NUMBER]
                  

              

      

      
        	
                3.5  

              	
                Governmental
                  Permits  [INSERT PAGE NUMBER]
                  

              

      

      
        	
                3.6  

              	
                Taxes 
[INSERT
                  PAGE NUMBER]

              

      

      
        	
                3.7  

              	
                Columbia
                  Mine
                  Lease [INSERT PAGE
                  NUMBER]

              

      

      
        	
                3.8  

              	
                Material
                  Agreements  [INSERT PAGE NUMBER]
                  

              

      

      
        	
                3.9  

              	
                No
                  Consents
                  Necessary  [INSERT PAGE NUMBER]
                  

              

      

      
        	
                3.10  

              	
                No
                  Environmental
                  Hazard  [INSERT PAGE NUMBER]
                  

              

      

      
        	
                3.11  

              	
                No
                  Pending
                  Litigation  [INSERT PAGE NUMBER]
                  

              

      

      
        	
                3.12  

              	
                Investment
                  Company
                  Act  [INSERT PAGE NUMBER]
                  

              

      

      
        	
                3.13  

              	
                Public
                  Utility Holding
                  Company Act  [INSERT PAGE NUMBER]
                  

              

      

      
        	
                3.14  

              	
                Securities
                  Acts  [INSERT PAGE NUMBER]
                  

              

      

      
        	
                3.15  

              	
                Full
                  Disclosure  [INSERT PAGE NUMBER]
                  

              

      

      
        	
                3.16  

              	
                Survival
                  of
                  Representations and Warranties  [INSERT PAGE NUMBER]

              

      

      
        	
                Section
                  4  

              	
                Affirmative
                  Covenants  [INSERT PAGE NUMBER]
                  

              

      

      
        	
                4.1  

              	
                Reporting
                  Requirements  [INSERT PAGE NUMBER]
                  

              

      

      
        	
                4.2  

              	
                Legal
                  Requirements  [INSERT PAGE NUMBER]
                  

              

      

      
        	
                4.3  

              	
                Performance
                  of
                  Obligations; Payment of Debt  [INSERT
                  PAGE NUMBER] 

              

      

      
        	
                4.4  

              	
                Columbia
                  Mine
                  Lease  [INSERT PAGE NUMBER]
                  

              

      

      
        	
                4.5  

              	
                Future
                  Permits  [INSERT PAGE NUMBER]
                  

              

      

      
        	
                4.6  

              	
                Escrow
                  Agreement  [INSERT PAGE NUMBER]
                  

              

      

      
        	
                4.7  

              	
                Payment
                  of
                  Expenses  [INSERT PAGE NUMBER]
                  

              

      

      
        	
                4.8  

              	
                Liens
                  and Security
                  Interest  [INSERT PAGE NUMBER]
                  

              

      

      
        	
                4.9  

              	
                Payment
                  of
                  Taxes  [INSERT PAGE NUMBER]
                  

              

      

      
        	
                4.10  

              	
                Adequate
                  Records;
                  Inspection Rights  [INSERT PAGE
                  NUMBER] 

              

      

      
        	
                4.11  

              	
                Maintenance
                  of
                  Existence and Business  [INSERT PAGE
                  NUMBER] 

              

      

      
        	
                4.12  

              	
                Maintenance
                  of
                  Insurance  [INSERT PAGE NUMBER]
                  

              

      

      
        	
                4.13  

              	
                Indemnity [INSERT
                  PAGE
                  NUMBER]

              

      

      
        	
                4.14  

              	
                Further
                  Assurances  [INSERT PAGE NUMBER]
                  

              

      

      
        	
                Section
                  5  

              	
                Negative
                  Covenants  [INSERT PAGE NUMBER]
                  

              

      

      
        	
                5.1  

              	
                Senior
                  or Pari Passu Debt [INSERT
                  PAGE
                  NUMBER]

              

      

      
        	
                5.2  

              	
                Contingent
                  Liabilities  [INSERT PAGE NUMBER]
                  

              

      

      
        	
                5.3  

              	
                Liens 
[INSERT
                  PAGE NUMBER]

              

      

      
        	
                5.4  

              	
                Operating
                  Agreements  [INSERT PAGE NUMBER]
                  

              

      

      
        	
                5.5  

              	
                Dividends,
                  Restricted
                  Payments and Restricted Purchases  [INSERT PAGE NUMBER]

              

      

      
        	
                5.6  

              	
                Reorganization,
                  Merger, Etc  [INSERT PAGE NUMBER]
                  

              

      

      
        	
                5.7  

              	
                Transactions
                  with
                  Affiliates  [INSERT PAGE NUMBER]
                  

              

      

      
        	
                5.8  

              	
                Prepayments
                  of Other
                  Debt  [INSERT PAGE NUMBER]
                  

              

      

      
        	
                5.9  

              	
                Fiscal
                  Year  [INSERT PAGE NUMBER]
                  

              

      

      
        	
                5.10  

              	
                Limitation
                  on Negative
                  Pledge Clauses  [INSERT PAGE NUMBER]
                  

              

      

      
        	
                Section
                  6  

              	
                General
                  Conditions Of
                  Borrowing  [INSERT PAGE NUMBER]
                  

              

      

      
        	
                6.1  

              	
                Escrow
                  Closing
                  Proceedings  [INSERT PAGE NUMBER]
                  

              

      

      
        	
                6.2  

              	
                Final
                  Closing
                  Proceedings  [INSERT PAGE NUMBER]
                  

              

      

      
        	
                6.3  

              	
                General
                  Proceedings  [INSERT PAGE NUMBER]
                  

              

      

      
        	
                6.4  

              	
                Sole
                  Benefit of
                  Lenders  [INSERT PAGE NUMBER]
                  

              

      

      
        	
                Section
                  7  

              	
                Events
                  Of Default And
                  Remedies  [INSERT PAGE NUMBER]
                  

              

      

      
        	
                7.1  

              	
                Events 
[INSERT
                  PAGE NUMBER]

              

      

      
        	
                7.2  

              	
                Remedies 
                  [INSERT PAGE NUMBER]
                  

              

      

      
        	
                7.3  

              	
                Cumulative
                  Rights  [INSERT PAGE NUMBER]
                  

              

      

      
        	
                7.4  

              	
                Waivers 
                  [INSERT PAGE NUMBER]
                  

              

      

      
        	
                Section
                  8  

              	
                Miscellaneous 
                  [INSERT PAGE NUMBER]
                  

              

      

      
        	
                8.1  

              	
                Survival
                  of Various
                  Matters  [INSERT PAGE NUMBER]
                  

              

      

      
        	
                8.2  

              	
                Notices 
                  [INSERT PAGE NUMBER]
                  

              

      

      
        	
                8.3  

              	
                Control 
                  [INSERT PAGE NUMBER]
                  

              

      

      
        	
                8.4  

              	
                Successors
                  and
                  Assigns  [INSERT PAGE NUMBER]
                  

              

      

      
        	
                8.5  

              	
                Renewals 
                  [INSERT PAGE NUMBER]
                  

              

      

      
        	
                8.6  

              	
                No
                  Waiver 
                  [INSERT PAGE NUMBER]
                  

              

      

      
        	
                8.7  

              	
                Governing
                  Law  [INSERT PAGE NUMBER]
                  

              

      

      
        	
                8.8  

              	
                Non-Subordination 
                  [INSERT PAGE NUMBER]
                  

              

      

      
        	
                8.9  

              	
                Exhibits
                  and
                  Schedules  [INSERT PAGE NUMBER]
                  

              

      

      
        	
                8.10  

              	
                Severability 
                  [INSERT PAGE NUMBER]
                  

              

      

      
        	
                8.11  

              	
                Savings
                  Clause  [INSERT PAGE NUMBER]
                  

              

      

      
        	
                8.12  

              	
                Counterparts 
                  [INSERT PAGE NUMBER]
                  

              

      

      
        	
                8.13  

              	
                Limitation
                  of
                  Remedies  [INSERT PAGE NUMBER]
                  

              

      

      
        	
                8.14  

              	
                Headings 
                  [INSERT PAGE NUMBER]
                  

              

      

      
        	
                8.15  

              	
                No
                  Obligation to Make
                  Advance  [INSERT PAGE NUMBER]
                  

              

      

      
        	
                8.16  

              	
                Role
                  of
                  Lenders  [INSERT PAGE NUMBER]
                  

              

      

      
        	
                8.17  

              	
                NO
                  OTHER AGREEMENTS  [INSERT PAGE
                  NUMBER] 

              

      

      
        	
                8.18  

              	
                WAIVER
                  OF JURY  [INSERT PAGE NUMBER]
                  

              

      

      
        	
                8.19  

              	
                No
                  Duty 
                  [INSERT PAGE NUMBER]
                  

              

      

      

      

      Exhibits

      

      Exhibit
        A
        -                                
Compliance Certificate

      

      Schedules

      

      1.1
        -                                
Related Party Debt

      4.8
        -                                
Collateral

      

      

      
        
          
             

            980722v4

          

          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

      

      

      LOAN
        AGREEMENT

      

      THIS
        LOAN
        AGREEMENT is dated and effective on and as of October 9, 2008, by and among
        Denly ACI Partners,
        Ltd., a Texas limited partnership (the "Partnership"),
        and
Dennis C. von Waaden, and
        Sally
        A. von Waaden, as Co-Trustees ofThe von Waaden 2004
        Revocable
        Trust (the "Trust"),
        and America West Resources,
        Inc.,
        a Nevada corporation (the "Borrower").  The
        Partnership and the Trust are hereinafter collectively referred to as the
        "Lenders").

       

       

      RECITALS

       

      The
        Borrower has requested loans from the Lenders up to the aggregate principal
        amount of $2,800,000.00.  The Lenders are willing to make the loans to
        the Borrower in reliance upon, and subject to, the representations, warranties,
        terms and conditions of this Agreement.

       

       

      AGREEMENTS

       

      For
        and
        in consideration of the mutual covenants and agreements herein contained,
        the
        Lenders and the Borrower have agreed and do hereby agree as
        follows:

       

      Section
        1

       

      GENERAL
        TERMS

       

      1.1 Certain
        Definitions:  As used in this Loan Agreement:

       

      "Advance"
        shall mean
        an advance of proceeds of the Loans.

       

      "Affiliate"
        shall mean
        with respect to any Person (i) each Person that, directly or indirectly,
        owns or
        controls, whether beneficially, or as a trustee, guardian or other fiduciary
        10%
        or more of the securities or interests having ordinary voting power in the
        election of directors of such Person, (ii) each Person that controls, is
        controlled by or is under common control with such Person or any Affiliate
        of
        such Person and (iii) each of such Person's officers, directors, joint venturers
        and partners.  For the purpose of this definition "control" of a
        Person shall mean the possession, directly or indirectly, of the power to
        direct
        or cause the direction of its management or policies, whether through the
        ownership of voting securities, by contract or otherwise.  Anything
        herein to the contrary notwithstanding, in no event shall either of the Lenders
        be considered an "Affiliate" of the Borrower.

       

      "Agreement"
        shall mean
        this Loan Agreement, as the same may be modified, amended, restated or replaced
        from time to time.

       

      "Bankruptcy
        Code"
        shall mean Title 11, United States Code, 11 U.S.C. 101 et seq., as the same
        may
        be amended and in force and effect from time to time, or any successor
        law.

       

      "Borrower"
        shall mean
        America West Resources, Inc., a Nevada corporation, its successors and
        assigns.

       

      "Bridge
        Shares" shall
        mean the Capital Stock of the Borrower to be issued to the Lenders pursuant
        to
        the provisions of the Stock Purchase Agreement.

       

      "C&P"
        shall mean
        C&P Coal Associates, LLC, a Utah limited liability company, and its
        successors and assigns as the "Lessor" under the Columbia Mine
        Lease.

       

      "Capital
        Stock" shall
        mean, as to any Person, the equity interests in such Person, including, without
        limitation, the shares of each class of capital stock of any Person that
        is a
        corporation, membership interests in any Person that is a limited liability
        company and partnership and joint venture interests (general and limited)
        in any
        Person that is a partnership or joint venture.

       

      "Code"
        shall mean the
        Internal Revenue Code of 1986, as amended, as now or hereafter in effect,
        together with all regulations thereof or thereunder by the Internal Revenue
        Service.

       

      "Collateral"
        shall
        mean the security for payment of the Indebtedness and performance of the
        Obligations as contemplated by, and referred to in, Section 4.8
        of this
        Agreement.

       

      "Collateral
        Documents"
        shall mean all security agreements, guaranties, collateral assignments, pledge
        agreements, deeds of trust, mortgages and lien instruments executed by the
        Borrower or others to secure, guarantee or otherwise provide for payment
        of the
        Indebtedness or performance of the Obligations, in favor of or for the benefit
        of the Lenders, including those which have been previously executed or are
        executed concurrently herewith or subsequently hereto.

       

      "Columbia
        Mine" shall
        mean the coal mine that is the subject of the Columbia Mine Lease.

       

      "Columbia
        Mine Lease"
        shall mean that certain Coal Mining Lease and Option to Purchase dated July
        2,
        2008 between C&P, as Lessor, and the Borrower as the lessee relating to that
        certain coal mine located in Carbon County, Utah and commonly referred to
        as the
        "Columbia Mine."

       

      "Committed
        Amount"
        shall mean, as to the Partnership, the principal amount of $1,866,666.66
        and, as
        to the Trust, the principal amount of $933,333.33.

       

      "Compliance
        Certificate" shall mean a certificate substantially in the form of Exhibit
        A attached and to be executed and delivered from time to time as required
        by the provisions of Section 4.1(d)
        hereof and
        to be signed by an appropriate officer of the Borrower demonstrating, in
        reasonable detail, compliance with the covenants set forth in Section 4.1(d),
        and
        containing a statement whether to the knowledge of such officer an Event
        of
        Default or Default has occurred hereunder and, if so, whether it is continuing
        and specifying the steps that are being taken by the Borrower to cure the
        same.

       

      "Confirmation
        Order"
        shall mean an order signed and entered of record which approves a plan of
        organization in the case of in re: Hidden Splendor Resources, Inc., Case
        No.
        BI-N-07-51378-gwz, United States Bankruptcy Court, District of
        Nevada.

       

      "Contingent
        Liability"
        shall mean, as to any Person, any Guaranty, and any obligation, contingent
        or
        otherwise, of such Person guaranteeing or having the economic effect of
        guaranteeing any Debt or obligation of any other Person in any manner, whether
        directly or indirectly, including without limitation any obligation of such
        Person, direct or indirect, (a) to purchase or pay (or advance or supply
        funds
        for the purchase or payment of) such Debt or to purchase (or to advance or
        supply funds for the purchase of) any security for the payment of such Debt,
        (b)
        to purchase Property or services for the purpose of assuring the owner of
        such
        Debt of its payment, or (c) to maintain the solvency, working capital, equity,
        cash flow, fixed charge or other coverage ratio, or any other financial
        condition of the primary obligor so as to enable the primary obligor to pay
        any
        Debt or to comply with any agreement relating to any Debt or
        obligation.

       

      "Credit
        Limit" shall
        mean the principal amount of $2,800,000.00, being the aggregate Committed
        Amount
        of each of the Lenders.

       

      "Debt"
        shall mean, as
        to any Person, all indebtedness as determined in accordance with GAAP and,
        in
        any event, shall include (a) all indebtedness secured by any lien upon Property
        owned by such Person, even though such Person has not assumed or become liable
        for the payment of such indebtedness and (b) all indebtedness of such Person
        created or arising under any conditional sale or other title retention agreement
        with respect to Property acquired by such Person, even though the rights
        and
        remedies of the seller or Lenders under such agreement in the event of default
        are limited to repossession or sale of such Property and (c) all capitalized
        lease obligations.  For all purposes of this Agreement, the Debt of
        any Person shall include all recourse Debt of any partnership and joint venture
        in which such Person is a general partner or a joint venturer.

       

      "Default"
        shall mean
        any occurrence which, but for the passage of time or giving of notice or
        both,
        or the happening of any further condition, event or act, would be an Event
        of
        Default.

       

      "Default
        Rate" shall
        mean a rate of interest equal to twenty (20%) per annum.

       

      "Dividend"
        shall mean,
        as to any Person, (a) any declaration or payment of any dividend on, or the
        setting aside or the creation of a sinking fund with respect to, or the making
        of any pro rata distribution, loan, advance or investment to or in any holder
        (in its capacity as a holder) of, any Capital Stock of such Person (other
        than a
        dividend in, or distribution of, Capital Stock of the same class and series
        or
        the right to acquire Capital Stock of the same class and series), or (b)
        any
        purchase, redemption or other acquisition or retirement for value of any
        Capital
        Stock of such Person, or the setting aside of funds or the creation of a
        sinking
        fund with respect thereto.

       

      "Environmental
        Laws"
        shall mean any and all present and future federal, state, local and foreign
        laws, rules or regulations, and any orders or decrees, in each case as now
        or
        hereafter in effect, relating to the regulation or protection of human health,
        safety or the environment or to emissions, discharges, releases or threatened
        releases of pollutants, contaminants, chemicals or toxic or hazardous substances
        or wastes into the indoor or outdoor environment, including, without limitation,
        ambient air, soil, surface water, ground water, wetlands, land or subsurface
        strata, or otherwise relating to the manufacture, processing, distribution,
        use,
        treatment, storage, disposal, transport or handling of pollutants, contaminants,
        chemicals or toxic or hazardous substances or wastes.

       

      "Escrow
        Agent" shall
        mean the Person named as Escrow Agent in the Escrow Agreement.

       

      "Escrow
        Agreement"
        shall mean the escrow agreement described in Section 4.6
        hereof.

       

      "Escrow
        Funds" shall
        mean the "Escrow Property" as that term is defined in the Escrow
        Agreement.

       

      "Escrow
        Closing Date"
        shall mean the date of this Agreement or such later date as may be agreed
        to in
        writing by the Lenders.

       

      "Event
        of Default"
        shall mean any of the events specified or referred to in Section 7.1
        of this
        Agreement with respect to which any requirement in connection with such event
        for the giving of notice, or the lapse of time, or the happening of any further
        condition, event or act, has been satisfied.

       

      "Final
        Closing Date"
        shall mean the date that a Confirmation Order becomes a Final Confirmation
        Order, but no earlier than fifteen (15) days after the entry of the Confirmation
        Order and no later than December 5, 2008.

       

      "Final
        Confirmation
        Order" shall mean a Confirmation Order with respect to which there is no
        pending motion for reconsideration, rehearing or the like, and no pending
        appeal, and the time for filing any such motion or appeal has
        expired.

       

      "GAAP"
        shall mean, as
        to a particular Person and subject to the provisions of Section 1.2,
        such
        accounting practice as, in the opinion of the independent accountants of
        recognized standing regularly retained by such Person and acceptable to the
        Lenders, conforms at the time to generally accepted accounting principles,
        consistently applied.  Generally accepted accounting principles means
        those principles and practices (a) which are recognized as such by the Financial
        Accounting Standards Board, (b) which are applied for all periods after the
        date
        hereof in a manner consistent with the manner in which such principles and
        practices were applied to the most recent audited financial statements of
        the
        Person furnished to the Lenders, and (c) which are consistently applied for
        all
        periods after the date hereof so as to reflect properly the financial condition,
        and results of operations and changes in financial position, of such
        Person.

       

      "Governmental
        Authority" shall mean any governmental authority, including that of the
        United States of America, any State of the United States, any foreign country,
        and any political subdivision of any of the foregoing, and any domestic or
        foreign agency, department, commission, board, bureau or court having
        jurisdiction over the Borrower or the Columbia Mine.

       

      "Governmental
        Permits"
        shall mean all certificates, licenses, permits and no action letters from
        any
        Governmental Authority required to evidence full compliance by the Borrower
        and
        its Subsidiaries and conformance of their respective Properties with all
        Legal
        Requirements applicable to the Borrower and its Subsidiaries and the
        development, management and operation of their respective Properties, including
        without limitation the Columbia Mine.

       

      "Guaranty"
        shall mean,
        as to a Person, any agreement by which such Person assumes, guarantees,
        endorses, contingently agrees to purchase or provide funds for the payment
        of,
        or otherwise becomes liable upon, the obligation of any other Person, or
        agrees
        to maintain the net worth or working capital or other financial condition
        of any
        other Person, or otherwise assures any creditor or such other Person against
        loss, including, without limitation, any agreement which assures any creditor
        or
        such other Person payment or performance of any obligation, or any take-or-pay
        contract and shall include without limitation, the contingent liability of
        such
        Person in connection with any application for a letter of credit (without
        duplication of any amount already included in Debt).

       

      "Hazardous
        Material"
        shall mean, collectively, (a) any petroleum or petroleum products, flammable
        explosives, radioactive materials, asbestos in any form that is or could
        become
        friable, insulation, transformers or other equipment that in each case contains
        dielectric fluid containing polychlorinated biphenyls, (b) any chemicals
        or
        other material or substances which are now or hereafter become defined as
        or
        included in the definition of "hazardous substances", "hazardous wastes",
        "restricted hazardous wastes", "toxic substances", "toxic pollutants",
        recontaminants", "pollutants" or words of similar import under any Environmental
        Laws and (c) any other chemical or other material or substance, exposure
        to
        which is now or hereafter prohibited, limited or regulated under any
        Environmental Laws.

       

      "herein,"
        "hereof," "hereto,"
        "hereunder" and
        similar terms, shall refer to this Agreement and not to any particular section
        or provision of this Agreement.

       

      "Hidden
        Splendor"
        shall mean Hidden Splendor Resources, Inc., a Nevada corporation, and wholly
        owned Subsidiary of the Borrower.

       

      "Impermissible
        Qualification" shall mean, relative to the opinion or certification of
        any independent public accountant as to any financial statement of any Person,
        any qualification or exception to such opinion or certification (a) which
        is of
        a "going concern" or similar nature; (b) which relates to the limited scope
        of
        examination or matters relevant to such financial statement not in accordance
        with GAAP; or (c) which relates to the treatment or classification of any
        item
        in such financial statement and which, as a condition to its removal, would
        require an adjustment to such item the effect of which would be to cause
        a
        Default or Event of Default.

       

      "Indebtedness"
        shall
        mean all sums at any time and from time to time owed by the Borrower to the
        Lenders under this Agreement, including principal and interest on the Notes,
        and
        any and all other indebtedness now or hereafter to become owing pursuant
        to any
        of the other Loan Documents.

       

      "Indemnified
        Matters"
        shall have the meaning given such term in Section 4.13(a).

       

      "Indemnitees"
        shall
        have the meaning given such term in Section 4.13(a).

       

      "Legal
        Requirement"
        shall mean any law, statute, ordinance, decree, requirement, order, judgment,
        rule, or regulation (or interpretation of any of the foregoing) of, and the
        terms of any license or permit issued by, any Governmental Authority, including
        (without limitation) any order, writ, injunction, award or decree of any
        court,
        arbitrator, administrative agency or other Governmental Authority.

       

      "Lenders"
        shall mean,
        collectively, the Partnership and the Trust, and their respective successors
        and
        assigns.

       

      "Liabilities"
        shall
        mean all Debt and other items of indebtedness or liability (except capital
        and
        surplus, but including reserves other than those deducted in determining
        Tangible Assets) which in accordance with GAAP would be included in determining
        total liabilities as shown on the liability side of a balance
        sheet.

       

      "Liens"
        shall mean any
        mortgage, pledge, security interest, encumbrance, lien, or charge of any
        kind,
        including without limitation any agreement to give or not to give any of
        the
        foregoing, any conditional sale or other title retention agreement, any lease
        in
        the nature thereof, and the filing of or agreement to give any financing
        statement or other similar form of public notice under the laws of any
        jurisdiction (except for the filing of a financing statement or notice in
        connection with an operating lease).

       

      "Litigation"
        shall
        mean any proceeding, claim, lawsuit, arbitration, and investigation conducted
        or
        threatened by or before any Governmental Authority, including without limitation
        proceedings, claims, lawsuits, and investigations under or pursuant to any
        environmental, occupational, safety and health, antitrust, unfair competition,
        securities, tax, or other law, or under or pursuant to any contract, agreement,
        or other instrument.

       

      "Loan
        Documents" shall
        mean this Agreement, the Notes, the Collateral Documents, the Escrow Agreement,
        the Subordination Agreements, the Tri-Party Agreement and all other documents,
        financing statements, agreements, and certificates executed and delivered
        by any
        Person in connection with any thereof.  Anything herein to the
        contrary notwithstanding, the Stock Purchase Agreement is not, and shall
        not be
        deemed to be, a Loan Document.

       

      "Loans"
        shall mean the
        loans referred to in Section 2.1
        of this
        Agreement.

       

      "Material
        Adverse
        Change" shall mean any circumstance or event that (a) can reasonably be
        expected to cause a Default or Event of Default, (b) otherwise can reasonably
        be
        expected to (i) be material and adverse to the continued operation of the
        Borrower and its Subsidiaries taken as a whole, or (ii) be material and adverse
        to the financial condition, business operations, prospects or Properties
        of the
        Borrower and its Subsidiaries taken as a whole, or (c) in any manner whatsoever
        does or can reasonably be expected to materially and adversely affect the
        validity or enforceability of any of the Loan Documents.

       

      "Maturity
        Date" shall
        mean October 9, 2009.

       

      "Maximum
        Lawful
        Amount" shall mean the maximum amount of non-usurious interest, and
        "Maximum Lawful
        Rate" shall mean the maximum rate of non-usurious interest, permitted
        with respect to the indebtedness evidenced by the Notes from time to time
        by
        applicable law after taking into account any and all fees, payments, and
        other
        charges that constitute interest under applicable law.  Use of the
        term Maximum Lawful Amount shall not be deemed to imply or affirm that there
        is
        any Maximum Lawful Amount applicable to the Notes.

       

      "Notes"
        shall mean the
        promissory notes evidencing the Loans and delivered or to be delivered to
        the
        Lenders by the Borrower pursuant to this Agreement, together with any and
        all
        renewals, extensions, modifications and rearrangements thereof.

       

      "Obligations"
        shall
        mean any and all of the covenants, conditions, warranties, representations
        and
        other obligations (other than to repay the Indebtedness) made or undertaken
        by
        the Borrower as set forth in this Agreement, the Notes and any other Loan
        Documents.

       

      "Operating
        Agreement"
        shall mean one or more agreements executed by the Borrower prior hereto,
        contemporaneously herewith or at any time hereafter and pursuant to which
        the
        Borrower contracts with another Person for any or all of the development,
        management or operation of the Columbia Mine.

       

      "Permitted
        Liens"
        shall mean:

       

      (a)           
        Liens on Property of the Borrower existing on the Escrow Closing Date, provided
        that such Liens shall secure only those obligations which they secure on
        the
        Escrow Closing Date;

       

      (b)           
        any Lien existing on any Property of the Borrower prior to the acquisition
        thereof by the Borrower, provided that: (i) such Lien is not created in
        contemplation of or in connection with such acquisition, and (ii) such Lien
        does
        not apply to any other Property of the Borrower;

       

      (c)           
        Liens for Taxes to the extent nonpayment thereof shall be permitted by Section 3.6
        hereof;

       

      (d)           
        Carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s, landlord’s or
        other like Liens arising in the ordinary course of business and securing
        obligations that are not due and payable;

       

      (e)           
        Deposits to secure the performance of bids, trade contracts (other than for
        indebtedness), leases, statutory obligations, surety and appeal bonds,
        performance bonds and other obligations of a like nature incurred in the
        ordinary course of business;

       

      (f)           
        Zoning restrictions, easements, licenses, covenants, conditions, rights-of-way,
        restrictions on use of real property and other similar encumbrances incurred
        in
        the ordinary course of business and minor irregularities of title that, in
        the
        aggregate, are not substantial in amount and do not materially detract from
        the
        value of the Property subject thereto or interfere with the ordinary conduct
        of
        the business of the Borrower;

       

      (g)           
        Purchase money security interests in real property, improvements thereto
        or
        equipment hereafter acquired (or, in the case of improvements, constructed)
        by
        the Borrower, provided that (i) such Liens secure Debt permitted by the terms
        of
        this Agreement, (ii) such Liens are incurred, and the Debt secured thereby
        is
        created, within 90 days after such acquisition (or construction), (iii) the
        Debt
        secured thereby does not exceed 85% of the lesser of the cost or the fair
        market
        value of such real property, improvements or equipment at the time of such
        acquisition (or construction), and (iv)such Liens do not apply to any other
        Property of the Borrower;

       

      (h)           
        Liens arising out of judgments or awards (other than any judgment that
        constitutes an Event of Default hereunder) in respect of which the Borrower
        shall in good faith be prosecuting an appeal or proceedings for review and
        in
        respect of which it shall have secured a subsisting stay of execution pending
        such appeal or proceedings for review, provided the Borrower shall have set
        aside on its books adequate reserves with respect to such judgment or
        award;

       

      (i)           
        Deposits, liens or pledges to secure payments of workmen’s compensation and
        other payments, public liability, unemployment and other insurance, old-age
        pensions or other social security obligations, or the performance of bids,
        tenders, leases, contracts (other than contracts for the payment of money),
        public or statutory obligations, surety, stay or appeal bonds, or other similar
        obligations arising in the ordinary course of business;

       

      (j)           
        Deposits, Liens or pledges made in connection with any equipment leasing,
        provided that (i) such Liens secure Debt permitted by the terms of this
        Agreement, (ii) the Debt secured thereby does not exceed 85% of the lesser
        of
        the cost or the fair market value of the equipment being lease at the time
        such
        lease is entered into, and (iii)such Liens do not apply to any Property of
        the
        Borrower other than the equipment being leased; and

       

      (g)           
        Liens securing the payment of the Indebtedness and performance of the
        Obligations.

       

      "Person"
        shall mean
        any individual, partnership, joint venture, corporation, limited liability
        company, trust, unincorporated association, Governmental Authority or any
        other
        form of entity.

       

      "Proper
        Form" shall
        mean such form as is satisfactory in form and substance to the Lenders and
        legal
        counsel for the Lenders.

       

      "Property"
        shall mean
        all types of real, personal, tangible, intangible, or mixed property, whether
        owned in fee simple or leased.  The term "Property" shall include, but
        shall not be limited to, the Columbia Mine Lease and the Columbia Mine, together
        with all rights appurtenant to each thereof.

       

      "Related
        Party Debt"
        shall mean Debt owing by the Borrower to related parties described on Schedule
        1.1
        attached.

       

      "Restricted
        Payments"
        shall mean any Dividend or any direct or indirect distribution, dividend
        or
        other payment on account of any general or limited partnership interest in
        (or
        the setting aside of funds for, or the establishment of a sinking fund or
        analogous fund with respect to), or shares of Capital Stock or other securities
        of, the Borrower or any Subsidiary.

       

      "Restricted
        Purchases"
        shall mean any payments (or the setting aside of funds for, or the establishment
        of a sinking fund with respect to) on account of the purchase, redemption
        or
        other acquisition or retirement of any general or limited partnership interest
        in, or shares of Capital Stock or other securities of, the Borrower or any
        of
        its Subsidiaries.

       

      "SEC"
        shall mean the
        United States Securities and Exchange Commission.

       

      "Securities
        Act" shall
        mean the United States Securities Act of 1933, as amended.

       

      "Stock
        Purchase
        Agreement" shall mean that certain Common Stock Purchase Agreement of
        even date herewith among the Borrower and the Lenders, as the same may be
        modified or amended.

       

      "Subordination
        Agreements" shall mean subordination agreements in Proper Form among the
        Borrower, the Lenders and the holders of the Related Party Debt pursuant
        to
        which the payment of the Related Party Debt is subordinated to the payment
        of
        the Indebtedness and performance of the Obligations.

       

      "Taxes"
        shall mean all
        taxes, assessments, imposts, fees, and other charges at any time imposed
        by any
        laws or Governmental Authority.

       

      "Tri-Party
        Agreement"
        shall mean an agreement among the Borrower, the Lenders and C&P (together
        with the mortgagee of the Columbia Coal Mine, if any), in Proper Form, and
        pursuant to which C&P (and its mortgagee, if any) agree, among other things,
        (i) to give the Lenders notice of any default under the Columbia Mine Lease
        and
        a reasonable opportunity to cure the same, (ii) not to terminate the Columbia
        Mine Lease because of an uncurable default, such as a bankruptcy proceeding
        or
        failure to comply with applicable laws) so long as the Lenders cause all
        monetary obligations to be satisfied and are proceeding in good faith to
        foreclose their Liens upon the Columbia Mine Lease, (iii) to recognize the
        Lenders or their nominee or assigns as the lessee under the Columbia Mine
        Lease
        upon the foreclosure or assignment thereof to the Lenders, their nominee
        or
        assigns, (iv) that the interests of the Borrower and the Lenders will not
        be
        disturbed so long as the lease obligations are performed, subject to the
        Lenders' right to maintain the Columbia Mine Lease without curing uncurable
        defaults as provided herein, and (v) that the Liens of such mortgagee, if
        any,
        upon the Columbia Mine or Columbia Mine Lease, or both, will be released
        upon
        the closing of the option to purchase set forth in the Columbia Mine
        Lease.

       

      1.2 Other
        Documents; Accounting
        Terms.  All terms defined in this Agreement shall be used with
        such defined meanings when used in any note, certificate, schedule, report
        or
        other document made or delivered pursuant to this Agreement, unless specifically
        required otherwise.  Each accounting term not specifically defined
        herein shall have the meaning given in accordance with GAAP and, when applied
        to
        a Person, shall mean such Person and its Subsidiaries on a consolidated basis,
        unless otherwise expressly stated.  If any change in any accounting
        principle or practice is required by the Financial Accounting Standards Board
        in
        order for such principle or practice to continue as a generally accepted
        accounting principal or practice and such change results in a change in the
        method or calculation of financial covenants, standards or terms in this
        Agreement, then the Borrower and the Lenders agree to enter into negotiations
        in
        order to amend such provisions of this Agreement so as to equitably reflect
        such
        change with the desired result being that the criteria for evaluating the
        Borrower's financial condition shall be the same after such change as if
        such
        change had not been made.  Until such time as such an amendment shall
        have been executed and delivered by the Borrower and the Lenders, all financial
        covenants, standards and terms in this Agreement shall continue to be calculated
        as if such change had not occurred.

       

      1.3 Use
        of
        Pronouns.  Terms defined or used in the singular shall include
        the plural, and those in the plural shall include the singular, unless the
        context shall otherwise require, and the use of masculine, feminine and neuter
        pronouns shall include each gender as the context may require.

       

      1.4 Amendments,
        Etc.  Unless the context otherwise requires or unless otherwise
        provided, the terms defined in Section 1.1
        hereof which
        mean or refer to a particular agreement, instrument or document shall also
        mean,
        refer to and include when appropriate all amendments, renewals, extensions,
        substitutions and modifications of such agreement, instrument or document,
        provided that nothing contained in this Section 1.4
        shall be
        construed to authorize the execution or entering into by any Person of any
        such
        renewal, extension or modification except as may be permitted by other
        provisions of this Agreement.

       

      Section
        2

       

      The
        Loans

       

      2.1 Term
        Loans.

       

      (a) Upon
        and
        subject to the terms and conditions of this Agreement, each Lender agrees
        to
        advance a loan to the Borrower in a single advance equal to the respective
        Lender's Committed Amount for the purpose specified in Section 2.2
        of this
        Agreement.

       

      (b) The
        obligation of the Borrower to repay the Loans shall be evidenced by its 17%
        Secured Promissory Notes, in Proper Form, and payable to the order of the
        Lenders.  Except as otherwise provided herein and in the Notes, the
        outstanding principal balance of each Promissory Note shall bear interest
        at a
        rate equal to seventeen percent (17%) per annum with all principal and interest
        outstanding under such Promissory Note being due and payable in full on the
        Maturity Date.  While any Event of Default exists and also following
        any acceleration of the maturity of the Indebtedness, the Borrower shall
        pay
        interest (after as well as before the entry of any judgment thereon to the
        extent permitted by law) on all outstanding Indebtedness at a rate equal
        to the
        Default Rate.

       

      2.2 Use
        of
        Proceeds.  The proceeds of the Loans shall be used solely as
        follows:

       

      (a) On
        the
        Escrow Closing Date, subject to the provisions of Section 6.1
        hereof,
        $2,250,000.00 of the proceeds of the Loans shall be deposited with the Escrow
        Agent to be held in escrow in accordance with the terms of the Escrow
        Agreement.  The balance of the proceeds will be deposited to the
        Escrow Agent at the Final Closing Date, subject to the provisions of Section 6.2
        hereof.

       

      (b) 
        On the
        Final Closing Date, if all conditions to the final closing of the Loans as
        set
        forth in Section
6.2
        hereof have
        been satisfied and remain satisfied and the Lenders have not previously
        instructed the Escrow Agent to deliver the Escrow Funds to the Lenders pursuant
        to Section 7.2(e)
        hereof,
        then the Escrow Funds shall be distributed by the Escrow Agent (and the Borrower
        and the Lenders shall so instruct the Escrow Agent) in accordance with the
        terms
        of the Escrow Agreement, as follows:

       

      (i) $2,250,000
        shall be distributed to Hidden Splendor, debtor in possession, to pay off
        obligations of Hidden Splendor pursuant to Hidden Splendor’s Plan of
        Reorganization as confirmed by a Final Confirmation Order;

       

      (ii) upon
        Hidden Splendor’s emergence from bankruptcy, (a) $300,000 shall be distributed
        by the Escrow Agent as commissions to Riverstone Wealth Management;
        and

       

      (iii) the
        remaining funds shall be distributed by the Escrow Agent to pay the Borrower’s
        obligations under the Columbia Mine Lease.

       

      (c) 
        On the
        Final Closing Date, if all conditions to the final closing of the Loans as
        set
        forth in Section
6.2
        hereof have
        not been satisfied or the Lenders have not previously instructed the Escrow
        Agent to deliver the Escrow Funds to the Lenders pursuant to Section 7.2(e)
        hereof,
        then the Escrow Funds shall be distributed by the Escrow Agent to the Lenders
        in
        accordance with the terms of the Escrow Agreement.

       

      (d) None
        of
        the Proceeds shall be used for personal, household or agricultural
        purposes.

       

      2.3 Interest
        Accrual.  Interest on the Notes shall be calculated at a daily
        rate based on a year of 360 days, with the daily rate so determined being
        applied for the actual number of days elapsed, provided that in no event
        shall
        the amount of interest payable hereunder exceed the Maximum Lawful
        Amount.

       

      2.4 Default
        Interest.  During the continuation of (a) any Default or (b)
        any Event of Default, the Borrower shall pay, on demand, at the Lenders'
        option,
        interest on the principal amount of the Loans outstanding and on all other
        Obligations due and unpaid hereunder or under any other Loan Document at
        a per
        annum rate equal to the Default Rate.  Following the maturity of the
        Loans, whether by acceleration or otherwise, the Borrower shall pay, on demand,
        at the Lenders' option, interest (after as well as before judgment to the
        extent
        permitted by applicable law) on the principal amount of the Loans outstanding
        and on all other Obligations due and unpaid hereunder or under any other
        Loan
        Document at a per annum rate equal to the Maximum Lawful Rate.

       

      2.5 Accounts
        Stated.  All statements of account rendered by the Lenders to
        the Borrower relating to any Obligation or Indebtedness, including without
        limitation all statements of principal, interest, expenses and costs owing
        by
        the Borrower to the Lenders, shall be presumed correct and accurate and shall
        constitute an account stated between the Borrower and the Lenders unless,
        within
        thirty (30) days after receipt thereof by the Borrower, the Borrower shall
        deliver to the Lenders written objection thereto, specifying the error or
        errors, if any, contained in such statement.

       

      Section
        3

       

      Representations
        And
        Warranties

       

      The
        Borrower represents and warrants to the Lenders that:

       

      3.1 Authority,
        Etc.. The
        Borrower and each of its Subsidiaries is a corporation duly organized, validly
        existing and in good standing under the laws of the jurisdiction of its
        organization.  The Borrower has full legal right, power and authority
        to carry on its business as presently conducted and to execute, deliver,
        and
        perform its obligations under the Loan Documents, and all necessary corporate
        action has been taken (including any necessary shareholder approvals) for
        the
        execution, delivery and performance of its obligations under this Agreement,
        the
        Notes and the other Loan Documents to which the Borrower is a party and the
        performance by the Borrower of its obligations hereunder and thereunder and
        each
        thereof is the valid and binding obligation of the Borrower, enforceable
        in
        accordance with its respective terms subject to applicable bankruptcy,
        insolvency, reorganization, moratorium and other similar laws relating to
        or
        affecting creditors' rights generally and principles of equity. All outstanding
        Capital Stock of the Borrower and each of its Subsidiaries is validly issued
        and
        fully paid and nonassessable.  The Borrower and each of its
        Subsidiaries is duly qualified to do business in and is in good standing
        in each
        jurisdiction in which the nature of the business it conducts makes such
        qualification necessary.

       

      3.2 Financial
        Condition.  The financial statements of the Borrower which are
        on file with the SEC as of the Escrow Closing Date are true, complete and
        correct, have been prepared in accordance with GAAP, and fully and accurately
        reflect the financial condition of the Borrower, as of the dates and for
        the
        periods stated.  No Material Adverse Change has occurred in the
        condition, financial or otherwise, of the Borrower since the date of the
        most
        recent thereof.  

       

      3.3 Debt,
        Liens,
        Liabilities.  The Borrower and its Subsidiaries have no
        outstanding Debt, Liens, or Contingent Liabilities except as shown on its
        financial statements on file with the SEC as of the Escrow Closing
        Date.  Except for Liabilities incurred in the normal course of
        business and not material in amount (either individually or in the aggregate),
        the Borrower and its Subsidiaries have no liabilities, direct or contingent,
        that have arisen or been incurred or accrued subsequent to the date of the
        most
        recent thereof.

       

      3.4 No
        Default.  As of the Escrow Closing Date, no Event of Default
        nor Default exists and neither the Borrower nor any of its Subsidiaries is
        in
        default in any respect under any Legal Requirement binding upon or affecting
        the
        Borrower or any of its Subsidiaries or by which any of the Properties of
        the
        Borrower or any of its Subsidiaries may be bound or affected, or under any
        agreement or other undertaking or instrument to which the Borrower or any
        of its
        Subsidiaries is a party or by which it is bound, and nothing has occurred
        which
        would adversely affect in any material respect the ability of the Borrower
        or
        its Subsidiaries to carry on their respective businesses or perform their
        respective obligations under any Legal Requirement or other undertaking or
        agreement.  The execution and delivery of this Agreement, the Notes
        and the other Loan Documents by the Borrower, and the performance of the
        obligations and consummation of the transactions contemplated herein and
        therein
        do not and will not conflict with or result in a breach of any of the terms,
        conditions or provisions of, or constitute a default under, (i) the articles
        of
        incorporation or bylaws of the Borrower or (ii) any bond, debenture, note
        or
        other evidence of indebtedness or (iii) any contract, indenture, mortgage,
        loan
        agreement, lease, joint venture or other agreement or instrument to which
        the
        Borrower is a party or by which the Borrower or any of its Properties are
        bound,
        or result in any violation by the Borrower of any Legal
        Requirement.  Neither the Borrower nor any of is Subsidiaries is in
        violation of, and the execution, delivery and performance by the Borrower
        of the
        Loan Documents will not result in violation of, any Legal Requirement to
        which
        it or any of its Subsidiaries may be subject.

       

      3.5 Governmental
        Permits.  To the best of the Borrower's knowledge, no claim has
        been asserted by any Person with respect to the use of any of the Borrower's
        or
        any of its Subsidiaries' Governmental Permits.  The Borrower knows of
        no impediments to the granting to the Borrower and its Subsidiaries, as the
        case
        may be, of any  future Governmental Permits and expects to receive the
        same at such time as required for the Borrower or its Subsidiaries, as the
        case
        may be, to carry on their respective businesses as presently conducted and
        as
        proposed to be conducted.

       

      3.6 Taxes.  The
        Borrower and its Subsidiaries (except as provided for in connection with
        Hidden
        Splendor's Plan of Reorganization as confirmed by a Final Confirmation Order)
        have filed all federal, state and other tax returns that are required to
        be
        filed by any of them.  The Borrower and its Subsidiaries have paid all
        Taxes as shown on any such returns, as well as all other Taxes, to the extent
        due and payable by any of them.  All liabilities for Taxes of the
        Borrower and its Subsidiaries are adequately provided for on their books,
        including interest and penalties, and adequate reserves have been established
        therefor in accordance with GAAP.  No liability for income Taxes,
        state or federal, has been asserted by taxing authorities for Taxes in excess
        of
        those already paid and no taxing authority has notified the Borrower or any
        of
        its Subsidiaries of any deficiency in any tax return.

       

      3.7 Columbia
        Mine
        Lease.  The Borrower has delivered to the Lenders true, correct
        and complete copies of the Columbia Mine Lease and all documents and instruments
        representing and describing its coal reserves, the value thereof and the
        title
        thereto which are in the Borrower's possession or otherwise known by the
        Borrower to exist.  The Columbia Mine Lease is valid and subsisting
        with no default existing and, to the best of the knowledge of the Borrower,
        no
        default threatened.  The Borrower has good and indefeasible leasehold
        title to the Columbia Mine pursuant to the Columbia Mine Lease, subject to
        no
        Liens other than Permitted Liens.  The Columbia Mine Lease contains no
        provision which materially adversely affects the Borrower's ability to develop,
        manage and operate the Columbia Mine.  To the best of the Borrower's
        knowledge, C&P owns good and indefeasible title to the Columbia Mine free
        and clear of all Liens other than the Columbia Mine Lease and Permitted
        Liens.  As of the Escrow Closing Date, there are no Operating
        Agreements.

       

      3.8 Material
        Agreements.  There are no material agreements entered into by
        or affecting the development, management and operation of the Columbia Mine,
        other than the Columbia Mine Lease.  

       

      3.9 No
        Consents
        Necessary.  No consent or approval of any third party,
        including, without limitation, any Governmental Authority, is required in
        connection with the execution, delivery or performance by the Borrower of
        this
        Loan Agreement, the Notes or any other Loan Document.

       

      3.10 No
        Environmental
        Hazard.  The Borrower and its Subsidiaries are in compliance
        with all Environmental Laws applicable to them and the development, management
        and operation of their respective Properties including, without limitation,
        the
        Columbia Mine, and there is not now pending, nor, to the best knowledge of
        the
        Borrower, threatened, any action, suit, investigation or proceeding against
        the
        Borrower or any of its Subsidiaries seeking to enforce any right or remedy
        under
        any of the Environmental Laws.  No notice has been served on the
        Borrower or any of its Subsidiaries from any entity, Governmental Authority,
        or
        individual claiming any violation of any Environmental Laws, or demanding
        payment or contribution for environmental damage or injury to natural
        resources.

       

      3.11 No
        Pending
        Litigation.  No Litigation is pending or, to the knowledge of
        the Borrower, threatened against or affecting the Borrower or any of its
        Subsidiaries, except as set forth in the Borrower's filings with the SEC,
        and
        none of such pending litigation involves any of the transactions contemplated
        by
        this Agreement or could, if adversely determined, cause a Material Adverse
        Change.

       

      3.12 Investment
        Company
        Act.  Neither the Borrower nor any of its Subsidiaries is an
        investment company within the meaning of the Investment Company Act of 1940,
        as
        amended, or, directly or indirectly, controlled by or acting on behalf of
        any
        Person which is an investment company, within the meaning of said
        Act.

       

      3.13 Public
        Utility Holding
        Company Act.  Neither the Borrower nor any of its Subsidiaries
        is an "affiliate" or a "subsidiary company" of a "public utility company,"
        or a
        "holding company," or an "affiliate" or a "subsidiary company" of a "holding
        company," as such terms are defined in the Public Utility Holding Company
        Act of
        1935, as amended ("PUHC
        Act").  Further, none of the transactions contemplated under
        the Loan Documents shall cause or constitute a violation of any of the
        provisions, rules, regulations or orders of or under the PUHC Act and the
        PUHC
        Act does not in any manner impair the legality, validity or enforceability
        of
        the Notes, the liabilities of the Borrower under any of the Loan Documents
        or
        any liens created under the Collateral Documents.

       

      3.14 Securities
        Acts.  The Borrower has not issued any unregistered securities
        in violation of the registration requirements of Section 5 of the Securities
        Act, or any other law, and is not violating any material rule, regulation
        or
        requirement under the Securities Act, or the Securities and Exchange Act
        of
        1934, as amended.  The Borrower is not required to qualify this
        Agreement or any other Loan Document as an indenture under the Trust Indenture
        Act of 1939, as amended, in connection with its execution and delivery of
        the
        Notes.

       

      3.15 Full
        Disclosure.  Neither this Agreement nor any certificate or
        statement or any other data furnished by the Borrower in connection with
        the
        negotiation of this Agreement or the transactions contemplated hereby contains
        any untrue statement of a material fact or omits a material fact known to
        the
        Borrower necessary to make the statements contained herein or therein not
        misleading.

       

      3.16 Survival
        of Representations
        and Warranties.  All representations and warranties contained
        in this Agreement and any other Loan Documents shall survive, and not be
        waived
        by, the execution hereof by the Lenders, any investigation or inquiry by
        the
        Lenders, or by the making of the Loans.

       

      Section
        4

       

      Affirmative
        Covenants

       

      Until
        all
        Indebtedness has been paid and all Obligations performed, the Borrower covenants
        and agrees with the Lenders as follows:

       

      4.1 Reporting
        Requirements.  The Borrower will promptly furnish to the
        Lenders from time to time the following information regarding the business
        affairs and financial condition of the Borrower:

       

      (a) 
        As soon
        as possible and in any event within five (5) days after the occurrence of
        any
        Event of Default or Default the Borrower will give a written statement to
        the
        Lenders of the default, setting forth details of such Event of Default or
        Default, the period of existence thereof and the action which the Borrower
        has
        taken and proposes to take with respect thereto.

       

      (b) As
        soon
        as available and in any event within 45 days after the end of each fiscal
        quarter, (x) unaudited financial statements (balance sheet and the related
        statements of consolidated and consolidating income and retained earnings
        and of
        cashflows, setting forth in comparative form the figures for the previous
        fiscal
        year) of the Borrower (covering at least the statements mentioned above)
        for the
        fiscal quarter then ending, and for the year to date.

       

      (c) As
        soon
        as available and in any event within 90 days after the end of each of the
        Borrower's fiscal years, audited financial statements (balance sheet and
        the
        related statements of consolidated and consolidating income and retained
        earnings and of cashflows, setting forth in comparative form the figures
        for the
        previous fiscal year) of the Borrower certified without any Impermissible
        Qualification by an independent accountant satisfactory to the Lenders that
        such
        financial statements fairly present the financial position of the Borrower
        in
        conformity with GAAP.

       

      (d) 
        Promptly, and in any event within 30 days after the end of each calendar
        month,
        the Borrower shall deliver to the Lenders a Compliance Certificate.

       

      (e) Promptly
        upon receipt thereof, copies of all material reports or letters submitted
        to the
        Borrower or any of its Subsidiaries by any accountants in connection with
        any
        annual, interim, or special audit, including without limitation the comment
        letter submitted to management in connection with any such audit.

       

      (f) As
        soon
        as possible and in any event, within 10 days after the Borrower's obtaining
        notice thereof, the Borrower shall give a written report to the Lenders of
        all
        Litigation (other than Litigation being defended by an insurance carrier
        without
        reservation as to coverage and seeking recovery of amounts within the limits
        of
        said coverage), together with a statement of the Borrower's president or
        vice
        president describing the allegations of such Litigation, and the action being
        taken or proposed to be taken with respect thereto.

       

      (g) Promptly
        upon their becoming available, the Borrower shall deliver to the Lenders
        copies
        of all press releases and other statements made available generally by the
        Borrower to the public concerning material developments in the business of
        the
        Borrower.

       

      (h) Promptly
        upon preparation thereof, the Borrower shall deliver to the Lenders copies
        of
        all material reports or financial statements that the Borrower files with
        any
        state or federal regulatory agency, including (without regard to the materiality
        thereof) copies of all filings made with the SEC.

       

      (i) Such
        other information as the Lenders may reasonably request from time to
        time.

       

      4.2 Legal
        Requirements.  The Borrower will (and will cause its
        Subsidiaries to) comply in all material respects with all Legal Requirements
        applicable to it and its Subsidiaries.

       

      4.3 Performance
        of Obligations;
        Payment of Debt.  The Borrower will pay the Notes according to
        the reading, tenor and effect of each thereof and will perform and discharge
        or
        cause to be performed and discharged the obligations provided to be performed
        and discharged under this Agreement and the other Loan Documents.  The
        Borrower shall, and shall cause each of its Subsidiaries to, pay its Debt
        as and
        when due (or within any applicable grace period), unless payment thereof
        is
        being contested in good faith by appropriate proceedings, action to foreclose
        on
        any Properties of the Borrower or its Subsidiaries, as the case may be, is
        properly stayed, and adequate reserves have been established for the payment
        thereof.  The foregoing notwithstanding, the Lenders acknowledge that
        Hidden Splendor is bound by the terms of Hidden Splendor's Plan of
        Reorganization, as confirmed by a Final Confirmation Order, and any conflict
        between this Agreement and such confirmed Plan of Reorganization, insofar
        only
        as Hidden Splendor is concerned, will be in favor of such confirmed Plan
        of
        Reorganization.

       

      4.4 Columbia
        Mine
        Lease.  The Borrower shall faithfully and timely perform it's
        obligations under the Columbia Mine Lease and shall not amend, modify or
        terminate the same, nor suffer or permit anything to occur, which may cause
        the
        modification or termination or expiration of the Columbia Mine Lease, or
        of any
        obligations of any party thereunder, or which may diminish or impair the
        value
        thereof.  Following any election of the Borrower to exercise its
        option to purchase the Columbia Mine, the Borrower shall consummate such
        person
        in accordance with the provisions of the Columbia Mine Lease.

       

      4.5 Future
        Permits.  The Borrower and its Subsidiaries will use their best
        efforts to obtain, as needed, all Governmental Permits from each Governmental
        Authority necessary for the development, management and operation of their
        respective Properties, including (without limitation) the Columbia
        Mine.

       

      4.6 Escrow
        Agreement.  The Borrower shall enter into the Escrow Agreement
        on the Escrow Closing Date with the Lenders and an escrow agent satisfactory
        to
        the Lenders, which Escrow Agreement shall be in Proper Form and pursuant
        to
        which the Borrower shall agree to escrow the funds received from the Loans
        and
        make certain other deposits as provided herein and therein.  Pursuant
        to the Escrow Agreement, the Borrower agrees that the funds shall be disbursed
        as follows: (i) $2,250,000 shall be used to pay the obligations of Hidden
        Splendor, pursuant to Hidden Splendor’s Plan of Reorganization as confirmed by a
        Final Confirmation Order; (ii) upon Hidden Splendor’s emergence from bankruptcy,
        (a) $300,000 shall be paid as commissions to Riverstone Wealth Management;
        and
        (b) the remaining funds shall be used to pay the Borrower’s obligations under
        the Columbia Mine Lease as the same become due and
        payable.   Pursuant to the Escrow Agreement, the Borrower agrees
        to pay $35,000 per month (or such greater amount as may be necessary to make
        payments due under the Columbia Mine Lease) to the Escrow Agent (as defined
        in
        the Escrow Agreement) to be used to make payments of the Borrower pursuant
        to
        the Columbia Mine Lease.  The payments shall begin on November 1, 2008
        and each subsequent month thereafter for as long as the Indebtedness remains
        unpaid and the Obligations remain outstanding.

       

      4.7 Payment
        of
        Expenses.  To the extent not prohibited by applicable law and
        subject to the provisions of Section 8.11
        hereof, the
        Borrower will pay all costs and expenses and reimburse the Lenders for any
        and
        all expenditures of every character incurred or expended from time to time
        by
        the Lenders to third parties for services rendered in connection with the
        Lenders' negotiation, documenting and closing the transactions reflected
        by the
        provisions of this Agreement and any amendments, modifications, replacements
        and
        additions hereto and to the other Loan Documents, as well as evaluating,
        monitoring, administering and protecting the Loans and the Collateral and
        creating, perfecting and realizing upon the Lenders' security interest in
        and
        liens upon the Collateral, and all costs and expenses incurred or expended
        by
        the Lenders to third parties for services rendered and related to the Lenders'
        exercising any of its rights and remedies hereunder, under this Agreement,
        the
        Notes, or any of the other Loan Documents, or at law, including, without
        limitation, all appraisal fees, consulting fees, filing fees, Taxes, brokerage
        fees and commissions, fees incident to security interests, liens and other
        title
        searches and reports, escrow fees, attorney's fees, legal expenses, court
        costs,
        auctioneer fees and expenses, other fees and expenses incurred in connection
        with liquidation or sale of the Collateral and all other professional
        fees.  Any amount to be paid hereunder by the Borrower to the Lenders,
        to the extent not prohibited by applicable law, shall bear interest from
        the
        date of expenditure until reimbursed to the Lenders by the Borrower at the
        Default Rate.

       

      4.8 Liens
        and Security
        Interest.

       

      (a) To
        secure
        payment of the Indebtedness and performance of the Obligations, and as a
        condition of any approval by the Lenders of the Loans, the Borrower shall
        grant
        and create (or cause to be granted and created) in favor of the Lenders a
        first,
        prior and perfected security interest in and to, and Lien upon, and assignment
        of, all collateral which is described on Schedule
        4.8
        attached hereto.  The Borrower shall execute and deliver (or cause to
        be executed and delivered) from time to time the Collateral Documents to
        the
        Lenders together with all such other instruments, documents, certificates,
        assignments, financing statements, and other items as required by the Lenders
        to
        create and perfect the Liens, security interests and assignments described
        herein and shall cause such of the Collateral Documents as the Lenders may
        require to be filed or recorded and shall pay all costs and expenses of doing
        so.

       

      (b) 
        With
        respect to any Property of the types defined as Collateral that are acquired
        or
        created after the Escrow Closing Date or in which a first-priority lien in
        favor
        of the Lender has not been granted as of the Escrow Closing Date, the Borrower
        shall promptly grant or cause to be granted to the Lender a Lien on all such
        Property and interests, free of all Liens except those expressly permitted
        hereby. The Borrower, at its own expense, shall execute, acknowledge and
        deliver, or cause the execution, acknowledgment and delivery of, and thereafter
        register, file or record, or cause to be registered, filed or recorded, in
        an
        appropriate governmental office, any document or instrument reasonably deemed
        by
        the Lender to be necessary or desirable for the creation, perfection, renewal
        and continuation of the foregoing Liens and shall pay, or cause to be paid,
        all
        Taxes, fees and reasonable legal expenses related to such registration, filing
        or recording. All such Collateral Documents shall be in Proper
        Form.

       

      4.9 Payment
        of
        Taxes  The Borrower will and will cause each of its
        Subsidiaries to, promptly pay and discharge all lawful Taxes imposed upon
        it or
        upon its income or profit or upon any Property belonging to it, unless such
        Tax
        shall not at the time be due and payable, or if the validity thereof shall
        currently be contested on a timely basis in good faith by appropriate
        proceedings (provided that the enforcement of any Liens arising out of any
        such
        nonpayment shall be stayed or bonded during the proceedings) and adequate
        reserves with respect to such Tax shall have been established.  The
        foregoing notwithstanding, the Lenders acknowledge that Hidden Splendor is
        bound
        by the terms of Hidden Splendor's Plan of Reorganization, as confirmed by
        a
        Final Confirmation Order, and any conflict between this Agreement and such
        confirmed Plan of Reorganization, insofar only as Hidden Splendor is concerned,
        will be in favor of such confirmed Plan of Reorganization.

       

      4.10 Adequate
        Records; Inspection
        Rights.  The Borrower shall keep (and shall cause each or its
        Subsidiaries to keep) adequate records and books of account, in accordance
        with
        GAAP, of all of its transactions so that at any time, and from time to time,
        its
        true and complete financial condition may be readily determined.  The
        Borrower shall, and shall cause each of its Subsidiaries to permit the Lenders,
        to examine and make copies or any abstracts from their records and books
        of
        account, to visit and inspect their Properties and to discuss their affairs,
        finances, and accounts with any of their directors, officers, employees,
        accountants, attorneys and other representatives, all as the Lenders may
        reasonably request.

       

      4.11 Maintenance
        of Existence and
        Business.  The Borrower shall, and shall cause its Subsidiaries
        to:

       

      (a) Preserve
        and maintain, or timely obtain and thereafter preserve and maintain (i) material
        rights, authorizations and consents, privileges and all material Governmental
        Permits which in the good faith judgment of it's board of directors is deemed
        necessary or desirable to conduct its business in the ordinary course, and
        (ii)
        its existence; and

       

      (b) Qualify
        and remain qualified and authorized to do business in each jurisdiction in
        which
        the character of its Properties or the nature of its business requires such
        qualification or authorization.

       

      4.12 Maintenance
        of
        Insurance.  The Borrower shall, and shall cause its
        Subsidiaries to, maintain insurance from responsible companies in such amounts
        and against such risks as shall be customary and usual in the industry for
        responsible companies, but in no event less than the amount and types insured
        as
        of the Escrow Closing Date.  Each insurance policy with respect to the
        Columbia Mine or potential liabilities arising from the development, management
        and operation thereof shall name the Lenders as additional insureds, or loss
        payees, as appropriate, and provide for at least 30 days' prior notice to
        the
        Lenders of any proposed termination or cancellation of such policy, whether
        or
        account of default or otherwise.

       

      4.13 Indemnity.

       

      (a) 
        The
        Borrower agrees to defend, protect, indemnify and hold harmless the Lenders,
        their respective Affiliates, and each of their respective (including such
        Affiliates') trustees, officers, directors, employees, agents, attorneys,
        shareholders and consultants (including, without limitation, those retained
        in
        connection with the satisfaction or attempted satisfaction of any of the
        conditions set forth herein) of each of the foregoing (collectively, "Indemnitees") from
        and against any and all liabilities, obligations, losses, damages, penalties,
        actions, judgments, suits, claims, costs, expenses and disbursements of any
        kind
        or nature whatsoever (including, without limitation, the reasonable fees
        and
        disbursements of counsel for such Indemnitees in connection with any
        investigative, administrative or judicial proceeding, whether or not such
        Indemnitees shall be designated a party thereto or such proceeding shall
        have
        actually been instituted), imposed on, incurred by, or asserted against such
        Indemnitees (whether direct, indirect or consequential and whether based
        on any
        federal, state, or local laws and regulations, under common law or at equitable
        cause, or on contract, tort or otherwise), arising from or connected (a)
        with
        the past, present, or future operations of the Borrower, any of its
        Subsidiaries, any Affiliate or any predecessors in interest, or (b) with
        the
        management, operation and conduct of the business and affairs of the Borrower
        and any of its Subsidiaries, or as a result of any assertion or claim of
        any
        liability or responsibility of the Lenders for the payment or performances
        of
        any indebtedness or obligation of the Borrower or any of its Subsidiaries,
        or
        (c) with the past, present or future environmental condition of the Property
        of
        the Borrower, any of its Subsidiaries, any Affiliate or any predecessors
        in
        interest, or (d) in any way relating to or arising out of this Agreement,
        the
        Loan Documents, or any act, event or transaction or alleged act, event or
        transaction relating or attendant thereto, including in connection with,
        or as a
        result, in whole or in part, of any negligence of the Lenders, or based upon
        or
        asserted on the basis of strict liability, or the use or intended use of
        the
        proceeds of the Loans hereunder, or in connection with any investigation
        of any
        potential matter covered hereby, but excluding any claim or liability that
        arises as the result of (i) the gross negligence or willful misconduct of
        any
        Indemnitee, as finally judicially determined by a court of competent
        jurisdiction, and (ii) the act, omission, event or circumstances (including,
        without limitation, a violation of any Environmental Law) taken, or caused,
        solely by the Lenders at any time after the Lenders takes possession of,
        or
        otherwise forecloses upon, any Collateral (collectively, "Indemnified
        Matters").  In addition, the Borrower shall periodically, upon
        request, reimburse each Indemnitee for its reasonable legal and other actual
        expenses (including the cost of any investigation and preparation) incurred
        in
        connection with any Indemnified Matter.

       

      (b) The
        reimbursement, indemnity and contribution obligations under this Section
        shall
        be in addition to any liability which the Borrower may otherwise have, shall
        extend upon the same terms and conditions to each Indemnitee, and shall be
        binding upon and inure to the benefit of any successors, assigns, heirs and
        personal representatives of the Borrower, the Lenders, and all other
        Indemnitees.  The obligations of the Borrower under this Section shall
        survive (i) the execution of this Agreement and (ii) any termination of this
        Agreement and payment of the Obligations.

       

      (c) THE
        INDEMNITY IN THIS SECTION WILL APPLY
        EVEN IF THE LOSS OR DAMAGE IS CAUSED IN WHOLE OR IN PART BY THE ORDINARY
        NEGLIGENCE OR STRICT LIABILITY OF THE INDEMNITEE BUT WILL NOT APPLY TO THE
        EXTENT THE LOSS OR DAMAGE IS CAUSED BY THE GROSS NEGLIGENCE OR WILLFUL
        MISCONDUCT OF THE INDEMNITEE.

       

      4.14 Further
        Assurances.  The Borrower shall perform or cause to be
        performed any and all things the Lenders may hereafter request to protect,
        perfect or more fully evidence the rights and agreements established or
        contemplated by this Agreement.

       

      Section
        5

       

      Negative
        Covenants

       

      Until
        all
        Indebtedness has been paid and all Obligations performed, the Borrower covenants
        and agrees with the Lenders as follows:

       

      5.1 Senior
        or Pari Passu
        Debt.  The Borrower shall not incur, create, assume, guarantee
        or permit to exist any Debt that ranks senior in priority to, or pari passu
        with, the Indebtedness or Obligations, except for (i) Debt existing on the
        Escrow Closing Date and only to the extent that such Debt ranks pari passu
        with,
        but not senior to, the Indebtedness and Obligations, and (ii) Debt created
        as a
        result of a subsequent financing if the gross proceeds to the Borrower of
        such
        financing are equal to or greater than the aggregate principal amount of
        the
        Loans and the Indebtedness is repaid in full upon the closing of such
        financing.

       

      5.2 Contingent
        Liabilities.  The Borrower shall not incur, create, assume,
        become or be liable in any manner in respect of, or suffer to exist, any
        Contingent Liabilities, except Contingent Liabilities in existence on the
        Escrow
        Closing Date and only to the extent that such Contingent Liabilities rank
        pari
        passu with, but not senior to, the Indebtedness and
        Obligations.  Anything herein to the contrary notwithstanding, the
        Borrower may guarantee Debt of Hidden Splendor up to the principal amount
        of
        $1,500,000.00 so long as such guaranty is unsecured and is required by the
        terms
        of a plan of reorganization as confirmed by a Final Confirmation Order and
        only
        to the extent that such Contingent Liabilities rank pari passu with, but
        not
        senior to, the Indebtedness and Obligations.

       

      5.3 Liens.  The
        Borrower shall not create or suffer to exist any Lien upon any of its
        Properties, except Permitted Liens.  The foregoing notwithstanding,
        the Borrower shall neither create, incur, assume nor permit to exist any
        Lien
        upon the Columbia Mine Lease, other than Liens in favor of the
        Lender.

       

      5.4 Operating
        Agreements.  The Borrower shall not enter into any Operating
        Agreements without the prior written consent of the Lenders.  All
        Operating Agreements shall be assigned to the Lenders as Collateral in
        accordance with the provisions of Section 4.8(b)
        hereof.

       

      5.5 Dividends,
        Restricted
        Payments and Restricted Purchases.  The Borrower shall not
        declare or pay Dividends, or make any Restricted Payments or Restricted
        Purchases.

       

      5.6 Reorganization,
        Merger,
        Etc.  The Borrower will not reorganize, merge or consolidate
        with or acquire all or substantially all of the assets or Capital Stock of
        any
        Person, convert its organizational structure to a different form of entity,
        enter into any joint ventures, create subsidiaries, or make any other
        substantial change in its capitalization, organizational structure, or character
        of its business.

       

      5.7 Transactions
        with
        Affiliates.  Any other provision of this Agreement
        notwithstanding, the Borrower shall not carry on any transaction with any
        Affiliate, except at arm's length on terms no less favorable to the Borrower
        than otherwise obtainable in the marketplace generally.

       

      5.8 Prepayments
        of Other
        Debt.  The Borrower will not at any time prepay any Debt which
        it may owe to parties other than the Lenders and shall make no payments with
        respect to Subordinated Debt, except as otherwise set forth in Subordination
        Agreement, which provides that Borrower may make payments on the Related
        Party
        Debt at any time so long as the Borrower has raised the aggregate of
        $3,000,000.00 in equity financing by December 31, 2008.

       

      5.9 Fiscal
        Year.  The Borrower shall not, and shall not permit any of its
        Subsidiaries to, change its fiscal year.

       

      5.10 Limitation
        on Negative
        Pledge Clauses.  The Borrower shall not enter into any
        agreement, other than this Agreement and the other Loan Documents, or any
        purchase money mortgages or financing leases permitted by this Agreement
        (a)
        which prohibits or limits the ability of the Borrower to create, incur, assume
        or suffer to exist any Liens upon the Columbia Mine Lease, or (b) which
        prohibits or requires the consent of any Person to any amendment, modification
        or supplement to this Agreement or any of the other Loan Documents.

       

      Section
        6

       

      General
        Conditions Of
        Borrowing

       

      6.1 Escrow
        Closing
        Proceedings.  The making of the first Advances in the aggregate
        principal amount of Two Million Two Hundred Fifty Thousand and 00/100 Dollars
        ($2,250,000.00) on the Escrow Closing Date to the Escrow Agent shall be subject
        to the following conditions, in addition to those stated in other provisions
        of
        this Agreement (the Lenders having no obligation to make such Advances in
        the
        event any one or more of such conditions has not been satisfied, or having
        previously been satisfied does not remain satisfied, on the Escrow Closing
        Date):

       

      (a) This
        Agreement shall have been duly and validly executed and delivered by the
        Borrower and the Lenders.

       

      (b) The
        Notes
        shall have been duly and validly executed and delivered by the Borrower to
        the
        Lenders.

       

      (c) The
        Escrow Agreement shall have been duly and validly executed and delivered
        by the
        parties thereto.

       

      (d) The
        Borrower shall have duly and validly executed and delivered or caused to
        be
        executed and delivered to the Lenders a collateral assignment of the Escrow
        Agreement in Proper Form.

       

      (e) The
        Borrower shall have delivered or caused to be delivered to the Lenders an
        officers' certificate in Proper Form certifying the following matters to
        the
        Lenders:

       

      (i) Resolutions
        of its Board of Directors, which resolutions shall authorize the execution,
        delivery and performance by the Borrower of this Agreement, the Notes, and
        the
        other Loan Documents to which the Borrower is a party and which shall authorize
        the consummation and performance of the transactions contemplated hereby
        and
        thereby;

       

      (ii) The
        incumbency of its officers with specimen signatures of its President, Vice
        President, Treasurer, Secretary and other officers who will sign this Agreement,
        the Notes or any of the other Loan Documents in connection herewith and
        delivered pursuant hereto;

       

      (iii) Articles
        of Incorporation of the Borrower certified as of a recent date by the Secretary
        of the State of its incorporation; and

       

      (iv) By-laws
        of the Borrower.

       

      (f) The
        Borrower shall have delivered or caused to be delivered to the Lenders
        certificates of the appropriate government officials of the states of Nevada
        and
        Utah each bearing a recent date, to the effect that the Borrower is (as the
        case
        may be) a corporation, duly incorporated, validly existing, qualified to
        transact business and in good standing under the laws of the respective
        states.

       

      (g) No
        event
        shall have occurred and be continuing (or would occur after giving effect
        to the
        Loans) which constitutes (or would constitute after giving effect to the
        Loans)
        an Event of Default or Default under this Agreement as of the Escrow Closing
        Date and a certificate to such effect signed by the President or a Vice
        President of the Borrower shall be delivered to the Lenders.

       

      (h) Each
        and
        all of the representations and warranties of the Borrower in this Agreement
        and
        the other Loan Documents shall be true, correct and accurate as of the Escrow
        Closing Date and a certificate to such effect signed by the President or
        a Vice
        President of the Borrower shall be delivered to the Lenders.

       

      (i) The
        Borrower shall have duly and timely performed each and all of its agreements
        and
        undertakings contained in this Agreement.

       

      (j) The
        Lenders shall have received payment of all fees and reimbursement of all
        reasonable attorneys’ fees and expenses incurred through the Escrow Closing Date
        by the Lenders in connection with the preparation, negotiation and consummation
        of the loan transaction evidenced by this Agreement and the other Loan
        Documents.

       

      (k) The
        Lenders shall have completed all due diligence deemed necessary in their
        sole
        discretion, and all such information revealed in connection with such due
        diligence shall be acceptable to the Lenders in their sole
        discretion.

       

      (l) The
        Borrower shall have furnished to the Lenders one or more opinions of counsel
        acceptable to the Lenders as of the Escrow Closing Date, that:

       

      (i) The
        Borrower is a corporation duly organized and validly existing in good standing
        under the laws of the State of Nevada;

       

      (ii) The
        execution and delivery of this Agreement, the Notes, and the other Loan
        Documents executed on or before the Escrow Closing Date, the making of the
        borrowings contemplated hereby, and the granting of security as herein
        contemplated have been duly and validly authorized by the Borrower;

       

      (iii) This
        Agreement, the Notes and the other Loan Documents have each been duly and
        validly executed and delivered by the parties thereto; and this Agreement,
        the
        Notes, and the other Loan Documents executed on or before the Escrow Closing
        Date are the legal, valid and binding obligations of the Borrower, under
        federal
        laws and regulations, and applicable laws and regulations of the State of Utah,
        and are enforceable in accordance with their terms, subject to such
        qualifications as the Lenders may approve;

       

      (iv) The
        Collateral Documents executed on or before the Escrow Closing Date are effective
        to create valid, legal and enforceable Liens upon the Collateral described
        in
        each thereof.

       

      (v) The
        Loans, as reflected in the Loan Documents executed on or before the Escrow
        Closing Date, are not usurious under applicable laws.

       

      (vi) No
        approval of any Governmental Authority is required to enable the Borrower
        to
        consummate any transactions contemplated in this Agreement, the Notes, and
        other
        Loan Documents.

       

      6.2 Final
        Closing
        Proceedings.  In the event the following conditions, in
        addition to those stated in other provisions of this Agreement, shall each
        have
        been and remain satisfied by the Borrower on the Final Closing Date or waived
        in
        writing by the Lenders, and the Lenders have not previously instructed the
        Escrow Agent to deliver the Escrow Funds to the Lenders, then (a) the Lenders
        shall make Advances in the aggregate amount of Five Hundred Fifty Thousand
        and
        00/100 Dollars ($550,000.00) on the Final Closing Date to the Escrow Agent
        and
        (b) the Borrower and the Lenders shall jointly instruct the Escrow Agent
        to
        disburse the Escrow Funds in accordance with the terms of the Escrow Agreement
        as described in Section 2.2(b)
        hereof
        (the Lenders having no obligation to make such Advances or to give such
        instructions in the event any one or more of such conditions has not been
        satisfied, or having previously been satisfied does not remain satisfied,
        on the
        Final Closing Date, in which case the Escrow Funds shall be distributed to
        the
        Lenders upon their written instructions to the Escrow Agent as provided in
Section 2.2(c)
        hereof):

       

      (a) A
        Confirmation Order shall have been entered and shall have become a Final
        Confirmation Order.

       

      (b) The
        Borrower shall have duly and validly executed and delivered or caused to
        be
        executed and delivered to the Lenders the Collateral Documents, and all other
        Loan Documents, and each Collateral Document which is to be filed or recorded
        shall have been properly filed or recorded and the fees and Taxes, if any,
        for
        filing or recording the same shall have been paid by the Borrower.

       

      (c) The
        Borrower, the Lenders and C&P (and its mortgagee, if any) shall have
        executed and delivered to the Lenders the Tri-Party Agreement.

       

      (d) 
        The
        Borrower, the Lenders and the holders of the Related Party Debt shall have
        executed and delivered the Subordination Agreements to the Lenders.

       

      (e) The
        issuance of the Bridge Shares to the Lenders shall have occurred, or shall
        occur
        simultaneously on the Final Closing Date with the closing of the transactions
        hereunder, in accordance with the provisions of the Stock Purchase
        Agreement.

       

      (f) There
        shall have occurred no Material Adverse Change since the date of the most
        recent
        financial statement of the Borrower on file with the SEC.

       

      (g) No
        event
        shall have occurred and be continuing (or would occur after giving effect
        to the
        Loans) which constitutes (or would constitute after giving effect to the
        Loans)
        an Event of Default or Default under this Agreement as of the Final Closing
        Date
        and a certificate to such effect signed by the President or a Vice President
        of
        the Borrower shall be delivered to the Lenders.

       

      (h) Each
        and
        all of the representations and warranties of the Borrower in this Agreement
        and
        the other Loan Documents shall be true, correct and accurate as of the Final
        Closing Date and a certificate to such effect signed by the President or
        a Vice
        President of the Borrower shall be delivered to the Lenders.

       

      (i) The
        Lenders shall have received (i) evidence satisfactory to it that the Collateral
        is all owned by the Borrower free and clear of any Liens (other than Permitted
        Liens) and, in the event any such Liens do exist, then the Lenders shall
        have
        received written releases or subordination agreements in Proper Form executed
        by
        each Person in whose favor a Lien exists and (ii) evidence satisfactory to
        it
        that the Columbia Mine is owned by C&P free and clear of any Liens and, in
        the event any such Liens do exist, then the Lenders shall have received written
        estoppels and agreements in Proper Form executed by each Person in whose
        favor a
        Lien exists.

       

      (j) The
        Borrower shall have delivered or caused to be delivered to the Lenders an
        officers' certificate in Proper Form certifying the following matters to
        the
        Lenders:

       

      (i) Resolutions
        of its Board of Directors, which resolutions shall authorize the execution,
        delivery and performance by the Borrower of this Agreement, the Notes, and
        the
        other Loan Documents to which the Borrower is a party and which shall authorize
        the consummation and performance of the transactions contemplated hereby
        and
        thereby;

       

      (ii) The
        incumbency of its officers with specimen signatures of its President, Vice
        President, Treasurer, Secretary and other officers who will sign this Agreement,
        the Notes or any of the other Loan Documents in connection herewith and
        delivered pursuant hereto;

       

      (iii) Articles
        of Incorporation of the Borrower certified as of a recent date by the Secretary
        of the State of its incorporation; and

       

      (iv) By-laws
        of the Borrower.

       

      (k) The
        Borrower shall have delivered or caused to be delivered to the Lenders
        certificates of the appropriate government officials of the states of Nevada
        and
        Utah each bearing a recent date, to the effect that the Borrower is (as the
        case
        may be) a corporation, duly incorporated, validly existing, qualified to
        transact business and in good standing under the laws of the respective
        states.

       

      (l) The
        Borrower shall have duly and timely performed each and all of its agreements
        and
        undertakings contained in this Agreement.

       

      (m) The
        Lenders shall have received payment of all fees and reimbursement of all
        reasonable attorneys’ fees and expenses incurred through the Final Closing Date
        by the Lenders in connection with the preparation, negotiation and consummation
        of the loan transaction evidenced by this Agreement and the other Loan
        Documents.

       

      (n) The
        Borrower shall have obtained and furnished to the Lenders evidence of the
        existence of insurance and endorsements thereto as required pursuant to the
        provisions of Section
4.12
        hereof and
        shall have paid all premiums therefor.

       

      (o) The
        Lenders shall have completed all due diligence deemed necessary in their
        sole
        discretion, and all such information revealed in connection with such due
        diligence shall be acceptable to the Lenders in their sole
        discretion.

       

      (p) The
        Borrower shall have furnished to the Lenders one or more opinions of counsel
        acceptable to the Lenders as of the Final Closing Date, that:

       

      (i) The
        Borrower is a corporation duly organized and validly existing in good standing
        under the laws of the State of Nevada;

       

      (ii) The
        execution and delivery of this Agreement, the Notes, and the other Loan
        Documents executed on or before the Final Closing Date, the making of the
        borrowings contemplated hereby, and the granting of security as herein
        contemplated have been duly and validly authorized by the Borrower;

       

      (iii) This
        Agreement, the Notes and the other Loan Documents have each been duly and
        validly executed and delivered by the parties thereto; and this Agreement,
        the
        Notes, and the other Loan Documents executed on or before the Final Closing
        Date
        are the legal, valid and binding obligations of the Borrower, under federal
        laws
        and regulations, and applicable laws and regulations of the State of Utah,
        and
        are enforceable in accordance with their terms, subject to such qualifications
        as the Lenders may approve;

       

      (iv) The
        Collateral Documents executed on or before the Final Closing Date are effective
        to create valid, legal and enforceable Liens upon the Collateral described
        in
        each thereof.

       

      (v) The
        Loans, as reflected in the Loan Documents executed on or before the Final
        Closing Date, are not usurious under applicable laws.

       

      (vi) No
        approval of any Governmental Authority is required to enable the Borrower
        to
        consummate any transactions contemplated in this Agreement, the Notes, and
        other
        Loan Documents.

       

      (vii) A
        Confirmation Order has been entered and has become a Final Confirmation
        Order.

       

      6.3 General
        Proceedings.  All proceedings to be taken in connection with
        the transactions contemplated by this Agreement and the other Loan Documents
        and
        all documents incident hereto or thereto, and all actions necessary to evidence,
        create, and perfect the security interests contemplated hereby, shall have
        been
        taken and be in Proper Form and the Lenders shall have received copies of
        all
        documents which it may reasonably request in connection with such transactions
        and all corporate proceedings with respect thereto, in Proper Form.

       

      6.4 Sole
        Benefit of
        Lenders.  All conditions precedent to the obligation of the
        Lenders to make the Loans are imposed hereby solely for the benefit of the
        Lenders and no other party may require satisfaction of any such condition
        precedent or be entitled to assume that the Lenders will refuse to make the
        Loans in the absence of strict compliance with such conditions
        precedent.  Any requirement of this Agreement may be waived by the
        Lenders, in whole or in part, at any time.  Any requirement herein of
        submission of evidence of the existence or non-existence of a fact shall
        be
        deemed, also, to be a requirement that the fact shall exist or not exist,
        as the
        case may be, and without waiving any condition or obligation of the Borrower,
        the Lenders may at all times independently establish to its satisfaction
        such
        existence or non-existence.

       

      Section
        7

       

      Events
        Of Default And
        Remedies

       

      7.1 Events.  Any
        of the following events which shall occur and be continuing for any reason
        whatsoever, whether voluntary or involuntary, by operation of law or otherwise,
        shall be considered an Event of Default as that term is used
        herein:

       

      (a) The
        Borrower shall fail to pay any principal, interest, fees, or any other amounts
        payable under the Loan Documents when due.

       

      (b) The
        Borrower shall fail to perform or observe any other term or covenant contained
        in any Loan Documents, other than those described in subsection (a), and
        such
        failure shall not be remedied within 5 days following the earlier of knowledge
        thereof by an officer of the Borrower or of written notice by the Lenders
        to the
        Borrower.

       

      (c) Any
        representation or warranty made or deemed made by the Borrower or any of
        its
        Subsidiaries (or any of their officers) under or in connection with any Loan
        Documents shall have been materially incorrect or misleading in any material
        respect when made or deemed made.

       

      (d) Any
        default shall occur in the performance of, or compliance with, any obligation
        of
        any party under the Columbia Mine Lease; or the validity or enforceability
        of
        the Columbia Mine Lease or any material provision thereof shall be contested
        by
        any party thereto; or any party to the Columbia Mine Lease shall deny that
        it
        has any or further liability or obligation thereunder or shall revoke or
        terminate or attempt to revoke or terminate the same.

       

      (e) Any
        of
        the Loan Documents or any provision thereof shall, for any reason, not be
        valid
        and binding on the Borrower or any other party thereto; or any of the above
        shall not be in full force and effect, or shall be declared to be null and
        void;
        or the validity or enforceability of any of the Loan Documents shall be
        contested by the Borrower or any of its Subsidiaries or any Affiliate of
        any
        thereof, or any other party thereto; the Borrower or any of its Subsidiaries
        or
        other party to any thereof shall deny that it has any or further liability
        or
        obligation under its respective Loan Documents or shall revoke or terminate
        or
        attempt to revoke or terminate the same; or any default or breach under any
        provision of any Loan Documents shall continue after the applicable grace
        period, if any, specified in such Loan Documents.

       

      (f) The
        Borrower or any of its Subsidiaries (including Hidden Splendor from and after
        the date a Confirmation Order has been entered) or C&P shall (i) make a
        general assignment for the benefit of creditors, or (ii) apply for or consent
        to
        the appointment of, or allow to be appointed, a custodian, receiver, a trustee
        or liquidator of itself or of all or a substantial part of its assets, or
        (iii)
        file a petition for relief under or be the subject of an order for relief
        entered pursuant to a petition filed under, any bankruptcy or similar statute
        (whether Federal or State) relating to relief of debtors; or (iv) be the
        subject
        of any petition for relief filed against it under any bankruptcy or similar
        statute (whether Federal or State) relating to relief of debtors which shall
        not
        be vacated or dismissed within thirty (30) days after the filing thereof;
        or (v)
        dissolve, liquidate, reorganize, or be acquired by any Person(s).

       

      (g) The
        Borrower or any of its Subsidiaries (including Hidden Splendor from and after
        the date a Confirmation Order has been entered) shall fail to pay any Debt
        or
        Contingent Liability when due (whether by scheduled maturity, required
        prepayment, acceleration, demand, or otherwise), and such failure, shall
        continue after the applicable grace period, if any, specified in the agreement
        or instrument relating to such Debt or Contingent Liability; the Borrower
        or any
        of its Subsidiaries shall fail to perform or observe any term or covenant
        contained in any agreement or instrument relating to any such Debt or Contingent
        Liability, when required to be performed or observed, and such failure shall
        continue after the applicable grace period, if any, specified in such agreement
        or instrument, or can result in acceleration of the maturity of such Debt
        or
        Contingent Liability; or any such Debt or Contingent Liability shall be declared
        to be due and payable, or required to be prepaid (other than by a regularly
        scheduled required prepayment), prior to the stated maturity
        thereof.

       

      (h) Any
        party
        shall commence any action, suit or proceeding against or affecting the Borrower
        or any of its Subsidiaries or any part of the Collateral or involving the
        validity or enforceability of this Agreement or any of the other Loan Documents
        or the priority of the Liens created by any of the other Loan Documents,
        at law
        or in equity, or before any governmental authority, which in the reasonable
        judgment of the Lenders materially impairs or would materially impair its
        interest in any part of the Collateral, the enforceability of this Agreement
        or
        any of the other Loan Documents or the Lenders' ability to collect the
        Indebtedness when due or to enforce the Obligations.

       

      (i) The
        Borrower or any Subsidiary shall be required under any Environmental Law
        (i) to
        implement any remedial, neutralization, or stabilization process or program,
        the
        cost of which would constitute a Material Adverse Change, or (ii) to pay
        any
        penalty, fine, or damages in an aggregate amount of $100,000.00 or
        more.

       

      (j) There
        shall occur judgments or fines (including, without limitation, pursuant to
        any
        civil or criminal action brought by any Governmental Authority) against the
        Borrower or any Subsidiary in the aggregate in excess of $100,000.00 at any
        one
        time outstanding that are either uninsured or for which the insurer fails
        to pay
        for more than 60 days and which are either final and unappealable or remain
        uncontested by such Person;

       

      (k) Any
        lease, contract, permit, license or authorization of the Borrower or any
        of its
        Subsidiaries shall terminate or cease to be effective, which termination
        or
        cessation would be a Material Adverse Change.

       

      (l) A
        Confirmation Order shall not have been entered and become a Final Confirmation
        Order by the Final Closing Date.

       

      7.2 Remedies.  Upon
        the happening of any Default, the Lenders may, at their option and without
        notice, suspend any agreement to advance funds hereunder, without limiting
        its
        rights set out elsewhere in this Agreement as to the Loans
        hereunder.  Upon the happening of any Event of Default, Lenders may,
        at their option and without further notice:

       

      (a) Cancel
        any agreement to advance funds hereunder without limiting its rights set
        out
        elsewhere in this Agreement as to loans hereunder;

       

      (b) Declare
        the entire outstanding aggregate principal amount of the Notes (or any thereof)
        then outstanding hereunder, and the unpaid interest accrued thereon, immediately
        due and payable without notice and without presentment, demand, protest,
        or
        other notice, whether of default, intent to accelerate, acceleration or
        dishonor, or of any kind, all of which are hereby expressly waived by the
        Borrower;

       

      (c) Pursue
        any other right or remedy pursuant to this Agreement, the Notes, the other
        Loan
        Documents or provided by law;

       

      (d) Foreclose
        or seek to foreclose, by private or public sale, or by judicial or non-judicial
        means, any Collateral;

       

      (e) 
        If any
        of the Escrow Funds are still held by the Escrow Agent, the Lenders may
        unilaterally instruct the Escrow Agent to release the Escrow Funds held in
        Escrow to the Lenders; and

       

      (f) Exercise
        or pursue any one or more of the foregoing rights or remedies at any time
        or
        times, without prejudice to (or election as to) the exercise of any other
        rights(s), remedy or remedies thereafter, or concurrently
        therewith.

       

      7.3 Cumulative
        Rights.  All rights available to the Lenders under the Loan
        Documents shall be cumulative of and in addition to all other rights granted
        thereto at law or in equity, whether or not amounts owing thereunder shall
        be
        due and payable, and whether or not the Lenders shall have instituted any
        suit
        for collection or other action in connection with the Loan
        Documents.

       

      7.4 Waivers.  The
        acceptance by the Lenders at any time and from time to time of partial payment
        of any amount owing under any Loan Documents shall not be deemed to be a
        waiver
        of any Event of Default then existing.  No waiver by the Lenders of
        any Event of Default shall be deemed to be a waiver of any Event of Default
        other than such Event of Default.  No delay or omission by the Lenders
        in exercising any right under the Loan Documents shall impair such right
        or be
        construed as a waiver thereof or an acquiescence therein, nor shall any single
        or partial exercise of any such right preclude other or further exercise
        thereof, or the exercise of any other right under the Loan Documents or
        otherwise.

       

      Section
        8

       

      Miscellaneous

       

      8.1 Survival
        of Various
        Matters.  All covenants and agreements herein not fully
        performed before the date of this Agreement shall survive such
        date.

       

      8.2 Notices.  All
        notices, requests and communications hereunder shall be in writing and shall
        be
        deemed to have been duly given to a party when delivered in person (including
        delivery by an express delivery service or by facsimile transmission during
        the
        recipient's regular business hours) to the officer of the Borrower or of
        the
        Lenders, respectively, named below, or two calendar days after such notice
        is
        enclosed in a properly sealed envelope, certified or registered, and deposited
        (postage and certification or registration prepaid) in a post office or
        collection facility regularly maintained by the United States Postal Service
        and
        addressed as follows:

       

      If
        to
        Lenders:

       

      Denly
        ACI
        Partners, Ltd.

      13809
        Research Blvd., Suite 810

      Austin,
        Texas  78750

      Attn:
        D.
        Mark von Waaden

      Fax:
        512.
        401.6551

       

      and

       

      The
        von
        Waaden 2004 Revocable Trust

      13809
        Research Blvd., Suite 810

      Austin,
        Texas  78750

      Attn:
        D.
        Mark von Waaden

      Fax:
        512.401.6551

       

      With
        a
        copy (which shall not constitute notice) to:

       

      Graves,
        Dougherty, Hearon & Moody, P.C.

      401
        Congress Avenue, Suite 2200

      Austin,
        Texas 78701

      Attn:  R.
        Clarke Heidrick

      Fax:  512.480.5836

       

      If
        to
        Borrower:

       

      America
        West Resources, Inc.

      57
        West
        200 South, Suite 400

      Salt
        Lake
        City, Utah, 84101

      Attn:
        Dan
        R. Baker, CEO

      Fax:
        801.521.3301

       

      With
        a
        copy (which shall not constitute notice) to:

       

      Brewer
        & Pritchard, P.C.

      3
        Riverway, Suite 1800

      Houston,
        Texas  77056

      Attn:
        Thomas C. Pritchard

      Fax:
        713.209.2921

       

      Either
        party may, by proper written notice hereunder to the other party, change
        the
        address or the officer to which notices shall thereafter be sent to
        it.

       

      8.3 Control.  None
        of the covenants or other provisions contained in this Agreement shall, or
        shall
        be deemed to, give the Lenders rights to exercise control over the affairs
        or
        management of the Borrower or any of its Subsidiaries, the power of the Lenders
        being limited to the rights to exercise the remedies provided in the Loan
        Documents; provided, however, that if the Lenders becomes the owner of any
        stock
        or other equity interest in any Person, whether through foreclosure or
        otherwise, it shall be entitled to exercise such legal rights as it may have
        by
        being an owner of such stock or other equity interest in such
        Person.

       

      8.4 Successors
        and
        Assigns.  All covenants and agreements herein contained by or
        on behalf of the Borrower and the Lenders shall bind their respective successors
        and assigns and shall inure to the benefit of the Borrower and the Lenders
        and
        their respective successors and assigns; provided, however, that the Borrower
        shall not have the right to assign its rights hereunder or any interest herein
        without the prior written consent of the Lenders.  The Lenders
        reserves the right to sell or assign all or any portion of the Indebtedness
        and
        Obligations and to grant one or more participations or interests in the
        Indebtedness and Obligations.  The Lenders may, in connection with any
        participation or proposed participation, disclose to the participant or proposed
        participant any information relating to the Borrower furnished to the Lenders
        by
        or on behalf of the Borrower and its Subsidiaries.

       

      8.5 Renewals.  All
        provisions of this Agreement relating to the Notes shall apply with equal
        force
        and effect to each and all promissory notes hereafter executed which in whole
        or
        in part represent a renewal, extension, consolidation or rearrangement of
        any
        part of the indebtedness originally represented by the Notes.

       

      8.6 No
        Waiver.  No course of dealing on the part of the Lenders or its
        trustees, officers or employees or any failure or delay by the Lenders with
        respect to exercising any right, power or privilege of the Lenders under
        this
        Agreement, the Notes or other Loan Documents shall operate as a waiver
        thereof.  The rights and remedies of the Lenders shall be cumulative
        and the exercise or partial exercise of any such right or remedy shall not
        preclude the exercise of any other right or remedy.

       

      8.7 Governing
        Law.  This Agreement, the Notes and the other Loan Documents
        shall be deemed to be contracts made under and shall be construed in accordance
        with and governed by the laws of the State of Utah, except as federal law
        may
        apply.  The Borrower irrevocably agrees that any cause of action
        brought to enforce or interpret the provisions of this Agreement, the Notes
        or
        any of the other Loan Documents shall be brought in the district courts of
        Salt
        Lake County, Utah, or in the United States District Court for the Central
        District of Utah.

       

      8.8 Non-Subordination.  The
        Notes shall never be in a position subordinate to any indebtedness owing
        to any
        other creditor of the Borrower.

       

      8.9 Exhibits
        and
        Schedules.  The Exhibits and Schedules attached to this
        Agreement are incorporated herein for all purposes and shall be considered
        a
        part of this Agreement.  In the event of any conflicts or
        inconsistencies, the terms and provisions of this Agreement shall
        control.

       

      8.10 Severability.  In
        the event any one or more of the provisions contained in this Agreement or
        in
        the Notes, or in any of the other Loan Documents or any other instrument
        referred to herein or executed in connection with or as security for the
        Notes
        shall, for any reason, be held to be invalid, illegal or unenforceable in
        any
        respect, such invalidity, illegality or unenforceability shall not affect
        any
        other provision of this Agreement, the Notes, the other Loan Documents or
        any
        other instrument referred to herein or executed in connection with or as
        security for either of the Notes.  Furthermore, in lieu of such an
        illegal, invalid or unenforceable provision, there shall be added automatically
        as part of this Agreement, the Notes or any other Loan Document, as the case
        may
        be, a provision as similar in terms to such illegal, invalid or unenforceable
        provision as may be possible and be legal, valid or enforceable.

       

      8.11 Savings
        Clause.  It is not the intention of any party to any of the
        Loan Documents to make an agreement violative of the laws of any applicable
        jurisdiction relating to usury.  Regardless of any provision in any of
        the Loan Documents, the Lenders shall never be entitled to receive, collect
        or
        apply, as interest on the Indebtedness or Obligations, any amount which would
        cause the interest paid or payable thereon to exceed the Maximum Lawful
        Amount.  If the Lenders ever receive, collect or apply, as interest,
        any such excess, such amount which would be excessive interest shall be deemed
        a
        partial repayment of principal and treated hereunder as such; and if principal
        is paid in full, any remaining excess shall be paid to the
        Borrower.  In determining whether or not the interest paid or payable,
        under any specific contingency, would cause the interest to exceed the Maximum
        Lawful Amount, the Borrower and the Lenders shall, to the maximum extent
        permitted under applicable laws, (i) characterize any nonprincipal payment
        as an
        expense, fee or premium rather than as interest, (ii) exclude voluntary
        prepayments and the effect thereof, and (iii) amortize, prorate, allocate
        and
        spread in equal parts, the total amount of interest among all of the Loans
        throughout the entire contemplated term of the Loans so that the interest
        rate
        is uniform throughout the entire term of the Loans; provided that if the
        Indebtedness or Obligations are paid and performed in full prior to the end
        of
        the full contemplated term thereof, and if the interest received for the
        actual
        period of existence thereof would cause the interest to exceed the Maximum
        Lawful Amount, the Lenders shall refund to the Borrower the amount of such
        excess or credit the amount of such excess against the total principal amount
        owing, and, in such event, Lenders shall not be subject to any penalties
        provided by any laws for contracting for, charging or receiving interest
        in
        excess of the Maximum Lawful Amount.  This Section 8.11
        shall
        control every other provision of all agreements among the parties to this
        Agreement pertaining to the transactions contemplated by or contained in
        any of
        the Loan Documents.

       

      8.12 Counterparts.  To
        facilitate execution, this Agreement and the other Loan Documents may be
        executed in any number of counterparts as may be convenient or necessary,
        and it
        shall not be necessary that the signatures of all parties hereto or thereto
        be
        contained on any one counterpart hereof or thereof.  Additionally, the
        parties hereto agree that for purposes of facilitating the execution of this
        Agreement and the other Loan Documents, (a) the signature pages taken from
        separate individually executed counterparts of this Agreement and the other
        Loan
        Documents may be combined to form multiple fully executed counterparts and
        (b) a
        facsimile transmission shall be deemed to be an original
        signature.  All executed counterparts of this Agreement and the other
        Loan Documents shall be deemed to be originals, but all such counterparts
        taken
        together or collectively, as the case may be, shall constitute one and the
        same
        agreement.

       

      8.13 Limitation
        of
        Remedies.  Anything contained in this Agreement and anything
        contained in the other Loan Documents to the contrary notwithstanding, in
        the
        event that the Lenders (i) fails or refuses to grant consent or approval
        when
        required by applicable law or when required hereunder or under any of the
        other
        Loan Documents for any matter or (ii) acts unreasonably or unreasonably
        withholds or delays acting in any circumstances where by law or hereunder
        or
        under any of the other Loan Documents there is an obligation to act reasonably
        or promptly (it being agreed that no such obligation is implied) the parties
        agree that the damages which might arise as a result of any such actions
        or
        inactions are incapable of accurate determination.  Accordingly, the
        parties agree that the remedies of specific performance and injunctive relief
        are and shall be the sole and exclusive remedies and relief of the Borrower
        with
        respect to such actions against the Lenders, and the Borrower hereby irrevocably
        and unconditionally waives all claims for damages with respect
        thereto.  Neither the Lenders, nor any Affiliate, trustee, officer,
        director, employee, attorney, or agent of the Lenders shall have any liability
        with respect to, and the Borrower, hereby waives, releases, and agrees not
        to
        sue any of them upon, any claim for any special, indirect, incidental, or
        consequential damages suffered or incurred by the Borrower or any Subsidiary
        of
        the Borrower in connection with, arising out of, or in any way related to,
        this
        Agreement or any of the other Loan Documents, or any of the transactions
        contemplated by this Agreement, any of the other Loan Documents.  The
        Borrower hereby waives, releases, and agrees not to sue the Lenders or any
        of
        the Lenders' Affiliates, trustees, officers, directors, employees, attorneys,
        or
        agents for punitive damages in respect of any claim in connection with, arising
        out of, or in any way related to, this Agreement or any of the Notes, or
        any of
        the other Loan Documents.

       

      8.14 Headings.  The
        headings of the sections of this Agreement are inserted for convenience only
        and
        shall not be deemed to constitute a part hereof.

       

      8.15 No
        Obligation to Make
        Advance.  No advances need be made by the Lenders under this
        Agreement or the Notes if such loan or advance should cause the Lenders to
        be in
        violation of any law, rule, regulation or interpretation of a governmental
        body
        applicable to the Lenders.

       

      8.16 Role
        of
        Lenders.  Any term or condition hereof, or of any of the other
        Loan Documents to the contrary notwithstanding, the Lenders shall not have,
        and
        by their execution and acceptance of this Agreement hereby expressly disclaim,
        any obligation or responsibility for the management, conduct or operation
        of the
        business and affairs of the Borrower and its Subsidiaries, and any term or
        condition hereof, or of any of the other Loan Documents, permitting the Lenders
        to disburse funds, whether from the proceeds of the Loans, or otherwise,
        or to
        take or refrain from taking any action with respect to the Borrower, the
        Collateral or any other security for repayment of the Loans, shall be deemed
        to
        be solely to permit the Lenders to audit and review the management, operation
        and conduct of the business and affairs of the Borrower and its Subsidiaries,
        and to maintain and preserve the security given by the Borrower to the Lenders
        for the Loans and may not be relied upon by any other
        person.  Further, the Lenders shall not have, has not assumed and, by
        their execution and acceptance of this Agreement, hereby expressly disclaim
        any
        liability or responsibility for the repayment or performance of any indebtedness
        or obligation of the Borrower or its Subsidiaries, and no condition hereof,
        or
        of any of the other Loan Documents, shall be construed so as to deem the
        relationship between the Borrower and the Lenders to be other than that of
        borrower and lender, and the Borrower shall at all times represent that the
        relationship between the Borrower and the Lenders is solely that of borrower
        and
        lender. No provision in this Agreement or of any of the other Loan Documents
        and
        no course of dealing between the parties shall be deemed to create any fiduciary
        duty by the Lenders to the Borrower or any of its Subsidiaries.

       

      8.17 NO
        OTHER
        AGREEMENTS.  THIS AGREEMENT,
        THE
        NOTES AND THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN
        THE
        PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS,
        OR
        SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.  THERE ARE NO UNWRITTEN
        ORAL AGREEMENTS BETWEEN THE PARTIES.

       

      8.18 WAIVER
        OF
        JURY.  THE LENDERS AND THE BORROWER HEREBY IRREVOCABLY WAIVE
        ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTER-CLAIM, ARISING
        OUT OF OR RELATED TO THIS AGREEMENT, THE NOTES, AND THE OTHER LOAN DOCUMENTS
        OR
        THE ACTIONS OF THE LENDERS IN THE ENFORCEMENT THEREOF OR WITH RESPECT TO
        THE
        TRANSACTIONS CONTEMPLATED BY THE PROVISIONS THEREOF.

       

      8.19 No
        Duty.  All attorneys, accountants, appraisers, and other
        professional Persons and consultants retained by the Lenders shall have the
        right to act exclusively in the interest of the Lenders and shall have no
        duty
        of disclosure, duty of loyalty, duty of care, or other duty or obligation
        of any
        type or nature whatsoever to the Borrower or any of the Borrower's shareholders
        or Subsidiaries.

       

      IN
        WITNESS WHEREOF, the parties hereto have caused this instrument to be duly
        executed in multiple counterparts, each of which is an original instrument
        for
        all purposes, all as of the day and year first above written.

       

      Signature
        Pages Follow

       

      
        
          
            980722v4

          

          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      COUNTERPART
        SIGNATURE PAGE FOR ATTACHMENT TO LOAN AGREEMENT AMONG DENLY ACI PARTNERS, LTD., A
        TEXAS LIMITED PARTNERSHIP (THE "PARTNERSHIP"), AND
        DENNIS C. VON WAADEN, AND
        SALLY
        A. VON WAADEN, AS CO-TRUSTEES OFTHE VON WAADEN 2004
        REVOCABLE
        TRUST (THE "TRUST"),
        AND AMERICA WEST RESOURCES,
        INC.,
        A NEVADA CORPORATION (THE "BORROWER").

       

      Denly
        ACI Partners,
        Ltd.,

      a
        Texas limited
        partnership

      

      By:           
        Denly ACI Mgt., LLC,

      a
        Texas limited liability
        company

      

      By:                                                                
        

      Dennis
        C. von Waaden,
        Manager

      

      

      By:                                                                
        

      Sally
        A. von Waaden,
        Manager

      

      

      

      

      Dennis
        C. von Waaden, Co-Trustee of The von Waaden 2004 Revocable Trust, created
        under
        agreement dated May 13, 2004

      

      

      

      Sally
        A. von Waaden, Co-Trustee of
        The

      von
        Waaden 2004 Revocable Trust, created under agreement dated May 13,
        2004

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      COUNTERPART
        SIGNATURE PAGE FOR ATTACHMENT TO LOAN AGREEMENT AMONG DENLY ACI PARTNERS, LTD., A
        TEXAS LIMITED PARTNERSHIP (THE "PARTNERSHIP"), AND
        DENNIS C. VON WAADEN, AND
        SALLY
        A. VON WAADEN, AS CO-TRUSTEES OFTHE VON WAADEN 2004
        REVOCABLE
        TRUST (THE "TRUST"),
        AND AMERICA WEST RESOURCES,
        INC.,
        A NEVADA CORPORATION (THE "BORROWER").

       

      

      America
        West Resources,
        Inc.,

      a
        Nevada corporation

      

      

      By:                                                                
        

      Dan
        R. Baker,

      Chief
        Executive Officer

      

      ATTEST:

      

      

      

      ______________________________

      Alex
        Walker, Secretary

      

      

      

      

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      COMPLIANCE
        CERTIFICATE

      

      

      

      Date:  _________________

      

      

      TO:           
        Denly ACI Partners, Ltd.

      The
        von Waaden 2004 Revocable
        Trust

      

      In
        accordance with the provisions of
Section 4.1(d)
        of that
        certain Loan Agreement (as modified, amended, restated or replaced from time
        to
        time, the "Loan
        Agreement") dated as of October 9, 2009 by and among Denly ACI Partners,
        Ltd., a
        Texas limited partnership (the "Partnership"), and
        Dennis C. von Waaden, and
        Sally
        A. von Waaden, as Co-Trustees ofThe von Waaden 2004
        Revocable
        Trust (the "Trust"),
        and America West Resources,
        Inc.,
        a Nevada corporation (the "Borrower"), the
        undersigned, as the chief financial officer of the Borrower, hereby certifies
        as
        of ____________, 200__ (the "Certification Date") to the best of [his/her]
        knowledge to the following:

      

      1.           
        As of the Certification Date, no Default or Event of Default had occurred
        [other
        than. Such Default or Event of Default is not continuing or, if continuing,
        the
        Borrower is taking the following steps to cure the same:.]

      

      3.           
        Terms used herein and not otherwise defined are used with the same meanings
        given such terms in the Loan Agreement.

      

      America
        West Resources,
        Inc.

      

      

      By:                                                                
        

      Name:

      Title:

      

      

      

      
        
          
            EXHIBIT  A

            TO

            LOAN
              AGREEMENT

            980722v4

          

          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
        	
                Document

              	
                Date
                  Issued

              	
                Principal
                  Amount

              	
                Party

              	
                Interest
                  Rate

              	
                Due
                  Date

              
	
                John
                  Thomas Bridge

                loan
                  agreement 2 –

                June
                  08

              	
                6/25/08

              	
                 $250,000.00

              	
                John
                  Thomas Bridge & Opportunity Fund

              	
                10%

              	
                12-31-08
                  or the closing of a

                 $10
                  mill equity financing,

                whichever
                  is earlier.

              
	
                Promissory
                  Note –

                Dan
                  Baker –

                Sept
                  08

              	
                9/30/08

              	
                 $
                  50,000.00

              	
                Dan
                  Baker

              	
                10%

              	
                12-31-08
                  or the closing of a

                $10
                  mill equity financing,

                whichever
                  is earlier.

              
	
                Promissory
                  Note –

                George
                  Jarkesy –

                Sept
                  2008

              	
                9/30/08

              	
                 $
                  70,000.00

              	
                George
                  Jarkesy

              	
                10%

              	
                12-31-08
                  or the closing of a

                $10
                  mill equity financing,

                whichever
                  is earlier.

              
	
                Promissory
                  Note –

                Jarkesy
                  Foundation –

                Sept
                  2008

              	
                9/12/08

              	
                 $  20,000.00

              	
                The
                  Jarkesy Foundation

              	
                10%

              	
                12-31-08
                  or the closing of a

                $10
                  mill equity financing,

                whichever
                  is earlier.

              
	
                Promissory
                  Note –

                John
                  Thomas Fund –

                Sept
                  2008

              	
                9/12/08

              	
                 $100,000.00

              	
                John
                  Thomas Bridge & Opportunity Fund

              	
                10%

              	
                12-31-08
                  or the closing of a

                $10
                  mill equity financing,

                whichever
                  is earlier.

              
	
                Promissory
                  Note –

                John
                  Thomas Fund –

                Sept
                  2008 - no 2

              	
                9/26/08

              	
                 $100,000.00

              	
                John
                  Thomas Bridge & Opportunity Fund

              	
                10%

              	
                12-31-08
                  or the closing of a

                $10
                  mill equity financing,

                whichever
                  is earlier.

              
	
                Promissory
                  Note –

                John
                  Thomas Fund –

                Sept
                  2008 - no 3

              	
                9/30/08

              	
                 $  50,000.00

              	
                John
                  Thomas Bridge & Opportunity Fund

              	
                10%

              	
                12-31-08
                  or the closing of a

                $10
                  mill equity financing,

                whichever
                  is earlier.

              
	 	
                10/2/08

              	
                 $100,000.00

              	
                John
                  Thomas Bridge & Opportunity Fund

              	
                10%

              	
                12-31-08
                  or the closing of a

                $10
                  mill equity financing,

                whichever
                  is earlier.

              

      

      
        
          
            SCHEDULE
              1.1

            TO

            LOAN
              AGREEMENT

            980722v4

          

          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      COLLATERAL

      

      

      1.           
        The Columbia Mine Lease and all rights appurtenant thereto.

      

      2.           
        The Escrow Agreement and Escrow Funds held by the escrow agent under the
        Escrow
        Agreement.

      

      3.           
        All Operating Agreements.

      

      
        
          
            SCHEDULE
              4.8

            TO

            LOAN
              AGREEMENT

            980722v4

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