Document:

Exhibit 4.1 (9.5.12)

364-DAY CREDIT AGREEMENT
dated as of
August 31, 2012,
among
BEST BUY CO., INC.,
The SUBSIDIARY GUARANTORS Party Hereto,
The LENDERS Party Hereto
and
JPMORGAN CHASE BANK, N.A.,
as Administrative Agent

$1,000,000,000

J.P. MORGAN SECURITIES LLC,
U.S. Bank National Association,
bbVA SECURITIES INC., 
CITIGROUP GLOBAL MARKETS INC.
and
RBC CAPITAL MARKETS,
as Joint Lead Arrangers and Joint Bookrunners
U.S. BANK NATIONAL ASSOCIATION,
as Syndication Agent
BBVA SECURITIES INC., 
CITIBANK, N.A.
and
RBC CAPITAL MARKETS,
as Documentation Agents

TABLE OF CONTENTS
Page
ARTICLE I

Definitions

	
				
	SECTION 1.01.
	Defined Terms
	1
	

	SECTION 1.02.
	Classification of Loans and Borrowings
	13
	

	SECTION 1.03.
	Terms Generally
	13
	

	SECTION 1.04.
	Accounting Terms; GAAP
	14
	

ARTICLE II

The Credits

	
				
	SECTION 2.01.
	The Commitments
	14
	

	SECTION 2.02.
	Loans and Borrowings
	14
	

	SECTION 2.03.
	Requests for Syndicated Borrowings
	15
	

	SECTION 2.04.
	Competitive Bid Procedure
	15
	

	SECTION 2.05.
	[Intentionally Omitted]
	17
	

	SECTION 2.06.
	[Intentionally Omitted]
	17
	

	SECTION 2.07.
	Funding of Borrowings
	17
	

	SECTION 2.08.
	Interest Elections
	17
	

	SECTION 2.09.
	Termination and Reduction of the Commitments
	18
	

	SECTION 2.10.
	Repayment of Loans; Evidence of Debt
	18
	

	SECTION 2.11.
	Prepayment of Loans
	19
	

	SECTION 2.12
	Fees
	19
	

	SECTION 2.13.
	Interest
	20
	

	SECTION 2.14.
	Alternate Rate of Interest
	20
	

	SECTION 2.15.
	Increased Costs
	21
	

	SECTION 2.16.
	Break Funding Payments
	21
	

	SECTION 2.17.
	Taxes
	22
	

	SECTION 2.18.
	Payments Generally; Pro Rata Treatment; Sharing of Setoffs
	24
	

	SECTION 2.19.
	Mitigation Obligations; Replacement of Lenders
	25
	

	SECTION 2.20.
	Defaulting Lenders
	26
	

	SECTION 2.21.
	Term-Out Option
	26
	

ARTICLE III

Guarantee

	
				
	SECTION 3.01.
	The Guarantee
	26
	

	SECTION 3.02.
	Obligations Unconditional
	27
	

	SECTION 3.03.
	Reinstatement
	27
	

	SECTION 3.04.
	Subrogation
	27
	

	SECTION 3.05.
	Remedies
	27
	

	SECTION 3.06.
	Instrument for the Payment of Money
	28
	

	SECTION 3.07.
	Continuing Guarantee
	28
	

	SECTION 3.08.
	Rights of Contribution
	28
	

	SECTION 3.09.
	General Limitation on Guarantee Obligations
	28
	

	SECTION 3.10.
	Designation of Subsidiary Guarantors
	28
	

	SECTION 3.11.
	Release of Guarantees
	28
	

ARTICLE IV

Representations and Warranties

	
				
	SECTION 4.01.
	Organization
	29
	

	SECTION 4.02.
	Authorization; Enforceability
	29
	

	SECTION 4.03.
	Governmental Approvals; No Conflicts
	29
	

	SECTION 4.04.
	Financial Condition; No Material Adverse Change
	29
	

	SECTION 4.05.
	Properties
	29
	

	SECTION 4.06.
	Litigation and Environmental Matters
	29
	

	SECTION 4.07.
	Compliance with Laws and Agreements
	30
	

	SECTION 4.08.
	Investment Company Status
	30
	

	SECTION 4.09.
	Taxes
	30
	

	SECTION 4.10.
	ERISA
	30
	

	SECTION 4.11.
	Subsidiaries
	30
	

	SECTION 4.12.
	Federal Reserve Regulations
	30
	

ARTICLE V

Conditions

	
				
	SECTION 5.01.
	Effective Date
	30
	

	SECTION 5.02.
	Each Credit Even
	31
	

ARTICLE VI

Affirmative Covenants

	
				
	SECTION 6.01.
	Financial Statements, Rating Changes and Other Information
	31
	

	SECTION 6.02.
	Notices of Material Events
	32
	

	SECTION 6.03.
	Existence; Conduct of Business
	32
	

	SECTION 6.04.
	Payment of Obligations
	33
	

	SECTION 6.05.
	Maintenance of Properties; Insurance
	33
	

	SECTION 6.06.
	Books and Records; Inspection Rights
	33
	

	SECTION 6.07.
	Compliance with Laws
	33
	

	SECTION 6.08.
	New Specified Subsidiaries to Become Subsidiary Guarantors
	33
	

	SECTION 6.09.
	Use of Proceeds; Federal Reserve Regulations
	33
	

ARTICLE VII

Negative Covenants

	
				
	SECTION 7.01.
	Subsidiary Indebtedness
	34
	

	SECTION 7.02.
	Liens
	34
	

	SECTION 7.03.
	Fundamental Changes
	35
	

	SECTION 7.04.
	Restrictive Agreements
	36
	

	SECTION 7.05.
	Transactions with Affiliates
	36
	

	SECTION 7.06.
	Certain Financial Covenants
	36
	

	SECTION 7.07.
	Investments in Foreign Subsidiaries
	37
	

ARTICLE VIII

Events of Default

ARTICLE IX

Agency

	
				
	SECTION 9.01.
	Administrative Agent
	38
	

	SECTION 9.02.
	Bookrunners, Etc.
	40
	

ARTICLE X

Miscellaneous

	
				
	SECTION 10.01.
	Notices
	40
	

	SECTION 10.02.
	Waivers; Amendments
	41
	

	SECTION 10.03.
	Expenses; Indemnity; Damage Waiver
	42
	

	SECTION 10.04.
	Successors and Assigns
	43
	

	SECTION 10.05.
	Survival
	45
	

	SECTION 10.06.
	Counterparts; Integration; Effectiveness; Electronic Execution
	45
	

	SECTION 10.07.
	Severability
	45
	

	SECTION 10.08.
	Right of Setoff
	45
	

	SECTION 10.09.
	Governing Law; Jurisdiction; Etc. (a)  Governing Law
	46
	

	SECTION 10.10.
	WAIVER OF JURY TRIAL
	46
	

	SECTION 10.11.
	Headings
	46
	

	SECTION 10.12.
	Treatment of Certain Information; Confidentiality
	46
	

	SECTION 10.13.
	USA PATRIOT Act
	47
	

	SECTION 10.14.
	Interest Rate Limitation
	47
	

	SECTION 10.15.
	No Fiduciary Relationship
	48
	

SCHEDULE 2.01 ‐ Commitments
SCHEDULE 4.11 ‐ Subsidiaries
SCHEDULE 7.01 ‐ Existing and Available Indebtedness
SCHEDULE 7.02 ‐  Certain Existing Liens
SCHEDULE 7.04 ‐ Restrictive Agreements

EXHIBIT A ‐ Form of Assignment and Assumption
EXHIBIT B ‐ Form of Guarantee Assumption Agreement
EXHIBIT C ‐ Form of Non-Bank Certificate
EXHIBIT D ‐ Form of Borrowing Request

364-DAY CREDIT AGREEMENT dated as of August 31, 2012, among BEST BUY CO., INC., the SUBSIDIARY GUARANTORS party hereto, the LENDERS party hereto and JPMORGAN CHASE BANK, N.A., as Administrative Agent.

The Borrower (as hereinafter defined) has requested that the Lenders (as hereinafter defined) make Loans (as hereinafter defined) to the Borrower in an aggregate principal amount not exceeding $1,000,000,000 at any one time outstanding in Dollars.  The Lenders are prepared to extend such Loans upon the terms and conditions hereof, and, accordingly, the parties hereto agree as follows:

ARTICLE I

Definitions

SECTION 1.01.    Defined Terms.  As used in this Agreement (including the introductory paragraph hereto), the following terms have the meanings specified below:

“ABR”, when used in reference to any Loan or Borrowing, refers to whether such Loan, or the Loans comprising such Borrowing, are bearing interest at a rate determined by reference to the Alternate Base Rate.

“Adjusted LIBO Rate” means, for the Interest Period for any Syndicated Eurocurrency Borrowing, an interest rate per annum (rounded upwards, if necessary, to the next 1/16 of 1%) equal to (a) the LIBO Rate for such Interest Period multiplied by (b) the Statutory Reserve Rate for such Interest Period.

“Administrative Agent” means JPMCB, in its capacity as administrative agent for the Lenders hereunder and under the other Loan Documents, and its successors in such capacity as provided in Article IX.

“Administrative Agent's Account” means an account designated by the Administrative Agent in a notice to the Borrower and the Lenders.

“Administrative Questionnaire” means an Administrative Questionnaire in a form supplied by the Administrative Agent.

“Affiliate” means, with respect to a specified Person, another Person that directly, or indirectly through one or more intermediaries, Controls or is Controlled by or is under common Control with the Person specified.

“Alternate Base Rate” means, for any day, a rate per annum equal to the greatest of (a) the Prime Rate in effect on such day, (b) the Federal Funds Effective Rate in effect on such day plus 1⁄2 of 1% and (c) the Adjusted LIBO Rate on such day (or if such day is not a Business Day, the immediately preceding Business Day) for a deposit in Dollars with a maturity of one month plus 1%.  For purposes of clause (c) above, the Adjusted LIBO Rate on any day shall be based on the rate per annum appearing on the Reuters “LIBOR01” screen displaying British Bankers' Association Interest Settlement Rates (or on any successor or substitute screen provided by Reuters, or any successor to or substitute for such service, providing rate quotations comparable to those currently provided on such screen, as determined by the Administrative Agent from time to time for purposes of providing quotations of interest rates applicable to Dollar deposits in the London interbank market) at approximately 11:00 a.m., London time, on such day for deposits in Dollars with a maturity of one month.  Any change in the Alternate Base Rate due to a change in the Prime Rate, the Federal Funds Effective Rate or the Adjusted LIBO Rate shall be effective from and including the effective date of such change in the Prime Rate, the Federal Funds Effective Rate or the Adjusted LIBO Rate, as the case may be.

“Applicable Percentage” means, with respect to any Lender, the percentage of the total Commitments represented by such Lender's Commitment.  If the Commitments have terminated or expired, the Applicable Percentages shall be determined based upon the Commitments most recently in effect, giving effect to any assignments.

“Applicable Rate” means, for any day, with respect to any Syndicated ABR Loan or Syndicated Eurocurrency Loan, or with respect to the facility fees payable hereunder, as the case may be, the applicable rate per annum set forth below under the caption ABR Spread, Eurocurrency Spread or Facility Fee Rate, as the case may be, based upon the applicable Moody's Rating and/or S&P Rating, respectively, applicable on such date:

1

	
							
	S&P Rating / Moody's Rating
	 
	ABR Spread
	 
	Eurocurrency Spread
	 
	Facility Fee Rate

	Category 1
	 
	 
	 
	 
	 
	 

	A-/A3 or higher
	 
	—%
	 
	0.925%
	 
	0.075%

	Category 2

	 
	 
	 
	 
	 
	 

	BBB+/Baa1
	 
	0.025%
	 
	1.025%
	 
	0.100%

	Category 3
	 
	 
	 
	 
	 
	 

	BBB/Baa2
	 
	0.250%
	 
	1.250%
	 
	0.125%

	Category 4

	 
	 
	 
	 
	 
	 

	BBB-/Baa3
	 
	0.325%
	 
	1.325%
	 
	0.175%

	Category 5

	 
	 
	 
	 
	 
	 

	BB+/Ba1 or lower, or unrated
	 
	0.525%
	 
	1.525%
	 
	0.225%

For purposes of the foregoing, (a) if any of Moody's or S&P shall not have in effect a Moody's Rating or an S&P Rating, as the case may be (other than by reason of the circumstances referred to in the last sentence of this definition), then the Borrower and the Lenders shall negotiate in good faith to amend this definition to reflect the unavailability of ratings from such rating agency and, pending the effectiveness of any such amendment, such rating agency shall be deemed to have established a rating in Category 5; (b) if the Moody's Rating or S&P Rating established or deemed to have been established by Moody's or S&P, as the case may be, shall fall within different Categories, the Applicable Rate shall be based on the higher of the two ratings, unless the ratings differ by two or more categories, in which case the Applicable Rate shall be based on the Category one level below that corresponding to the higher rating; and (c) if the Moody's Rating or S&P Rating established or deemed to have been established by Moody's or S&P, as the case may be, shall be changed (other than as a result of a change in the rating system of Moody's or S&P), such change shall be effective as of the date on which it is first announced by the applicable rating agency, irrespective of when notice of such change shall have been furnished by the Borrower to the Administrative Agent and the Lenders pursuant to Section 6.01 or otherwise.  Each change in the Applicable Rate shall apply during the period commencing on the effective date of such change and ending on the date immediately preceding the effective date of the next such change.  If the rating system of Moody's or S&P shall change, or if any such rating agency shall cease to be in the business of rating corporate debt obligations, the Borrower and the Lenders shall negotiate in good faith to amend this definition to reflect such changed rating system or the unavailability of ratings from such rating agency and, pending the effectiveness of any such amendment, the Applicable Rate shall be determined by reference to the rating most recently in effect prior to such change or cessation.

“Approved Fund” means any Person (other than a natural person) that is engaged in making, purchasing, holding or investing in bank loans and similar extensions of credit in the ordinary course of its business and that is administered or managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an entity that administers or manages a Lender.

“Arranger” means each of J.P. Morgan Securities LLC, U.S. Bank National Association, BBVA Securities Inc., Citigroup Global Markets Inc. and RBC Capital Markets, in its capacity as joint lead arranger and joint bookrunner for the credit facility established hereunder.

“Assignment and Assumption” means an assignment and assumption entered into by a Lender and an assignee (with the consent of any Person whose consent is required by Section 10.04), and accepted by the Administrative Agent, in substantially the form of Exhibit A or any other form approved by the Administrative Agent.

“Availability Period” means the period from and including the Effective Date to but excluding the earlier of the Commitment Termination Date and the date of termination of the Commitments.

“Bankruptcy Event” means, with respect to any Person, that such Person has become the subject of a bankruptcy or insolvency proceeding, or has had a receiver, conservator, trustee, administrator, custodian, assignee for the benefit of creditors or similar Person charged with the reorganization or liquidation of its business appointed for it, or, in the good faith determination of the Administrative Agent, has taken any action in furtherance of, or indicating its consent to, approval of or acquiescence in any such proceeding or appointment; provided that a Bankruptcy Event shall not result solely by virtue of any ownership interest, or the acquisition of any ownership interest, in such Person by a Governmental Authority; provided, however, that such ownership interest  does not result in or provide such Person with immunity from the jurisdiction of courts within the United States of America or from the enforcement of judgments or writs of attachment on its assets or permit such Person (or such Governmental Authority) to reject, repudiate, disavow or disaffirm any agreements made by such Person.

2

“Best Buy Europe Distributions” means Best Buy Europe Distributions Limited, a limited company incorporated in England and Wales with registered number 06534088.

“Board” means the Board of Governors of the Federal Reserve System of the United States of America.

“Borrower” means Best Buy Co., Inc., a Minnesota corporation.

“Borrowing” means (a) all Syndicated ABR Loans made, converted or continued on the same date or (b) Syndicated Eurocurrency Loans or Competitive Loans of the same Type that have the same Interest Period (or any single Competitive Loan that does not have the same Interest Period as any other Competitive Loan of the same Type).

“Borrowing Request” means a request by the Borrower for a Syndicated Borrowing in accordance with Section 2.03.

“Business Day” means any day (a) that is not a Saturday, Sunday or other day on which commercial banks in New York City are authorized or required by law to remain closed and (b) if such day relates to a Competitive Bid Request or Competitive Bid for a Competitive Eurocurrency Loan, or to a borrowing, a continuation or conversion of or into, or the Interest Period for, a Eurocurrency Borrowing, or to a notice by the Borrower with respect to any such borrowing, payment, prepayment, continuation, conversion, or Interest Period, that is also a day on which dealings in deposits denominated in Dollars are carried out in the London interbank market.

“Capital Lease Obligations” of any Person means the obligations of such Person to pay rent or other amounts under any lease of (or other arrangement conveying the right to use) real or personal property, or a combination thereof, which obligations are required to be classified and accounted for as capital leases on a balance sheet of such Person under GAAP, and the amount of such obligations shall be the capitalized amount thereof determined in accordance with GAAP.

“Cash Flow Leverage Ratio” means, as of the last day of any Measurement Period, the ratio of (a) the sum of (i) Net Interest-bearing Indebtedness on such day, (ii) the principal amount of the Securitization Transactions on such day plus (iii) eight times Rental and Lease Expense for the Measurement Period ended on such day, to (b) the sum of EBITDA and Rental and Lease Expense for the Measurement Period ended on such day.

“Change in Control” means either (a) the occurrence, after the Effective Date, of any of any Person or two or more Persons acting in concert acquiring beneficial ownership (within the meaning of Rule 13d-3 of the Securities and Exchange Commission under the Exchange Act), directly or indirectly, of common stock of the Borrower representing 50% or more of the combined voting power of all common stock of the Borrower entitled to vote in the election of directors or (b) during any period of up to twelve consecutive months, whether commencing before or after the Effective Date, individuals who at the beginning of such twelve-month period were directors of the Borrower, ceasing for any reason (other than by reason of death, disability or scheduled retirement) to constitute a majority of the Board of Directors of the Borrower, unless such directors were replaced by new directors whose election to the Board of Directors of the Borrower, or whose nomination for election by the shareholders of the Borrower, was approved by a majority of the directors then still in office who either were directors at the beginning of such period or whose election or nomination for election was previously so approved.

“Change in Law” means the occurrence, after the date of this Agreement, of any of the following:  (a) the adoption or taking effect of any law, rule, regulation or treaty, (b) any change in any law, rule, regulation or treaty or in the administration, interpretation, implementation or application thereof by any Governmental Authority or (c) the making or issuance of any request, guideline or directive (whether or not having the force of law) by any Governmental Authority; provided that, notwithstanding anything herein to the contrary, (i) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, guidelines or directives thereunder or issued in connection therewith and (ii) all requests, rules, guidelines or directives promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States regulatory authorities, in each case pursuant to Basel III, shall in each case be deemed to be a “Change in Law”, regardless of the date enacted, adopted, promulgated or issued; and provided, further, that the determination by any Lender of any additional amount owing to it, to the extent claimed in reliance on the preceding proviso, shall be made in good faith in a manner generally consistent with such Lender's standard practices.

“Class”, when used in reference to any Loan or Borrowing, refers to whether such Loan, or the Loans comprising such Borrowing, are Syndicated Loans or Competitive Loans.

“Code” means the Internal Revenue Code of 1986.

3

“Commitment” means, with respect to each Lender, the commitment of such Lender to make Syndicated Loans hereunder, expressed as an amount representing the maximum aggregate amount of such Lender's Revolving Credit Exposure hereunder, as such commitment may be (a) reduced from time to time pursuant to Section 2.09 and (b) reduced or increased from time to time pursuant to assignments by or to such Lender pursuant to Section 10.04.  The initial amount of each Lender's Commitment is set forth on Schedule 2.01 or in the Assignment and Assumption pursuant to which such Lender shall have assumed its Commitment.  The initial aggregate amount of the Lenders' Commitments is $1,000,000,000.

“Commitment Termination Date” means August 30, 2013 (or, if such date is not a Business Day, the immediately preceding Business Day).

“Competitive”, when used in reference to any Loan or Borrowing, refers to whether such Loan, or the Loans comprising such Borrowing, are made pursuant to Section 2.04.

“Competitive Bid” means an offer by a Lender to make a Competitive Loan in accordance with Section 2.04.

“Competitive Bid Rate” means, with respect to any Competitive Bid, the Margin or the Fixed Rate, as applicable, offered by the Lender making such Competitive Bid.

“Competitive Bid Request” means a request by the Borrower for Competitive Bids in accordance with Section 2.04.

“Connection Income Taxes” means Other Connection Taxes that are imposed on or measured by net income (however denominated) or that are franchise Taxes or branch profits Taxes.

“Control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ability to exercise voting power, by contract or otherwise.  “Controlling” and “Controlled” have meanings correlative thereto.

“Default” means any event or condition which constitutes an Event of Default or which upon notice, lapse of time or both would, unless cured or waived, become an Event of Default.

“Defaulting Lender” means any Lender that (a) has failed, within two Business Days of the date required to be funded or paid, (i) to fund any portion of its Loans or (ii) to pay to the Administrative Agent or any other Lender any other amount required to be paid by it hereunder, unless, in the case of clause (i) above, such Lender notifies the Administrative Agent in writing that such failure is the result of such Lender's good faith determination that a condition precedent to funding (specifically identified in writing, including, if applicable, by reference to a specific Default) has not been satisfied, (b) has notified the Borrower, the Administrative Agent or any other Lender in writing, or has made a public statement to the effect, that it does not intend or expect to comply with any of its funding obligations under this Agreement (unless such writing or public statement indicates that such position is based on such Lender's good-faith determination that a condition precedent (specifically identified in such writing, including, if applicable, by reference to a specific Default) to funding a Loan cannot be satisfied) or generally under other agreements in which it commits to extend credit, (c) has failed, within three Business Days after request by the Administrative Agent or any other Lender, made in good faith, to provide a certification in writing from an authorized officer of such Lender that it will comply with its obligations to fund prospective Loans, provided that such Lender shall cease to be a Defaulting Lender pursuant to this clause (c) upon the receipt by the Administrative Agent or such other Lender of such certification, or (d) has become the subject of a Bankruptcy Event.

“Documentation Agent” means each of BBVA Securities Inc., Citibank, N.A. and RBC Capital Markets in its capacity as documentation agent for the credit facility established hereunder. 

“Dollars” or “$” refers to lawful money of the United States of America.

“Domestic Securitization Transaction” means any transfer by the Borrower or any of its Domestic Subsidiaries of its accounts receivable or interests (including security interests) therein  (a) to a trust, partnership, corporation, limited liability company or other entity, which transfer is funded in whole or in part, directly or indirectly, by the incurrence or issuance by the transferee or successor transferee of Indebtedness or other securities that are to receive payments from, or that represent interests in, the cash flow derived from such accounts receivable or interests therein, or (b) directly to one or more investors or other purchasers.

“Domestic Subsidiary” means any Subsidiary of the Borrower organized or incorporated under the laws of any 

4

State within the United States of America or the District of Columbia.

“EBITDA” means, for any period, the consolidated net income of the Borrower and its consolidated Subsidiaries determined in accordance with GAAP (but excluding therefrom any portion thereof attributable to any noncontrolling interest in a Subsidiary and, prior to the Restricted Date, excluding all amounts relating to Best Buy Europe Distributions and its Subsidiaries) plus (a) to the extent deducted in determining such consolidated net income, the sum of (i) interest expense (net of interest income), income tax expense and depreciation and amortization, all as determined in accordance with GAAP, (ii) extraordinary, non-recurring or unusual charges or losses, (iii) charges resulting from the application of FASB Statement Number 123 (Revised), (iv) other non-cash charges, and (v) losses arising from the sale of assets other than in the ordinary course of business, minus (b) to the extent included in such consolidated net income, extraordinary gains and gains arising from the sale of assets other than in the ordinary course of business.

“Effective Date” means the date on which the Administrative Agent declares this Agreement effective as provided in Section 5.01.

“Environmental Laws” means all laws, rules, regulations, codes, ordinances, orders, decrees, judgments, injunctions, notices or binding agreements issued, promulgated or entered into by any Governmental Authority, relating in any way to the environment, preservation or reclamation of natural resources, the management, release or threatened release of any Hazardous Material or to health and safety matters.

“Environmental Liability” means any liability, contingent or otherwise (including any liability for damages, costs of environmental remediation, fines, penalties or indemnities), of the Borrower or any Subsidiary directly or indirectly resulting from or based upon (a) violation of any Environmental Law, (b) the generation, use, handling, transportation, storage, treatment or disposal of any Hazardous Materials, (c) exposure to any Hazardous Materials, (d) the release or threatened release of any Hazardous Materials into the environment or (e) any contract, agreement or other consensual arrangement pursuant to which liability is assumed or imposed with respect to any of the foregoing.

“Equity Interests” means shares of capital stock, partnership interests, membership interests in a limited liability company, beneficial interests in a trust or other equity ownership interests in a Person, and any warrants, options or other rights entitling the holder thereof to purchase or acquire any such equity interest.

“ERISA” means the Employee Retirement Income Security Act of 1974.

“ERISA Affiliate” means any trade or business (whether or not incorporated) that, together with the Borrower, is treated as a single employer under Section 414(b) or (c) of the Code, or, solely for purposes of Section 302 of ERISA and Section 412 of the Code, is treated as a single employer under Section 414 of the Code.

“ERISA Event” means (a) any “reportable event”, as defined in Section 4043 of ERISA or the regulations issued thereunder with respect to a Plan (other than an event for which the 30‐day notice period is waived); (b) a failure by any Plan to meet the “minimum funding standard” (as defined in Section 412 of the Code or Section 302 of ERISA) applicable to such Plan, in each instance, whether or not waived; (c) the filing pursuant to Section 412(c) of the Code or Section 302(c) of ERISA of an application for a waiver of the minimum funding standard with respect to any Plan; (d) the incurrence by the Borrower or any of its ERISA Affiliates of any liability under Title IV of ERISA with respect to the termination of any Plan; (e) the receipt by the Borrower or any ERISA Affiliate from the PBGC or a plan administrator of any notice relating to an intention to terminate any Plan or Plans or to appoint a trustee to administer any Plan; (f) the incurrence by the Borrower or any of its ERISA Affiliates of any liability with respect to the withdrawal or partial withdrawal from any Plan or Multiemployer Plan; or (g) the receipt by the Borrower or any ERISA Affiliate of any notice, or the receipt by any Multiemployer Plan from the Borrower or any ERISA Affiliate of any notice, concerning the imposition of Withdrawal Liability or a determination that a Multiemployer Plan is, or is expected to be, insolvent or in reorganization, within the meaning of Title IV of ERISA.

“Eurocurrency”, when used in reference to any Loan or Borrowing, refers to whether such Loan, or the Loans comprising such Borrowing, are bearing interest at a rate determined by reference to (a) in the case of a Syndicated Loan or a Syndicated Borrowing, the Adjusted LIBO Rate, or (b) in the case of a Competitive Loan or a Competitive Borrowing, the LIBO Rate.

“Event of Default” has the meaning specified in Article VIII.

“Excess Funding Guarantor” has the meaning specified in Section 3.08.

5

“Excess Payment” has the meaning specified in Section 3.08.

“Exchange Act” means the Securities Exchange Act of 1934.

“Excluded Taxes” means, with respect to the Administrative Agent, any Lender or any other recipient of any payment to be made by or on account of any obligation of the Borrower or any Subsidiary Guarantor hereunder or under any other Loan Document, (a) Taxes imposed on or measured by net income (however denominated), franchise Taxes or minimum Taxes (in lieu of net income Taxes), and branch profits Taxes imposed as a result of such recipient being organized under the laws of, or having its principal office or, in the case of any Lender, its applicable lending office located in, the jurisdiction imposing such Tax (or any political subdivision thereof), (b) any Taxes that are Other Connection Taxes, (c) in the case of a Lender (other than an assignee pursuant to a request by the Borrower under Section 2.19(b)), any withholding Tax that is imposed by the United States of America on amounts payable to such Lender at the time such Lender becomes a party hereto (or designates a new lending office), except to the extent that such Lender (or its assignor, if any) was entitled, at the time of designation of a new lending office (or assignment), to receive additional amounts from the Borrower with respect to such withholding tax pursuant to Section 2.17(a) or 2.17(c), (d) Taxes attributable to such Lender's failure or inability (other than as a result of a Change in Law) to comply with Section 2.17(f) or 2.17(g), and (e) any U.S. Federal withholding Taxes imposed under FATCA.

“Existing Credit Agreement” means the 364-Day Credit Agreement dated as of October 7, 2011, among the Borrower, the subsidiary guarantors party thereto, JPMCB, as administrative agent, and the lenders party thereto. 

“FATCA” means Sections 1471 through 1474 of the Code, as of the date of this Agreement (or any amended or successor version that is substantively comparable and not materially more onerous to comply with) and any current or future regulations or official interpretations thereof.  

“Federal Funds Effective Rate” means, for any day, the weighted average (rounded upwards, if necessary, to the next 1/100 of 1%) of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers, as published on the next succeeding Business Day by the Federal Reserve Bank of New York, or, if such rate is not so published for any day that is a Business Day, the average (rounded upwards, if necessary, to the next 1/100 of 1%) of the quotations for such day for such transactions received by the Administrative Agent from three Federal funds brokers of recognized standing selected by it.

“Financial Officer” means the principal financial officer, chief financial officer, principal accounting officer, treasurer, controller or director-treasury of the Borrower.

“Five-Year Credit Agreement” means the Five-Year Credit Agreement dated as of October 7, 2011, among the Borrower, the subsidiary guarantors party thereto, JPMCB, as administrative agent, and the lenders party thereto.

“Fixed Rate” means, with respect to any Competitive Loan (other than a Competitive Eurocurrency Loan), the fixed rate of interest per annum specified by the Lender making such Competitive Loan in its related Competitive Bid.  When used in reference to any Loan or Borrowing, “Fixed Rate” refers to whether such Loan, or the Loans comprising such Borrowing, are Competitive Loans bearing interest at a Fixed Rate.

“Foreign Lender” means any Lender that is organized under the laws of a jurisdiction other than the United States of America, a State thereof or the District of Columbia.

“Foreign Securitization Transaction” means any transfer by any Foreign Subsidiaries of its accounts receivable or interests (including security interests) therein (a) to a trust, partnership, corporation, limited liability company or other entity, which transfer is funded in whole or in part, directly or indirectly, by the incurrence or issuance by the transferee or successor transferee of Indebtedness or other securities that are to receive payments from, or that represent interests in, the cash flow derived from such accounts receivable or interests therein, or (b) directly to one or more investors or other purchasers.

“Foreign Subsidiary” means any Subsidiary of the Borrower that is not a Domestic Subsidiary.

“GAAP” means generally accepted accounting principles in the United States of America.

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

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“Guarantee” of or by any Person (the “guarantor”) means any obligation, contingent or otherwise, of the guarantor guaranteeing or having the economic effect of guaranteeing any Indebtedness or other obligation of any other Person (the “primary obligor”) in any manner, whether directly or indirectly, and including any obligation of the guarantor, direct or indirect, (a) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or other obligation or to purchase (or to advance or supply funds for the purchase of) any security for the payment thereof, (b) to purchase or lease property, securities or services for the purpose of assuring the owner of such Indebtedness or other obligation of the payment thereof, (c) to maintain working capital, equity capital or any other financial statement condition or liquidity of the primary obligor so as to enable the primary obligor to pay such Indebtedness or other obligation or (d) as an account party in respect of any letter of credit or letter of guaranty issued to support such Indebtedness or obligation; provided that the term Guarantee shall not include endorsements for collection or deposit in the ordinary course of business.

“Guarantee Assumption Agreement” means a Guarantee Assumption Agreement substantially in the form of Exhibit B by (a) an entity that, pursuant to Section 6.08, is required to become a “Subsidiary Guarantor” hereunder or (b) any Domestic Subsidiary that, pursuant to Section 3.10, is designated a “Subsidiary Guarantor” by the Borrower, in each case in favor of the Administrative Agent.

“Guaranteed Obligations” has the meaning set forth in Section 3.01.

“Hazardous Materials” means all explosive or radioactive substances or wastes and all hazardous or toxic substances, wastes or other pollutants, including petroleum or petroleum distillates, asbestos or asbestos containing materials, polychlorinated biphenyls, radon gas, infectious or medical wastes and all other substances or wastes of any nature regulated as “toxic” or “hazardous” or as a “pollutant” or “contaminant” by any Governmental Authority.

“Hedging Agreement” means any agreement with respect to any swap, forward, future or derivative transaction or option or similar agreement involving, or settled by reference to, one or more rates, currencies, commodities, equity or debt instruments or securities, or economic, financial or pricing indices or measures of economic, financial or pricing risk or value or any similar transaction or any combination of these transactions; provided that no phantom stock or similar plan (including the Borrower's omnibus stock and incentive plan and the Borrower's employee stock purchase plan) providing for payments only on account of services provided by current or former directors, officers, employees or consultants of the Borrower or its Subsidiaries shall be a Hedging Agreement.

“Indebtedness”  means, with respect to any Person at any time of determination, without duplication, (a) all obligations of such Person for borrowed money, (b) all obligations of such Person evidenced by bonds, debentures, notes or other similar instruments, (c) all obligations of such Person upon which interest charges are customarily paid or accrued by such Person, (d) all obligations of such Person for the deferred purchase price of property not constituting a current liability, (e) all Capital Lease Obligations of such Person, (f) all obligations of such Person, actual or contingent, as an account party in respect of letters of credit or bankers' acceptances, (g) all Guarantees by such Person of Indebtedness of others and (h) all Indebtedness of others secured by any Lien on property owned by such Person, whether or not the Indebtedness secured thereby has been assumed.  The Indebtedness of any Person shall include the Indebtedness of any other Person (including any partnership in which such Person is a general partner) to the extent such Person is liable therefor as a result of such Person's ownership interest in or other relationship with such other Person, except to the extent the terms of such Indebtedness provide that such Person is not liable therefor.

“Indemnified Taxes” means Taxes imposed on or with respect to any payment made by or on account of any obligation of the Borrower or any Subsidiary Guarantor, other than Excluded Taxes.

“Indemnitee” has the meaning specified in Section 10.03(b).

“Initial Purchase Price” means $2,167,000,000.

“Interest Coverage Ratio” means, for any Measurement Period, the ratio of (a) the sum of EBITDA and Rental and Lease Expense for such Measurement Period to (b) the sum of Net Interest Expense/Income and Rental and Lease Expense for such Measurement Period.

“Interest Election Request” means a request by the Borrower to convert or continue a Syndicated Borrowing in accordance with Section 2.08.

“Interest Payment Date” means (a) with respect to any Syndicated ABR Loan, each Quarterly Date, (b) with respect to any Eurocurrency Loan, the last day of each Interest Period therefor and, in the case of any Interest Period for a 

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Eurocurrency Loan of more than three months' duration, each day prior to the last day of such Interest Period that occurs at three‐month intervals after the first day of such Interest Period and (c) with respect to any Fixed Rate Loan, the last day of the Interest Period therefor and, in the case of any Interest Period for a Fixed Rate Loan of more than 90 days' duration (unless otherwise specified in the applicable Competitive Bid Request), each day prior to the last day of such Interest Period that occurs at 90‐day intervals after the first day of such Interest Period, and any other dates that are specified in the applicable Competitive Bid Request as Interest Payment Dates with respect to such Loan.

“Interest Period” means:

(a)    for any Syndicated Eurocurrency Loan or Borrowing, the period commencing on the date of such Loan or Borrowing and ending on the day that is seven days or the numerically corresponding day in the calendar month that is one, two, three or six months (or, with the consent of each Lender, nine or twelve months) thereafter, as specified in the applicable Borrowing Request or Interest Election Request;

(b)    for any Competitive Eurocurrency Loan or Borrowing, the period commencing on the date of such Loan or Borrowing and ending on the numerically corresponding day in the calendar month that is one, two, three or six months thereafter, as specified in the applicable Competitive Bid Request; and

(c)    for any Fixed Rate Loan or Borrowing, the period (which shall not be less than seven days or more than 360 days) commencing on the date of such Loan or Borrowing and ending on the date specified in the applicable Competitive Bid Request;

provided that (i) if any Interest Period would end on a day other than a Business Day, such Interest Period shall be extended to the next succeeding Business Day unless, in the case of a Eurocurrency Borrowing only, such next succeeding Business Day would fall in the next calendar month, in which case such Interest Period shall end on the next preceding Business Day, (ii) any Interest Period pertaining to a Eurocurrency Borrowing that commences on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the last calendar month of such Interest Period) shall end on the last Business Day of the last calendar month of such Interest Period and (iii) any Interest Period must comply with Section 2.02(d).  For purposes hereof, the date of a Loan or Borrowing initially shall be the date on which such Loan or Borrowing is made and, in the case of a Syndicated Loan or Borrowing, thereafter shall be the effective date of the most recent conversion or continuation of such Loan or Borrowing.

“Inventory” means goods held for sale, lease or use by a Person in the ordinary course of business, net of any reserve for goods that have been segregated by such Person to be returned to the applicable vendor for credit, as determined in accordance with GAAP.

“Investments” means, for any Person: (a) the acquisition (whether for cash, property, services or securities or otherwise) of capital stock, bonds, notes, debentures, partnership or other ownership interests or other securities of, or the making of any capital contribution to, any other Person or any agreement to make any such acquisition, (b) the making of any deposit with, or advance, loan or other extension of credit to, any other Person (including the purchase of property from another Person subject to an understanding or agreement, contingent or otherwise, to resell such property to such Person), and (c) the entering into of any Guarantee of, or other contingent obligation with respect to, Indebtedness or other liabilities of any other Person (provided that for purposes of Section 7.07(b), the amount of any such Guarantee or contingent obligation shall equal the then outstanding amount of the Indebtedness or other liabilities subject thereto).

“JPMCB” means JPMorgan Chase Bank, N.A.

“Lenders” means the Persons listed on Schedule 2.01 and any other Person that shall have become a party hereto pursuant to an Assignment and Assumption, other than any such Person that ceases to be a party hereto pursuant to an Assignment and Assumption.

“LIBO Rate” means, for the Interest Period for any Eurocurrency Borrowing, the rate appearing on the Reuters “LIBOR01” screen displaying British Bankers' Association Interest Settlement Rates (or on any successor or substitute screen provided by Reuters, or any successor to or substitute for such service, providing rate quotations comparable to those currently provided on such screen, as determined by the Administrative Agent from time to time for purposes of providing quotations of interest rates applicable to Dollar deposits in the London interbank market) at approximately 11:00 a.m., London time, two Business Days prior to the commencement of such Interest Period, as the rate for deposits denominated in Dollars with a maturity comparable to such Interest Period.  In the event that such rate is not available at such time for any reason, then the LIBO Rate for such Interest Period shall be the rate at which deposits in Dollars in the amount of $5,000,000 and for a maturity comparable to such Interest 

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Period are offered by the principal London office of the Administrative Agent in immediately available funds in the London interbank market at approximately 11:00 a.m., London time, two Business Days prior to the commencement of such Interest Period.

“Lien” means, with respect to any asset, (a) any mortgage, deed of trust, lien, pledge, hypothecation, encumbrance, charge or security interest in, on or of such asset and (b) the interest of a vendor or a lessor under any conditional sale agreement, capital lease or title retention agreement (or any financing lease having substantially the same economic effect as any of the foregoing) relating to such asset.

“Loan Documents” means this Agreement and each Guarantee Assumption Agreement.

“Loans” means the loans made by the Lenders to the Borrower pursuant to this Agreement.

“Margin” means, with respect to any Competitive Loan bearing interest at a rate based on the LIBO Rate, the marginal rate of interest, if any, to be added to or subtracted from the LIBO Rate to determine the rate of interest applicable to such Loan, as specified by the Lender making such Loan in its related Competitive Bid.

“Margin Stock” means “margin stock” within the meaning of Regulation U issued by the Board, as from time to time amended

“Material Adverse Effect” means (a) a materially adverse effect on the business, assets, operations, or financial condition of the Borrower and its Subsidiaries taken as a whole, (b) material impairment of the ability of the Obligors taken as a whole to perform any material obligation under any Loan Document to which such Person is or becomes a party or (c) material impairment of any of the material rights of, or benefits available to, the Administrative Agent or the Lenders under any Loan Document.

“Material Indebtedness” means Indebtedness (other than the Loans) and Securitization Transactions, or obligations in respect of one or more Hedging Agreements, of any one or more of the Borrower and its Subsidiaries in an aggregate principal amount exceeding $150,000,000.  For purposes of determining Material Indebtedness, the “principal amount” of (a) the obligations of the Borrower or any of its Subsidiaries in respect of any Hedging Agreement at any time shall be the maximum aggregate amount (giving effect to any netting agreements) that the Borrower or any Subsidiary would be required to pay if such Hedging Agreement were terminated at such time and (b) any Securitization Transaction shall be determined as set forth in the definition of such term.

“Material Subsidiary” means, at any time, with respect to any fiscal year of the Borrower, any Subsidiary which accounted for an amount equal to or greater than 5.0% of the consolidated aggregate revenues of the Borrower for such fiscal year, provided that, notwithstanding the foregoing, each Subsidiary Guarantor shall be deemed to be a “Material Subsidiary”.

“Maturity Date” means the Commitment Termination Date or any later date to which the Maturity Date shall have been extended pursuant to Section 2.21. 

“Measurement Period” means a period of four consecutive fiscal quarters ending on the last day of a fiscal quarter of the Borrower.

“Moody's” means Moody's Investors Service, Inc., and any successor to its rating agency business.

“Moody's Rating” means Moody's rating of the Borrower's long term, unenhanced, senior unsecured debt.

“Multiemployer Plan” means a multiemployer plan as defined in Section 4001(a)(3) of ERISA.

“Net Interest-bearing Indebtedness” means, as of the last day of any Measurement Period, all Indebtedness of the Borrower and its Subsidiaries for borrowed money or that bears interest and that, in accordance with GAAP, would be classified as long term or short term debt on the consolidated balance sheet of the Borrower, net of the aggregate amount of invested cash and cash equivalents held by the Borrower or any Subsidiary as of such date, excluding any such cash and cash equivalents that (a) are subject to any Liens (other than Liens in favor of the Administrative Agent or any other Lender created under the Loan Documents), (b) are subject to any restrictions on the use or disposition thereof or (c) are held by a Subsidiary, to the extent such Subsidiary is subject to any restriction on the distribution of such cash or cash equivalents without prior approval or waiver (that has not been obtained), pursuant to the terms of such Subsidiary's organizational documents or any agreement, judgment, order, law or other restriction binding upon such Subsidiary; provided that in no event shall Net Interest-bearing Indebtedness be less than zero.

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“Net Interest Expense/Income” means, for any period of determination, interest expense minus interest income, in each case calculated on a consolidated basis for the Borrower and its Subsidiaries in accordance with GAAP.

“Obligor” means the Borrower and each Subsidiary Guarantor.

“Other Connection Taxes” means, with respect to the Administrative Agent, any Lender or any other recipient, Taxes imposed as a result of a present or former connection between such recipient and the jurisdiction imposing such Tax (other than connections arising from such recipient having executed, delivered, become a party to, performed its obligations under, received payments under, received or perfected a security interest under, engaged in any other transaction pursuant to or enforced any Loan Document, or sold or assigned an interest in any Loan, any other Guaranteed obligation or any Loan Document).

“Other Taxes” means any and all present or future recording, stamp, court, documentary, filing, excise, property or similar Taxes arising from any payment made hereunder or under any other Loan Document or from the execution, delivery or enforcement of, or otherwise with respect to, this Agreement or any other Loan Document, except (i) any such Taxes that are Other Connection Taxes imposed with respect to an assignment (other than an assignment pursuant to a request by the Borrower under Section 2.19(b) and (ii) any Excluded Taxes.

“Participant” has the meaning set forth in Section 10.04(c)(i).

“Participant Register” has the meaning set forth in Section 10.04(c)(i).

“PBGC” means the Pension Benefit Guaranty Corporation referred to and defined in ERISA.

“Permitted Encumbrances” means: 

(a)    Liens for Taxes not delinquent or which are being contested in good faith by appropriate proceedings and for which whatever reserves required by GAAP have been established;

(b)    Liens consisting of easements, rights-of-way, zoning restrictions, restrictions on the use of real property, and defects and irregularities in the title thereto and other similar charges or encumbrances; 

(c)    Liens imposed by law, such as landlord's, materialmens', mechanic's, workmen's, repairmen's, carriers', warehousemans', vendors' or other similar liens and encumbrances arising in the ordinary course of the business of the Borrower or any of its Subsidiaries, or governmental (federal, state or municipal) Liens arising out of contracts for the sale of products or services by the Borrower or any of its Subsidiaries, in each case, securing obligations that are not overdue by more than 30 days or which are being contested in compliance with Section 6.04, or deposits or pledges to obtain the release of any of the foregoing Liens;

(d)    deposits to secure the performance of bids, trade contracts, leases, statutory obligations, government contracts, supply agreements, utilities, performance and return-of money bonds contracts, surety and appeal bonds and other obligations of a like nature, in each case in the ordinary course of business; 

(e)    licenses, leases, or subleases granted to third Persons or to the Borrower or its Subsidiaries by the Borrower and its Subsidiaries in the ordinary course of business;

(f)    Liens encumbering deposits made to secure obligations arising from statutory, regulatory, contractual or warranty requirements of the Borrower and its Subsidiaries (excluding deposits securing the repayment of Indebtedness); 

(g)    Liens encumbering customary initial deposits and margin deposits, and other Liens incurred in the ordinary course of business and which are within the general parameters customary in the industry securing obligations under commodities agreements; 

(h)    Liens arising in connection with Capital Lease Obligations; provided that no such Lien shall extend to or cover any assets other than the assets subject to the applicable capital leases; 

(i)    any (i) interest or title of a lessor or sublessor under any lease, (ii) restriction or encumbrance that the interest or title of such lessor or sublessor may be subject to, or (iii) subordination of the interest of the lessee or sublessee under such lease to any restriction or encumbrance referred to in the preceding clause (ii); 

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(j)    Liens on any property or assets of any Person existing at the time such Person is merged into or consolidated with the Borrower or any Subsidiary, provided that such Lien was not incurred in contemplation thereof and does not extend to any other property of the Borrower or any of its Subsidiaries; 

(k)    Liens arising from filing UCC financing statements relating solely to leases not prohibited by this Agreement;

(l)    Liens in favor of customs and revenue authorities arising as a matter of law to secure payment of customs duties in connection with the importation of goods; 

(m)    judgment Liens in respect of judgments that do not constitute an Event of Default under clause (j) of Article VIII; 

(n)    Liens solely on cash earnest money deposits made by Borrower or any Subsidiary in connection with any letter of intent or purchase agreement permitted hereunder; provided that such Liens are granted on customary business terms and in the ordinary course of business of the Borrower or such Subsidiary; and

(o)    Liens (i) of a collection bank arising under Section 4-210 of the UCC on items in the course of collection and (ii) in favor of a banking institution arising as a matter of law encumbering deposits (including the right of set-off) and which are within the general parameters customary in the banking industry, in each case existing solely with respect to cash or cash equivalents. 

“Person” means any natural person, corporation, limited liability company, trust, joint venture, association, company, partnership, Governmental Authority or other entity.

“Plan” means any employee pension benefit plan (other than a Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section 412 of the Code or Section 302 of ERISA that is sponsored, maintained or contributed to by the Borrower or any ERISA Affiliate.

“Prime Rate” means the rate of interest per annum publicly announced from time to time by JPMCB as its prime rate in effect at its principal office in New York City.  Each change in the Prime Rate shall be effective from and including the date such change is publicly announced as being effective.

“Pro Rata Share” has the meaning set forth in Section 3.08.

“Quarterly Dates” means the last Business Day of each fiscal quarter of the Borrower in each of its fiscal years, the first of which shall be the first such day after the date hereof.

“Receivables” means all rights of the Borrower or any of its Subsidiaries to payments (whether constituting accounts, chattel paper, instruments, general intangibles or otherwise, and including the right to payment of any interest or finance charges), which rights are identified (or, in the case of future rights to payments, are expected to be identified) in the accounting records of the Borrower or such Subsidiary as accounts receivable, as determined in accordance with GAAP.

“Register” has the meaning set forth in Section 10.04.

“Related Parties” means, with respect to any Person, such Person's Affiliates and the partners, members, trustees, directors, officers, employees, agents and advisors of such Person and of such Person's Affiliates.

“Rental and Lease Expense” means, for any Measurement Period, all items that, in accordance with GAAP, would be classified as rental and lease expense that are included in selling, general and administrative expenses on the consolidated statement of earnings of the Borrower, in each case determined in accordance with GAAP, provided that Rental and Lease Expense shall not include any Rental and Lease Expense incurred during the Measurement Period under leases that have been assigned to and assumed by any Person (other than the Borrower or a Subsidiary) or that constitute or relate to discontinued operations for which the Borrower and its Subsidiaries are no longer obligated.

“Required Lenders” means, at any time, Lenders having Revolving Credit Exposures and unused Commitments representing more than 50% of the sum of the total Revolving Credit Exposures and unused Commitments at such time (provided that, for purposes of declaring the Loans to be due and payable pursuant to Article VIII, and for all purposes after the Loans become due and payable pursuant to Article VIII or the Commitments expire or terminate, the outstanding Competitive Loans of the Lenders 

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shall be included in their respective Revolving Credit Exposures in determining the Required Lenders).

“Restricted Date” has the meaning set forth in the definition of “Subsidiary”.

“Revolving Credit Exposure” means, with respect to any Lender at any time, the sum of the outstanding principal amount of such Lender's Syndicated Loans at such time.

“Securitization Transaction” means any Domestic Securitization Transaction or any Foreign Securitization Transaction.  The “amount” or “principal amount” of any Domestic Securitization Transaction or Foreign Securitization Transaction shall be deemed at any time to be the aggregate principal or stated amount of the Indebtedness or other securities referred to in the definition of the term “Domestic Securitization Transaction” or “Foreign Securitization Transaction”, as applicable, or, if there shall be no such principal or stated amount, the uncollected amount of the accounts receivable or interests therein transferred pursuant to such Domestic Securitization Transaction or Foreign Securitization Transaction, as applicable, net of any such accounts receivable or interests therein that have been written off as uncollectible.

“Specified Subsidiary” means, with respect to any fiscal year of the Borrower, any Domestic Subsidiary which accounted for an amount equal to or greater than 20.0% of the consolidated aggregate revenues of the Borrower for such fiscal year, provided that, if, in any fiscal year of the Borrower, the Subsidiaries (other than Best Buy Stores, L.P.), on a collective basis, accounted for more than 50.0% of the consolidated aggregate revenues of the Borrower for such fiscal year, then the percentage amount stated in the clause preceding the proviso clause of this definition shall be automatically and permanently reduced to 5.0%.

“S&P” means Standard & Poor's Ratings Services, a division of The McGraw-Hill Companies, Inc., and any successor to its rating agency business.

“S&P Rating” means S&P's corporate credit rating for the Borrower.

“Statutory Reserve Rate” means, for the Interest Period for any Syndicated Eurocurrency Borrowing, a fraction (expressed as a decimal), the numerator of which is the number one and the denominator of which is the number one minus the arithmetic mean, taken over each day in such Interest Period, of the aggregate of the maximum reserve percentages (including any marginal, special, emergency or supplemental reserves) expressed as a decimal established by the Board to which the Administrative Agent is subject for eurocurrency funding (currently referred to as “Eurocurrency liabilities” in Regulation D of the Board).  Such reserve percentages shall include those imposed pursuant to Regulation D of the Board.  Eurocurrency Loans shall be deemed to constitute eurocurrency funding and to be subject to such reserve requirements without benefit of or credit for proration, exemptions or offsets that may be available from time to time to any Lender under Regulation D of the Board or any comparable regulation.  The Statutory Reserve Rate shall be adjusted automatically on and as of the effective date of any change in any reserve percentage.

“Subsidiary” means, with respect to any Person (the “parent”) at any date, any corporation, limited liability company, partnership, association or other entity the accounts of which would be consolidated with those of the parent in the parent's consolidated financial statements if such financial statements were prepared in accordance with GAAP as of such date, as well as any other corporation, limited liability company, partnership, association or other entity (a) of which securities or other ownership interests representing more than 50% of the equity or more than 50% of the ordinary voting power or, in the case of a partnership, more than 50% of the general partnership interests are, as of such date, owned, controlled or held, or (b) that is, as of such date, otherwise Controlled, by the parent or one or more subsidiaries of the parent or by the parent and one or more subsidiaries of the parent.  Unless otherwise specified, “Subsidiary” means a Subsidiary of the Borrower.  Notwithstanding the foregoing, Best Buy Europe Distributions and its Subsidiaries shall be deemed not to constitute “Subsidiaries” of the Borrower for the purposes of this Agreement and the other Loan Documents; provided that, (a) this sentence shall not apply to the definition of the term “Total Assets” and (b) the Borrower may specify in a written notice to the Administrative Agent (the date thereof, the “Restricted Date”) that Best Buy Europe Distributions and its Subsidiaries shall thereafter be treated as “Subsidiaries” of the Borrower for the purposes of this Agreement and the other Loan Documents, provided that, (i) immediately before and after the Restricted Date, no Default shall have occurred and be continuing, including, on a pro forma basis, pursuant to the covenants set forth in Section 7.06 (and the Borrower shall deliver to the Administrative Agent a certificate of a Financial Officer setting forth in reasonable detail the calculations demonstrating compliance with such covenants) and (ii) the Borrower may not subsequently specify that Best Buy Europe Distributions and its Subsidiaries shall no longer be treated as “Subsidiaries” of the Borrower for the purposes of this Agreement and the Loan Documents. If the Restricted Date occurs, Best Buy Europe Distributions and its Subsidiaries shall be deemed to have incurred on such date any Indebtedness or Liens of Best Buy Europe Distributions or such Subsidiary existing on such date.

“Subsidiary Guarantor” means Best Buy Stores, L.P., BBC Investment Co., BBC Property Co., each Specified Subsidiary that becomes a “Subsidiary Guarantor” after the date hereof pursuant to Section 6.08 and each Domestic Subsidiary 

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that becomes a “Subsidiary Guarantor” after the date hereof pursuant to Section 3.10.

“Syndicated”, when used in reference to any Loan or Borrowing, refers to whether such Loan, or the Loans comprising such Borrowing, are made pursuant to Section 2.01.

“Syndication Agent” means USB, in its capacity as syndication agent for the credit facility established hereunder. 

“Tangible Net Worth” means, as of any date, the sum for the Borrower and its Subsidiaries (determined on a consolidated basis without duplication in accordance with GAAP, but excluding all amounts attributable to noncontrolling interests in any Subsidiary and, prior to the Restricted Date, all amounts relating to Best Buy Europe Distributions and its Subsidiaries), of the following:

(a)    the total assets of the Borrower and its Subsidiaries as shown on the consolidated balance sheet of the Borrower and its Subsidiaries for the fiscal quarter or fiscal year of the Borrower most recently ended on or prior to such date prepared in accordance with GAAP, minus

(b)    the total liabilities of the Borrower and its Subsidiaries as shown on such consolidated balance sheet, minus

(c)    the net book amount of all assets of the Borrower and its Subsidiaries shown as intangible assets (including goodwill) on such consolidated balance sheet.

“Taxes” means all present or future taxes, levies, imposts, duties, deductions, withholdings, assessments, fees or other charges imposed by any Governmental Authority, including any interest, additions to tax or penalties applicable thereto.

“Term-Out Option” has the meaning set forth in Section 2.21.

“Total Assets” means, as of any date, for the Borrower and its Subsidiaries (determined on a consolidated basis without duplication in accordance with GAAP), the total assets of the Borrower and its Subsidiaries as shown on the consolidated balance sheet of the Borrower and its Subsidiaries for the fiscal quarter or fiscal year of the Borrower most recently ended prior to such date for which financial statements are available prepared in accordance with GAAP (but excluding therefrom all amounts attributable to noncontrolling interests in any Subsidiary).

“Transactions” means the execution, delivery and performance by each Obligor of this Agreement and the other Loan Documents to which such Obligor is intended to be a party, the borrowing of Loans and the use of the proceeds thereof.

“Type”, when used in reference to any Loan or Borrowing, refers to whether the rate of interest on such Loan, or on the Loans comprising such Borrowing, is determined by reference to the Adjusted LIBO Rate, the Alternate Base Rate or, in the case of a Competitive Loan or Borrowing, the LIBO Rate or a Fixed Rate.

“UCC” means the Uniform Commercial Code as in effect in the State of New York.

“USA Patriot Act” means the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001.

“USB” means U.S. Bank National Association

“Withdrawal Liability” means liability to a Multiemployer Plan as a result of a complete or partial withdrawal from such Multiemployer Plan, as such terms are defined in Part I of Subtitle E of Title IV of ERISA.

“Withholding Agent” means the Borrower and the Administrative Agent.

SECTION 1.02.    Classification of Loans and Borrowings.  For purposes of this Agreement, Loans may be classified and referred to by Class (e.g., a “Competitive Loan”), by Type (e.g., a “Eurocurrency  Loan”) or by Class and Type (e.g., a “Competitive Eurocurrency  Loan”).  Borrowings also may be classified and referred to by Class (e.g., a “Competitive Borrowing”), by Type (e.g., a “Eurocurrency  Borrowing”) or by Class and Type (e.g., a “Competitive Eurocurrency  Borrowing”).

SECTION 1.03.    Terms Generally.  The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined.  Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms.  The words “include”, “includes” and “including” shall be deemed to be followed by the phrase “without 

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limitation”.  The word “will” shall be construed to have the same meaning and effect as the word “shall”.  The words “asset” and “property” shall be construed to have the same meaning and effect and to refer to any and all real and personal, tangible and intangible assets and properties, including cash, securities, accounts and contract rights.  The word “law” shall be construed as referring to all statutes, rules, regulations, codes and other laws (including official rulings and interpretations thereunder having the force of law or with which affected Persons customarily comply), and all judgments, orders, writs and decrees, of all Governmental Authorities.  Unless the context requires otherwise (a) any definition of or reference to any agreement, instrument or other document herein (including this Agreement) shall be construed as referring to such agreement, instrument or other document as from time to time amended, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth herein), (b) any reference herein to any Person shall be construed to include such Person's successors and assigns (subject to any restrictions on assignment set forth herein) and, in the case of any Governmental Authority, any other Governmental Authority that shall have succeeded to any or all functions thereof, (c) any definition of or reference to any statute, rule or regulation shall be construed as referring thereto as from time to time amended, supplemented or otherwise modified (including by succession of comparable successor laws), (d) the words “herein”, “hereof” and “hereunder”, and words of similar import, shall be construed to refer to this Agreement in its entirety and not to any particular provision hereof and (e) all references herein to Articles, Sections, Exhibits and Schedules shall be construed to refer to Articles and Sections of, and Exhibits and Schedules to, this Agreement.

SECTION 1.04    Accounting Terms; GAAP.  Except as otherwise expressly provided herein, all terms of an accounting or financial nature shall be construed in accordance with GAAP as in effect from time to time; provided that if the Borrower notifies the Administrative Agent that the Borrower requests an amendment to any provision hereof to eliminate the effect of any change occurring after the date hereof in GAAP or in the application thereof on the operation of such provision (or if the Administrative Agent notifies the Borrower that the Required Lenders request an amendment to any provision hereof for such purpose), regardless of whether any such notice is given before or after such change in GAAP or in the application thereof, then such provision shall be interpreted on the basis of GAAP as in effect and applied immediately before such change shall have become effective until such notice shall have been withdrawn or such provision amended in accordance herewith.  Notwithstanding the foregoing, (a) all liabilities under or in respect of any lease (whether now outstanding or at any time entered into or incurred) that, under GAAP as in effect on the Effective Date, would be accrued as Rental and Lease Expense and would not constitute a Capital Lease Obligation, shall continue to be treated as Rental and Lease Expense in accordance with GAAP as in effect on the Effective Date and shall not constitute a Capital Lease Obligation, in each case, for purposes of the covenants set forth herein and all defined terms as used therein and (b)  all terms of an accounting or financial nature used herein shall be construed, and all computations of amounts and ratios referred to herein shall be made, without giving effect to any election under Statement of Financial Accounting Standards 159, The Fair Value Option for Financial Assets and Financial Liabilities, or any successor thereto (including pursuant to the Accounting Standards Codification), to value any Indebtedness of the Borrower or any Subsidiary at “fair value”, as defined therein.

ARTICLE II

The Credits

SECTION 2.01.    The Commitments.  Subject to the terms and conditions set forth herein, each Lender agrees to make Syndicated Loans in Dollars to the Borrower from time to time during the Availability Period in an aggregate principal amount that will not result in (a) such Lender's Revolving Credit Exposure exceeding such Lender's Commitment or (b) the sum of the total Revolving Credit Exposures plus the aggregate principal amount of outstanding Competitive Loans exceeding the total Commitments.  Within the foregoing limits and subject to the terms and conditions set forth herein, the Borrower may borrow, prepay and reborrow Syndicated Loans.

SECTION 2.02.    Loans and Borrowings.  (a)  Obligations of Lenders.  Each Syndicated Loan shall be made as part of a Borrowing consisting of Loans of the same Class and Type made by the Lenders ratably in accordance with their respective Commitments.  Each Competitive Loan shall be made in accordance with the procedures set forth in Section 2.04.  The failure of any Lender to make any Loan required to be made by it shall not relieve any other Lender of its obligations hereunder; provided that the Commitments and Competitive Bids of the Lenders are several and no Lender shall be responsible for any other Lender's failure to make Loans as required.

(b)Type of Loans.  Subject to Section 2.14, (i) each Syndicated Borrowing shall be comprised entirely of ABR Loans or of Eurocurrency Loans, as the Borrower may request in accordance herewith, and (ii) each Competitive Borrowing shall be comprised entirely of Eurocurrency Loans or Fixed Rate Loans, as the Borrower may request in accordance herewith.  Each Lender at its option may make any Eurocurrency Loan by causing any domestic or foreign branch or Affiliate of such Lender to make such Loan; provided that any exercise of such option shall not affect the obligation of the Borrower to repay such Loan in accordance with the terms of this Agreement.

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(c)Minimum Amounts; Limitation on Number of Borrowings.  Each Syndicated Eurocurrency Borrowing shall be in an aggregate amount of $5,000,000 or a larger multiple of $500,000.  Each Syndicated ABR Borrowing shall be in an aggregate amount equal to $2,000,000 or a larger multiple of $500,000; provided that a Syndicated ABR Borrowing may be in an aggregate amount that is equal to the entire unused balance of the total Commitments.  Each Competitive Borrowing shall be in an aggregate amount equal to $5,000,000 or a larger multiple of $1,000,000.  Borrowings of more than one Class and Type may be outstanding at the same time; provided that there shall not at any time be more than a total of 20 Syndicated Eurocurrency Borrowings outstanding.

(d)Limitations on Interest Periods.  Notwithstanding any other provision of this Agreement, the Borrower shall not be entitled to request (or to elect to convert to or continue as a Syndicated Eurocurrency Borrowing) any Borrowing if the Interest Period requested therefor would end after the Commitment Termination Date (or, in the case of any Syndicated Borrowing if the Term-Out Option has been exercised, the Maturity Date as it has been extended pursuant thereto).

SECTION 2.03.    Requests for Syndicated Borrowings.  (a)  Notice by the Borrower.  To request a Syndicated Borrowing, the Borrower shall notify the Administrative Agent of such request by telephone (i) in the case of a Syndicated Eurocurrency Borrowing, not later than 1:00 pm, New York City time, three Business Days before the date of the proposed Borrowing or (ii) in the case of a Syndicated ABR Borrowing, not later than 1:00 p.m., New York City time, the same Business Day as the date of the proposed Borrowing.  Each such telephonic Borrowing Request shall be irrevocable and shall be confirmed promptly by hand delivery or facsimile to the Administrative Agent of a written Borrowing Request in substantially the form of Exhibit D and signed by the Borrower.

(b)Content of Borrowing Requests.  Each telephonic and written Borrowing Request shall specify the following information in compliance with Section 2.02:

(i)the aggregate principal amount of the requested Borrowing;

(ii)the date of such Borrowing, which shall be a Business Day;

(iii)whether such Borrowing is to be an ABR Borrowing or a Eurocurrency Borrowing; and

(iv)in the case of a Syndicated Eurocurrency Borrowing, the Interest Period therefor, which shall be a period contemplated by the definition of the term “Interest Period” and permitted under Section 2.02(d).

(c)Notice by the Administrative Agent to the Lenders.  Promptly following receipt of a Borrowing Request in accordance with this Section, the Administrative Agent shall advise each Lender of the details thereof and of the amount of such Lender's Loan to be made as part of the requested Borrowing.

(d)Failure to Elect.  If no election as to the Type of a Syndicated Borrowing is specified, then the requested Borrowing shall be an ABR Borrowing.  If no Interest Period is specified with respect to any requested Syndicated Eurocurrency Borrowing, the Borrower shall be deemed to have selected an Interest Period of one month's duration.

SECTION 2.04.    Competitive Bid Procedure.  (a)  Requests for Bids by the Borrower.  Subject to the terms and conditions set forth herein, from time to time during the Availability Period the Borrower may request Competitive Bids and may (but shall not have any obligation to) accept Competitive Bids and borrow Competitive Loans denominated in Dollars; provided that the sum of the total Revolving Credit Exposures plus the aggregate principal amount of outstanding Competitive Loans at any time shall not exceed the total Commitments.  To request Competitive Bids, the Borrower shall notify the Administrative Agent of such request by telephone, in the case of a Eurocurrency Borrowing, not later than 1:00 p.m., New York City time, four Business Days before the date of the proposed Borrowing and, in the case of a Fixed Rate Borrowing, not later than 12:00 noon, New York City time, one Business Day before the date of the proposed Borrowing; provided that the Borrower may submit up to (but not more than) one Competitive Bid Request on the same day, but a Competitive Bid Request shall not be made within four Business Days after the date of any previous Competitive Bid Request, unless any and all such previous Competitive Bid Requests shall have been withdrawn or all Competitive Bids received in response thereto rejected.  Each such telephonic Competitive Bid Request shall be confirmed promptly by hand delivery or facsimile to the Administrative Agent of a written Competitive Bid Request in a form approved by the Administrative Agent and signed by the Borrower.  Each such telephonic and written Competitive Bid Request shall specify the following information in compliance with Section 2.02:

(i)the aggregate amount of the requested Borrowing;

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(ii)the date of such Borrowing, which shall be a Business Day;

(iii)the maturity date of such Borrowing, which date shall not be less than seven days or more than 360 days after the date of such Borrowing;

(iv)whether such Borrowing is to be a Eurocurrency Borrowing or a Fixed Rate Borrowing; 

(v)the Interest Period for such Borrowing, which shall be a period contemplated by the definition of the term “Interest Period” that does not extend beyond the Commitment Termination Date; and

(vi)the location and number of the Borrower's account to which funds are to be disbursed.

Promptly following receipt of a Competitive Bid Request in accordance with this Section, the Administrative Agent shall notify the Lenders of the details thereof, inviting the Lenders to submit Competitive Bids.

(b)Making of Bids by Lenders.  Each Lender may (but shall not have any obligation to) make one or more Competitive Bids to the Borrower in response to a Competitive Bid Request.  Each Competitive Bid by a Lender must be in a form approved by the Administrative Agent and must be received by the Administrative Agent by facsimile, in the case of a Competitive Eurocurrency Borrowing, not later than 9:30 a.m., New York City time, three Business Days before the proposed date of such Borrowing, and in the case of a Fixed Rate Borrowing, not later than 9:30 a.m., New York City time, on the proposed date of such Borrowing.  Competitive Bids that do not conform substantially to the form approved by the Administrative Agent may be rejected by the Administrative Agent, and the Administrative Agent shall notify the applicable Lender of such rejection as promptly as practicable.  Each Competitive Bid shall specify (i) the principal amount (which shall be $5,000,000 or a larger multiple of $1,000,000 and which may equal the entire principal amount of the Competitive Borrowing requested by the Borrower) of the Competitive Loan or Loans that the Lender is willing to make, (ii) the Competitive Bid Rate or Competitive Bid Rates at which the Lender is prepared to make such Loan or Loans (expressed as a percentage rate per annum in the form of a decimal to no more than four decimal places) and (iii) the Interest Period for each such Loan and the last day thereof.

(c)Notification of Bids by Administrative Agent.  The Administrative Agent shall promptly notify the Borrower by facsimile of the Competitive Bid Rate and the principal amount specified in each Competitive Bid and the identity of the Lender that shall have made such Competitive Bid.

(d)Acceptance of Bids by the Borrower.  Subject only to the provisions of this paragraph, the Borrower may accept or reject any Competitive Bid.  The Borrower shall notify the Administrative Agent by telephone, confirmed by facsimile in a form approved by the Administrative Agent, whether and to what extent it has decided to accept or reject each Competitive Bid, in the case of a Competitive Eurocurrency Borrowing, not later than 12:00 noon, New York City time, three Business Days before the date of the proposed Competitive Borrowing, and in the case of a Fixed Rate Borrowing, not later than 11:00 a.m., New York City time, on the proposed date of the Competitive Borrowing; provided, that (i) the failure of the Borrower to give such notice shall be deemed to be a rejection of each Competitive Bid, (ii) the Borrower shall not accept a Competitive Bid made at a particular Competitive Bid Rate if the Borrower rejects a Competitive Bid made at a lower Competitive Bid Rate, (iii) the aggregate amount of the Competitive Bids accepted by the Borrower shall not exceed the aggregate amount of the requested Competitive Borrowing specified in the related Competitive Bid Request, (iv) to the extent necessary to comply with clause (iii) of this proviso, the Borrower may accept Competitive Bids at the same Competitive Bid Rate in part, which acceptance, in the case of multiple Competitive Bids at such Competitive Bid Rate, shall be made pro rata in accordance with the amount of each such Competitive Bid, and (v) except pursuant to clause (iv) of this proviso, no Competitive Bid shall be accepted for a Competitive Loan unless such Competitive Loan is in a principal amount of $5,000,000 or a larger multiple of $1,000,000; provided further that if a Competitive Loan must be in an amount less than $5,000,000 because of the provisions of clause (iv) of the first proviso of this paragraph, such Competitive Loan may be in the amount of $1,000,000 or any multiple thereof, and in calculating the pro rata allocation of acceptances of portions of multiple Competitive Bids at a particular Competitive Bid Rate pursuant to such clause (iv) the amounts shall be rounded to multiples of $1,000,000 in a manner determined by the Borrower.  A notice given by the Borrower pursuant to this paragraph shall be irrevocable.

(e)Notification of Acceptances by the Administrative Agent.  The Administrative Agent shall promptly notify each bidding Lender whether or not its Competitive Bid has been accepted (and, if so, the amount and Competitive Bid Rate so accepted), and each successful bidder will thereupon become bound, subject to the terms and conditions hereof, to make the Competitive Loan in respect of which its Competitive Bid has been accepted.

(f)Bids by the Administrative Agent.  If the Administrative Agent shall elect to submit a Competitive Bid in its capacity as a Lender, it shall submit such Competitive Bid directly to the Borrower at least one quarter of an hour earlier 

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than the time by which the other Lenders are required to submit their Competitive Bids to the Administrative Agent pursuant to paragraph (b) of this Section.  Any Competitive Bid submitted by the Administrative Agent that fails to comply with the provisions of paragraph (b) above and this paragraph (f) shall be void ab initio. 

SECTION 2.05.    [Intentionally Omitted]

SECTION 2.06.    [Intentionally Omitted]

SECTION 2.07.    Funding of Borrowings.  (a)  Funding by Lenders.  Each Lender shall make each Loan to be made by it hereunder on the proposed date thereof by wire transfer of immediately available funds by 2:00 p.m., New York City time (or, in the case of any Syndicated ABR Loan, 4:00 p.m. New York City time), to the account of the Administrative Agent most recently designated by it for such purpose by notice to the Lenders.  The Administrative Agent will make such Loans available to the Borrower by promptly crediting the amounts so received, in like funds, to an account of the Borrower designated by the Borrower in the applicable borrowing request.

(e)Presumption by the Administrative Agent.  Unless the Administrative Agent shall have received notice from a Lender prior to the proposed time of any Borrowing that such Lender will not make available to the Administrative Agent such Lender's share of such Borrowing, the Administrative Agent may assume that such Lender has made such share available on such date in accordance with paragraph (a) of this Section and may, in reliance upon such assumption, make available to the Borrower a corresponding amount.  In such event, if a Lender has not in fact made its share of the applicable Borrowing available to the Administrative Agent, then the applicable Lender and the Borrower severally agree to pay to the Administrative Agent forthwith on demand such corresponding amount with interest thereon, for each day from and including the date such amount is made available to the Borrower to but excluding the date of payment to the Administrative Agent, at (i) in the case of a payment to be made by such Lender, the greater of the Federal Funds Effective Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation and (ii) in the case of a payment to be made by the Borrower, the interest rate applicable to Syndicated ABR Loans.  If the Borrower and such Lender shall pay such interest to the Administrative Agent for the same or an overlapping period, the Administrative Agent shall promptly remit to the Borrower the amount of such interest paid by the Borrower for such period.  If such Lender pays its share of the applicable Borrowing to the Administrative Agent, then the amount so paid shall constitute such Lender's Loan included in such Borrowing.  Any payment by the Borrower shall be without prejudice to any claim the Borrower may have against a Lender that shall have failed to make such payment to the Administrative Agent.

SECTION 2.08.    Interest Elections.  (a)  Elections by the Borrower for Syndicated Borrowings.  The Loans comprising each Syndicated Borrowing initially shall be of the Type specified in the applicable Borrowing Request or as otherwise provided in Section 2.03(d) and, in the case of a Syndicated Eurocurrency Borrowing, shall have the Interest Period specified in such Borrowing Request or as otherwise provided in Section 2.03(d).  Thereafter, the Borrower may elect to convert such Borrowing to a Borrowing of a different Type or to continue such Borrowing as a Borrowing of the same Type and, in the case of a Syndicated Eurocurrency Borrowing, may elect the Interest Period therefor, all as provided in this Section.  The Borrower may elect different options with respect to different portions of the affected Borrowing, in which case each such portion shall be allocated ratably among the Lenders holding the Loans comprising such Borrowing, and the Loans comprising each such portion shall be considered a separate Borrowing.  This Section shall not apply to Competitive Borrowings, which may not be converted or continued.

(b)Notice of Elections.  To make an election pursuant to this Section, the Borrower shall notify the Administrative Agent of such election by telephone by the time that a Borrowing Request would be required under Section 2.03 if the Borrower were requesting a Syndicated Borrowing of the Type resulting from such election to be made on the effective date of such election.  Each such telephonic Interest Election Request shall be irrevocable and shall be confirmed promptly by hand delivery or facsimile to the Administrative Agent of a written Interest Election Request in a form approved by the Administrative Agent and signed by the Borrower.

(c)Content of Interest Election Requests.  Each telephonic and written Interest Election Request shall specify the following information in compliance with Section 2.02:

(i)the Borrowing to which such Interest Election Request applies and, if different options are being elected with respect to different portions thereof, the portions thereof to be allocated to each resulting Borrowing (in which case the information to be specified pursuant to clauses (iii) and (iv) below shall be specified for each resulting Borrowing);

(ii)the effective date of the election made pursuant to such Interest Election Request, which shall be a Business Day;

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(iii)whether the resulting Borrowing is to be an ABR Borrowing or a Eurocurrency Borrowing; and

(iv)if the resulting Borrowing is a Syndicated Eurocurrency Borrowing, the Interest Period therefor after giving effect to such election, which shall be a period contemplated by the definition of the term “Interest Period” and permitted under Section 2.02(d).

(d)Notice by the Administrative Agent to the Lenders.  Promptly following receipt of an Interest Election Request, the Administrative Agent shall advise each Lender of the details thereof and of such Lender's portion of each resulting Borrowing.

(e)Failure to Elect; Events of Default.  If the Borrower fails to deliver a timely and complete Interest Election Request with respect to a Syndicated Eurocurrency Borrowing prior to the end of the Interest Period therefor, then, unless such Syndicated Eurocurrency Borrowing is repaid as provided herein, the Borrower shall be deemed to have selected an Interest Period of one month's duration.

Notwithstanding any contrary provision hereof, if an Event of Default has occurred and is continuing and the Administrative Agent, at the request of the Required Lenders, so notifies the Borrower (provided that no such notice shall be required in the case of any Event of Default under clause (h) or (i) of Article VII with respect to the Borrower), then, so long as an Event of Default is continuing (A) no outstanding Syndicated Borrowing may be converted to or continued as a Syndicated Eurocurrency Borrowing and (B) unless repaid, each Syndicated Eurocurrency Borrowing shall be converted to a Syndicated ABR Borrowing at the end of the Interest Period therefor.

SECTION 2.09.    Termination and Reduction of the Commitments.  (a)  Scheduled Termination.  Unless previously terminated, the Commitments shall terminate  on the Commitment Termination Date.

(b)Voluntary Termination or Reduction.  The Borrower may at any time terminate, or from time to time reduce, the Commitments; provided that (i) each partial reduction of the Commitments shall be in an amount that is $5,000,000 or a larger multiple thereof and (ii) the Borrower shall not terminate or reduce the Commitments if, after giving effect to any concurrent prepayment of the Loans in accordance with Section 2.11, the sum of the total Revolving Credit Exposures plus the aggregate principal amount of outstanding Competitive Loans would exceed the total Commitments.

(c)Notice of Voluntary Termination or Reduction.  The Borrower shall notify the Administrative Agent of any election to terminate or reduce the Commitments under paragraph (b) of this Section at least three Business Days prior to the effective date of such termination or reduction, specifying such election and the effective date thereof.  Promptly following receipt of any notice, the Administrative Agent shall advise the Lenders of the contents thereof.  Each notice delivered by the Borrower pursuant to this Section shall be irrevocable; provided that a notice of termination of the Commitments delivered by the Borrower may state that such notice is conditioned upon the effectiveness of other credit facilities, in which case such notice may be revoked by the Borrower (by notice to the Administrative Agent on or prior to the specified effective date) if such condition is not satisfied.

(d)Effect of Termination or Reduction.  Any termination or reduction of the Commitments shall be permanent.  Each reduction of the Commitments shall be made ratably among the Lenders in accordance with their respective Commitments.

SECTION 2.10.    Repayment of Loans; Evidence of Debt.  (a) Repayment.  The Borrower hereby unconditionally promises to pay the Loans as follows:

(i)to the Administrative Agent for account of each Lender the outstanding principal amount of the Syndicated Loans of such Lender on the Maturity Date, and

(ii)to the Administrative Agent for account of each Lender the then unpaid principal amount of each Competitive Loan of such Lender on the last day of the Interest Period therefor.

(b)Manner of Payment.  Prior to any repayment or prepayment of any Borrowings hereunder, and subject (in the case of a prepayment) to any applicable provisions of Section 2.11, the Borrower shall select the Borrowing or Borrowings to be paid and shall notify the Administrative Agent by telephone (confirmed by facsimile) of such selection not later than 11:00 a.m., New York City time, three Business Days before the scheduled date of such repayment.  If the Borrower fails to make a timely selection of the Borrowing or Borrowings to be repaid or prepaid, such payment shall be applied, first, to pay any outstanding ABR Borrowings and, second, to other Borrowings in the order of the remaining duration of their respective Interest Periods (the Borrowing with the shortest remaining Interest Period to be repaid first).  Each payment of a Syndicated Borrowing shall be applied 

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ratably to the Loans included in such Borrowing.

(c)Maintenance of Records by Lenders.  Each Lender shall maintain in accordance with its usual practice records evidencing the indebtedness of the Borrower to such Lender resulting from each Loan made by such Lender, including the amounts of principal and interest payable and paid to such Lender from time to time hereunder.

(d)Maintenance of Records by the Administrative Agent.  The Administrative Agent shall maintain records in which it shall record (i) the amount of each Loan made hereunder, the Class and Type thereof and, if applicable, each Interest Period therefor, (ii) the amount of any principal or interest due and payable or to become due and payable from the Borrower to each Lender hereunder and (iii) the amount of any sum received by the Administrative Agent hereunder for account of the Lenders and each Lender's share thereof.

(e)Effect of Entries.  The entries made in the records maintained pursuant to paragraph (c) or (d) of this Section shall be prima facie evidence of the existence and amounts of the obligations recorded therein; provided that the failure of any Lender or the Administrative Agent to maintain such records or any error therein shall not in any manner affect the obligation of the Borrower to repay the Loans or pay any other amounts hereunder in accordance with the terms of this Agreement.

(f)Promissory Notes.  Any Lender may request that Loans made by it be evidenced by a promissory note.  In such event, the Borrower shall prepare, execute and deliver to such Lender a promissory note payable to such Lender and its registered assigns and in customary form reasonably satisfactory to the Borrower and the Administrative Agent.  Thereafter, the Loans evidenced by such promissory note and interest thereon shall at all times (including after assignment pursuant to Section 10.04) be represented by one or more promissory notes in such form payable to the payee named therein or its registered assigns.

SECTION 2.11.    Prepayment of Loans.  (a)  Optional Prepayments.  The Borrower shall have the right at any time and from time to time to prepay any Borrowing in whole or in part, without premium or penalty, subject to the requirements of this Section; provided that the Borrower shall not have the right to prepay any Competitive Loan without the prior consent of the Lender thereof.

(f)Notices, Etc.  The Borrower shall notify the Administrative Agent by telephone (confirmed by facsimile) of any prepayment hereunder (i) in the case of prepayment of a Syndicated Eurocurrency Borrowing or of a Competitive Borrowing, not later than 12:00 noon, New York City time, three Business Days before the date of prepayment or (ii) in the case of prepayment of a Syndicated ABR Borrowing, not later than 12:00 noon, New York City time, on the date of prepayment.  Each such notice shall be irrevocable and shall specify the prepayment date, the principal amount of each Borrowing or portion thereof to be prepaid, any other information required to be in such notice pursuant to Section 2.10(b); provided that, if a notice of prepayment is given in connection with a conditional notice of termination of the Commitments as contemplated by Section 2.09, then such notice of prepayment may be revoked if such notice of termination is revoked in accordance with Section 2.09.  Promptly following receipt of any such notice relating to a Syndicated Borrowing or Competitive Borrowing, the Administrative Agent shall advise the relevant Lenders of the contents thereof.  Each partial prepayment of any Borrowing shall be in an amount that would be permitted in the case of a Borrowing of the same Class and Type as provided in Section 2.02.  Each prepayment of a Syndicated Borrowing shall be applied ratably to the Loans included in the prepaid Borrowing.  Prepayments shall be accompanied by accrued interest to the extent required by Section 2.13 and any payments pursuant to Section 2.16, if applicable.

SECTION 2.12.    Fees.  (a)  Facility Fees.  The Borrower agrees to pay to the Administrative Agent for account of each Lender a facility fee, which shall accrue at the Applicable Rate on the daily amount of the Commitment of such Lender (whether used or unused) during the period from and including the date hereof to but excluding the date such Commitment terminates; provided that, if such Lender continues to have any Revolving Credit Exposure after its Commitment terminates (including as a result of the exercise of the Term-Out Option), then such facility fee shall continue to accrue on the daily amount of such Lender's Revolving Credit Exposure from and including the date on which its Commitment terminates to but excluding the date on which such Lender ceases to have any Revolving Credit Exposure.  Accrued facility fees shall be payable in arrears on each Quarterly Date, on the date the Commitments terminate and, if the Term-Out Option has been exercised, on each date following the date the Commitments terminate on which any Syndicated Loans are prepaid or repaid, commencing on the first such date to occur after the date hereof; provided that any facility fees accruing after the date on which the Commitments terminate shall (unless the Term-Out Option has been exercised) be payable on demand.  All facility fees shall be computed on the basis of a year of 360 days and shall be payable for the actual number of days elapsed (including the first day but excluding the last day).

(b)Administrative Agent Fees.  The Borrower agrees to pay to the Administrative Agent, for its own account, fees payable in the amounts and at the times separately agreed upon between the Borrower and the Administrative Agent.

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(c)Term-Out Fees.  On the Commitment Termination Date, the Borrower agrees to pay to the Administrative Agent, for the account of each Lender, a fee equal to 1.00% of the aggregate principal amount of such Lender's outstanding Syndicated Loans that have been termed out on the Commitment Termination Date as a result of the exercise of the Term-Out Option) pursuant to Section 2.21.

(d)Payment of Fees.  All fees payable hereunder shall be paid on the dates due, in Dollars and immediately available funds, to the Administrative Agent for distribution, in the case of facility fees and term-out fees, to the Lenders entitled thereto.  Fees paid shall not be refundable under any circumstances.

SECTION 2.13.    Interest.  (a)  ABR Loans.  The Loans comprising each ABR Borrowing shall bear interest at a rate per annum equal to the Alternate Base Rate plus the Applicable Rate.

(b)Eurocurrency Loans.  The Loans comprising each Eurocurrency Borrowing shall bear interest at a rate per annum equal to (i) in the case of a Syndicated Eurocurrency Borrowing, the Adjusted LIBO Rate for the Interest Period for such Borrowing plus the Applicable Rate, or (ii) in the case of a Competitive Eurocurrency Borrowing, the LIBO Rate for the Interest Period for such Borrowing plus (or minus, as applicable) the Margin applicable to such Borrowing.

(c)Fixed Rate Loans.  Each Fixed Rate Loan shall bear interest at a rate per annum equal to the Fixed Rate applicable to such Loan.

(d)Default Interest.  Notwithstanding the foregoing, if any principal of or interest on any Loan or any fee or other amount payable by the Borrower hereunder is not paid when due, whether at stated maturity, upon acceleration or otherwise, such overdue amount shall bear interest, after as well as before judgment, at a rate per annum equal to (i) in the case of overdue principal of any Loan, 2% plus the rate otherwise applicable to such Loan as provided above or (ii) in the case of any other amount, 2% plus the rate applicable to ABR Loans as provided in paragraph (a) of this Section.

(e)Payment of Interest.  Accrued interest on each Loan shall be payable in arrears on each Interest Payment Date for such Loan and, in the case of Syndicated Loans, upon termination of the Commitments; provided that (i) interest accrued pursuant to paragraph (d) of this Section shall be payable on demand; (ii) in the event of any repayment or prepayment of any Loan (other than a prepayment of a Syndicated ABR Loan prior to the Commitment Termination Date), accrued interest on the principal amount repaid or prepaid shall be payable on the date of such repayment or prepayment and (iii) in the event of any conversion of any Syndicated Eurocurrency Borrowing prior to the end of the Interest Period therefor, accrued interest on such Borrowing shall be payable on the effective date of such conversion.

(f)Computation.  All interest hereunder shall be computed on the basis of a year of 360 days, except that interest computed by reference to the Alternate Base Rate at times when the Alternate Base Rate is based on the Prime Rate shall be computed on the basis of a year of 365 days (or 366 days in a leap year), and in each case shall be payable for the actual number of days elapsed (including the first day but excluding the last day).  The applicable Alternate Base Rate, Adjusted LIBO Rate or LIBO Rate shall be determined by the Administrative Agent, and such determination shall be conclusive absent manifest error.

SECTION 2.14.    Alternate Rate of Interest.  If prior to the commencement of the Interest Period for any Eurocurrency Borrowing:

(a)the Administrative Agent determines (which determination shall be conclusive absent manifest error) that adequate and reasonable means do not exist for ascertaining the Adjusted LIBO Rate (in the case of a Syndicated Eurocurrency Borrowing) or the LIBO Rate (in the case of a Competitive Eurocurrency Borrowing) for such Interest Period; or

(b)the Administrative Agent is advised by the Required Lenders (or, in the case of a Competitive Eurocurrency Borrowing, any Lender that is required to make a Loan included in such Borrowing) that the Adjusted LIBO Rate (in the case of a Syndicated Eurocurrency Borrowing) or the LIBO Rate (in the case of a Competitive Eurocurrency Borrowing) for such Interest Period will not adequately and fairly reflect the cost to such Lenders (or Lender) of making or maintaining their respective Loans (or its Loan) included in such Borrowing for such Interest Period;

then the Administrative Agent shall give notice thereof to the Borrower and the Lenders by telephone or facsimile as promptly as practicable thereafter and, until the Administrative Agent notifies the Borrower and the Lenders that the circumstances giving rise to such notice no longer exist, (i) any Interest Election Request that requests the conversion of any Syndicated Borrowing to, or the continuation of any Syndicated Borrowing as, a Syndicated Eurocurrency Borrowing shall be ineffective and such Syndicated Borrowing (unless prepaid) shall be continued as, or converted to, a Syndicated ABR Borrowing and (ii) any Borrowing Request  for a Syndicated Eurocurrency Borrowing shall be treated as a request for a Syndicated ABR Borrowing.

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SECTION 2.15.    Increased Costs.  (a)  Increased Costs Generally.  If any Change in Law shall:

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

(ii)subject any Lender or the Administrative Agent to any Tax (other than (A) Indemnified Taxes, (B) Other Taxes, (C) Taxes described in clauses (a) and (c) through (e) of the definition of Excluded Taxes, (D) Connection Income Taxes and (E) Taxes imposed on gross or net income, profits or revenue, including value-added and similar Taxes) of any kind whatsoever with respect to its loans, loan principal, letters of credit, commitments or other obligations, or its deposits, reserves, other liabilities or capital attributable thereto; or

(iii)impose on any Lender or the London interbank market any other condition, cost or expense affecting this Agreement, Eurocurrency Loans or Fixed Rate Loans made by such Lender;

and the result of any of the foregoing shall be to increase the cost to such Lender of making or maintaining any Eurocurrency Loan or Fixed Rate Loan (or of maintaining its obligation to make any such Loan), or to reduce the amount of any sum received or receivable by such Lender or the Administrative Agent hereunder (whether of principal, interest or any other amount) then, upon request of such Lender or the Administrative Agent, as the case may be, the Borrower will pay to such Lender or the Administrative Agent, as the case may be, in Dollars, such additional amount or amounts as will compensate such Lender or the Administrative Agent, as the case may be, for such additional costs incurred or reduction suffered.

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

(c)Certificates for Reimbursement.  A certificate of a Lender setting forth the amount or amounts, in Dollars, necessary to compensate such Lender or its holding company, as the case may be, as specified in paragraph (a) or (b) of this Section and delivered to the Borrower shall be conclusive absent manifest error.  The Borrower shall pay such Lender the amount shown as due on any such certificate within 10 days after receipt thereof.

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

(e)Competitive Loans.  Notwithstanding the foregoing provisions of this Section, a Lender shall not be entitled to compensation pursuant to this Section in respect of any Competitive Loan if the Change in Law (other than any Change in Law referred to in the proviso of the definition of such term) that would otherwise entitle it to such compensation shall have been publicly announced prior to submission of the Competitive Bid pursuant to which such Loan was made.

SECTION 2.16.    Break Funding Payments.  In the event of (a) the payment of any principal of any Eurocurrency Loan or Fixed Rate Loan other than on the last day of the Interest Period therefor (including as a result of an Event of Default), (b) the conversion of any Syndicated Eurocurrency Loan other than on the last day of the Interest Period therefor, (c) the failure to borrow, convert, continue or prepay any Syndicated Loan on the date specified in any notice delivered pursuant hereto (regardless of whether such notice is permitted to be revocable under Section 2.11(b) and is revoked in accordance herewith), (d) the failure to borrow any Competitive Loan after accepting the Competitive Bid to make such Loan, or (e) the assignment as a result of a request by the Borrower pursuant to Section 2.19(b) of any Syndicated Eurocurrency Loan other than on the last day of the Interest Period therefor, then, in any such event, the Borrower shall compensate each Lender for the loss, cost and expense attributable to such event.  In the case of a Eurocurrency Loan, the loss to any Lender attributable to any such event shall be deemed to include 

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an amount determined by such Lender to be equal to the excess, if any, of (i) the amount of interest that such Lender would pay for a deposit equal to the principal amount of such Loan for the period from the date of such payment, conversion, failure or assignment to the last day of the Interest Period for such Loan (or, in the case of a failure to borrow, convert or continue, the duration of the Interest Period that would have resulted from such borrowing, conversion or continuation) if the interest rate payable on such deposit were equal to the Adjusted LIBO Rate (in the case of a Syndicated Eurocurrency Loan) or the LIBO Rate (in the case of a Competitive Eurocurrency Loan) for such Interest Period, over (ii) the amount of interest that such Lender would earn on such principal amount for such period if such Lender were to invest such principal amount for such period at the interest rate that would be bid by such Lender (or an affiliate of such Lender) for deposits denominated in Dollars from other banks in the eurocurrency market at the commencement of such period.  A certificate of any Lender setting forth any amount or amounts that such Lender is entitled to receive pursuant to this Section shall be delivered to the Borrower and shall be conclusive absent manifest error.  The Borrower shall pay such Lender the amount shown as due on any such certificate within 10 days after receipt thereof.

SECTION 2.17.    Taxes.  (a)  Payments Free of Taxes.  Any and all payments by or on account of any obligation of the Borrower or any Subsidiary Guarantor hereunder or under any other Loan Document shall be made free and clear of and without deduction or withholding for any Indemnified Taxes (including Other Taxes); provided that if the Borrower or any Subsidiary Guarantor shall be required by applicable law to deduct any Indemnified Taxes (including any Other Taxes) from such payments, then (i) the sum payable shall be increased as necessary so that after making all required deductions (including deductions applicable to additional sums payable under this Section) the Administrative Agent or Lender, as the case may be, receives an amount equal to the sum it would have received had no such deductions been made, (ii) the Borrower or such Subsidiary Guarantor shall make or cause to be made such deductions and (iii) the Borrower or such Subsidiary Guarantor shall timely pay or cause to be paid the full amount deducted to the relevant Governmental Authority in accordance with applicable law.

(b)Payment of Other Taxes by the Borrower.  Without limiting the provisions of paragraph (a) above, the Borrower and each Subsidiary Guarantor shall timely pay any Other Taxes to the relevant Governmental Authority in accordance with applicable law.

(c)Indemnification by the Borrower.  The Borrower shall indemnify the Administrative Agent and each Lender, within 30 days after written demand therefor, for the full amount of any Indemnified Taxes (including Other Taxes, and Indemnified Taxes imposed or asserted on or attributable to amounts paid or payable under this Section, but excluding Excluded Taxes under all circumstances) paid or payable by the Administrative Agent or such Lender, as the case may be, and any penalties and interest  arising therefrom or with respect thereto, whether or not such Indemnified Taxes (including Other Taxes) were correctly or legally imposed or asserted by the relevant Governmental Authority.  A certificate as to the amount of such payment or liability, prepared in good faith and delivered to the Borrower by a Lender (with a copy to the Administrative Agent), or by the Administrative Agent on its own behalf or on behalf of a Lender, shall be conclusive absent manifest error.  The Borrower shall not be obligated to indemnify for any Indemnified Taxes (including Other Taxes) if a written demand therefor is not made by the Administrative Agent or a Lender, as the case may be, within 120 days from the first date the Administrative Agent or such Lender knows or reasonably should have known of the imposition of such Taxes.

(d)Evidence of Payments.  As soon as practicable after any payment of Indemnified Taxes (including Other Taxes) by the Borrower or any Subsidiary Guarantor to a Governmental Authority, the Borrower or such Subsidiary Guarantor shall deliver to the Administrative Agent the original or a certified copy of a receipt issued by such Governmental Authority evidencing such payment or other evidence of such payment reasonably satisfactory to the Administrative Agent.

(e)Indemnification by the Lenders.  Each Lender shall severally indemnify the Administrative Agent for any Taxes attributable to such Lender (but only to the extent that the Borrower and the Subsidiary Guarantors have not already indemnified the Administrative Agent for such Taxes and without limiting the obligation of the Borrower and the Subsidiary Guarantors to do so) that are paid or payable by the Administrative Agent in connection with any Loan Document and any reasonable expenses arising therefrom or with respect thereto, whether or not such Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority.  The indemnity under this paragraph (e) shall be paid within 10 days after the Administrative Agent delivers to the applicable Lender a certificate stating the amount of Taxes so paid or payable by the Administrative Agent.  Such certificate shall be conclusive of the amount so paid or payable absent manifest error.

(f)Foreign Lender Tax Certifications.  (i) Any Foreign Lender that is entitled to an exemption from, or reduction of, any applicable withholding Tax with respect to any payments under any Loan Document shall deliver to the Borrower and the Administrative Agent, at the time or times reasonably requested by the Borrower or the Administrative Agent, such properly completed and executed documentation reasonably requested by the Borrower or the Administrative Agent as will permit such payments to be made without, or at a reduced rate of, withholding.  Upon the reasonable request of the Borrower or the Administrative Agent, any Lender shall update any form or certification previously delivered pursuant to this paragraph (f).  If any form or certification previously delivered pursuant to this Section expires or becomes obsolete or inaccurate in any respect with respect 

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to a Lender, such Lender shall promptly (and in any event within 10 days after such expiration, obsolescence or inaccuracy) notify the Borrower and the Administrative Agent in writing of such expiration, obsolescence or inaccuracy and update the form or certification if it is legally eligible to do so.

(ii)Without limiting the generality of the foregoing:

(A)each Foreign Lender shall (x) furnish on or before the date on which it becomes a party to this Agreement either (1) two accurate and complete originally executed U.S. Internal Revenue Service Form W-8BEN (or successor form), (2) two accurate and complete originally executed U.S. Internal Revenue Service Form W-8ECI (or successor form), and/or (3) two accurate and complete originally executed U.S. Internal Service Form W-8IMY (together with the forms described in clauses (1) and (2), as required) certifying, in each case, to such Foreign Lender's legal entitlement to a complete exemption from U.S. Federal withholding tax with respect to all interest payments hereunder, and (y) provide a new Form W-8BEN (or successor form) or Form W-8ECI (or successor form) and/or Form W-8IMY (or successor form) upon the expiration or obsolescence of any previously delivered form to reconfirm complete exemption from U.S. Federal withholding tax with respect to any interest payment hereunder to the extent (in case of this clause (y)) such Foreign Lender is legally able to do so; provided that any Foreign Lender that is relying on the so-called “portfolio interest exemption” and is not (x) a “bank” within the meaning of Section 881(c)(3)(A) of the Code, (y) a “10 percent shareholder” of the Borrower within the meaning of Section 881(c)(3)(B) of the Code and (z) a controlled foreign corporation described in Section 881(c)(3)(C) of the Code, shall also furnish a “Non-Bank Certificate” in the form of Exhibit C together with a Form W-8BEN.  Notwithstanding any other provision of this Section 2.17(f)(ii)(A), a Foreign Lender that is an assignee shall not be required to deliver any documentation pursuant to this Section 2.17(f)(ii)(A) that such Foreign Lender is not legally able to deliver.  For the avoidance of doubt, the legal inability of a Foreign Lender to provide any documentation pursuant to this Section 2.17(f)(ii)(A) shall not cause any Tax resulting from such inability to be an Excluded Tax in circumstances where such inability arises solely due to a Change in Law subsequent to the date the Foreign Lender becomes a party to this Agreement.  Subject to Section 2.17(a), if any Foreign Lender fails to provide the certifications described in this paragraph, each such Foreign Lender acknowledges that the Borrower and the Administrative Agent shall be entitled to deduct and withhold any Taxes imposed by the United States or any taxing authority thereof or therein, to the extent required by law.

(B)If a payment made to a Lender under any Loan Document would be subject to U.S. Federal withholding Tax imposed by FATCA if such Lender were to fail to comply with the applicable reporting requirements of FATCA (including those contained in Section 1471(b) or 1472(b) of the Code, as applicable), such Lender shall deliver to the Withholding Agent, at the time or times prescribed by law and at such time or times reasonably requested by the Withholding Agent, such documentation prescribed by applicable law (including as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such additional documentation reasonably requested by the Withholding Agent as may be necessary for the Withholding Agent to comply with its obligations under FATCA, to determine that such Lender has or has not complied with such Lender's obligations under FATCA and, as necessary, to determine the amount to deduct and withhold from such payment.  Solely for purposes of this Section 2.17(f)(ii)(B), “FATCA” shall include any amendments made to FATCA after the date of this Agreement.

(g)U.S. Lender Tax Certifications.  Any Lender that is a United States person, as defined in Section 7701(a)(30) of the Code and is not an exempt recipient within the meaning of Treasury Regulations Section 1.6049-4(c), shall deliver to the Borrower (with a copy to the Administrative Agent) two accurate and complete original signed copies of Internal Service Form W-9, or any successor form that such person is entitled to provide, establishing that the Lender is not subject to U.S. Federal backup withholding Tax.

(h)Cooperation in Contesting Indemnified Taxes.  If the Borrower determines in good faith that a reasonable basis exists for contesting any Indemnified Taxes (including Other Taxes) for which additional amounts have been paid under this Section 2.17, the Administrative Agent or the relevant Lender, as the case may be, shall cooperate with the Borrower in challenging such Indemnified Taxes (including Other Taxes) at the Borrower's expense, if so requested by the Borrower in writing; provided that, in the sole discretion, exercised in good faith, of the Administrative Agent or such Lender, as the case may be, doing so would not materially prejudice the Administrative Agent or such Lender, and the Administrative Agent or such Lender would not be required to disclose any information it considers proprietary or make available its Tax returns (or any other information relating to its Taxes that it deems confidential) to the Borrower or any other Person.

(i)Treatment of Certain Refunds.  If the Administrative Agent or a Lender determines, in its reasonable discretion, that it has received a refund of any Indemnified Taxes (including Other Taxes) as to which it has been indemnified by 

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the Borrower or any Subsidiary Guarantor or with respect to which the Borrower or any Subsidiary Guarantor has paid additional amounts pursuant to this Section, it shall pay to the Borrower or such Subsidiary Guarantor an amount equal to such refund (but only to the extent of indemnity payments made, or additional amounts paid, by the Borrower or such Subsidiary Guarantor under this Section with respect to the Indemnified Taxes (including Other Taxes) giving rise to such refund), net of all reasonable out-of-pocket expenses of the Administrative Agent or such Lender, as the case may be, and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund); provided that the Borrower or such Subsidiary Guarantor, upon the request of the Administrative Agent or such Lender, shall repay the amount paid over to the Borrower or such Subsidiary Guarantor (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) to the Administrative Agent or such Lender in the event the Administrative Agent or such Lender is required to repay such refund to such Governmental Authority.  This paragraph shall not be construed to require the Administrative Agent or any Lender to disclose any information it considers proprietary or make available its Tax returns (or any other information relating to its Taxes that it deems confidential) to the Borrower, any Subsidiary Guarantor or any other Person.

SECTION 2.18.    Payments Generally; Pro Rata Treatment; Sharing of Setoffs.  (a)  Payments by the Obligors.  Each Obligor shall make each payment required to be made by it hereunder (whether of principal, interest or fees, or of amounts payable under Section 2.15, 2.16 or 2.17, or otherwise), or under any other Loan Document (except to the extent otherwise provided therein), prior to 1:00 p.m., New York City time, on the date when due, in immediately available funds, without setoff or counterclaim.  Any amounts received after such time on any date may, in the discretion of the Administrative Agent, be deemed to have been received on the next succeeding Business Day for purposes of calculating interest thereon.  All such payments shall be made to the Administrative Agent at the Administrative Agent's Account, except as otherwise expressly provided in the relevant Loan Document and except payments pursuant to Sections 2.15, 2.16, 2.17 and 10.03, which shall be made directly to the Persons entitled thereto.  The Administrative Agent shall distribute any such payments received by it for account of any other Person to the appropriate recipient promptly following receipt thereof.  If any payment hereunder shall be due on a day that is not a Business Day, the date for payment shall be extended to the next succeeding Business Day and, in the case of any payment accruing interest, interest thereon shall be payable for the period of such extension.  All payments under each Loan Document shall be made in Dollars.

(b)Application of Insufficient Payments.  If at any time insufficient funds are received by and available to the Administrative Agent to pay fully all amounts of principal, interest and fees then due hereunder, such funds shall be applied (i) first, to pay interest and fees then due hereunder, ratably among the parties entitled thereto in accordance with the amounts of interest and fees then due to such parties, and (ii) second, to pay principal then due hereunder, ratably among the parties entitled thereto in accordance with the amounts of principal then due to such parties.

(c)Pro Rata Treatment.  Except to the extent otherwise provided herein (for the avoidance of doubt, as this Agreement is in effect from time to time): (i) each payment of facility fees under Section 2.12(a) shall be made for account of the Lenders, and each termination or reduction of the amount of the Commitments under Section 2.09 shall be applied to the respective Commitments of the Lenders, pro rata according to the amounts of their respective Commitments (or, in the case of any such payment of facility fees at a time when the Commitments shall have terminated or expired, pro rata according to the amounts of their respective Revolving Credit Exposure); (ii) each Syndicated Borrowing shall be allocated pro rata among the Lenders according to the amounts of their respective Commitments (in the case of the making of Syndicated Loans) or their respective Loans that are to be included in such Borrowing (in the case of conversions and continuations of Loans); (iii) each payment or prepayment of any Syndicated Borrowing shall be applied ratably to the Loans included in the repaid or prepaid Syndicated Borrowing; and (iv) if the Term-Out Option is exercised, the payment of the term-out fees under Section 2.12(c) shall be made for account of the Lenders pro rata according to the amounts of their respective Commitments immediately prior to the Commitment Termination Date.

(d)Sharing of Payments by Lenders.  If any Lender shall, by exercising any right of setoff or counterclaim or otherwise, obtain payment in respect of any principal of or interest on any of its Loans (other than a Competitive Loan) resulting in such Lender's receiving payment of a greater proportion of the aggregate amount of its Loans (other than Competitive Loans) and accrued interest thereon than the proportion received by any other Lender, then the Lender receiving such greater proportion shall (A) notify the Administrative Agent of such fact and (B) purchase (for cash at face value) participations in the Loans (other than Competitive Loans) of other Lenders, or make such other adjustments as shall be equitable, so that the benefit of all such payments shall be shared by the Lenders ratably in accordance with the aggregate amounts of principal of and accrued interest on their Loans (other than Competitive Loans), provided that:

(i)if any such participations are purchased and all or any portion of the payment giving rise thereto is recovered, such participations shall be rescinded and the purchase price restored to the extent of such recovery, without interest; and

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(ii)the provisions of this paragraph shall not be construed to apply to (x) any payment made by any Obligor pursuant to and in accordance with the express terms of this Agreement (for the avoidance of doubt, as this Agreement is in effect from time to time) or (y) any payment obtained by a Lender as consideration for the assignment of or sale of a participation in any of its Loans to any assignee or participant, other than to the Borrower or any Subsidiary thereof (as to which the provisions of this paragraph shall apply).

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

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

(f)Certain Deductions by the Administrative Agent.  If any Lender shall fail to make any payment required to be made by it hereunder to or for the account of the Administrative Agent, then the Administrative Agent may, in its discretion (notwithstanding any contrary provision hereof), (i) apply any amounts thereafter received by the Administrative Agent for the account of such Lender to satisfy such Lender's obligations in respect of such payment until all such unsatisfied obligations have been discharged or (ii) hold any such amounts in a segregated account as cash collateral for, and application to, any future funding obligations of such Lender pursuant to this Agreement (including pursuant to Sections 2.07(b), 2.18(e) and 10.03(c)), in each case in such order as shall be determined by the Administrative Agent in its discretion.

SECTION 2.19.    Mitigation Obligations; Replacement of Lenders.  (a) Designation of a Different Lending Office.  If any Lender requests compensation under Section 2.15, or requires the Borrower to pay any additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 2.17, then such Lender shall use reasonable efforts to designate a different lending office for funding or booking its Loans hereunder or to assign and delegate its rights and obligations hereunder to another of its offices, branches or Affiliates, if, in the judgment of such Lender, such designation or assignment and delegation (i) would eliminate or reduce amounts payable pursuant to Section 2.15 or 2.17, as the case may be, in the future and (ii) would not subject such Lender to any unreimbursed cost or expense and would not otherwise be disadvantageous to such Lender.  The Borrower hereby agrees to pay all reasonable costs and expenses incurred by any Lender in connection with any such designation or assignment and delegation.

(b)Replacement of Lenders.  If (i) any Lender requests compensation under Section 2.15, (ii) the Borrower is required to pay any additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 2.17, (iii)  any Lender has become a Defaulting Lender, or (iv) any Lender does not consent to any proposed amendment, supplement, modification, consent or waiver of any provision of this Agreement or any other Loan Document that requires the consent of such Lender or each of the Lenders or each of the Lenders affected thereby (so long as the consent of the Required Lenders has been obtained), then the Borrower may, at its sole expense and effort, upon notice to such Lender and the Administrative Agent, require such Lender to assign and delegate, without recourse (in accordance with and subject to the restrictions contained in, and consents required by, Section 10.04), all of its interests, rights and obligations under this Agreement and the related Loan Documents (other than any outstanding Competitive Loans held by it) to an assignee that shall assume such obligations (which assignee may be another Lender, if a Lender accepts such assignment), provided that:

(A)the Borrower shall have received the prior written consent of the Administrative Agent, which consent shall not unreasonably be withheld;

(B)the Borrower shall have paid to the Administrative Agent the assignment fee specified in Section 10.04;

(C)such Lender shall have received payment of an amount equal to the outstanding principal of its Loans (other than Competitive Loans), accrued interest thereon, accrued fees and all other amounts (except Competitive Loans) payable to it hereunder and under the other Loan Documents (including any amounts under Section 2.16) from the assignee (to the extent of such outstanding principal and accrued interest and fees) or the Borrower (in the case of all other amounts);
(D)in the case of any such assignment and delegation resulting from a claim for compensation under 

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Section 2.15 or payments required to be made pursuant to Section 2.17, such assignment and delegation will result in a reduction in such compensation or payments thereafter; and

(E)such assignment does not conflict with applicable law.

A Lender shall not be required to make any such assignment or delegation if, prior thereto, as a result of a waiver by such Lender or otherwise, the circumstances entitling the Borrower to require such assignment and delegation cease to apply.  Each party hereto agrees that an assignment and delegation required pursuant to this paragraph may be effected pursuant to an Assignment and Assumption executed by the Borrower, the Administrative Agent and the assignee and that the Lender required to make such assignment and delegation need not be a party thereto.

SECTION 2.20.    Defaulting Lenders.  Notwithstanding any provision of this Agreement to the contrary, if any Lender becomes a Defaulting Lender, then the following provisions shall apply for so long as such Lender is a Defaulting Lender:

(a)facility fees shall continue to accrue on the amount of the Commitment of such Defaulting Lender pursuant to Section 2.12(a) only to the extent of the Revolving Credit Exposure of such Defaulting Lender; and

(b)the Commitment, the Revolving Credit Exposure and the aggregate principal amount of outstanding Competitive Loans of such Defaulting Lender shall not be included in determining whether the Required Lenders or any other requisite Lenders have taken or may take any action hereunder or under any other Loan Document (including any consent to any amendment, waiver or other modification pursuant to Section 10.02); provided that any amendment, waiver or other modification requiring the consent of all Lenders or all Lenders affected thereby shall, except as otherwise provided in Section 10.02, require the consent of such Defaulting Lender in accordance with the terms hereof.

In the event that the Administrative Agent and the Borrower each agree that a Defaulting Lender has adequately remedied all matters that caused such Lender to be a Defaulting Lender, then on such date such Lender shall purchase at par such of the Syndicated Loans of the other Lenders as the Administrative Agent shall determine may be necessary in order for such Lender to hold such Loans in accordance with its Applicable Percentage.

SECTION 2.21.    Term-Out Option.  The Borrower may, by irrevocable written notice to the Administrative Agent given, not less than 30 days, but not more than 60 days, prior to the Commitment Termination Date, elect (such election, the “Term-Out Option”) to extend the Maturity Date to a one-year anniversary of the Commitment Termination Date; provided that on the Commitment Termination Date (a) no Default shall have occurred and be continuing or would result therefrom, (b) the representations and warranties set forth in Article IV and in the other Loan Documents shall be true and correct on and as of the Commitment Termination Date as if made on and as of such date (or, if any such representation or warranty is expressly stated to have been made as of a specific date, as of such specific date) and (c) the Borrower shall pay the Term-Out Fee to the Administrative Agent for the account of each Lender pursuant to Section 2.12(c).    Each notice by the Borrower under this Section shall be deemed to constitute a representation and warranty by the Borrower as to the matters specified in clauses (a) and (b) above as of the Commitment Termination Date.  For the avoidance of doubt all Commitments will terminate on the Commitment Termination Date, and no additional Borrowings will be permitted after the Commitment Termination Date.  This Section shall not apply to Competitive Loans, which must be repaid on or prior to the Commitment Termination Date.

ARTICLE II

Guarantee

SECTION 3.01.    The Guarantee.  The Subsidiary Guarantors hereby jointly and severally, as a primary obligor and not merely as a surety, guarantee to each Lender, each other holder of a Guaranteed Obligation (as hereinafter defined) and the Administrative Agent and their respective successors and assigns the prompt payment in full when due (whether at stated maturity, by acceleration or otherwise) of the principal of and interest on the Loans made by the Lenders to the Borrower and all fees, indemnification payments and other amounts whatsoever, whether direct or indirect, absolute or contingent, now or hereafter from time to time owing to the Lenders or the Administrative Agent by the Borrower under this Agreement and by any Obligor under any of the other Loan Documents, in each case strictly in accordance with the terms thereof and including all interest, fees and expenses accrued or incurred subsequent to the commencement of any bankruptcy or insolvency proceedings with respect to the Borrower, whether or not such interest, fees or expenses are allowed as a claim in such proceeding (such obligations being herein collectively called the “Guaranteed Obligations”).  The Subsidiary Guarantors hereby further jointly and severally agree that if the Borrower shall fail to pay in full when due (whether at stated maturity, by acceleration or otherwise) any of the Guaranteed Obligations, the Subsidiary Guarantors will promptly pay the same, without any demand or notice whatsoever, and that in the case of any extension of time of payment or renewal of any of the Guaranteed Obligations, the same will be promptly paid in full when 

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due (whether at extended maturity, by acceleration or otherwise) in accordance with the terms of such extension or renewal.

SECTION 3.02.    Obligations Unconditional.  The obligations of the Subsidiary Guarantors under Section 3.01 are absolute and unconditional, joint and several, irrespective of the value, genuineness, validity, regularity or enforceability of the obligations of the Borrower under this Agreement or any other agreement or instrument referred to herein, or any substitution, release or exchange of any other guarantee of or security for any of the Guaranteed Obligations, and, to the fullest extent permitted by applicable law, irrespective of any other circumstance whatsoever that might otherwise constitute a legal or equitable discharge or defense of a surety or guarantor, it being the intent of this Section that the obligations of the Subsidiary Guarantors hereunder shall be absolute and unconditional, joint and several, under any and all circumstances.  Without limiting the generality of the foregoing, it is agreed that the occurrence of any one or more of the following shall not alter or impair the liability of the Subsidiary Guarantors hereunder, which shall remain absolute and unconditional as described above:

(i)at any time or from time to time, without notice to the Subsidiary Guarantors, the time for any performance of or compliance with any of the Guaranteed Obligations shall be extended, or such performance or compliance shall be waived;

(ii)any of the acts mentioned in any of the provisions of this Agreement or any other agreement or instrument referred to herein shall be done or omitted;

(iii)the maturity of any of the Guaranteed Obligations shall be accelerated, or any of the Guaranteed Obligations shall be modified, supplemented or amended in any respect, or any right under this Agreement or any other agreement or instrument referred to herein  shall be waived or any other guarantee of any of the Guaranteed Obligations or any security therefor shall be released or exchanged in whole or in part or otherwise dealt with; or

(iv)any lien or security interest granted to, or in favor of, the Administrative Agent or any Lender or Lenders as security for any of the Guaranteed Obligations shall fail to be perfected.

The Subsidiary Guarantors hereby expressly waive diligence, presentment, demand of payment, protest and all notices whatsoever.  Each Subsidiary Guarantor agrees that its guarantee hereunder constitutes a guarantee of payment  when due (whether or not any bankruptcy, insolvency, receivership or similar proceeding shall have stayed the accrual or collection of any of the Guaranteed Obligations or operated as a discharge thereof) and not merely of collection, and hereby expressly waives any requirement that the Administrative Agent or any Lender exhaust any right, power or remedy or proceed against the Borrower under this Agreement or any other agreement or instrument referred to herein, or against any other Person under any other guarantee of, or security for, any of the Guaranteed Obligations.

SECTION 3.03.    Reinstatement.  The obligations of the Subsidiary Guarantors under this Article shall be automatically reinstated if and to the extent that for any reason any payment by or on behalf of the Borrower in respect of the Guaranteed Obligations is rescinded or must be otherwise restored by any holder of any of the Guaranteed Obligations, whether as a result of any proceedings in bankruptcy or reorganization or otherwise, and the Subsidiary Guarantors jointly and severally agree that they will indemnify the Administrative Agent and each Lender on demand for all reasonable costs and expenses (including fees of counsel) incurred by the Administrative Agent or such Lender in connection with such rescission or restoration, including any such costs and expenses incurred in defending against any claim alleging that such payment constituted a preference, fraudulent transfer or similar payment under any bankruptcy, insolvency or similar law.

SECTION 3.04.    Subrogation.  The Subsidiary Guarantors hereby jointly and severally agree that until the payment and satisfaction in full of all Guaranteed Obligations and the expiration and termination of the Commitments of the Lenders under this Agreement they shall not exercise any right or remedy arising by reason of any performance by them of their guarantee in Section 3.01, whether by subrogation or otherwise, against the Borrower or any other guarantor of any of the Guaranteed Obligations or any security for any of the Guaranteed Obligations.

SECTION 3.05.    Remedies.  The Subsidiary Guarantors jointly and severally agree that, as between the Subsidiary Guarantors and the Lenders, the obligations of the Borrower under this Agreement may be declared to be forthwith due and payable as provided in Article VIII (and shall be deemed to have become automatically due and payable in the circumstances provided in Article VIII) for purposes of Section 3.01 notwithstanding any stay, injunction or other prohibition preventing such declaration (or such obligations from becoming automatically due and payable) as against the Borrower and that, in the event of such declaration (or such obligations being deemed to have become automatically due and payable), such obligations (whether or not due and payable by the Borrower) shall forthwith become due and payable by the Subsidiary Guarantors for purposes of Section 3.01.

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SECTION 3.06.    Instrument for the Payment of Money.  To the fullest extent permitted by N.Y. Civ. Prac. L&R § 3213 and other applicable law, each Subsidiary Guarantor hereby acknowledges that the guarantee in this Article constitutes an instrument for the payment of money, and consents and agrees that any Lender or the Administrative Agent, at its sole option, in the event of a dispute by such Subsidiary Guarantor in the payment of any moneys due hereunder, shall have the right to bring motion action under N.Y. Civ. Prac. L&R § 3213.

SECTION 3.07.    Continuing Guarantee.  The guarantee in this Article is a continuing guarantee, and shall apply to all Guaranteed Obligations whenever arising.  Each Subsidiary Guarantor further agrees that the Guaranteed Obligations may be extended or renewed, in whole or in part, or amended or modified, without notice to or further assent from it, and that it will remain bound upon its guarantee hereunder notwithstanding any extension, renewal, amendment or modification of any Guaranteed Obligation.

SECTION 3.08.    Rights of Contribution.  The Subsidiary Guarantors hereby agree, as between themselves, that if any Subsidiary Guarantor shall become an Excess Funding Guarantor (as defined below) by reason of the payment by such Subsidiary Guarantor of any Guaranteed Obligations, then each other Subsidiary Guarantor shall, on demand of such Excess Funding Guarantor (but subject to the next sentence), pay to such Excess Funding Guarantor an amount equal to such Subsidiary Guarantor's Pro Rata Share (as defined below and determined, for this purpose, without reference to the properties, debts and liabilities of such Excess Funding Guarantor) of the Excess Payment (as defined below) in respect of such Guaranteed Obligations.  The payment obligation of a Subsidiary Guarantor to any Excess Funding Guarantor under this Section shall be subordinate and subject in right of payment to the prior payment in full of the obligations of such Subsidiary Guarantor under the other provisions of this Article and such Excess Funding Guarantor shall not exercise any right or remedy with respect to such excess until payment and satisfaction in full of all of such obligations.

For purposes of this Section, (a) “Excess Funding Guarantor” means, in respect of any Guaranteed Obligations, a Subsidiary Guarantor that has paid an amount in excess of its Pro Rata Share of such Guaranteed Obligations, (b) “Excess Payment” means, in respect of any Guaranteed Obligations, the amount paid by an Excess Funding Guarantor in excess of its Pro Rata Share of such Guaranteed Obligations and (c) “Pro Rata Share” means, for any Subsidiary Guarantor, the ratio (expressed as a percentage) of (i) the amount by which the aggregate present fair saleable value of all properties of such Subsidiary Guarantor (excluding any shares of stock or other equity interest of any other Subsidiary Guarantor) exceeds the amount of all the debts and liabilities of such Subsidiary Guarantor (including contingent, subordinated, unmatured and unliquidated liabilities, but excluding the obligations of such Subsidiary Guarantor hereunder and any obligations of any other Subsidiary Guarantor that have been Guaranteed by such Subsidiary Guarantor) to (ii) the amount by which the aggregate fair saleable value of all properties of all of the Subsidiary Guarantors exceeds the amount of all the debts and liabilities (including contingent, subordinated, unmatured and unliquidated liabilities, but excluding the obligations of the Borrower and the Subsidiary Guarantors hereunder and under the other Loan Documents) of all of the Subsidiary Guarantors, determined (A) with respect to any Subsidiary Guarantor that is a party hereto on the Effective Date, as of the Effective Date, and (B) with respect to any other Subsidiary Guarantor, as of the date such Subsidiary Guarantor becomes a Subsidiary Guarantor hereunder.

SECTION 3.09.    General Limitation on Guarantee Obligations.  In any action or proceeding involving any state corporate law, or any state or Federal bankruptcy, insolvency, reorganization or other law affecting the rights of creditors generally, if the obligations of any Subsidiary Guarantor under Section 3.01 would otherwise, taking into account the provisions of Section 3.08, be held or determined to be void, invalid or unenforceable on account of the amount of its liability under Section 3.01, then, notwithstanding any other provision hereof to the contrary, the amount of such liability shall, without any further action by such Subsidiary Guarantor, any Lender, the Administrative Agent or any other Person, be automatically limited and reduced to the highest amount that is valid and enforceable as determined in such action or proceeding.

SECTION 3.10.    Designation of Subsidiary Guarantors.  The Borrower may at any time and from time to time designate, in its sole discretion, any Domestic Subsidiary as a Subsidiary Guarantor, in each case by delivery to the Administrative Agent of (a) a duly executed Guarantee Assumption Agreement properly completed for such Subsidiary and in such number of counterparts as may reasonably be requested by the Administrative Agent and (b) proof of corporate action, incumbency of officers, opinions of counsel and other documents consistent with those delivered by the Subsidiary Guarantors pursuant to Section 5.01 on the Effective Date as may reasonably be requested by the Administrative Agent.  Any Subsidiary Guarantor designated as such pursuant to this Section 3.10 shall continue to be a Subsidiary Guarantor until the Borrower shall have delivered written notice to the Administrative Agent of the termination of such designation; provided that the preceding clause shall not limit the Borrower's obligations with respect to Specified Subsidiaries pursuant to Section 6.08.

SECTION 3.11.    Release of Guarantees.  A Subsidiary Guarantor will automatically be released from its obligations under this Article III, upon the consummation of any transaction permitted by this Agreement as a result of which neither the Borrower nor any of its Subsidiaries owns any equity interest in such Subsidiary Guarantor, provided that, if so required 

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by this Agreement, the Required Lenders shall have consented to such transactions and the terms of such consent shall not have provided otherwise.  In connection with any release pursuant to this Section, the Administrative Agent shall execute and deliver to any Obligor, at such Obligor's expense, all documents that such Obligor shall reasonably request to evidence such release.  Any execution and delivery of documents pursuant to this Section shall be without recourse to or warranty by the Administrative Agent.

ARTICLE IV

Representations and Warranties

The Borrower represents and warrants to the Administrative Agent and the Lenders that:

SECTION 4.01.    Organization.  Each Obligor is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization.

SECTION 4.02.    Authorization; Enforceability.  The Transactions are within each Obligor's corporate or other organizational powers and have been duly authorized by all necessary corporate or other organizational action.  This Agreement has been duly executed and delivered by each Obligor identified herein as a signatory party hereto and constitutes, and each of the other Loan Documents to which any Obligor is a party when executed and delivered by such Obligor will constitute, a legal, valid and binding obligation of such Obligor, enforceable against each Obligor in accordance with its terms, except as such enforceability may be limited by (a) bankruptcy, insolvency, reorganization, moratorium or similar laws of general applicability affecting the enforcement of creditors' rights and (b) the application of general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law).

SECTION 4.03.    Governmental Approvals; No Conflicts.  The Transactions (a) do not require any consent or approval of, registration or filing with, or any other action by, any Governmental Authority, except such as have been obtained or made and are in full force and effect, (b) do not violate the charter, by‐laws or other organizational documents of any Obligor and do not violate in any material respect any applicable law or regulation or any order of any Governmental Authority, and (c) do not constitute a default under any material indenture, agreement or other instrument binding upon the Borrower or any of its Subsidiaries.

SECTION 4.04.    Financial Condition; No Material Adverse Change.  (a) Financial Condition.  The Borrower's consolidated balance sheet and statements of earnings, shareholders' equity and cash flows (i) as of and for the fiscal year ended March 3, 2012, reported on by Deloitte & Touche LLP, independent registered public accounting firm, and (ii) as of and for the fiscal quarter and the portion of the fiscal year ended May 5, 2012, certified by the chief financial officer of the Borrower, present fairly, in all material respects, the financial position and results of operations and cash flows of the Borrower and its consolidated Subsidiaries as of such dates and for such periods in accordance with GAAP, subject to year‐end audit adjustments and the absence of certain footnotes in the case of the statements referred to in clause (ii).

(b)No Material Adverse Change.  Since March 3, 2012, there has been no material adverse change in the business, assets, operations or condition (financial or otherwise) of the Borrower and its Subsidiaries taken as a whole.

SECTION 4.05.    Properties.  Except in respect of matters that would not reasonably be expected to have a Material Adverse Effect, the Borrower and its Subsidiaries have title to, or leasehold interests in, or the use of, property sufficient to conduct their business, except for defects in title that do not interfere with their ability to conduct their business.

SECTION 4.06.    Litigation and Environmental Matters.  (a)  Actions, Suits and Proceedings.  (i)  There are no material actions, suits or proceedings by or before any arbitrator or Governmental Authority now pending against or, to the knowledge of the Borrower, threatened against or affecting the Borrower or any of its Subsidiaries, except as disclosed in the Annual Report on Form 10-K of the Borrower for the fiscal year ended March 3, 2012 as filed with the Securities and Exchange Commission.

(ii)There are no actions, suits or proceedings by or before any arbitrator or Governmental Authority now pending against or, to the knowledge of the Borrower, threatened against or affecting the Borrower or any of its Subsidiaries that purport to affect the legality, validity or enforceability of any Loan Document, the borrowing or repayment of any Loans.

(b)Environmental, Health and Safety Laws.  Neither the Borrower nor any Subsidiary has received any notice to the effect that any part of its operations or properties is not in compliance with any Environmental Law or order or any notice that it or its property is the subject of any governmental investigation evaluating whether any remedial action is needed to respond to any release of any Hazardous Material into the environment, which non-compliance or remedial action could reasonably be expected to have a Material Adverse Effect.

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SECTION 4.07.    Compliance with Laws and Agreements.  Each of the Borrower and its Subsidiaries is in compliance with all laws, regulations and orders of any Governmental Authority applicable to it or its property and all indentures, agreements and other instruments binding upon it or its property, except where the failure to do so, individually or in the aggregate, would not reasonably be expected to result in a Material Adverse Effect.  No Default has occurred and is continuing.

SECTION 4.08.    Investment Company Status.  No Obligor is an “investment company” as defined in, or subject to regulation under, the Investment Company Act of 1940.

SECTION 4.09.    Taxes.  Each of the Borrower and its Subsidiaries has timely filed or caused to be filed all material Tax returns and reports required to have been filed and has paid or caused to be paid all Taxes required to have been paid by it, except (a) Taxes that are being contested in good faith by appropriate proceedings and for which such Person has set aside on its books adequate reserves in accordance with GAAP or (b) to the extent that the failure to do so would not reasonably be expected to result in a Material Adverse Effect.

SECTION 4.10.    ERISA.  No ERISA Event has occurred or is reasonably expected to occur that, when taken together with all other such ERISA Events for which liability is reasonably expected to occur, could reasonably be expected to result in a Material Adverse Effect.

SECTION 4.11.    Subsidiaries.  Set forth on Schedule 4.11 is a complete and correct list as of the Effective Date of (a) all of the Subsidiaries of the Borrower and (b) each Subsidiary holding ownership interests in other Subsidiaries of the Borrower, together with, for each such Subsidiary, the jurisdiction of organization of such Subsidiary.  Schedule 4.11 separately identifies all Specified Subsidiaries and Material Subsidiaries as of the date hereof.

SECTION 4.12.    Federal Reserve Regulations.  Neither the Borrower nor any Subsidiary is engaged principally or as one of its important activities in the business of extending credit for the purpose of purchasing or carrying Margin Stock.  The value of all Margin Stock owned by the Borrower and its Subsidiaries (including, without limitation, all capital stock of the Borrower held by the Borrower in treasury) does not constitute more than 25.0% of the value of the consolidated assets of the Borrower.

ARTICLE V

Conditions

SECTION 5.01.    Effective Date.  The obligations of the Lenders to make Loans hereunder shall not become effective until the date on which the following conditions shall have been satisfied (or delivery of such documents is waived in accordance with Section 10.02):

(a)Executed Counterparts.  The Administrative Agent shall have received from each party hereto either (i) a counterpart of this Agreement signed on behalf of such party or (ii) written evidence satisfactory to the Administrative Agent (which may include facsimile or other electronic transmission of a signed signature page to this Agreement) that such party has signed a counterpart of this Agreement.

(b)Opinion of Counsel to the Obligors.  The Administrative Agent shall have received opinions, dated the Effective Date, of General Counsel of the Borrower and of Simpson Thacher & Bartlett LLP, special counsel for the Borrower in form and substance reasonably satisfactory to the Administrative Agent (and each Obligor hereby instructs such counsel to deliver such opinion to the Lenders and the Administrative Agent).

(c)Corporate Documents.  The Administrative Agent shall have received such documents and certificates as the Administrative Agent or its counsel may reasonably request relating to the organization, existence and good standing of each Obligor, the authorization of the Transactions and any other legal matters relating to the Obligors, this Agreement or the Transactions, all in form and substance satisfactory to the Administrative Agent and its counsel.

(d)Officer's Certificate.  The Administrative Agent shall have received a certificate, dated the Effective Date and signed by the president, a vice president or a Financial Officer of the Borrower, confirming, to the best knowledge of such Person, following due inquiry, compliance with the conditions set forth in the lettered clauses of the first sentence of Section 5.02 (except, in the case of clause (a) thereof, without giving effect to the parenthetical statement therein).

(e)Repayment of Existing Indebtedness.  The Administrative Agent shall have received evidence that the 

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principal of and interest on, and all other amounts owing in respect of, Indebtedness under the Existing Credit Agreement shall have been (or shall simultaneously be) paid in full, that the commitments to extend credit under the Existing Credit Agreement have been (or shall simultaneously be) canceled or terminated.

(f)Other Documents.  The Administrative Agent shall have received such other documents as the Administrative Agent or Cravath, Swaine & Moore LLP, New York counsel to JPMCB, may reasonably request.

(g)Delivery of Information.  The Lenders shall have received all documentation and other information required by bank regulatory authorities under applicable “know your customer” and anti-money laundering rules and regulations, including the USA PATRIOT Act that have been requested at least five Business Days prior to the Effective Date.

The obligation of each Lender to make its initial extension of credit hereunder is also subject to the payment by the Borrower of such fees as the Borrower shall have agreed in writing to pay to any Lender or the Administrative Agent in connection herewith, including the reasonable and documented fees and expenses of Cravath, Swaine & Moore LLP, New York counsel to JPMCB, in connection with the negotiation, preparation, execution and delivery of this Agreement and the other Loan Documents and the extensions of credit hereunder (to the extent that statements for such fees and expenses have been delivered to the Borrower).

The Administrative Agent shall notify the Borrower and the Lenders when it determines that this Agreement has become effective, and such notice shall be conclusive and binding.  Notwithstanding the foregoing, the obligations of the Lenders to make Loans hereunder shall not become effective unless each of the foregoing conditions is satisfied (or waived pursuant to Section 10.02) at or prior to 3:00 p.m., New York City time, on October 5, 2012 (and, in the event such conditions are not so satisfied or waived, the Commitments shall terminate at such time).

SECTION 5.02.    Each Credit Event.  The obligation of each Lender to make any Loan is additionally subject to the satisfaction of the following conditions:

(a)the representations and warranties of the Borrower set forth in this Agreement (other than, after the Effective Date, those set forth in Sections 4.04(b) and 4.06(a)(i)) shall be true and correct on and as of the date of such Loan; and

(b)at the time of and immediately after giving effect to such Loan, no Default or Event of Default shall have occurred and be continuing.

Each Borrowing shall be deemed to constitute a representation and warranty by the Borrower on the date thereof as to the matters specified in the preceding sentence.

ARTICLE VI

Affirmative Covenants

Until the Commitments have expired or been terminated and the principal of and interest on each Loan and all fees payable hereunder shall have been paid in full, the Borrower covenants and agrees with the Lenders that:

SECTION 6.01.    Financial Statements, Rating Changes and Other Information.  The Borrower will furnish to the Administrative Agent and each Lender:

(a)as soon as available and in any event within 90 days after the end of each fiscal year of the Borrower, the audited consolidated balance sheet and related statements of earnings, shareholders' equity and cash flows of the Borrower and its Subsidiaries as of the end of and for such year, setting forth in each case in comparative form the figures for the previous fiscal year, all reported on by Deloitte & Touche LLP or another independent registered public accounting firm of recognized national standing (without a “going concern” or like qualification or exception and without any qualification or exception as to the scope of such audit) to the effect that such consolidated financial statements present fairly in all material respects the financial condition and results of operations and cash flows of the Borrower and its Subsidiaries on a consolidated basis in accordance with GAAP;

(b)as soon as available and in any event within 45 days after the end of each of the first three fiscal quarters of each fiscal year of the Borrower, the consolidated balance sheet and related statements of earnings, shareholders' equity and cash flows of the Borrower and its Subsidiaries as of the end of and for such fiscal quarter and the then elapsed portion of the fiscal year, setting forth in each case in comparative form the figures for (or, in the case of the balance sheet, as of the end of) the 

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corresponding period or periods of the previous fiscal year, all certified by a Financial Officer of the Borrower as presenting fairly in all material respects the financial condition and results of operations and cash flows of the Borrower and its Subsidiaries on a consolidated basis in accordance with GAAP, subject to normal year‐end audit adjustments and the absence of certain footnotes;

(c)concurrently with any delivery of financial statements under clause (a) or (b) of this Section, a certificate of a Financial Officer of the Borrower (i) certifying as to whether, to the best knowledge of such Financial Officer (following due inquiry), a Default has occurred and, if a Default has occurred, specifying the details thereof and any action taken or proposed to be taken with respect thereto, (ii) setting forth reasonably detailed calculations demonstrating compliance with Section 7.06, and (iii) stating whether any change in GAAP or in the application thereof has been given effect in the preparation of such financial statements that became effective after the date of the audited financial statements referred to in Section 4.04 that affects calculations pursuant to Section 7.06 and has not previously been reported in such a certificate and, if any such not previously reported change has occurred, specifying the effect of such change on the financial statements accompanying such certificate;

(d)promptly after Moody's or S&P shall have publicly announced a change in the Moody's Rating or the S&P Rating, as the case may be, written notice of such rating change; and

(e)promptly following any request therefor, such other information regarding the operations, business affairs and financial condition of the Borrower or any of its Subsidiaries, or compliance with the terms of this Agreement and the other Loan Documents, as the Administrative Agent or any Lender through the Administrative Agent may reasonably request.

The Borrower's obligations under clauses (a) and (b) of this Section shall in any event be deemed sufficiently performed if the financial statements referred to therein are delivered by the time required under the applicable clause in such form and content as permitted under the Exchange Act.  Documents required to be delivered pursuant to clauses (a) and (b) of this Section (to the extent any such documents are included in materials otherwise filed with the Securities and Exchange Commission), may be delivered electronically and, if so delivered, shall be deemed to have been delivered on the date on which the Borrower posts such documents on www.sec.gov, or provides a link thereto on the Borrower's website at www.bestbuy.com.  Notices required to be delivered pursuant to clause (d) of this Section may be delivered electronically and, if so delivered, shall be deemed delivered on the date on which the applicable rating agency posts such notice, or provides a link thereto, on the website of such rating agency.  All documents and notices required by this Section shall be deemed sufficiently delivered when posted on the Borrower's behalf on IntraLinks/IntraAgency or another relevant website, if any, to which each Lender and the Administrative Agent have ready access without charge (whether a commercial, third-party website or whether sponsored by the Administrative Agent).

SECTION 6.02.    Notices of Material Events.  The Borrower will furnish to the Administrative Agent and each Lender (through the Administrative Agent) prompt written notice of the following:

(a)the occurrence of any Default;

(b)the filing or commencement of any action, suit or proceeding by or before any arbitrator or Governmental Authority against or affecting the Borrower or any of its Subsidiaries that could reasonably be expected to result in a Material Adverse Effect;

(c)the occurrence of any ERISA Event that, alone or together with any other ERISA Events that have occurred, results in, or could reasonably be expected to result in, a Material Adverse Effect; and

(d)any other development that results in, or could reasonably be expected to result in, a Material Adverse Effect.

Each notice delivered under this Section shall be accompanied by a statement of a Financial Officer or other executive officer of the Borrower setting forth the details of the event or development requiring such notice and any action taken or proposed to be taken with respect thereto.

SECTION 6.03.    Existence; Conduct of Business.  The Borrower will, and will cause each of its Material Subsidiaries to, do or cause to be done all things necessary to obtain, preserve, renew and keep in full force and effect its legal existence and the rights, licenses, permits, privileges, authorizations and franchises material to the conduct of its business; provided that the foregoing shall not prohibit any transaction permitted under Section 7.03.

SECTION 6.04.    Payment of Obligations.  The Borrower will, and will cause each of its Subsidiaries to, pay its obliga-tions, including Tax liabilities, that, if not paid, would result in a Material Adverse Effect before the same shall become delinquent or in default, except where (a) the validity or amount thereof is being contested in good faith by appropri-ate proceedings, 

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(b) the Borrower or such Subsidiary has set aside on its books adequate reserves with respect thereto in accordance with GAAP and (c) the failure to make payment pending such contest would not reasonably be expected to result in a Material Adverse Effect.

SECTION 6.05.    Maintenance of Properties; Insurance.  The Borrower will, and will cause each of its Subsidiaries to, (a) keep and maintain all property material to the conduct of its business in working order and condition sufficient to permit the conduct of business in the ordinary course, ordinary wear and tear excepted, and (b) maintain, with financially sound and reputable insurance companies (or with the Borrower's captive self-insurance Subsidiary or other customary self insurance, so long as such arrangements are administered in accordance with sound business practices), insurance in such amounts and against such risks as are customarily maintained by companies engaged in the same or similar businesses operating in the same or similar locations.

SECTION 6.06.    Books and Records; Inspection Rights.  The Borrower will, and will cause each of its Subsidiaries to, keep proper books of record and account in such detail as is necessary to allow the delivery of the reports required by Section 6.01, in which full, true and correct entries are made of all dealings and transactions in relation to its business and activities in accordance with and as required by GAAP in all material respects.  The Borrower will, and will cause each of its Subsidiaries to, permit any representatives designated by the Administrative Agent (on its own behalf or as requested by any Lender), upon reasonable prior notice, to visit and inspect its properties, to examine and make extracts from its books and records, and to discuss its affairs, finances and condition with its officers and independent accountants, all at such reasonable times and as often as reasonably requested (collectively, the “Inspections”); provided that the Borrower shall not be obligated to permit more than one Inspection in any calendar year unless a Default or Event of Default is then continuing or to make available material non-public information to any Person in any respect that would (in the opinion of counsel to the Borrower) violate applicable law, including the Exchange Act.

SECTION 6.07.    Compliance with Laws.  The Borrower will, and will cause each of its Subsidiaries to, comply with all laws (including ERISA and Environmental Laws) and all rules, regulations and orders of any Governmental Authority applicable to it or its property, except where the failure to do so, individually or in the aggregate, would not reasonably be expected to result in a Material Adverse Effect.

SECTION 6.08.    New Specified Subsidiaries to Become Subsidiary Guarantors.  With respect to each Subsidiary that becomes a Specified Subsidiary after the Effective Date, the Borrower will (a) within 30 Business Days after such Subsidiary becomes a Specified Subsidiary, cause such Subsidiary to duly execute and deliver to the Administrative Agent a Guarantee Assumption Agreement properly completed for such Subsidiary and in such number of counterparts as may reasonably be requested by the Administrative Agent and (b) deliver to the Administrative Agent within a reasonable time (not exceeding 30 days) after its request therefor, such proof of corporate action, incumbency of officers, opinions of counsel and other documents consistent with those delivered by the Subsidiary Guarantors pursuant to Section 5.01 on the Effective Date as may reasonably be requested by the Administrative Agent.  Nothing in this Agreement shall obligate the Administrative Agent or the Lenders to release or terminate the Guarantee under Article III of this Agreement or any Guarantee Assumption Agreement of any Subsidiary Guarantor which ceases to be a Specified Subsidiary.

SECTION 6.09.    Use of Proceeds; Federal Reserve Regulations.  The Borrower will use the proceeds of the Loans for general corporate purposes (including, in the case of the Loans, to repay existing Indebtedness) in compliance with all applicable legal and regulatory requirements; provided that neither the Administrative Agent nor any Lender shall have any responsibility as to the use of any of such proceeds.  No part of the proceeds of any Loan will be used, whether directly or indirectly, for any purpose that entails a violation of any of the Regulations of the Board, including Regulations T, U and X, and the Borrower will not permit the value of all Margin Stock owned by the Borrower and its Subsidiaries (including, without limitation, all capital stock of the Borrower from time to time held by the Borrower in treasury) to constitute more than 25.0% of the value of the consolidated assets of the Borrower.

ARTICLE VII

Negative Covenants

Until the Commitments have expired or terminated and the principal of and interest on each Loan and all fees payable hereunder have been paid in full, the Borrower covenants and agrees with the Lenders that:

SECTION 7.01.    Subsidiary Indebtedness.  The Borrower will not permit any Domestic Subsidiary that is not an Obligor to create, incur, assume or permit to exist any Indebtedness, except:

(a)obligations under the Loan Documents;

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(b)any other Indebtedness existing on the Effective Date and described in Schedule 7.01 (and any Indebtedness that may be incurred after the Effective Date under commitments to extend such Indebtedness available on the Effective Date and so described), and Indebtedness the proceeds of which are used solely to refinance such Indebtedness;

(c)Indebtedness referred to in, and secured by Liens permitted under, Section 7.02(e);

(d)Indebtedness referred to in, and secured by Liens permitted under, Sections 7.02(c) and 7.02(d);

(e)Indebtedness in respect of (i) documentary letters of credit and trade letters of credit incurred in the ordinary course of business and (ii) trade bank acceptance drafts incurred in the ordinary course of business;

(f)current liabilities, other than for borrowed money, incurred in the ordinary course of business; 

(g)Indebtedness of any Subsidiary owing to the Borrower or any other Subsidiary; 

(h)Indebtedness arising from Domestic Securitization Transactions permitted by Section 7.02(k), provided that the aggregate amount of such Indebtedness shall not exceed $300,000,000 at any time outstanding; and

(i)other Indebtedness, provided that, as of the Effective Date and as of the time any Indebtedness is created, incurred or assumed in reliance on this clause (i), the aggregate principal amount of all Indebtedness outstanding in reliance on this clause (i) (together with the aggregate principal amount of any such Indebtedness to be created, incurred or assumed in reliance on this clause (i)) does not exceed the greater of (i) $250,000,000 and (ii) 5.0% of Tangible Net Worth as of the Effective Date or as of the date such Indebtedness is created, incurred or assumed, as applicable.

SECTION 7.02.    Liens.  The Borrower will not, nor will it permit any of its Subsidiaries to, create, incur, assume or permit to exist any Lien on any property or asset now owned or hereafter acquired by it, or assign or sell any income or revenues (including accounts receivable) or rights in respect of any thereof, except:

(a)Liens existing on the Effective Date and, if securing a liability in excess of $150,000,000, described on Schedule 7.02, and Liens on the same property (or, if such Lien attaches to a type or class of property of any Person, on the same type or class of property of such Person) securing any extension, renewal, refinancing, refunding or replacement of the liability secured by such Liens that do not increase the outstanding principal amount thereof;

(b)deposits or pledges, or cash collateral given to any financial institution that has issued a letter of credit, to secure payment of workers' compensation, unemployment insurance, old age pensions or other social security or employee benefit obligations, daylight overdraft exposure or ACH obligations, or liabilities under or in respect of self-insurance programs, in each case in the ordinary course of business of the Borrower and its Subsidiaries;

(c)Liens created or assumed in connection with the acquisition of real property by the Borrower or any Subsidiary; provided that such Liens attach only to the property acquired and secure only Indebtedness incurred solely to finance the acquisition of such property, and Liens on the same property securing any Indebtedness the proceeds of which are used solely to refinance such Indebtedness;

(d)Liens on inventory of the Borrower or any Subsidiary and proceeds thereof pursuant to agreements with the suppliers of inventory or inventory letter of credit providers to the Borrower or such Subsidiary; provided that such Liens attach only to inventory financed pursuant to such agreements and secure only Indebtedness incurred solely to finance the acquisition of such inventory by the Borrower or such Subsidiary;

(e)Liens securing Indebtedness and related obligations incurred to finance the acquisition or construction of capital assets not constituting real property or to reimburse the Borrower or a Subsidiary for expenditures made to acquire or construct such capital assets, and Liens securing Indebtedness and related obligations incurred by the same obligor to extend, renew, refinance, refund or replace any such Indebtedness or obligations so long as the outstanding principal amount thereof is not increased; provided that such Liens attach only to such capital assets and the proceeds thereof;

(f)Liens securing Indebtedness and related obligations of any Subsidiary which became a Subsidiary after the Effective Date if such Indebtedness and Liens were outstanding prior to the time it became a Subsidiary and not incurred in contemplation of its becoming a Subsidiary, and Liens on the same property (or, if such Lien attaches to a type or class of property of any Person, on the same type or class of property of such Person) securing Indebtedness and related obligations incurred by the 

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same obligor to extend, renew, refinance, refund or replace such Indebtedness or obligations so long as the outstanding principal thereof is not increased;

(g)Permitted Encumbrances; 

(h)Liens consisting of easements, rights of way, zoning restrictions, restrictions on the use of real property and defects and irregularities in the title thereto, landlords', materialmen's or mechanic's liens and other similar liens and encumbrances  none of which interfere materially with the use of the property covered thereby in the ordinary course of the business of the Borrower or such Subsidiary and which do not materially detract from the value of such properties;

(i)Liens on assets of Foreign Subsidiaries securing Indebtedness or other liabilities of Foreign Subsidiaries; 

(j)cash collateral given to any financial institution that has issued a trade bank acceptance draft in the ordinary course of business of the Borrower and its Subsidiaries;

(k)Securitization Transactions, and Liens on accounts receivable, interests therein and the proceeds thereof existing or deemed to exist in connection with any Securitization Transaction; provided that the aggregate amount of the Domestic Securitization Transactions shall not exceed $300,000,000 at any time;

(l)Liens on cash collateral given pursuant to Section 2.21 of the Five-Year Credit Agreement;

(m)Liens on assets securing obligations under the Five-Year Credit Agreement so long as obligations under this Agreement are secured on an equal and ratable basis on terms reasonably satisfactory to the Administrative Agent; and

(n)Liens securing other liabilities, provided that, as of the Effective Date and as of the time any Lien securing any obligations is created, incurred or assumed in reliance on this clause (n), the aggregate principal amount of all liabilities secured by Liens in reliance on this clause (n) (together with the aggregate principal amount of all liabilities secured by such Lien to be created, incurred or assumed in reliance on this clause (n)) does not exceed the greater of (i) $250,000,000 and (ii) 10.0% of Tangible Net Worth as of the Effective Date or as of the date any such Lien is created, incurred or assumed, as applicable.

SECTION 7.03.    Fundamental Changes.  (a)  Mergers, Consolidations, Sales of Assets, Etc.  

(i)The Borrower will not, and will not permit any Subsidiary Guarantor to, merge with or into or consolidate with (collectively, “merge” or a “merger”) any other Person, or permit any other Person to merge with or into it, or liquidate or dissolve; provided that, if at the time thereof and immediately after giving effect thereto no Default or Event of Default shall have occurred and be continuing, (A) any Subsidiary Guarantor may merge into the Borrower in a transaction in which the Borrower is the surviving entity; (B) any Subsidiary Guarantor may merge with or into any other Person (including in connection with any acquisition) in a transaction in which the surviving entity is, or concurrently with the consummation of such merger becomes, a Subsidiary Guarantor; (C) any Subsidiary Guarantor may be disposed of pursuant to a merger with or into another Person so long as such disposition does not violate clause (ii) below; (D) any Subsidiary Guarantor may liquidate or dissolve if the Borrower determines in good faith that such liquidation or dissolution is in the best interests of the Borrower and is not materially disadvantageous to the Lenders; and (E) the Borrower may merge with or into any other Person organized under the laws of the United States of America or any State thereof, provided that (1) the Borrower is the surviving entity or (2) if the surviving entity is not the Borrower, then (x) the surviving entity assumes all of the Borrower's obligations under this Agreement and the other Loan Documents pursuant to an agreement reasonably satisfactory to the Administrative Agent and (y) the Lenders shall have received all documentation and other information required by bank regulatory authorities under applicable “know your customer” and anti-money laundering rules and regulations, including the USA PATRIOT Act, with respect to such surviving entity, and provided further that on the date of consummation of any such merger, the Borrower shall deliver to the Administrative Agent a certificate of a Financial Officer demonstrating that the Borrower would be in pro forma compliance with Section 7.06 as of the last day of the fiscal quarter then most recently ended (determined as if such merger, and any related incurrence of Indebtedness, had occurred on the first day of the period of four consecutive fiscal quarters ending on such last day).

(ii)The Borrower will not, and will not permit any of its Subsidiaries to, sell, transfer, lease, license or otherwise dispose of (in one transaction or in a series of transactions, and whether directly or through any merger or consolidation) assets representing all or substantially all the consolidated assets of the Borrower and the Subsidiaries (whether now owned or hereafter acquired), taken as a whole.

(b)Lines of Business.  The Borrower will not, and will not permit any of its Subsidiaries to, engage to any 

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material extent in any business other than businesses of the type conducted by the Borrower and its Subsidiaries on the date of execution of this Agreement and businesses reasonably related thereto.

SECTION 7.04.    Restrictive Agreements.  The Borrower will not, and will not permit any of its Subsidiaries to, directly or indirectly, enter into, incur or permit to exist any agreement or other arrangement that prohibits, restricts or imposes any condition upon (collectively, “Restrictions”) (a) the ability of the Borrower or any Domestic Subsidiary to create, incur or permit to exist a first priority Lien upon any of its assets securing the obligations of the Borrower hereunder or, in the case of Domestic Subsidiaries, the Guarantees thereof, (b) the ability of any Subsidiary to pay dividends or similar distributions with respect to any shares of its capital stock (or similar Equity Interests) or to make or repay loans or advances to the Borrower or any Subsidiary Guarantor or (c) the ability of any Domestic Subsidiary to Guarantee any of the Guaranteed Obligations; provided that:

(i)the foregoing shall not apply to (A) Restrictions imposed by law, rule, regulation or order or by this Agreement or any other Loan Document, (B) Restrictions existing on the date hereof identified on Schedule 7.04 (but shall apply to any amendment or modification expanding the scope of any such Restrictions), (C) Restrictions imposed by any agreement by which any Subsidiary is bound at the time such Subsidiary became a Subsidiary, so long as such agreement was in effect at the time of such acquisition and was not created in contemplation of such acquisition and such Restrictions only apply to such Subsidiary (but shall apply to any amendment or modification expanding the scope of any such Restriction), (D) customary Restrictions contained in agreements relating to the sale of a Subsidiary or assets pending such sale, provided that (1) such Restrictions apply only to the Subsidiary or assets to be sold and (2) such sale is permitted hereunder, (E) Restrictions on cash or other deposits under contracts entered into in the ordinary course of business, (F) in the case of any Subsidiary that is not a wholly-owned Subsidiary of the Borrower, Restrictions imposed by its organizational documents or any related joint venture or similar agreement, provided that such Restrictions apply only to such Subsidiary and to any Equity Interests in such Subsidiary and (G) Restrictions contained in lease agreements or agreements not relating to Indebtedness, in each case, entered into by the Borrower or any Subsidiary in the ordinary course of business;

(ii)clause (a) of the foregoing shall not apply to (A) Restrictions imposed by any agreement relating to secured Indebtedness permitted by this Agreement if such Restrictions apply only to the assets securing such Indebtedness, (B) Restrictions imposed by any agreement relating to Indebtedness permitted by this Agreement incurred after the Effective Date to finance the acquisition of particular assets (and any agreement relating to any refinancing of such Indebtedness, so long as the aggregate principal amount of such refinancing Indebtedness does not exceed the then outstanding aggregate principal amount of such original Indebtedness), so long as such Restrictions apply only to such assets (other than Inventory and Receivables), (C) Restrictions imposed by any agreement relating to Indebtedness permitted by this Agreement, provided that neither the Borrower nor any Domestic Subsidiary may create, incur or permit to exist any Lien securing the Indebtedness under such agreement unless the Indebtedness under this Agreement is equally and ratably secured thereby on terms reasonably satisfactory to the Administrative Agent, and (D) customary provisions in leases and other contracts restricting the assignment thereof; and

(iii)clause (b) of the foregoing shall not apply to Restrictions imposed by any agreement if the Borrower's Board of Directors determines in good faith that such Restrictions could not reasonably be expected to have a material adverse effect on the ability of the Borrower and the Subsidiary Guarantors to pay their obligations under the Loan Documents when due.

SECTION 7.05.    Transactions with Affiliates.  The Borrower will not, and will not permit any of its Subsidiaries to, sell, lease or otherwise transfer any property or assets to, or purchase, lease or otherwise acquire any property or assets from, or otherwise engage in any other transactions with, any of its Affiliates, except (a) at prices and on terms and conditions not less favorable to the Borrower or such Subsidiary than could be obtained on an arm's-length basis from unrelated third parties and (b) transactions between or among the Borrower and its Subsidiaries not involving any other Affiliate.

SECTION 7.06.    Certain Financial Covenants.  (a)  Cash Flow Leverage Ratio.  The Borrower will not permit the Cash Flow Leverage Ratio on the last day of any fiscal quarter to exceed 3.50 to 1.00.

(g)Interest Coverage Ratio.  The Borrower will not permit the Interest Coverage Ratio, as at the end of any Measurement Period, to be less than 2.75 to 1.00.

SECTION 7.07.    Investments in Foreign Subsidiaries.  (a)  The Borrower will not, and will not permit any of its Domestic Subsidiaries to, sell, transfer, lease, license or otherwise dispose of (in one transaction or in a series of transactions) to any Foreign Subsidiary (i) any Equity Interests in any Domestic Subsidiary, (ii) any United States patents, copyrights, trademarks, service marks, trade names, trade dress, logos and other source or business identifiers, all registrations and recordings thereof, all 

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applications therefor, all extensions or renewals thereof and all goodwill associated therewith or symbolized thereby, that are, or are contemplated to be, used or useful in the conduct of the business of the Borrower and its Domestic Subsidiaries taken as a whole, (iii) any assets (other than (A) cash and cash equivalents and (B) Indebtedness or other obligations owing to the Borrower or any Domestic Subsidiary by any Foreign Subsidiary in the form  of intercompany loans or advances) that, individually or in the aggregate, are material to the conduct of the business of the Borrower and its Domestic Subsidiaries taken as a whole or (iv) all or any substantial portion of the assets of the Borrower and its Domestic Subsidiaries taken as a whole.

(h)Prior to the Restricted Date, the Borrower will not, and will not permit any of its Subsidiaries to, make any Investments in Best Buy Europe Distributions or its Subsidiaries unless, on the date of any such Investment, after giving effect thereto, the aggregate amount of all such Investments does not exceed the sum of (i) the Initial Purchase Price and (ii) 10.0% of Total Assets.

ARTICLE VIII

Events of Default

If any of the following events (“Events of Default”) shall occur:

(a)the Borrower shall fail to pay any principal of any Loan when and as the same shall become due and payable, whether at the due date thereof or at a date fixed for prepayment thereof or otherwise;

(b)the Borrower shall fail to pay any interest on any Loan or any fee or any other amount (other than an amount referred to in clause (a) of this Article) payable under this Agreement or under any other Loan Document, when and as the same shall become due and payable, and such failure shall continue unremedied for a period of three or more Business Days;

(c)any representation or warranty made or deemed made by or on behalf of the Borrower or any other Obligor in or in connection with this Agreement or any other Loan Document or any amendment or modification hereof or thereof, or any waiver hereunder or thereunder, or in any report, certificate, financial statement or other document furnished pursuant to or in connection with this Agreement or any other Loan Document or any amendment or modification hereof or thereof, or any waiver hereunder or thereunder, shall prove to have been incorrect in any material respect when made or deemed made;

(d)the Borrower shall fail to observe or perform any covenant, condition or agreement contained in Section 6.02(a), Section 6.03 (with respect to the Borrower's existence) or Section 6.08 or in Article VII;

(e)any Obligor shall fail to observe or perform any covenant, condition or agreement contained in this Agreement (other than those specified in clause (a), (b) or (d) of this Article) or any other Loan Document and such failure shall continue unremedied for a period of 30 or more days after notice thereof from the Administrative Agent or the Required Lenders to the Borrower;

(f)the Borrower or any of its Subsidiaries shall fail to make any payment (whether of principal or interest and regardless of amount) in respect of any Material Indebtedness, when and as the same shall become due and payable (after giving effect to any grace period applicable thereto); provided that any such failure with respect to any Indebtedness arising from the purchase of goods or services by the Borrower that is being contested in good faith by appropriate proceedings shall not constitute an Event of Default as long as the Borrower's or such Subsidiary's title to any substantial part of its property is not materially adversely affected, its use of such property in the ordinary course of its business is not materially interfered with and adequate reserves with respect thereto have been set aside on its books in conformity with GAAP;

(g)any event or condition occurs that results in any Material Indebtedness becoming due prior to its scheduled maturity or that enables or permits (with or without the giving of notice, the lapse of time or both) the holder or holders of any Material Indebtedness or any trustee or agent on its or their behalf, or, in the case of any Hedging Agreement, the applicable counterparty, or, in the case of any Securitization Transaction, the purchasers or lenders thereunder to cause any Material Indebtedness to become due, or to require the prepayment, repurchase, redemption or defeasance thereof, prior to its scheduled maturity or, in the case of any Hedging Agreement or Securitization Transaction, to cause the termination thereof; provided that this clause (g) shall not apply to secured Indebtedness that becomes due as a result of the voluntary sale or transfer of the property or assets securing such Indebtedness;

(h)an involuntary proceeding shall be commenced or an involuntary petition shall be filed seeking (i) liquidation, reorganization or other relief in respect of the Borrower or any of its Material Subsidiaries or its debts, or of a substantial part of its assets, under any Federal, state or foreign bankruptcy, insolvency, receivership or similar law now or hereafter 

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in effect or (ii) the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for the Borrower or any of its Material Subsidiaries or for a substantial part of its assets, and, in any such case, such proceeding or petition shall continue undismissed for a period of 60 or more days or an order or decree approving or ordering any of the foregoing shall be entered;

(i)the Borrower or any of its Material Subsidiaries shall (i) voluntarily commence any proceeding or file any petition seeking liquidation, reorganization or other relief under any Federal, state or foreign bankruptcy, insolvency, receivership or similar law now or hereafter in effect, (ii) consent to the institution of, or fail to contest in a timely and appropriate manner, any proceeding or petition described in clause (h) of this Article, (iii) apply for or consent to the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for the Borrower or any of its Material Subsidiaries or for a substantial part of its assets, (iv) file an answer admitting the material allegations of a petition filed against it in any such proceeding or (v) make a general assignment for the benefit of creditors;

(j)one or more judgments for the payment of money in an aggregate amount in excess of $150,000,000 shall be rendered against the Borrower or any of its Subsidiaries or any combination thereof and the same shall remain undischarged for a period of 60 consecutive days during which execution shall not be effectively stayed, or any action shall be legally taken by a judgment creditor to attach or levy upon any assets of the Borrower or any of its Subsidiaries to enforce any such judgment;

(k)an ERISA Event shall have occurred that, in the opinion of the Required Lenders, when taken together with all other ERISA Events that have occurred, could reasonably be expected to result in a Material Adverse Effect; or

(l)a Change in Control shall occur; 

then, and in every such event (other than an event with respect to the Borrower described in clause (h) or (i) of this Article), and at any time thereafter during the continuance of such event, the Administrative Agent may, and at the request of the Required Lenders shall, by notice to the Borrower, take either or both of the following actions, at the same or different times: (i) terminate the Commitments, and thereupon the Commitments shall terminate immediately, and (ii) declare the Loans then outstanding to be due and payable in whole, and thereupon the principal of the Loans, together with accrued interest thereon and all fees and other obligations of the Obligors accrued hereunder, shall become due and payable immediately, without presentment, demand, protest or other notice of any kind, all of which are hereby waived by each Obligor; and in case of any event with respect to the Borrower described in clause (h) or (i) of this Article, the Commitments shall automatically terminate and the principal of the Loans then outstanding, together with accrued interest thereon and all fees and other obligations of the Obligors accrued hereunder, shall automatically become due and payable, without presentment, demand, protest or other notice of any kind, all of which are hereby waived by each Obligor.

ARTICLE IX

Agency

SECTION 9.01.    Administrative Agent.  Each of the Lenders hereby irrevocably appoints the entity named as Administrative Agent in the heading of this Agreement and its successors to serve as Administrative Agent under the Loan Documents and authorizes the Administrative Agent to take such actions on its behalf and to exercise such powers as are delegated to the Administrative Agent by the terms hereof or thereof, together with such actions and powers as are reasonably incidental thereto.  The provisions of this Article are solely for the benefit of the Administrative Agent and the Lenders, and neither the Borrower nor any other Obligor shall have rights as a third party beneficiary of such provisions.

The Person serving as the Administrative Agent hereunder shall have the same rights and powers in its capacity as a Lender as any other Lender and may exercise the same as though it were not the Administrative Agent, and such Person and its Affiliates may accept deposits from, lend money to, act as the financial advisor or in any other advisory capacity for and generally engage in any kind of business with the Borrower or any of its Subsidiaries or other Affiliate thereof as if such Person were not the Administrative Agent hereunder and without any duty to account therefor to the Lenders.

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

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

(b)shall not have any duty to take any discretionary action or exercise any discretionary powers, except discretionary rights and powers expressly contemplated hereby or by the other Loan Documents that the Administrative Agent is 

38

required to exercise as directed in writing by the Required Lenders (or such other number or percentage of the Lenders as shall be necessary, or as the Administrative Agent shall believe in good faith to be necessary, under the circumstances as provided in Section 10.02); provided that the Administrative Agent shall not be required to take any action that, in its opinion or the opinion of its counsel, may expose the Administrative Agent to liability or be contrary to any Loan Document or applicable law; and

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

The Administrative Agent shall not be liable for any action taken or not taken by it (i) with the consent or at the request of the Required Lenders (or such other number or percentage of the Lenders as shall be necessary, or as the Administrative Agent shall believe in good faith shall be necessary, under the circumstances as provided in Section 10.02) or (ii) in the absence of its own gross negligence or willful misconduct (with such absence to be presumed unless otherwise determined by a court of competent jurisdiction in a final and nonappealable judgment).  The Administrative Agent shall be deemed not to have knowledge of any Default unless and until written notice describing such Default is given to the Administrative Agent by the Borrower or a Lender.

The Administrative Agent shall not be responsible for or have any duty to ascertain or inquire into (a) any statement, warranty or representation made in or in connection with this Agreement or any other Loan Document, (b) the contents of any certificate, report or other document delivered hereunder or thereunder or in connection herewith or therewith, (c) the performance or observance of any of the covenants, agreements or other terms or conditions set forth in any Loan Document or the occurrence of any Default, (d) the sufficiency, validity, enforceability, effectiveness or genuineness of this Agreement, any other Loan Document or any other agreement, instrument or document or (e) the satisfaction of any condition set forth in Article V or elsewhere in any Loan Document, other than to confirm receipt of items expressly required to be delivered to the Administrative Agent.  Notwithstanding anything herein to the contrary, the Administrative Agent shall not have any liability arising from any confirmation of the Revolving Credit Exposure or the component amounts thereof.

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

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

The Administrative Agent may at any time give notice of its resignation to the Lenders and the Borrower.  Upon receipt of any such notice of resignation, the Required Lenders shall have the right, with the consent of the Borrower (such consent not to be unreasonably withheld, or required if an Event of Default under clauses (a), (b), (h) or (i) of Article VIII has occurred and is continuing), to appoint a successor, which shall be a bank with an office in the United States of America, or an Affiliate of any such bank.  If no such successor shall have been so appointed by the Required Lenders and shall have accepted such appointment within 30 days after the retiring Administrative Agent gives notice of its resignation, then the retiring Administrative Agent may on behalf of the Lenders, appoint a successor Administrative Agent meeting the qualifications set forth above provided that if the Administrative Agent shall notify the Borrower and the Lenders that no qualifying Person has accepted such appointment, then such resignation shall nonetheless become effective in accordance with such notice and (a) the retiring Administrative Agent shall be discharged from its duties and obligations hereunder and under the other Loan Documents and (b) all payments, communications and determinations provided to be made by, to or through the Administrative Agent shall instead be made by or to each Lender directly, until such time as the Required Lenders appoint a successor Administrative Agent as provided for above in this paragraph.  Upon the acceptance of a successor's appointment as Administrative Agent hereunder, such successor shall succeed to and become vested with all of the rights, powers, privileges and duties of the retiring (or retired) Administrative Agent, and the retiring Administrative Agent shall be discharged from all of its duties and obligations hereunder or under the other Loan Documents (if 

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not already discharged therefrom as provided above in this paragraph).  The fees payable by the Borrower to a successor Administrative Agent shall be the same as those payable to its predecessor unless otherwise agreed between the Borrower and such successor.  After the retiring Administrative Agent's resignation hereunder and under the other Loan Documents, the provisions of this Article and Section 10.03 shall continue in effect for the benefit of such retiring Administrative Agent, its sub‐agents and their respective Related Parties in respect of any actions taken or omitted to be taken by any of them while the retiring Administrative Agent was acting as Administrative Agent.

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

Except as otherwise provided in Section 10.02(b) with respect to this Agreement, the Administrative Agent may, with the prior consent of the Required Lenders (but not otherwise), consent to any modification, supplement or waiver under any of the Loan Documents.

SECTION 9.02.    Bookrunners, Etc.  Anything herein to the contrary notwithstanding, none of the Arrangers, the Syndication Agent and the Documentation Agents listed on the cover page hereof shall have any duties or responsibilities under this Agreement or any of the other Loan Documents, except in its capacity, as applicable, as the Administrative Agent or a Lender hereunder.

ARTICLE X

Miscellaneous

SECTION 10.01.    Notices.  (a)  Notices Generally.  Except in the case of notices and other communications expressly permitted to be given by telephone (and except as provided in paragraph (b) below), all notices and other communications provided for herein shall be in writing and shall be delivered by hand or overnight courier service, mailed by certified or registered mail or sent by facsimile, as follows:

(i)if to the Borrower or any Subsidiary Guarantor, to Best Buy Co., Inc. at 7601 Penn Avenue South, Richfield, Minnesota, 55423, Attention of Treasurer (Telephone No. (612) 291-5781; Fax No. (952) 430-1316; email treasuryooo@bestbuy.com);

(ii)if to the Administrative Agent, to JPMorgan Chase Bank, N.A., Loan and Agency Services Group, 1111 Fannin Street, 10th Floor, Houston, Texas 77002-6925, Attention of Ryan Mader (Telephone No. (713) 750-2936; Fax No. (713) 750-2956; email ryan.g.mader@jpmorgan.com) and Thai Pham (Telephone No. (713) 750-2884; Fax. No. (713) 750-2956, email thai.x.pham@jpmorgan.com) with a copy to JPMorgan Chase Bank, N.A., 383 Madison Avenue, 24th Floor, New York, New York 10179, Attention of Jocelyn Shields (Telephone No. (212) 270-3641; Fax No. (212) 270-6637; email jocelyn.t.shields@jpmorgan.com); and

(iii)if to a Lender, to it at its address (or fax number) set forth in its Administrative Questionnaire.
Notices sent by hand or overnight courier service, or mailed by certified or registered mail, shall be deemed to have been given when received; notices sent by fax shall be deemed to have been given when sent (except that, if not given during normal business hours for the recipient, shall be deemed to have been given at the opening of business on the next business day for the recipient).  Notices delivered through electronic communications to the extent provided in paragraph (b) below, shall be effective as provided in said paragraph (b).

(b)Electronic Communications.  Notices and other communications to the Lenders hereunder may be delivered or furnished by electronic communications pursuant to procedures approved by the Administrative Agent; provided that the foregoing shall not apply to notices under Article II to any Lender if such Lender, as applicable, has notified the Administrative Agent that it is incapable of receiving notices under such Article by electronic communication.  Each Agent or the Borrower may, in its discretion, agree to accept notices and other communications to it hereunder by electronic communications pursuant to procedures approved by it; provided that approval of such procedures may be limited to particular notices or communications.

(c)Change of Address, Etc.  Any party hereto may change its address or fax number for notices and other 

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communications hereunder by notice to the other parties hereto (or, in the case of any such change by a Lender, by notice to the Borrower and the Administrative Agent).

SECTION 10.02.    Waivers; Amendments.  (a)  No Deemed Waivers; Remedies Cumulative.  No failure or delay by the Administrative Agent or any Lender in exercising any right or power hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or power, or any abandonment or discontinuance of steps to enforce such a right or power, preclude any other or further exercise thereof or the exercise of any other right or power.  The rights and remedies of the Administrative Agent and the Lenders hereunder are cumulative and are not exclusive of any rights or remedies that they would otherwise have.  No waiver of any provision of this Agreement or consent to any departure by any Obligor therefrom shall in any event be effective unless the same shall be permitted by paragraph (b) of this Section, and then such waiver or consent shall be effective only in the specific instance and for the purpose for which given.  Without limiting the generality of the foregoing, the execution and delivery of this Agreement or the making of a Loan shall not be construed as a waiver of any Default, regardless of whether the Administrative Agent or any Lender may have had notice or knowledge of such Default at the time.

(b)Amendments.  Neither this Agreement nor any provision hereof may be waived, amended or modified except pursuant to an agreement or agreements in writing entered into by the Borrower and the Required Lenders or by the Borrower and the Administrative Agent with the consent of the Required Lenders; provided that no such agreement shall:

(i)increase the Commitment of any Lender without the written consent of such Lender,

(ii)reduce the principal amount of any Loan outstanding to any Lender or reduce the rate of interest thereon (except in connection with the waiver of applicability of any post-default increase in interest rates pursuant to Section 2.13(d)), or reduce any fees payable to any Lender hereunder, without the written consent of such Lender,

(iii)postpone the scheduled date of payment of the principal amount of any Loan outstanding to any Lender (except as provided in Section 2.21 in connection with the exercise of the Term-Out Option), or any interest thereon, or any fees payable to any Lender hereunder, or reduce the amount of, waive or excuse any such payment, or postpone the scheduled date of expiration of any Commitment of any Lender, without the written consent of such Lender,

(iv)change Section 2.18(b), 2.18(c) or 2.18(d) in a manner that would alter the pro rata sharing of payments required thereby without the written consent of each Lender directly and adversely affected thereby, 

(v)change any of the provisions of this Section or the percentage in the definition of the term “Required Lenders” or any other provision hereof specifying the number or percentage of Lenders required to waive, amend or modify any rights hereunder or make any determination or grant any consent hereunder, without the written consent of each Lender  directly and adversely affected thereby, or

(vi)release all or substantially all of the Guarantors from their guarantee obligations under Article III without the written consent of each Lender, and

provided further that no such agreement shall amend, modify or otherwise affect the rights or duties of the Administrative Agent hereunder without the prior written consent of the Administrative Agent.

Notwithstanding the foregoing (but subject to the immediately preceding proviso), (A) any amendment of the definition of the term “Applicable Rate” pursuant to the last sentence of such definition shall require only the written consent of the Borrower and the Required Lenders, (B) no consent with respect to any amendment, waiver or other modification of this Agreement shall be required of any Defaulting Lender, except with respect to any amendment, waiver or other modification referred to in clause (i), (ii) or (iii) of the first proviso of this paragraph and then only in the event such Defaulting Lender shall be directly affected by such amendment, waiver or other modification, (C) the Administrative Agent may enter into one or more security agreements (including mortgages and pledge agreements) in connection with any grant of a security interest securing Indebtedness under this Agreement as contemplated by Sections 7.02(m) and 7.04 without the consent of any Lender and (D) this Agreement may be amended (or amended and restated) with the written consent of the Required Lenders, the Administrative Agent and the Borrower (x) to add one or more additional credit facilities to this Agreement and to permit the extensions of credit from time to time outstanding thereunder and the accrued interest and fees in respect thereof to share in the benefits of this Agreement and the other Loan Documents and (y) to include appropriately the Lenders holding such credit facilities in any determination of the Required Lenders.

SECTION 10.03.    Expenses; Indemnity; Damage Waiver.  (a)  Costs and Expenses.  The Borrower shall pay (i) all reasonable and documented out‐of‐pocket expenses incurred by the Administrative Agent, the Arrangers, the Documentation 

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Agents, the Syndication Agent and each of their respective Affiliates (including the reasonable and documented fees, charges and disbursements of one firm of counsel (and one firm of local counsel in each applicable jurisdiction) for the foregoing), in connection with the syndication of the credit facilities provided for herein, the preparation, negotiation, execution, delivery and administration of this Agreement and the other Loan Documents or any amendments, modifications or waivers of the provisions hereof or thereof (whether or not the transactions contemplated hereby or thereby shall be consummated and (ii) all out‐of‐pocket expenses incurred by the Administrative Agent or any Lender (including the reasonable fees, charges and disbursements of one firm of counsel (and one firm of local counsel in each applicable jurisdiction) for the Administrative Agent and the Lenders and of any separate counsel (including local counsel) that may be required in light of any conflicting interests among the foregoing parties) in connection with the enforcement or protection of its rights (A) in connection with this Agreement and the other Loan Documents, including its rights under this Section, or (B) in connection with the Loans made hereunder, including all such out‐of‐pocket expenses incurred during any workout, restructuring or negotiations in respect of such Loans.

(b)Indemnification by the Borrower.  The Borrower shall indemnify the Administrative Agent (and any sub‐agent thereof), the Arrangers, the Documentation Agents, the Syndication Agent and each Lender, and each Related Party of any of the foregoing Persons (each such Person being called an “Indemnitee”), against, and hold each Indemnitee harmless from, any and all losses, claims, damages, liabilities and related expenses (including the reasonable fees, charges and disbursements of one firm of counsel (and one firm of local counsel in each applicable jurisdiction) for the Indemnitees and of any separate counsel (including local counsel) that may be required in light of any conflicting interests among Indemnitees), incurred by any Indemnitee or asserted against any Indemnitee by any third party or by the Borrower or any other Obligor arising out of, in connection with, or as a result of (i) the execution or delivery of this Agreement, any other Loan Document or any agreement or instrument contemplated hereby or thereby, the performance by the parties hereto of their respective obligations hereunder or thereunder or the consummation of the transactions contemplated hereby or thereby, (ii) any Loan or the use or proposed use of the proceeds therefrom, (iii) any actual or alleged presence or Release of Hazardous Materials on or from any property owned or operated by the Borrower or any of its Subsidiaries, or any Environmental Liability related in any way to the Borrower or any of its Subsidiaries, or (iv) any actual or prospective claim, litigation, investigation or proceeding relating to any of the foregoing, whether based on contract, tort or any other theory, whether brought by a third party or by the Borrower or any other Obligor, and regardless of whether any Indemnitee is a party thereto; provided that such indemnity shall not, as to any Indemnitee, be available to the extent that such losses, claims, damages, liabilities or related expenses (x) are determined by a court of competent jurisdiction by final and nonappealable judgment to have resulted from the bad faith, gross negligence or willful misconduct of such Indemnitee or its Related Parties or (y) result from a claim brought in good faith by the Borrower or any other Obligor against an Indemnitee for breach in bad faith, gross negligence or willful misconduct of such Indemnitee's obligations hereunder or under any other Loan Document.

(c)Reimbursement by Lenders.  To the extent that the Borrower for any reason fails to indefeasibly pay any amount required under paragraph (a) or (b) of this Section to be paid by it to the Administrative Agent (or any sub‐agent thereof) or any Related Party of the Administrative Agent (or any sub-agent thereof), each Lender severally agrees to pay to the Administrative Agent (or any such sub‐agent), or such Related Party, as the case may be, such Lender's Applicable Percentage (determined as of the time that the applicable unreimbursed expense or indemnity payment is sought) of such unpaid amount; provided that the unreimbursed expense or indemnified loss, claim, damage, liability or related expense, as the case may be, was incurred by or asserted against the Administrative Agent (or any such sub‐agent) or against any Related Party of the Administrative Agent (or any sub-agent thereof) acting for the Administrative Agent (or any such sub‐agent) in connection with such capacity.  The obligations of the Lenders under this paragraph are several obligations.

(d)Waiver of Consequential Damages, Etc.  To the fullest extent permitted by applicable law, no Obligor shall assert, and each Obligor hereby waives, any claim against any Indemnitee, on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to direct or actual damages) arising out of, in connection with, or as a result of, this Agreement, any other Loan Document or any agreement or instrument contemplated hereby or thereby, the transactions contemplated hereby or thereby, any Loan or the use of the proceeds thereof.  No Indemnitee shall be liable for any damages arising from the use by unintended recipients of any information or other materials distributed by it through telecommunications, electronic or other information transmission systems, except to the extent they are determined by a final and non-appealable judgment of a court of competent jurisdiction to have resulted from the bad faith, willful misconduct or gross negligence of such Indemnitee or any of its Related Parties, or for any special, indirect, consequential or punitive damages in connection with this Agreement or the other Loan Documents or the transactions contemplated hereby or thereby.

(e)Payments.  All amounts due under this Section shall be payable promptly after demand therefor.

SECTION 10.04.    Successors and Assigns.  (a) Assignments Generally.  The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns permitted hereby, except that (i) other than as expressly provided in Section 7.03(a)(i), the Borrower may not assign or otherwise transfer any of its rights 

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or obligations hereunder without the prior written consent of each Lender (and any attempted assignment or transfer by the Borrower without such consent shall be null and void) and (ii) no Lender may assign or otherwise transfer its rights or obligations hereunder except in accordance with this Section.  Nothing in this Agreement, expressed or implied, shall be construed to confer upon any Person (other than the parties hereto, their respective successors and assigns permitted hereby, Participants (to the extent provided in paragraph (c) of this Section), the Arrangers, the Documentation Agent, the Syndication Agent and, to the extent expressly contemplated hereby, the sub-agents of the Administrative Agent and the Related Parties of each of the Administrative Agent and the Lenders) any legal or equitable right, remedy or claim under or by reason of this Agreement.

(b)Assignments by Lenders.

(i)Assignments Generally.  Subject to the conditions set forth in paragraph (b)(ii) below, any Lender may assign to one or more assignees (other than any natural person) all or a portion of its rights and obligations under this Agreement (including all or a portion of its Commitment and the Loans at the time owing to it) with the prior written consent (such consent not to be unreasonably withheld) of:

(A)the Borrower; provided that (x) no consent of the Borrower shall be required for an assignment to a Lender, an Affiliate of a Lender, an Approved Fund or, if an Event of Default has occurred and is continuing, any other assignee, and (y) the Borrower shall be deemed to have consented to any assignment unless it shall object thereto by written notice the Administrative Agent within 10 Business Days after having confirmed receipt of notice thereof; and

(B)the Administrative Agent; provided that no consent of the Administrative Agent shall be required for an assignment of all or any portion of the Commitments or Syndicated Loans to a Lender or an Affiliate of a Lender.

(ii)Certain Conditions to Assignments.  Assignments shall be subject to the following additional conditions: 

(A)except in the case of an assignment to a Lender or an Affiliate of a Lender or an assignment of the entire remaining amount of the assigning Lender's Commitment or Loans of any Class, the amount of the Commitment or Loans of the assigning Lender subject to each such assignment (determined as of the date the Assignment and Assumption with respect to such assignment is delivered to the Administrative Agent) shall not be less than $5,000,000 unless each of the Borrower and the Administrative Agent otherwise consent, provided that no such consent of the Borrower shall be required if an Event of Default has occurred and is continuing;

(B)each partial assignment shall be made as an assignment of a proportionate part of all the assigning Lender's rights and obligations under this Agreement;

(C)the parties to each assignment shall execute and deliver to the Administrative Agent an Assignment and Assumption, together with a processing and recordation fee of $3,500; and

(D)the assignee, if it shall not be a Lender, shall deliver to the Administrative Agent an Administrative Questionnaire in which the assignee designates one or more credit contacts to whom all syndicate-level information (which may contain material non-public information about the Borrower and its Related Parties or their respective securities) will be made available and who may receive such information in accordance with the assignee's compliance procedures and applicable laws, including Federal and state securities laws.

(iii)Effectiveness of Assignments.  Subject to acceptance and recording thereof pursuant to paragraph (b)(iv) of this Section, from and after the effective date specified in each Assignment and Assumption the assignee thereunder shall be a party hereto and, to the extent of the interest assigned by such Assignment and Assumption, have the rights and obligations of a Lender under this Agreement, and the assigning Lender thereunder shall, to the extent of the interest assigned by such Assignment and Assumption, be released from its obligations under this Agreement (and, in the case of an Assignment and Assumption covering all of the assigning Lender's rights and obligations under this Agreement, such Lender shall cease to be a party hereto but shall continue to be entitled to the benefits of Sections 2.15, 2.16, 2.17 and 10.03).  Any assignment or transfer by a Lender of rights or obligations under this Agreement that does not comply with this Section shall be treated for purposes of this Agreement as a sale by such Lender of a participation in such rights and obligations in accordance with paragraph (c) of this Section.

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(iv)Maintenance of Register.  The Administrative Agent, acting for this purpose as a non-fiduciary agent of the Borrower, shall maintain at one of its offices a copy of each Assignment and Assumption delivered to it and a register for the recordation of the names and addresses of the Lenders, and the Commitment of, and principal amount of the Loans owing to, each Lender pursuant to the terms hereof from time to time (the “Register”).  The entries in the Register shall be conclusive, and the Borrower, the Administrative Agent and the Lenders may treat each Person whose name is recorded in the Register pursuant to the terms hereof as a Lender hereunder for all purposes of this Agreement, notwithstanding notice to the contrary.  The Register shall be available for inspection by the Borrower and any Lender, at any reasonable time and from time to time upon reasonable prior notice.

(v)Acceptance of Assignments by Administrative Agent.  Upon its receipt of a duly completed Assignment and Assumption executed by an assigning Lender and an assignee, the assignee's completed Administrative Questionnaire (unless the assignee shall already be a Lender hereunder), the processing and recordation fee referred to in paragraph (b) of this Section and any written consent to such assignment required by paragraph (b) of this Section, the Administrative Agent shall accept such Assignment and Assumption and record the information contained therein in the Register; provided that if either the assigning Lender or the assignee shall have failed to make any payment required to be made by it pursuant to Section 2.07(b), 2.18(d) or 10.03(c), the Administrative Agent shall have no obligation to accept such Assignment and Assumption and record the information therein in the Register unless and until such payment shall have been made in full, together with all accrued interest thereon.  No assignment shall be effective for purposes of this Agreement unless it has been recorded in the Register as provided in this paragraph.

(c)Participations.

(i)Participations Generally.  Any Lender may, without the consent of the Borrower or the Administrative Agent, sell participations to one or more banks or other entities (a “Participant”) in all or a portion of such Lender's rights and obligations under this Agreement (including all or a portion of its Commitment and the Loans owing to it); provided that (A) such Lender's obligations under this Agreement shall remain unchanged, (B) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations and (C) the Borrower, the Administrative Agent and the other Lenders shall continue to deal solely and directly with such Lender in connection with such Lender's rights and obligations under this Agreement.  Any agreement or instrument pursuant to which a Lender sells such a participation shall provide that such Lender shall retain the sole right to enforce this Agreement and to approve any amendment, modification or waiver of any provision of this Agreement; provided that such agreement or instrument may provide that such Lender will not, without the consent of the Participant, agree to any amendment, modification or waiver described in the first proviso to Section 10.02(b) that directly and adversely affects such Participant.  Subject to paragraph (c)(ii) of this Section, the Borrower agrees that each Participant shall be entitled to the benefits of Sections 2.15, 2.16 and 2.17 (subject to the requirements and limitations therein, including the requirements under Sections 2.17(f) and 2.17(g) (it being understood that the documentation required under Sections 2.17(f) and 2.17(g) shall be delivered to the participating Lender)) to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to paragraph (b) of this Section.  To the extent permitted by law, each Participant also shall be entitled to the benefits of Section 10.08 as though it were a Lender, provided that such Participant agrees to be subject to Section 2.18(d) as though it were a Lender.  Each Lender selling participations shall keep a register (the “Participant Register”) in which it shall record the name and address of each Participant to which such Lender sells participations and the amount and terms of such participations, acting for this purpose as an agent of the Borrower; provided that no Lender shall have any obligation to disclose all or any portion of the Participant Register (including the identity of any Participant or any information relating to a Participant's interest in any Commitments, Loans or its other obligations under any Loan Document) to any Person except to the extent that such disclosure is necessary to establish that such Commitment, Loan or other obligation is in registered form under Section 5f.103-1(c) of the United States Treasury Regulations.  The entries in the Participant Register shall be conclusive absent manifest error, and such Lender shall treat each Person whose name is recorded in the Participant Register as the owner of such participation for all purposes of this Agreement notwithstanding any notice to the contrary.  For the avoidance of doubt, the Administrative Agent (in its capacity as Administrative Agent) shall have no responsibility for maintaining a Participant Register.

(ii)Limitations on Rights of Participants.  A Participant shall not be entitled to receive any greater payment under Section 2.15 or 2.17 than the applicable Lender would have been entitled to receive with respect to the participation sold to such Participant, unless the sale of the participation to such Participant is made with the Borrower's prior written consent.  A Participant that would be a Foreign Lender if it were a Lender shall not be entitled to the benefits of Section 2.17 unless the Borrower is notified of the participation sold to such Participant and such Participant agrees, for the benefit of the Borrower, to comply with Section 2.17(f) as though it were a Lender.

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(d)Certain Pledges.  Any Lender may at any time pledge or assign a security interest in all or any portion of its rights under this Agreement to secure obligations of such Lender, including without limitation any pledge or assignment to secure obligations to a Federal Reserve Bank, and this Section shall not apply to any such pledge or assignment of a security interest; provided that no such pledge or assignment of a security interest shall release a Lender from any of its obligations hereunder or substitute any such pledgee or assignee for such Lender as a party hereto.

SECTION 10.05.    Survival.  All covenants, agreements, representations and warranties made by the Borrower herein and in the certificates or other instruments delivered in connection with or pursuant to this Agreement shall be considered to have been relied upon by the other parties hereto and shall survive the execution and delivery of this Agreement and the making of any Loans, regardless of any investigation made by any such other party or on its behalf and notwithstanding that the Administrative Agent or any Lender may have had notice or knowledge of any Default or incorrect representation or warranty at the time any credit is extended hereunder, and shall continue in full force and effect as long as the principal of or any accrued interest on any Loan or any fee or any other amount payable under this Agreement is outstanding and unpaid and so long as the Commitments have not expired or terminated.  The provisions of Sections 2.15, 2.16, 2.17, 2.18(f), 3.03 and 10.03 and Article IX shall survive and remain in full force and effect regardless of the consummation of the transactions contemplated hereby, the repayment of the Loans and the Commitments or the termination of this Agreement or any provision hereof.

SECTION 10.06.    Counterparts; Integration; Effectiveness; Electronic Execution.  (a)  Counterparts; Integration; Effectiveness.  This Agreement may be executed in counterparts (and by different parties hereto in different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract.  This Agreement and the other Loan Documents, and any separate letter agreements with respect to fees payable to the Administrative Agent, constitute the entire contract between and among the parties relating to the subject matter hereof and supersede any and all previous agreements and understandings, oral or written, relating to the subject matter hereof (but do not supersede any provisions of any separate letter agreements with respect to fees payable to the Administrative Agent).  Except as provided in Section 5.01, this Agreement shall become effective when it shall have been executed by the Administrative Agent and when the Administrative Agent shall have received counterparts hereof that, when taken together, bear the signatures of each of the other parties hereto.  Delivery of an executed counterpart of a signature page to this Agreement by facsimile (or other electronic transmission) shall be effective as delivery of a manually executed counterpart of this Agreement.

(b)Electronic Execution of Assignments.  The words “execution,” “signed,” “signature,” and words of like import in any Assignment and Assumption shall be deemed to include electronic signatures or the keeping of records in electronic form, each of which shall be of the same legal effect, validity or enforceability as a manually executed signature or the use of a paper-based recordkeeping system, as the case may be, to the extent and as provided for in any applicable law, including the Federal Electronic Signatures in Global and National Commerce Act, the New York State Electronic Signatures and Records Act, or any other similar state laws based on the Uniform Electronic Transactions Act.

SECTION 10.07.    Severability.  Any provision of this Agreement held to be invalid, illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such invalidity, illegality or unenforceability without affecting the validity, legality and enforceability of the remaining provisions hereof; and the invalidity of a particular provision in a particular jurisdiction shall not invalidate such provision in any other jurisdiction.

SECTION 10.08.    Right of Setoff.  In addition to any rights and remedies of the Lenders provided by law, each Lender shall have the right, without notice to the Borrower or any Subsidiary Guarantor, any such notice being expressly waived by the Borrower and each Subsidiary Guarantor to the extent permitted by applicable law, upon any obligations of the Borrower or any Subsidiary Guarantor under this Agreement or any other Loan Document becoming due and payable (whether at the stated maturity, by acceleration or otherwise), to apply to the payment of such obligations, by setoff or otherwise, any and all deposits (general or special, time or demand, provisional or final), in any currency, and any other credits, indebtedness or claims, in any currency, in each case whether direct or indirect, absolute or contingent, matured or unmatured, at any time held or owing by such Lender, any Affiliate thereof or any of their respective branches or agencies to or for the credit or the account of the Borrower or any Subsidiary Guarantor; provided that if any Defaulting Lender shall exercise any such right of setoff, all amounts so set off shall be paid over immediately to the Administrative Agent for further application in accordance with the provisions of this Agreement and, pending such payment, shall be segregated by such Defaulting Lender from its other funds and deemed held in trust for the benefit of the Administrative Agent and the Lenders.  Each Lender (including any Defaulting Lender) agrees to notify the Borrower and the Administrative Agent promptly after any such application made by such Lender, provided that the failure to give such notice shall not affect the validity of such application.

SECTION 10.09.    Governing Law; Jurisdiction; Etc. (a)  Governing Law.  This Agreement shall be governed by, and construed in accordance with, the law of the State of New York.

45

(b)Submission to Jurisdiction.  Each Obligor irrevocably and unconditionally submits, for itself and its property, to the exclusive jurisdiction of the Supreme Court of the State of New York sitting in New York County and of the United States District Court of the Southern District of New York, and any appellate court from any thereof, in any action or proceeding arising out of or relating to this Agreement or any other Loan Document, or for recognition or enforcement of any judgment, and each of the parties hereto irrevocably and unconditionally agrees that all claims in respect of any such action or proceeding may be heard and determined in such New York State court or, to the fullest extent permitted by applicable law, in such Federal court.  Each of the parties hereto agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law.  Nothing in this Agreement or in any other Loan Document shall affect any right that the Administrative Agent or any Lender may otherwise have to bring any action or proceeding relating to this Agreement or any other Loan Document against any Obligor or its properties in the courts of any jurisdiction.

(c)Waiver of Venue.  Each Obligor irrevocably and unconditionally waives, to the fullest extent permitted by applicable law, any objection that it may now or hereafter have to the laying of venue of any action or proceeding arising out of or relating to this Agreement or any other Loan Document in any court referred to in paragraph (b) of this Section.  Each of the parties hereto irrevocably waives, to the fullest extent permitted by applicable law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court.

(d)Service of Process.  Each party hereto irrevocably consents to service of process in the manner provided for notices in Section 10.01.  Nothing in this Agreement will affect the right of any party hereto to serve process in any other manner permitted by applicable law.

SECTION 10.10.    WAIVER OF JURY TRIAL.  EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY).  EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

SECTION 10.11.    Headings.  Article and Section headings and the Table of Contents used herein are for convenience of reference only, are not part of this Agreement and shall not affect the construction of, or be taken into consideration in interpreting, this Agreement.

SECTION 10.12.    Treatment of Certain Information; Confidentiality.  (a) Treatment of Certain Information.  The Borrower acknowledges that from time to time financial advisory, investment banking and other services may be offered or provided to the Borrower or one or more of its Subsidiaries (in connection with this Agreement or otherwise) by any Lender or by one or more Subsidiaries or Affiliates of such Lender and the Borrower hereby authorizes each Lender to share any information delivered to such Lender by the Borrower and its Subsidiaries pursuant to this Agreement, or in connection with the decision of such Lender to enter into this Agreement, with any Subsidiary or Affiliate of such Lender, it being understood that any such Subsidiary or Affiliate of any Lender receiving such information shall be bound by the provisions of paragraph (b) of this Section as if it were a Lender hereunder.  Such authorization shall survive the repayment of the Loans and the Commitments or the termination of this Agreement or any provision hereof.

(b)Confidentiality.  Each of the Administrative Agent and the Lenders agrees to maintain the confidentiality of the Information (as defined below), except that Information may be disclosed (i) to its Affiliates and to its and its Affiliates' respective partners, directors, officers, employees, agents, advisors and other representatives (it being understood that the Persons to whom such disclosure is made will be informed of the confidential nature of such Information and instructed to keep such Information confidential), (ii) to the extent requested by any regulatory authority purporting to have jurisdiction over it or its Affiliates (including any self-regulatory authority, such as the National Association of Insurance Commissioners), (iii) to the extent required by applicable laws or regulations or by any subpoena or similar legal process, (iv) to any other party hereto, (v) in connection with the exercise of any remedies hereunder or under any other Loan Document or any action or proceeding relating to this Agreement or any other Loan Document or the enforcement of rights hereunder or thereunder, (vi) subject to an agreement containing provisions substantially the same as those of this Section, to (x) any assignee of or Participant in, or any prospective assignee of or Participant in, any of its rights or obligations under this Agreement or (y) any actual or prospective counterparty 

46

(or its advisors) to any swap or derivative transaction relating to the Borrower and its obligations, (vii) with the consent of the Borrower, (viii) to the extent such Information (x) becomes publicly available other than as a result of a breach of this Section or (y) becomes available to the Administrative Agent or any Lender or any of their respective Affiliates on a nonconfidential basis from a source other than an Obligor or (ix) to Moody's or S&P. 

For purposes of this Section, “Information” means all information received from any Obligor or any of its Subsidiaries relating to any Obligor or any of its Subsidiaries or any of their respective businesses, other than (a) any such information that is available to the Administrative Agent or any Lender on a nonconfidential basis prior to disclosure by an Obligor or any of its Subsidiaries and (b) any such information that is publicly disclosed by the Borrower in connection with its public filings with the Securities and Exchange Commission.  Any Person required to maintain the confidentiality of Information as provided in this Section shall be considered to have complied with its obligation to do so if such Person has exercised the same degree of care to maintain the confidentiality of such Information as such Person would accord to its own confidential information.

EACH LENDER AND THE ADMINISTRATIVE AGENT ACKNOWLEDGES THAT INFORMATION (AS DEFINED IN THIS SECTION) FURNISHED TO IT PURSUANT TO THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS MAY INCLUDE MATERIAL NON-PUBLIC INFORMATION CONCERNING THE BORROWER AND ITS RELATED PARTIES OR THEIR RESPECTIVE SECURITIES, AND CONFIRMS THAT IT HAS DEVELOPED COMPLIANCE PROCEDURES REGARDING THE USE OF MATERIAL NON-PUBLIC INFORMATION AND THAT IT WILL HANDLE SUCH MATERIAL NON-PUBLIC INFORMATION IN ACCORDANCE WITH APPLICABLE LAW, INCLUDING FEDERAL AND STATE SECURITIES LAWS.

ALL INFORMATION, INCLUDING REQUESTS FOR WAIVERS AND AMENDMENTS, FURNISHED BY ANY OBLIGOR OR THE ADMINISTRATIVE AGENT PURSUANT TO, OR IN THE COURSE OF ADMINISTERING, THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS WILL BE SYNDICATE-LEVEL INFORMATION, WHICH MAY CONTAIN MATERIAL NON-PUBLIC INFORMATION ABOUT THE BORROWER AND ITS RELATED PARTIES OR THEIR RESPECTIVE SECURITIES.  ACCORDINGLY, EACH LENDER REPRESENTS TO THE BORROWER AND THE ADMINISTRATIVE AGENT THAT IT HAS IDENTIFIED IN ITS ADMINISTRATIVE QUESTIONNAIRE A CREDIT CONTACT WHO MAY RECEIVE INFORMATION THAT MAY CONTAIN MATERIAL NON-PUBLIC INFORMATION IN ACCORDANCE WITH ITS COMPLIANCE PROCEDURES AND APPLICABLE LAW, INCLUDING FEDERAL AND STATE SECURITIES LAWS.

SECTION 10.13.    USA PATRIOT Act.  Each Lender hereby notifies the Borrower and the other Obligors that pursuant to the requirements of the USA PATRIOT Act, such Lender may be required to obtain, verify and record information that identifies the Borrower and the other Obligors, which information includes the name and address of the Borrower and the other Obligors and other information that will allow such Lender to identify the Borrower and the other Obligors in accordance with the USA PATRIOT Act.

SECTION 10.14.    Interest Rate Limitation.  Notwithstanding anything herein to the contrary, if at any time the interest rate applicable to any Loan, together with all fees, charges and other amounts which are treated as interest on such Loan under applicable law (collectively the “Charges”), shall exceed the maximum lawful rate (the “Maximum Rate”) which may be contracted for, charged, taken, received or reserved by the Lender holding such Loan in accordance with applicable law, the rate of interest payable in respect of such Loan hereunder, together with all Charges payable in respect thereof, shall be limited to the Maximum Rate and, to the extent lawful, the interest and Charges that would have been payable in respect of such Loan but were not payable as a result of the operation of this Section shall be cumulated and the interest and Charges payable to such Lender in respect of other Loans or periods shall be increased (but not above the Maximum Rate therefor) until such cumulated amount, together with interest thereon at the Federal Funds Effective Rate for each day to the date of repayment, shall have been received by such Lender.

SECTION 10.15.    No Fiduciary Relationship.  The Borrower, on behalf of itself and its Subsidiaries, agrees that in connection with all aspects of the transactions contemplated hereby and any communications in connection therewith, the Borrower, its Subsidiaries and their Affiliates, on the one hand, and the Administrative Agent, the Lenders the Arrangers, the Syndication Agent the Documentation Agents and their Affiliates, on the other hand, will have a business relationship that does not create, by implication or otherwise, any fiduciary duty on the part of the Administrative Agent, the Lenders, the Arrangers, the Syndication Agent, the Documentation Agents or their Affiliates, and no such duty will be deemed to have arisen in connection with any such transactions or communications.

47

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

	
		
	BORROWER

	 
	 

	BEST BUY CO., INC.,

	 
	 

	by
	/s/ CHRISTOPHER K.K. GOULD

	 
	Name:  Christopher K.K. Gould

	 
	Title:  Vice President, Treasurer

	 
	 

	SUBSIDIARY GUARANTORS

	 
	 

	BEST BUY STORES L.P.,

	 
	 

	by
	BBC Property Co., its General Partner

	 
	 

	by
	/s/ CHRISTOPHER K.K. GOULD

	 
	Name:  Christopher K.K. Gould

	 
	Title:  Vice President, Treasurer

	 
	 

	BBC PROPERTY CO.,

	 
	 

	by
	/s/ CHRISTOPHER K.K. GOULD

	 
	Name:  Christopher K.K. Gould

	 
	Title:  Vice President, Treasurer

	 
	 

	BBC INVESTMENT CO.,

	 
	 

	by
	/s/ CHRISTOPHER K.K. GOULD

	 
	Name:  Christopher K.K. Gould

	 
	Title:  Vice President, Treasurer

	
		
	LENDERS

	 
	 

	JPMORGAN CHASE BANK, N.A.,

	individually and as Administrative Agent

	 
	 

	by
	/s/ SARAH L. FREEDMAN

	 
	Name:  Sarah L. Freedman

	 
	Title:  Executive Director

	 
	 

LENDER SIGNATURE PAGE TO
BEST BUY CO., INC. 364-DAY CREDIT AGREEMENT

	
			
	Name of Institution:
	 
	U.S. Bank National Association

	 
	 
	 

	 
	by
	/s/ LUDMILA YAKOVLEV

	 
	 
	Name:  Ludmila Yakovlev

	 
	 
	Title:  Assistant Vice President

	 
	 
	 

	Name of Institution:
	 
	Citibank, N.A.

	 
	 
	 

	 
	by
	/s/ SHANNON SWEENEY

	 
	 
	Name:  Shannon Sweeney

	 
	 
	Title:  Vice President

	 
	 
	 

	Name of Institution:
	 
	Compass Bank

	 
	 
	 

	 
	by
	/s/ RAMON GARCIA

	 
	 
	Name:  Ramon Garcia

	 
	 
	Title:  Vice President

	 
	 
	 

	Name of Institution:
	 
	Royal Bank of Canada

	 
	 
	 

	 
	by
	/s/ GLEN BARISOFF

	 
	 
	Name:  Glen Barisoff

	 
	 
	Title:  Authorized Signatory

	 
	 
	 

	Name of Institution:
	 
	The Bank of Tokyo-Mitsubishi UFJ, Ltd.

	 
	 
	 

	 
	by
	/s/ CHRISTINE HOWATT

	 
	 
	Name:  Christine Howatt

	 
	 
	Title:  Authorized Signatory

	 
	 
	 

	Name of Institution:
	 
	Standard Chartered Bank

	 
	 
	 

	 
	by
	/s/ JOHANNA MINAYA

	 
	 
	Name:  Johanna Minaya

	 
	 
	Title:  Associate Director Capital Markets

	 
	 
	 

	 
	by
	/s/ ROBERT K. REDDINGTON

	 
	 
	Name:  Robert K. Reddington

	 
	 
	Title:  Credit Document Manager Credit Documentation Unit, WB Legal-Americas

	 
	 
	 

	Name of Institution:
	 
	Barclays Bank PLC

	 
	 
	 

	 
	by
	/s/ RONNIE GLENN

	 
	 
	Name:  Ronnie Glenn

	 
	 
	Title:  Vice President

	
			
	Name of Institution:
	 
	HSBC Bank USA, National Association

	 
	 
	 

	 
	by
	/s/ THOMAS A. FOLEY

	 
	 
	Name:  Thomas A. Foley

	 
	 
	Title:  Managing Director

	 
	 
	 

	Name of Institution:
	 
	GOLDMAN SACHS BANK USA

	 
	 
	 

	 
	by
	/s/ REBECCA KRATZ

	 
	 
	Name:  Rebecca Kratz

	 
	 
	Title:  Authorized Signatory

	 
	 
	 

	Name of Institution:
	 
	Bank of America, N.A.

	 
	 
	 

	 
	by
	/s/ SABRINA HASSAN

	 
	 
	Name:  Sabrina Hassan

	 
	 
	Title:  Vice President

	 
	 
	 

	Name of Institution:
	 
	THE ROYAL BANK OF SCOTLAND PLC

	 
	 
	 

	 
	by
	/s/ TIMOTHY J. MCNAUGHT

	 
	 
	Name:  Timothy J. McNaught

	 
	 
	Title:  Managing Director

	 
	 
	 

	Name of Institution:
	 
	DNB Bank ASA, Grand Cayman Branch

	 
	 
	 

	 
	by
	/s/ PHILIP F. KURPIEWSKI

	 
	 
	Name:  Philip F. Kurpiewski

	 
	 
	Title:  Senior Vice President

	 
	 
	 

	 
	by
	/s/ PAL BOGER

	 
	 
	Name:  Pal Boger

	 
	 
	Title:  Vice President

	 
	 
	 

	Name of Institution:
	 
	Mizuho Corporate Bank, Ltd.

	 
	 
	 

	 
	by
	/s/ NOEL PURCELL

	 
	 
	Name:  Noel Purcell

	 
	 
	Title:  Authorized Signatory

	 
	 
	 

	Name of Institution:
	 
	Bank of China, New York

	 
	 
	 

	 
	by
	/s/ DONG YUAN

	 
	 
	Name:  Dong Yuan

	 
	 
	Title:  Deputy General ManagerNACoal-Reed Purchase Agreement

Exhibit 10.1

EXECUTION VERSION

SHARE AND MEMBERSHIP INTEREST  
PURCHASE AGREEMENT
by and among
TRU ENERGY SERVICES, LLC,
as Buyer,
THE SELLERS PARTY HERETO,
and
THE TRUSTEES AND BENEFICIARIES PARTY HERETO,

Dated as of August 31, 2012

TABLE OF CONTENTS
	
				
	 
	 
	Page

	 
	 
	 

	 
	 
	 

	RECITALS
	1
	

	 
	 

	ARTICLE I DEFINITIONS
	1
	

	  Section 1.1
	Terms Generally
	1
	

	  Section 1.2
	Certain Terms
	2
	

	 
	 
	 

	ARTICLE II SALES AND PURCHASE OF SHARES
	14
	

	  Section 2.1
	Sale and Purchase
	14
	

	  Section 2.2
	Purchase Price
	14
	

	  Section 2.3
	Earn-out
	15
	

	  Section 2.4
	Purchase Price Adjustment
	19
	

	  Section 2.5
	Allocation of Purchase Price
	21
	

	  Section 2.6
	Shareholder Acknowledgment
	21
	

	  Section 2.7
	Refunds and Remittances
	22
	

	  Section 2.8
	Buyer Acknowledgment
	22
	

	 
	 
	 

	ARTICLE III CLOSING AND DELIVERIES
	22
	

	  Section 3.1
	Closing
	22
	

	  Section 3.2
	Deliveries by the Shareholders
	23
	

	  Section 3.3
	Deliveries by Buyer
	24
	

	  Section 3.4
	Intercompany Arrangements
	25
	

	 
	 
	 

	ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE SHAREHOLDERS
	25
	

	  Section 4.1
	Organization, Power and Authority
	25
	

	  Section 4.2
	Validity of Agreements
	26
	

	  Section 4.3
	No Conflicts
	26
	

	  Section 4.4
	Consent
	26
	

	  Section 4.5
	Financial Statements
	26
	

	  Section 4.6
	No Material Adverse Changes
	27
	

	  Section 4.7
	Contracts
	28
	

	  Section 4.8
	Compliance with Laws; Permits
	30
	

	  Section 4.9
	Intellectual Property
	30
	

	  Section 4.10
	Litigation and Orders
	30
	

	  Section 4.11
	Taxes
	30
	

	  Section 4.12
	Mining and Environmental Matters
	33
	

ii

	
				
	 
	 
	 

	 
	 
	 

	  Section 4.13
	Insurance
	35
	

	  Section 4.14
	Real Property
	36
	

	  Section 4.15
	Mineral Assets; Company Assets
	38
	

	  Section 4.16
	Inventory
	38
	

	  Section 4.17
	Undisclosed Liabilities
	38
	

	  Section 4.18
	Customers
	38
	

	  Section 4.19
	Related Party Transactions
	39
	

	  Section 4.20
	Labor Matters
	39
	

	  Section 4.21
	Employee Plans
	40
	

	  Section 4.22
	Absence of Certain Commercial Practices
	42
	

	  Section 4.23
	No Broker's, Finder's or Insider Fees
	43
	

	  Section 4.24
	MSHA; OSHA
	43
	

	  Section 4.25
	Accounts Receivable
	44
	

	  Section 4.26
	Corporate Records
	44
	

	  Section 4.27
	Bank Accounts
	44
	

	  Section 4.28
	Quality
	44
	

	  Section 4.29
	No Other Representations or Warranties
	45
	

	 
	 
	 

	ARTICLE V REPRESENTATIONS AND WARRANTIES OF THE BUYER
	45
	

	  Section 5.1
	Organization, Power and Authority
	45
	

	  Section 5.2
	Validity of Agreements
	45
	

	  Section 5.3
	No Conflict; Consents
	45
	

	  Section 5.4
	Litigation
	46
	

	  Section 5.5
	No Broker's or Finder's Fees
	46
	

	  Section 5.6
	Availability of Funds
	46
	

	  Section 5.7
	Investment Intention
	46
	

	 
	 
	 

	ARTICLE VI COVENANTS
	46
	

	  Section 6.1
	Interim Operations
	46
	

	  Section 6.2
	Reasonable Access
	47
	

	  Section 6.3
	Notification of Certain Matters
	48
	

	  Section 6.4
	Reasonable Best Efforts
	49
	

	  Section 6.5
	Further Assurances
	49
	

	  Section 6.6
	No Shop
	50
	

	  Section 6.7
	Competitive Activity; Nonsolicitation; Confidentiality
	50
	

	  Section 6.8
	Taxes
	52
	

iii

	
				
	 
	 
	 

	 
	 
	 

	  Section 6.9
	Release by the Shareholders; Release by the Companies
	56
	

	  Section 6.10
	Correspondence
	58
	

	  Section 6.11
	Use of Names
	58
	

	  Section 6.12
	Indemnification and Insurance
	58
	

	  Section 6.13
	Personal Guaranties
	59
	

	  Section 6.14
	Reclamation Performance Bonds
	59
	

	 
	 
	 

	ARTICLE VII CONDITIONS TO THE OBLIGATIONS OF BUYER AND THE SHAREHOLDERS
	59
	

	  Section 7.1
	Conditions to Obligations of Each Party
	59
	

	  Section 7.2
	Conditions to Obligations of Buyer
	59
	

	  Section 7.3
	Conditions to Obligations of the Shareholders
	60
	

	  Section 7.4
	Frustration of Closing Conditions
	60
	

	 
	 
	 

	ARTICLE VIII EMPLOYEE MATTERS
	61
	

	  Section 8.1
	Benefits and Compensation
	61
	

	  Section 8.2
	Prior Service
	61
	

	  Section 8.3
	Transferred Employees
	61
	

	  Section 8.4
	No Employment Rights or Third Party Beneficiaries
	61
	

	 
	 
	 

	ARTICLE IX INDEMNIFICATION AND SURVIVAL
	61
	

	  Section 9.1
	General Indemnification Obligation
	61
	

	  Section 9.2
	Indemnification Procedures
	63
	

	  Section 9.3
	Limitations on Indemnification; Survival
	65
	

	  Section 9.4
	Adjustments to Purchase Price
	66
	

	  Section 9.5
	Indemnity Escrow
	66
	

	  Section 9.6
	Contribution and Waiver
	67
	

	  Section 9.7
	Effect of Investigation
	67
	

	  Section 9.8
	Exclusive Remedy
	67
	

	 
	 
	 

	ARTICLE X TERMINATION
	67
	

	  Section 10.1
	Termination of Agreement
	67
	

	  Section 10.2
	Effect of Termination
	68
	

	 
	 
	 

	ARTICLE XI MISCELLANEOUS
	68
	

	  Section 11.1
	Waivers and Amendments
	68
	

	  Section 11.2
	Shareholders' Representative
	68
	

	  Section 11.3
	Notices
	69
	

	  Section 11.4
	Fees and Expenses
	70
	

iv

	
				
	 
	 
	 

	 
	 
	 

	  Section 11.5
	Successors and Assigns
	70
	

	  Section 11.6
	Third Party Beneficiaries
	71
	

	  Section 11.7
	Consent to Jurisdiction
	71
	

	  Section 11.8
	Governing Law
	71
	

	  Section 11.9
	Waiver of Jury Trial
	71
	

	  Section 11.10
	Severability
	72
	

	  Section 11.11
	Specific Performance
	72
	

	  Section 11.12
	Entire Agreement
	72
	

	  Section 11.13
	Construction
	72
	

	  Section 11.14
	Incorporation of Exhibits and Schedules
	72
	

	  Section 11.15
	Headings
	72
	

	  Section 11.16
	Counterparts
	73
	

	  Section 11.17
	No Presumption Against Drafting Party
	73
	

	  Section 11.18
	Announcements
	73
	

INDEX OF EXHIBITS

	
		
	Exhibit
	 

	A
	Form of Escrow Agreement

	B
	Form of Lease Agreements

	C
	Form of Consulting Agreement

	D
	Company Release

	E
	NACoal Guarantee

INDEX OF SCHEDULES

	
		
	Schedule
	 

	1.2(a)
	Operating Leases

	1.2(b)
	LOI Payments

	1.2(c)
	Reclamation Performance Bonds

	2.3(a)
	Sample Earn-out Payment and Adjustment Calculation

	2.4(a)
	Closing Working Capital Calculation

	2.4(a)(ii)
	Calculation of Shot Rock Inventory Value

	2.6
	McWane and QCC Amounts

	3.4
	Intercompany Arrangements

	4.1(c)
	Capitalization; Managers, Directors and Officers

	4.3
	Notice to Alabama Surface Mining Commission

	4.5(a)
	Financial Statements

	4.5(b)
	Non-GAAP Financial Statements

	4.6
	Material Adverse Effects

v

	
		
	Schedule
	 

	4.7
	Contracts

	4.8(a)
	Noncompliance with Laws

	4.8(b)
	Permits

	4.9
	Intellectual Property Rights

	4.1
	Litigation

	4.11
	Tax Exceptions

	4.12
	Mining and Environmental Exceptions

	4.12(h)
	Former Reed Locations

	4.13(a)
	Insurance

	4.13(b)
	Self-Insurance; Risk-Sharing Arrangements

	4.13(c)
	Reclamation Bonds

	4.13(d)
	Insurance Exceptions

	4.14(a)
	Owned Real Property

	4.14(b)(i)
	Leased Real Property

	4.14(b)(ii)
	Right of Access Real Property

	4.14(b)(iii)
	Former Mines

	4.14(c)
	Leased Real Property Exceptions

	4.15(a)
	Mines

	4.17
	Liabilities

	4.18
	Material Customers

	4.19
	Related Party Transactions

	4.20(a)
	Labor Matters

	4.20(b)
	Bonus Plans

	4.20(d)
	Employment Law

	4.21(a)
	Employee Plans

	4.21(b)
	Employment Plans – Compliance with Law

	4.21(d)
	Payments to Employees

	4.21(l)
	Other Employee Plans

	4.21(q)
	Independent Contractors

	4.23
	Broker’s, Finder’s and Insider Fees

	4.24(a)
	MSHA and OSHA Compliance

	4.24(c)
	MSHA and OSHA Assessments and Fines

	4.24(d)
	MSHA and OSHA Reports and Orders

	4.25
	Accounts Receivable

	4.27
	Bank Accounts

	4.28
	Quality

	5.5
	Broker’s, Finder’s and Insider Fees

	6.1
	Interim Operations Exceptions

	6.7(b)
	Certain Employees

	6.8(g)
	Allocation Schedule

	6.13
	Personal Guaranties

	7.2(e)
	Consents

	8.1
	Employee Benefit Matters

vi

SHARE AND MEMBERSHIP INTEREST PURCHASE AGREEMENT
THIS SHARE AND MEMBERSHIP INTEREST PURCHASE AGREEMENT, dated as of this 31st day of August, 2012, is by and among TRU Energy Services, LLC, a Nevada limited liability company (“Buyer”), the shareholders and members of the Companies listed on the signature pages hereof (collectively, the “Sellers”), and the individual trustees and beneficiaries of the Trust, in such capacities (each, a “Beneficiary”).
RECITALS
WHEREAS, Mr. Robert J. Reed (“Mr. Reed”) and the B&R Family Trust (the “Trust”)  collectively own all of the outstanding shares (the “Minerals Shares”) of Reed Minerals, Inc., an Alabama corporation (“Reed Minerals”);
WHEREAS, Mr. Reed owns all of the outstanding shares (the “Hauling Shares”) of Reed Hauling, Inc., an Alabama corporation (“Reed Hauling”);
WHEREAS, Mr. Reed and the Trust collectively own all of the outstanding shares (the “C&H Shares”) of C&H Mining Company, Inc., an Alabama corporation (“C&H Mining”); 
WHEREAS, Mr. Reed owns all of the membership interest units (the “Management Shares” and together with the Minerals Shares, the Hauling Shares and the C&H Shares, the “Shares”) of Reed Management, L.L.C., an Alabama limited liability company (“Reed Management” and together with Reed Minerals, Reed Hauling and C&H Mining, each a “Company” and collectively the “Companies”); 
WHEREAS, Robbin Reed Allen and James R. Reed (“BRJ” and together with Robin Reed Allen, the “Beneficiaries”) are beneficiaries of the Trust and will indirectly receive, pursuant to this Agreement and the Trust documents, the benefit of the consideration contemplated by this Agreement to be paid to the Trust; and
WHEREAS, the Sellers desire to sell to Buyer and Buyer desires to purchase from the Sellers all of the Shares, including the goodwill of the Companies, on the terms and subject to the conditions set forth in this Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of the premises and the representations, warranties, covenants and agreements herein contained and intending to be legally bound, the parties hereto hereby agree as follows:
ARTICLE I 
DEFINITIONS
Section 1.1        Terms Generally.  The words “hereby,” “herein,” “hereof,” “hereunder” and words of similar import refer to this Agreement as a whole (including any Schedules hereto) and not merely to the specific section, paragraph or clause in which such word appears, unless the context shall otherwise clearly require.  All references herein to Articles, Sections, Exhibits and 

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Schedules shall be deemed references to Articles and Sections of, and Exhibits and Schedules to, this Agreement unless the context shall otherwise clearly require.  The words “include,” “includes” and “including” shall be deemed to be followed by the phrase “without limitation.”  The definitions given for terms in this Article I and elsewhere in this Agreement shall apply equally to both the singular and plural forms of the terms defined.  Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms.  Except as otherwise expressly provided herein, all references to “dollars” or “$” shall be deemed references to the lawful money of the United States of America.  Unless the context otherwise requires, any reference to any federal, state, local or foreign statute or law will be deemed also to refer to all rules and regulations promulgated thereunder.  The word “extent” in the phrase “to the extent” shall mean the degree to which a subject or other thing extends, and such phrase shall not simply mean “if.”
Section 1.2        Certain Terms.  Whenever used in this Agreement (including in the Schedules), the following terms shall have the respective meanings given to them below or in the Sections indicated below:
“Accounting Firm” has the meaning set forth in Section 2.3(c).
“Accounts Receivable” has the meaning set forth in Section 4.25.
“Action” means any action, claim, demand, litigation, cause of action, suit, proceeding, citation, summons, subpoena, hearing, complaint or investigation of any nature, civil, criminal, regulatory or otherwise, at law or in equity, by or before any Governmental Authority.
“Affiliate” means, with respect to any specified Person, any other Person that directly, or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with, such specified Person; and “control” (including the terms “controlled by” and “under common control with”), with respect to the relationship between or among two or more Persons, shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the affairs or management of a Person, whether through the ownership of voting securities, by Contract or otherwise, including the ownership, directly or indirectly, of securities having the power to elect a majority of the board of directors or similar body governing the affairs of such Person.
“Agreement” means this Share and Membership Interest Purchase Agreement (including the Exhibits and Schedules hereto), as amended, modified or supplemented from time to time.
“Allocation” has the meaning set forth in Section 2.5.
“Allocation Schedule” has the meaning set forth in Section 6.8(g).
“Ancillary Agreements” means the Escrow Agreement, the Consulting Agreement, the Lease Amendments, the Company Releases and the NACoal Guarantee.
“Average Sale Price” means the average sale price of coal F.O.B. Mine, including all settlement payments, premiums, discounts and penalties.
“Balance Sheet Date” has the meaning set forth in Section 4.5(a).

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“Basket” has the meaning set forth in Section 9.3(a).  
“Beneficiary” has the meaning set forth in the recitals to this Agreement.
“Bona Fide Purchaser” means a non-related and unaffiliated third-party independent purchaser who pays valuable consideration in good faith in an arms’-length transaction.  Bona Fide Purchaser specifically excludes any Affiliate of Buyer.  Bona Fide Purchaser specifically includes the Cooperative.
“BRJ” has the meaning set forth in the recitals to this Agreement.
“Business Confidential Information” has the meaning set forth in Section 6.7(c).
“Business Day” means a day other than a Saturday, Sunday or other day on which commercial banks in Birmingham, Alabama are authorized or required by Law to close.
“Buyer” has the meaning set forth in the preamble to this Agreement.
“Buyer Indemnified Party” has the meaning set forth in Section 9.1(a).
“Buyer Released Parties” has the meaning set forth in Section 6.9(a).
“Buyer Returns” has the meaning set forth in Section 6.8(b).
“Buyer’s Plans” has the meaning set forth in Section 8.2.
“C&H Mining” has the meaning set forth in the recitals to this Agreement.
“C&H Shares” has the meaning set forth in the recitals to this Agreement.
“Cap Amount” has the meaning set forth in Section 9.3(b).
“Certified Indebtedness” has the meaning set forth in Section 3.2(e).
“Claims Notice” has the meaning set forth in Section 9.2(b).
“Closing” has the meaning set forth in Section 3.1.
“Closing Date” has the meaning set forth in Section 3.1.
“Closing Working Capital” has the meaning set forth in Section 2.4(a).
“Code” means the Internal Revenue Code of 1986, as amended.
“Collateral Trust Agreements” means, collectively, the Collateral Trust Agreement between C&H Mining and Bond Safeguard Insurance Company, and the Collateral Trust Agreement between Reed Minerals and Bond Safeguard Insurance Company, each dated October 26, 2011.
“Company” or “Companies” has the meaning set forth in the recitals to this Agreement.

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“Company Employees” has the meaning set forth in Section 8.1. 
“Company Indemnified Parties” has the meaning set forth in Section 6.12.
“Company Marks” has the meaning set forth in Section 6.11.
“Company Permits” has the meaning set forth in Section 4.8(b).
“Company Related Persons” has the meaning set forth in Section 6.9(f).
“Company Related Person Claims” has the meaning set forth in Section 6.9(f).
“Company Release” means the releases by each of Buyer and the Companies on behalf of the Company Related Persons, each in substantially the form attached hereto as Exhibit D. 
“Compiled Financial Statements” has the meaning set forth in Section 4.5(a).
“Consent” means a consent, approval, authorization, waiver, notification, permit, license, certificate, exemption, order, registration, declaration, filing or notice of, with or to any Person.
“Consultant” means each of BRJ, Robbin Reed Allen, and Anthony Allen.
“Consulting Agreement” means the consulting agreement to be entered into at the Closing between Reed Energy, LLC and Reed Management, Buyer or an Affiliate thereof, in the form attached hereto as Exhibit C.
“Contract” means any note, deed, lease (whether real or personal property), loan agreement, indenture, letter of credit (including any related letter of credit application and reimbursement obligation), mortgage, security agreement, license, franchise, power of attorney, open purchase order, guarantee, acquisition or divestiture agreement, employment, consulting, severance, agency, bonus, compensation or similar agreement, non-competition agreement, finder’s contract, secrecy, confidentiality, non-disclosure or similar agreement, and any other agreement, contract, and legally binding commitment, whether written or oral.
“Controlled Group” means any trade or business (whether or not incorporated) (i) under common control within the meaning of Section 4001(b)(1) of ERISA with any Company or (ii) which together with any Company is treated as a single employer under Section 414(t) of the Code.
“Cooperative” means the Alabama Coal Cooperative, an Alabama corporation.
“Cooperative Straddle Period”  means all quarterly or annual periods that begin on or before, and end after, the Closing Date.
“Current Businesses” has the meaning set forth in Section 6.7(a).
“Current Reserves” has the meaning set forth in Section 2.3(a)(i).

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“CPI-U Index” means the index entitled Consumer Price Index – All Urban Consumers (CPI-U), Series ID CUUR00005A0, All Items (1982-1984 = 100), as published from time to time by the United States Bureau of Labor Statistics. 
“Dilworth Lease” has the meaning set forth in Section 9.1(a)(v).
“Direct Claim” has the meaning set forth in Section 9.2(a).
“Drilling Data” has the meaning set forth in Section 4.15(d).
“Earn-out Base” means $100.00 per Ton, F.O.B. mine, as adjusted pursuant to Section 2.3(a)(ii).
“Earn-out Interest” has the meaning set forth in Section 9.5.
“Earn-out Payment Period” has the meaning set forth in Section 2.3(a).
“Employee Plans” has the meaning set forth in Section 4.21(a).
“Environment” or “Environmental” means soil, surface waters, groundwater, land, stream sediments, surface or subsurface strata, ambient air, indoor air or indoor air quality, including any material or substance used in the physical structure of any building or improvement and any environmental medium.
“Environmental Claim” means any Action by any Person alleging Liability (including Liability for investigatory costs, cleanup costs, governmental response costs, natural resource damages, fines or penalties) for any Environmental Losses.
“Environmental Condition” means any Release of any Hazardous Materials or any violation of Environmental Law in connection with:  (i) the Leased Real Property and any Hazardous Materials migrating thereto or therefrom; (ii) any real property formerly owned, leased or operated by any Company, its Affiliates or any of their respective predecessors; or (iii) any other real property at which any Hazardous Materials generated by the operations of any Company, its Affiliates or any of their respective predecessors prior to the Closing have been generated, treated, stored, recycled, disposed of or have otherwise come to be located.
“Environmental Law” means all present Law relating to remediation, restoration or protection of the Environment or human health (as relating to actual or potential exposure to Hazardous Materials), including such Laws relating to storage, treatment, management, generation, transportation, use or disposal of Hazardous Materials.
“Environmental Losses” means Losses arising from a Release of Hazardous Materials or noncompliance with or Liability under any Environmental Laws.
“Environmental or Mining Permit” means any permit, license, approval, consent or other authorization by or from a Governmental Authority required for coal mining or Reclamation or otherwise required under Environmental Law or Mining Law.

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“ERISA” means the Employee Retirement Income Security Act of 1974, as amended.
“Escrow Agent” has the meaning set forth in Section 9.5.
“Escrow Agreement” has the meaning set forth in Section 9.5.
“Escrow Amounts” means the General Escrow Amount and the Tax Escrow Amount.
“Financial Statements” has the meaning set forth in Section 4.5(a).
“First National Cash Account” means the account(s) in which the First National Cash Amount is held.
“First National Cash Amount” means the amount in cash held by First National Trust Company as collateral for surety bonds posted by Bond Safeguard Insurance Company in connection with the Collateral Trust Agreements.
“Former Coal Mines” has the meaning set forth in Section 4.14(b)(iii).
“Fundamental Representations” means those representations and warranties contained in Sections 4.1 (Organization, Power and Authority), 4.2 (Validity of Agreements), 4.3 (No Conflicts), 4.11 (Taxes) and 4.23 (No Brokers). 
“GAAP” means United States generally accepted accounting principles as applied on a consistent basis.
“General Enforceability Exceptions” has the meaning set forth in Section 4.2.
“General Escrow Account” means an account, set up pursuant to the Escrow Agreement, where the General Escrow Amount is held for disbursement by the Escrow Agent.
“General Escrow Amount” has the meaning set forth in Section 9.5(a).
“Governmental Authority” means any nation or government, any state or other political subdivision thereof, or any government authority, agency, department, board, commission or instrumentality of any such nation, government, state or political subdivision thereof exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government, or any federal, state, local or foreign court of competent jurisdiction.
“Hauling Shares” has the meaning set forth in the recitals to this Agreement.
“Hazardous Materials” means any substance or preparation defined as a “hazardous substance,” “toxic substance,” “hazardous waste” or any other term of similar import under any Environmental Law or any other materials that are regulated or give rise to Liability under Environmental Law, including petroleum (including crude oil or any fraction thereof), asbestos and asbestos-containing materials, radiation and radioactive materials, polychlorinated biphenyls, and acid mine drainage.

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“Indebtedness” of any Person means, without duplication: (i) all obligations of such Person (A) for the principal of, interest on, and premium and breakage costs in respect of, money borrowed (whether or not borrowed from an Affiliate of such Person), or (B) evidenced by notes, debentures, bonds (other than the Reclamation Performance Bonds) or other similar instruments for the payment of which such Person is responsible or liable; (ii) all obligations of such Person issued or assumed as the deferred purchase price for property, all conditional sale obligations of such Person and all obligations of such Person under any title retention agreement, including all obligations of such Person for the payment of money relating to leases that are required to be classified as capitalized lease obligations in accordance with GAAP but specifically excluding any obligation of such Person with respect to leases for equipment or other property as identified on Schedule 1.2(a); (iii) all obligations of such Person for the reimbursement of any obligor on any letter of credit (other than the letter of credit in connection with the RGGS Lease Agreement), banker’s acceptance or similar credit transaction; (iv) all obligations of such Person under interest rate or currency swap transactions (valued at the termination value thereof); (v) all obligations of the type referred to in clauses (i) through (iv) of other Persons for the payment of which such Person is responsible or liable, directly or indirectly, as obligor, guarantor, surety or otherwise, including guarantees of such obligations; and (vi) all obligations of the type referred to in clauses (i) through (iv) of other Persons secured by (or for which the holder of such obligations has an existing right, contingent or otherwise, to be secured by) any Lien on any property or asset of such Person (whether or not such obligation is assumed by such Person). 
“Indemnified Party” has the meaning set forth in Section 9.2(a).
“Indemnifying Party” has the meaning set forth in Section 9.2(a).
“Independent Expert” has the meaning set forth in Section 2.3(a)(iii).
“Intellectual Property Rights” has the meaning set forth in Section 4.9.
“Interest” has the meaning set forth in Section 2.4(c).
“Interim Financial Statements” has the meaning set forth in Section 4.5(a).
“Inventory” means all raw materials, work-in-process, supplies, parts, spare parts, replacement and component parts, and other inventories of any Company (including in transit, on consignment or in the possession of any third party).
“IRS” means the Internal Revenue Service or any successor agency, together with any division, office or representative thereof.
“Law” means any applicable law (including principles of the common law), act, statute, code, ordinance, rule, regulation or other requirement of any Governmental Authority.
“Lease” has the meaning set forth in Section 4.14(b)(i).
“Lease Agreements” means the lease agreements between the applicable Companies and Reed Energy, LLC, in the forms attached hereto as Exhibit B-1 and Exhibit B-2.

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“Lease Amendments” means the following, each in a form acceptable to Buyer: (a) Master Coal Mining Agreement Second Amendment, amending the McWane Agreement; (b) Memorandum of Master Coal Mining Agreement covering the McWane Agreement; (c) Second Amendment to Coal Mining Lease, dated September 12, 2008, between Reed Minerals and McWane, Inc. in the Burton Bend mine; (d) Second Amendment to Coal Mining Lease, dated November 21, 2007, between Reed Minerals and McWane, Inc. in the Town Creek mine; (e) Third Amendment to Coal Mining Lease, dated August 29, 2003, between C&H Mining and Palos, L.L.C. in the Lindbergh mine (the “Lindbergh Lease”); (f) Memorandum of Coal Mining Lease covering the Lindbergh Lease; (g) Third Amendment of Coal Mining Lease, dated July 15, 2002, between Palos, L.L.C. and Best Coal, Inc. in the Fishtrap mine (the “Fishtrap Lease”); (h) Acknowledgment of Transfer/Assignment of Mining Lease covering the Fishtrap Lease; (i) Second Amendment to Mining Contract, dated November 3, 2010, between C&H Mining and WB Mining, LLC in the Fishtrap mine (the “Mining Contract”); (j) Memorandum of Coal Mining Lease covering the Fishtrap Lease and the Mining Contract; (k) Consent of United States Steel Corporation delivered under the U.S. Steel Lease Agreement; (l) Memorandum of Lease covering the U.S. Steel Lease Agreement; (m) Consent of RGGS Land & Minerals Ltd., L.P. delivered under the RGGS Lease Agreement; and (n) Memorandum of Lease covering the RGGS Lease Agreement.
“Leased Real Property” has the meaning set forth in Section 4.14(b)(i).
“Letter of Intent” means the Letter of Intent between Buyer and the Companies, dated May 2, 2012.
“Liability” or “Liabilities” means any and all liabilities and obligations of every kind and description whatsoever, whether such liabilities or obligations are known or unknown, disclosed or undisclosed, matured or unmatured, accrued, absolute, contingent or otherwise.
“Lien” means any lien, charge, mortgage, pledge, deed of trust, security interest, title defect, title retention agreement, occupancy agreement, easement, encroachment or other encumbrance.
“Litigation Conditions” has the meaning set forth in Section 9.2(b).
“LOI Payments” means (i) any payments made by Buyer or its Affiliates pursuant to Section 14 of the Letter of Intent, as set forth on Schedule 1.2(b), plus (ii) $50,000.
“Loss” has the meaning set forth in Section 9.1(a).
“Management Shares ” has the meaning set forth in the recitals to this Agreement.
“Marks” has the meaning set forth in Section 6.11.
“Material Adverse Effect” means a material adverse effect on the business, results of operations, financial condition or assets of the Companies, taken as a whole, or on the ability of any Seller to consummate the transactions contemplated by this Agreement; provided, however, that Material Adverse Effect shall not include (a) any event, occurrence, fact, condition, or change, directly or indirectly, arising out of or attributable to any changes, conditions or effects: (i) that generally affect the mining industry in which any of the Companies operate (but only to the extent 

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such conditions do not disproportionately affect the Companies); (ii) in the United States economy in general or in the general economy in the geographic area in which the Companies operate or developments or changes therein; (iii) caused by acts of terrorism or war (whether or not declared) or other national or international political or social conditions; (iv) caused by a change in Law; (v) in financial, banking or securities markets; or (b) any adverse change in or effect on the business of the Companies that is cured by Shareholders before the earlier of (x) the Closing Date and (y) the date on which this Agreement is terminated pursuant to Article X hereof.
“Material Customers” has the meaning set forth in Section 4.18.
“Maximum Shareholder Amount” means $6,000,000 less amounts released by the Escrow Agent from the General Escrow Account pursuant to the terms of the Escrow Agreement to or for the benefit of Buyer Indemnified Parties to satisfy indemnification claims pursuant to Article IX; provided, that Losses relating to Sections 9.1(a)(ii) through 9.1(a)(vii) and Losses due to the failure to be true and correct of any of the Fundamental Representations do not count towards the Maximum Shareholder Amount.
“McWane Agreement” means the Master Coal Mining Agreement between Empire Coke Company and McWane Coal Sales, a division of McWane, Inc., and Reed Minerals, dated November 21, 2007, as amended.
“McWane Escrow Amount” means the amount of money held in the “Reclamation Bond Escrow Account” pursuant to the McWane Agreement.
“Mine” has the meaning set forth in Section 4.15(a).
“Minerals Shares” has the meaning set forth in the recitals to this Agreement.
“Mining” has the meaning set forth in the definition of “Mining Law.”
“Mining Law” means all present Laws relating to the exploration, extraction, processing, storage and transportation of coal and non-coal minerals and to the Reclamation of lands used for such activities (collectively referred to as “Mining”).
“Monthly Earn-out Amount” has the meaning set forth in Section 2.3(a)(i).
“Most Recent Fiscal Year-end” means, (a) with respect to C&H Mining, September 30, 2011 and (b) with respect to each Company other than C&H Mining, December 31, 2011.
“Mr. Reed” has the meaning set forth in the recitals to this Agreement.
“MSHA” means the Federal Mine Safety and Health Act, as amended.
“NACoal” means The North American Coal Corporation, a Delaware corporation.
“NACoal Guarantee” means the guarantee agreement in substantially the form attached hereto as Exhibit C.

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“Noncompete Period” means the period equal to five (5) years following the Closing. 
“Order” means any order, judgment, injunction, award, decree, ruling, charge or writ of any Governmental Authority.
“Ordinary Course of Business” means the ordinary course of business consistent with the applicable Company’s past custom and practice (including with respect to quantity and frequency).
“Organizational Documents” means, as to any Person, its articles or certificate of incorporation or certificate of formation and its bylaws or operating agreement or limited liability company agreement or any equivalent documents under the Law of such Person’s jurisdiction of incorporation or organization.
“OSHA” means the Occupational Safety and Health Act.
“Panel” has the meaning set forth in Section 2.3(a)(iii).
“Permit” means any license, permit, registration, permanent certificate of occupancy, concession, grant, franchise, filing, Consent, qualification or similar document or authority issued or granted by any Governmental Authority, including Environmental or Mining Permits.
“Permitted Liens” means: (a) Liens for Taxes not yet due and payable or, if due and payable, being diligently contested in good faith by appropriate legal proceedings and for which appropriate reserves according to GAAP are reflected on the balance sheets contained in the Financial Statements; (b) mechanic’s, materialman’s, repairer’s and other similar Liens arising or incurred in the Ordinary Course of Business that are not yet due and payable or, if due and payable, are being contested in good faith by appropriate procedures; (c) Liens arising under original purchase price conditional sales contracts and equipment leases with third parties entered into in the Ordinary Course of Business; and (d) in the case of Leased Real Property or subleased properties and assets, easements, rights of way, zoning ordinances and other similar encumbrances affecting Leased Real Property or subleased properties and assets which are not, individually or in the aggregate, material to the business of the Companies and Liens on the lessors’ or prior lessors’ interests. 
“Person” means any individual, sole proprietorship, partnership, limited partnership, corporation, limited liability company, unincorporated society, association, trust, joint venture, cooperative association, Governmental Authority or other legal entity.
“Personal Guaranties” has the meaning set forth in Section 6.13.
“Post-Closing Straddle Period” has the meaning set forth in Section 6.8(a).
“Pre-Closing Straddle Period” has the meaning set forth in Section 6.8(a).
“Pre-Closing Tax Period” means any Tax period ending on or before the Closing Date.
“Privilege Period” has the meaning set forth in Section 6.8(a).
“Purchase Price” has the meaning set forth in Section 2.2(a).

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“QCC Agreement” has the meaning set forth in Section 2.6.
“Quarterly Earn-out Payment” has the meaning set forth in Section 2.3(a).
“Quarterly Earn-out Settlement Date” has the meaning set forth in Section 2.3(b).
“Quarterly Earn-out Statement” has the meaning set forth in Section 2.3(b).
“Reclamation” means reclamation, revegetation, recontouring, abatement, control or prevention of adverse effects of Mining activities.
“Reclamation Performance Bonds” means all reclamation performance bonds as to which any Company is a principal, each of which is listed on Schedule 1.2(c).
“Reed Hauling” has the meaning set forth in the recitals to this Agreement.
“Reed Management” has the meaning set forth in the recitals to this Agreement.
“Reed Minerals” has the meaning set forth in the recitals to this Agreement.
“Reed No. 5 Mine” means the area near Cordova, Alabama for which Reed Minerals has a mine permit application pending and a surface lease agreement in effect with Reed Energy, LLC, and which is also referred to as “Dovertown Mine.”
“Reed Ownership Period” means, with respect to (a) Reed Hauling, the period beginning on November 22, 2005 and ending on the Closing Date, (b) Reed Management, the period beginning on March 16, 2009 and ending on the Closing Date, (c) C&H Mining, the period beginning on September 4, 2003 and ending on the Closing Date and (d) Reed Minerals, the period beginning on October 1, 2002 and ending on the Closing Date.
“Reimbursable Fees” means $62,632, which are the actual costs incurred by the Companies to drill the fourteen (14) drill holes, and to perform quality analysis on the resulting drill cores, requested by Buyer or NACoal in connection with the transactions contemplated by this Agreement.
“Related Persons” has the meaning set forth in Section 4.19.
“Release” means any releasing, spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping, leaching, migrating, disposing or dumping into the Environment (including the abandonment or discarding of barrels, containers and other receptacles containing any Hazardous Materials), and any condition that results in the exposure of a Person or property or other medium to a Hazardous Material.
“Restricted Territory” means: the geographic area within the State of Alabama. 
“Review Period” has the meaning set forth in Section 2.3(c).
“RGGS Lease Agreement” means the Coal Mining Lease between RGGS Land & Minerals Ltd., L.P. and C&H Mining, dated May 3, 2012.

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“Right of Access Leases” has the meaning set forth in Section 4.12(b).
“Right of Access Real Property” has the meaning set forth in Section 4.12(b).
“Section 338(h)(10) Election” has the meaning set forth in Section 6.8(g).
“Seller Indemnified Party” has the meaning set forth in Section 9.1(b).
“Seller Related Person Claims” has the meaning set forth in Section 6.9(a).
“Seller Related Persons” has the meaning set forth in Section 6.9(a).
“Seller Released Parties” has the meaning set forth in Section 6.9(f).
“Seller Returns” has the meaning set forth in Section 6.8(c).
“Sellers” has the meaning set forth in the preamble to this Agreement.
“Selling Expenses” means all (a) unpaid costs, fees and expenses of outside professionals incurred by any Company or which any Company has agreed to pay relating to the process of selling the Companies, whether incurred in connection with this Agreement, any Ancillary Agreement or otherwise, including all legal fees, accounting, Tax, investment banking fees and expenses, but, for the avoidance of doubt, excluding Buyer’s payment of any fee to Cornerstone Minerals, LLC in connection with the consummation of the transactions contemplated hereby and excluding the Reimbursable Fees, (b) bonuses payable to employees, agents and consultants of and to any Company as a result of the transactions contemplated by this Agreement and unpaid by such Company as of the Closing Date (including the employer portion of any payroll, Social Security, unemployment or similar Taxes), and (c) severance obligations owed by any Company to employees, agents and consultants of and to the Companies triggered prior to or as a result of the transactions contemplated by this Agreement (including the employer portion of any payroll, Social Security, unemployment or similar Taxes).
“Settlement Payment” means a payment from the Cooperative to any of the Companies in the Ordinary Course of Business for any settlement amount attributable to deliveries prior to the Closing Date, including, without limitation, any quarterly settlement payment, sulfur adjustment payment or patron dividend; provided, that such payment is not treated as an Account Receivable for purposes of the Working Capital.
“Shareholders” means, collectively, the Sellers and the Beneficiaries.
“Shareholders’ Knowledge” means, with respect to periods during the Reed Ownership Period, the actual knowledge after reasonable inquiry of the Shareholders and Anthony Allen, where “reasonable inquiry” is defined as reasonable discussions about the relevant subject matter with senior level employees and officers of each of the Companies who have responsibility or oversight for such subject matter, and, with respect to periods prior to the Reed Ownership Period, the actual knowledge of the Shareholders and Anthony Allen.
“Shareholders’ Pro Rata Share” has the meaning set forth in Section 2.7(c).

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“Shareholders’ Representative” means Robbin Reed Allen.
“Shares” has the meaning set forth in the recitals to this Agreement.
“SMCRA” has the meaning set forth in Section 4.12(m).
“Statement” has the meaning set forth in Section 2.4(a).
“Straddle Period”  means all Tax periods that begin on or before, and end after, the Closing Date.
“Subsidiary” of any Person means any other Person of which at least a majority of the outstanding shares or other equity interests having ordinary voting power for the election of directors or comparable managers of such other Person are at the time owned, directly or indirectly, by such first Person, by one or more of its Subsidiaries, or by such Person and one or more of its Subsidiaries.
“Target Working Capital” means $(600,000).
“Tax” means (a) any foreign, United States federal, state or local net income, alternative or add-on minimum tax, gross income, gross receipts, sales, use, ad valorem, value added, transfer, franchise, profits, license, withholding, payroll, employment, excise, severance, stamp, occupation, premium, property, environmental or windfall profit tax, custom, duty or other tax, governmental fee or other like assessment or charge of any kind whatsoever, including any liability under any state abandonment or unclaimed property, escheat or similar Law, together with any interest, penalty, addition to tax or additional amount imposed by any Law or Taxing Authority, whether disputed or not, (b) any liability for the payment of any amounts of any of the foregoing types as a result of being a member of an affiliated, consolidated, combined or unitary group, or being a party to any agreement or arrangement whereby liability for payment of such amounts was determined or taken into account with reference to the liability of any other Person, (c) any liability for the payment of any amounts as a result of being a party to any tax sharing or allocation agreements or arrangements (whether or not written) or with respect to the payment of any amounts of any of the foregoing types as a result of any express or implied obligation to indemnify any other Person, and (d) any liability for the payment of any of the foregoing types as a successor, transferee or otherwise.
“Tax Escrow Account” means an account, set up pursuant to the Escrow Agreement, where the Tax Escrow Amount is held for disbursement by the Escrow Agent.
“Tax Escrow Amount” has the meaning set forth in Section 9.5(a).
“Taxing Authority” means any Governmental Authority responsible for the collection, administration or the imposition of any Tax. 
“Tax Matter” has the meaning set forth in Section 6.8(f).
“Tax Return” means all Tax returns, statements, reports, elections, schedules, claims for refund and forms (including estimated Tax or information returns and reports), including any supplement or attachment thereto and any amendment thereof.

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“Termination Date” has the meaning set forth in Section 10.1(b).
“Third Party Claim” has the meaning set forth in Section 9.2(b).
“Ton” means two thousand (2,000) pounds.
“Transfer Taxes” has the meaning set forth in Section 6.8(d).
“Trust” has the meaning set forth in the recitals to this Agreement.
“Unresolved Claims” has the meaning set forth in Section 9.5.
“U.S. Steel Lease Agreement” means the Surface Mining Coal Lease by and between United States Steel Corporation and C&H Mining, dated May 10, 2012.
“Voluntary Benefits” means insured benefits for which each Company paid no portion of the premium immediately prior to the Closing and for which each Company only offered pre-tax payment of premiums.
“WARN Act” means the Worker Adjustment and Retraining Notification Act of 1988, as amended.
“Working Capital” means the current assets of the Companies on a consolidated basis, minus the current liabilities of the Companies on a consolidated basis, in each case, as calculated in accordance with the requirements of Section 2.4(a).
ARTICLE II 
SALE AND PURCHASE OF SHARES
Section 2.1        Sale and Purchase.  Upon the terms and subject to the conditions set forth in this Agreement, at the Closing, Buyer shall purchase from each Seller, and each Seller shall sell, transfer, assign, convey and deliver to Buyer, all of such Seller’s Shares, free and clear of any Liens or similar restrictions or limitations, including any restriction on the right to vote, sell or otherwise dispose of the Shares, other than restrictions under applicable securities laws.
Section 2.2    Purchase Price.  
(a)    Subject to adjustment as provided in Section 2.4, in consideration for the transfer of the Shares, (i) Buyer shall pay or cause to be paid, at the Closing, for the benefit of the Sellers (and, indirectly by virtue of payment to the Trust, the Beneficiaries), an amount equal to $62,500,000 (the “Purchase Price”), payable as provided in clauses (b) and (c) below, and (ii) Buyer shall make the contingent earn-out payments, if any, contemplated by Section 2.3.
(b)    Buyer shall deposit at Closing (i) the General Escrow Amount into the General Escrow Account pursuant to the terms of the Escrow Agreement, and (ii) the Tax Escrow Amount into the Tax Escrow Account pursuant to the terms of the Escrow Agreement.
(c)    Buyer shall pay the Purchase Price less the Escrow Amounts at the Closing as follows:  

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(i)    Buyer shall pay or cause to be paid to the Persons entitled thereto all of the Certified Indebtedness;
(ii)    the Selling Expenses shall be paid to the Persons entitled thereto, to the extent previously unpaid; and
(iii)    a net amount equal to the Purchase Price plus an amount equal to the McWane Escrow Amount plus an amount equal to the Reimbursable Fees, minus the LOI Payments minus the aggregate of the amounts referred to in clauses (i) and (ii) of this Section 2.2(c) and in Section 2.2(b) shall be paid by bank wire transfer of immediately available funds to an account designated to Buyer in writing by the Shareholders’ Representative (on behalf of the Sellers), such designation to be made at least two (2) Business Days prior to the Closing Date.  
In no event will Buyer, the Companies or any of their respective Affiliates have any responsibility or liability for the allocation of any such payment among the Sellers or the Beneficiaries by the Shareholders’ Representative or trustees of the Trust, as applicable, or the distribution of any such payment by the Shareholders’ Representative or the trustees of the Trust to the Sellers or the Beneficiaries, as applicable. 
Section 2.3    Earn-out.
(a)    As additional consideration for the Shares, on a quarterly basis beginning with the third calendar quarter of 2012 (each calendar quarter, an “Earn-out Payment Period”), Buyer (or, at the direction of Buyer, the Companies) shall pay to the Shareholders’ Representative an amount (each, a “Quarterly Earn-out Payment”), if any, equal to the sum of the Monthly Earn-out Amounts for each of the three months during the applicable Earn-out Payment Period, at the time specified in Section 2.3(b) and as adjusted in accordance with this Section 2.3(a).  A sample calculation of the Quarterly Earn-out Payment is set forth on Schedule 2.3(a), including a sample calculation of the adjustments contemplated by Section 2.3(a)(ii) below. Any payments made pursuant to this Section 2.3 shall be treated as adjustments to the Purchase Price.
(i)    The “Monthly Earn-out Amount” shall be equal to (A) 20% of the amount, if any, by which the Average Sale Price during the applicable calendar month exceeds the Earn-out Base, multiplied by (B) the number of Tons of coal mined after the Closing Date and sold during the applicable calendar month from the reserves owned, leased or controlled by the Companies at the Closing, including the reserves currently leased under the RGGS Lease Agreement and the U.S. Steel Lease Agreement (collectively, the “Current Reserves”); provided, however, that in no event will any Quarterly Earn-out Payment be due for any amount of such coal sold after the Closing that exceeds 15,000,000 Tons of coal mined and sold after the Closing, regardless of the sale price; provided further, however, that any such coal mined and sold at a per Ton sale price less than the minimum per Ton net proceeds received by C&H Mining or Reed Minerals from the Cooperative during such month will be excluded from the calculation of the Monthly Earn-out Amount and from the calculation of Average Sale Price.  For the avoidance of doubt, (i) no further Monthly Earn-out Amounts will be paid once 15,000,000 Tons of coal have been mined and sold from the Current Reserves after the Closing, regardless of sale price, and (ii) the Monthly Earn-Out Amounts shall be due from Buyer and calculated as provided in this Section 2.3(a) with respect to 

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coal mined and sold by any Person (whether a Company, Buyer, an Affiliate of Buyer or any Company, an independent contractor, any third party assignee, any other third party or any other Person) from the Current Reserves.
(ii)    Beginning effective January 1, 2013, the Earn-out Base shall be increased or decreased, as appropriate, as of January 1 of each applicable calendar year, in the same percentage by which (A) the first published value of the CPI-U Index for October of the preceding calendar year is greater or less than (B) the first published value of the CPI-U Index for May 2012 (which is 229.815, on the base of (1982-1984=100)).  Such increased or decreased Earn-out Base shall be effective as of the adjustment date and shall be included in the next Quarterly Earn-out Statement following such adjustment date, and any additional payment to be made by Buyer shall be made accordingly.  An example calculation of such adjustment is included on Schedule 2.3(a).  If any adjustment made pursuant to this Section 2.3(a)(ii) is based upon a first published CPI-U Index figure that is subsequently revised, there shall be no further adjustment of such amount on the basis of such revision.  If the CPI-U Index or any substitute index is changed in the future to use some base other than the base of (1982-1984=100), then for the purposes hereof the CPI-U Index or any substitute index, as the case may be, shall be adjusted so as to be in correct relationship to the base of (1982-1984=100) or some other alternative base that is mutually agreed by Buyer and the Shareholders’ Representative.  If publication of the CPI-U Index or any substitute index is no longer made by any federal agency, the index to be used shall be that index mutually agreed by Buyer and the Shareholders’ Representative.  If at any time either Buyer or the Shareholders’ Representative believes that the CPI-U Index does not accurately reflect the true change in the price level of consumer goods and services in the United States of America, then Buyer and the Shareholders’ Representative shall attempt to agree mutually upon a new index.  If Buyer and the Shareholders’ Representative do not agree to the continued use of the CPI-U Index or the use of a new index which Buyer and the Shareholders’ Representative agree more accurately reflects the changes in the price level of consumer goods and services in the United States of America, that issue will be subject to arbitration pursuant to clause (iii) below.
(iii)    Any dispute that arises between Buyer and the Shareholders’ Representative with respect to the continued use of the CPI-U Index or the use of a new index shall be submitted to a panel of three Independent Experts for determination as the exclusive means of resolving such dispute.  “Independent Expert” shall mean a regionally or nationally recognized economist who has not been employed or engaged by Buyer, any Shareholder, any Company, or any of their Affiliates, within the immediately preceding five (5) years.  Either Buyer or Shareholders’ Representative may give written notice to the other of a dispute under this Section 2.3(a)(iii).  Within thirty (30) days after receipt of such written notice, Buyer shall select one Independent Expert and Shareholders’ Representative shall select another Independent Expert.  Within fifteen (15) days after selection of the first two Independent Experts, those two Independent Experts shall select the third Independent Expert.  Those three Independent Experts shall constitute the “Panel”.  The Buyer and Shareholders’ Representative shall submit their positions and supporting information and documentation to the Panel and shall each have an opportunity to discuss the same with the Panel.  The Panel shall conduct and conclude its review of the disputed matters within thirty (30) days after selection of the Panel.  The Panel shall have no authority to modify any term or provision of this Agreement, award any damages or require any payments of any nature, or make any determination hereunder other than with respect to the continued use of the CPI-U or the selection and use of a 

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new index hereunder.  The determination by the Panel shall be final, conclusive and binding on the Parties.  The expenses of the Panel shall be shared equally by Buyer and the Shareholders’ Representative on behalf of the Sellers. 
(b)    Within 30 days after the end of each Earn-out Payment Period, Buyer shall (i) pay to the Shareholders’ Representative the Quarterly Earn-out Payment, if any, for the applicable Earn-out Payment Period by wire transfer of immediately available funds to an account designated by the Shareholder’s Representative and (ii) provide to the Shareholders’ Representative a statement in a form substantially similar to that used to prepare the sample calculation in Schedule 2.3(a) setting forth the Monthly Earn-out Amount for each of the calendar months in such Earn-out Payment Period (each, a “Quarterly Earn-out Statement”). Upon the reasonable request of the Shareholders’ Representative, Buyer shall deliver to the Shareholders’ Representative copies of the applicable records, work papers and other information contemplated by Section 2.3(d). Upon receipt of the Quarterly Earn-out Statement, the Shareholders’ Representative shall be entitled to object to the calculation of the Quarterly Earn-out Payment in a manner consistent with the procedures set forth in Section 2.3(c).  The date on which each Quarterly Earn-out Payment is finally determined pursuant to Section 2.3(c) shall be referred to herein as a “Quarterly Earn-out Settlement Date.”  On the fifth Business Day following the Quarterly Earn-out Settlement Date, Buyer shall pay to the Shareholders’ Representative by wire transfer of immediately available funds to an account designated by the Shareholders’ Representative an amount equal to the difference between the Quarterly Earn-out Payment paid to the Shareholders’ Representative pursuant to Section 2.3(b)(i), if any, and the Quarterly Earn-out Payment as finally determined in accordance with Section 2.3(c).
(c)    If the Shareholders’ Representative disagrees with any portions of the proposed Quarterly Earn-out Statement, it shall notify Buyer of such disagreement in writing, setting forth in reasonable detail the particulars of such disagreement, within 30 days after the Shareholders’ Representative’s receipt of the proposed Quarterly Earn-out Statement (in each case, the “Review Period”).  If the Shareholders’ Representative does not provide such a notice of disagreement within the Review Period, the Quarterly Earn-out Statement and the Quarterly Earn-out Payment shall be final, binding and conclusive for all purposes hereunder.  During the Review Period, the Shareholders’ Representative (and his or her representatives) shall have the right to inspect the applicable books and records of the Companies and Buyer during normal business hours at the offices of Buyer or the Companies, as applicable, upon reasonable prior notice and solely for the purposes of reasonably determining the Quarterly Earn-out Payment; provided, that all materials reviewed by or on behalf of the Shareholders’ Representative shall be deemed Confidential Information subject to Section 6.7 and shall only be used to determine the Quarterly Earn-out Payment (including raising, identifying and resolving any disputes relating thereto).  In the event the Shareholders’ Representative timely provides any such notice of disagreement, Buyer and the Shareholders’ Representative shall negotiate in good faith for a period of thirty (30) days (or such longer period as they may mutually agree) to resolve any disagreements with respect to the calculations of the Quarterly Earn-out Payment.  If, at the end of such period, the parties are unable to resolve such disagreements, then the parties shall jointly engage an independent accounting firm (meaning a firm of certified public accountants that has not provided services to any of the parties hereto or their Affiliates during the immediately preceding five (5) years), which firm shall initially be the firm of UHY LLP (the “Accounting Firm”), or another mutually acceptable, independent accounting firm, to resolve any remaining disagreements.  If at any point following the Closing 

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Date the Accounting Firm shall cease being independent from all the parties hereto, the parties shall jointly engage a new independent accounting firm to serve as the Accounting Firm. The fees and costs of the Accounting Firm shall be paid 50% by Buyer and 50% by the Shareholders’ Representative on behalf of the Sellers.  The Accounting Firm shall calculate (based solely on written submissions from Buyer and the Shareholders’ Representative) as promptly as practicable, but in any event, within fifteen (15) days of the date on which such dispute is referred to the Accounting Firm, the Quarterly Earn-out Payment; provided, that, except as provided in Section 2.3(f), the amount determined by the Accounting Firm shall be no lower than the lower of the submissions and no higher than the higher of the submissions.  The Accounting Firm’s calculation shall be final, binding and conclusive for all purposes hereunder.
(d)    Each Quarterly Earn-out Statement shall, at the reasonable request of the Shareholders’ Representative solely for the purpose of determining the Quarterly Earn-out Payment (including raising, identifying and resolving any disputes relating thereto), be accompanied by copies of invoices, purchase orders, sales receipts, bills of lading, truck weight tickets, railroad weight tickets, barge weight tickets, statements of transportation, washing and handling charges, and other reasonable forms of verification as may reasonably be deemed necessary by the Shareholders’ Representative showing the actual amount of the Current Reserves mined, processed, stockpiled, loaded, shipped and sold by Buyer, the Companies or their respective Affiliates, agents and assigns during the Earn-out Payment Period and shall also include individual sales of coal, the customers to which coal was sold, the sale price received for such coal, and the location, by Quarter-Quarter Section, Township, and Range from which such coal was mined.  All such information shall be deemed Confidential Information subject to Section 6.7 and shall only be used to verify the Quarterly Earn-out Payment (including raising, identifying and resolving any disputes relating thereto).  The Shareholders’ Representative shall bear all reasonable costs and expenses incurred by or on behalf of the Companies in connection with such requests over $100 per Earn-out Payment Period.
(e)    In no event will Buyer, the Companies or any of their respective Affiliates have any responsibility or liability for the distribution of any such Quarterly Earn-out Payments by the Shareholders’ Representative or the trustees of the Trust to the Sellers or the Beneficiaries, as applicable.
(f)    For purposes of determining the sales price of coal mined and sold pursuant to this Section 2.3 for the calculation of any and all Quarterly Earn-out Payments, it is specifically understood and agreed by Buyer that all calculations shall be made based on the sale of coal from the Current Reserves to a Bona Fide Purchaser. If the Companies or their respective Affiliates, employees, agents or assigns should sell coal from the Current Reserves to a purchaser, or otherwise transfer, exchange, assign or convey coal to another Person (whether an Affiliate or a third party), and the Shareholders’ Representative provides notice in writing to Buyer that, in the Shareholders’ Representative’s reasonable judgment, such purchaser or other transferee is not a Bona Fide Purchaser or such transaction was consummated with the intention of manipulating the sale price for the purpose of negatively impacting a Quarterly Earn-out Payment, and thereafter Buyer does not or is not able to justify to the Shareholders’ Representative’s reasonable satisfaction, within thirty (30) days from the date of such notice, that such purchaser or transferee is a Bona Fide Purchaser and such transaction was not intentionally consummated for the purpose of negatively 

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impacting a Quarterly Earn-out Payment, the amount of the Quarterly Earn-out Payment with respect to such transaction shall be submitted to the Accounting Firm for final determination pursuant to Section 2.3(c). If the Accounting Firm determines that the purchaser or transferee was not a Bona Fide Purchaser or that the transaction was consummated with the intention of manipulating the sale price for the purpose of negatively impacting a Quarterly Earn-out Payment, then the Accounting Firm shall substitute for the reported sale price of such sale the prevailing market price of coal of similar quality and quantity recently sold, F.O.B. Mine, by the Companies or, F.O.B. Mine, by other sellers to Bona Fide Purchasers in arms’ length transactions as determined by the Accounting Firm based on evidence gathered by it, including any evidence submitted by Buyer and the Shareholders’ Representative. The Shareholders shall have no right to control, and, except for a Quarterly Earn-out Payment adjustment claim pursuant to this Section 2.3(f), they hereby waive any claim related to controlling, (i) the sale price of coal set by Buyer or the Companies from and after the Closing and (ii) the Companies’ mine planning and sequencing, and whether and at what rate the Current Reserves are mined. 
(g)    The sale price of coal sold by the Companies to brokers that are Bona Fide Purchasers shall be the amount paid by the broker to the Companies for the coal F.O.B. mine, rather than the sale price from the broker to the third party purchaser of the coal.
(h)    Effective as of the Closing Date and thereafter until an aggregate of 15,000,000 Tons of coal have been mined and sold from the Current Reserves after the Closing and all payment obligations of Buyer under this Section 2.3 shall have been paid in full to the Shareholders’ Representative, Buyer, for itself, its Affiliates and the Companies, agrees that (i) Buyer shall not sell, assign, transfer, convey or otherwise voluntarily dispose of any of the Company Shares without the Shareholders’ Representative’s consent, which shall not be withheld unreasonably, (ii) none of Buyer, any Company or any of Buyer’s Affiliates shall, or shall permit, any Company to sell, assign, transfer, convey or otherwise dispose of the rights of any Company in and to any of the Leased Real Property with respect to the Current Reserves prior to the release of the Reclamation Bonds covering such Leased Real Property, and (iii) subject to any deficiencies in the Companies’ rights to the Leased Real Property as of the Closing Date, none of Buyer, any Company or any of Buyer’s Affiliates shall intentionally, or shall intentionally permit, any Company to, terminate or allow to terminate or expire any of the rights of the Companies in and to any of the Leased Real Property, without (in the case of each of clauses (i), (ii) and (iii) above) arrangements reasonably satisfactory to the Shareholders’ Representative for the continued compliance with the terms of this Section 2.3; provided, that no consummation of any such action shall in any way relieve Buyer of its obligations with respect to payment of the Monthly Earn-out Amounts with respect to the Current Reserves, except to the extent that any of such payment obligations have been satisfied by the applicable transferee.
Section 2.4    Purchase Price Adjustment.
(a)    Within sixty (60) days after the Closing Date, Buyer shall prepare and deliver to the Shareholders’ Representative a statement (the “Statement”) setting forth the actual Working Capital as of the close of business on the Closing Date (the “Closing Working Capital”), calculated in the manner set forth on Schedule 2.4(a).  The Statement shall be prepared in accordance with GAAP and consistent with the accounting principles, practices, methodologies and policies used 

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in the preparation of the Target Working Capital, except that Buyer is permitted to conduct a physical inventory, at Buyer’s cost and expense, for purposes of preparing the Statement. Schedule 2.4(a)(ii) sets forth the calculation for determining the value of shot rock inventory.  Buyer hereby agrees that the Shareholders and their respective representatives shall be permitted to attend and participate in the physical inventory conducted by Buyer under this Section 2.4, and Buyer hereby further agrees to provide written notice to the Shareholders’ Representative of the date(s) on which the physical inventory shall be conducted, which notice shall be delivered no later than ten (10) Business Days prior to the start of the physical inventory.
(b)    Within thirty (30) days following receipt by the Shareholders’ Representative of the Statement, the Shareholders’ Representative shall deliver written notice to Buyer of any dispute the Shareholders have regarding the Statement and the accurate calculation of the Closing Working Capital on a basis consistent with the requirements of Section 2.4(a) (such written notice shall set forth a detailed description of any such dispute); provided, however, that the Shareholders’ Representative (on behalf of the Shareholders) may not dispute the accounting principles, practices, methodologies and policies used in preparing the Statement if they are consistent with GAAP and consistent with the accounting principles, practices, methodologies and policies used in the preparation of the Target Working Capital.  If the Shareholders’ Representative does not so notify Buyer of a dispute with respect to the Statement within such 30-day period, such Statement will be final, conclusive and binding on the parties.  In the event of such notification of a dispute, the parties shall negotiate in good faith to resolve such dispute.  If Buyer and the Shareholders’ Representative, notwithstanding such good faith efforts, fail to resolve all or any portion of such dispute within fifteen (15) days after the Shareholders’ Representative advises Buyer of the dispute, then Buyer and the Shareholders’ Representative jointly shall engage the Accounting Firm, acting as accountants and not as arbitrators, to resolve the dispute, or any remaining portion thereof, on a basis consistent with the requirements of Section 2.4(a).  The parties agree that they will request that the Accounting Firm render its reasoned written decision within thirty (30) days after referral of the dispute to the Accounting Firm for decision pursuant hereto.  In resolving the dispute, the Accounting Firm shall limit its review to the items that were properly identified by the Shareholders’ Representative in the written notification of the dispute (which decision, in the case of each disputed item, shall be within the range of the respective amounts asserted by the Shareholders’ Representative and Buyer to be the correct amount of such disputed item).  All determinations so made by the Accounting Firm shall be final, conclusive and binding on the parties, absent manifest error.  Judgment may be entered to enforce such determination in any court of competent jurisdiction.  Buyer and the Shareholders’ Representative (on behalf of the Sellers) shall each bear its own costs and expenses, including reasonable expenses of their respective representatives and experts, that may be incurred by such Person in connection with the preparation, review, dispute (if any) and final determination of the Statement and Closing Working Capital; provided, that Buyer and the Shareholders’ Representative (on behalf of the Sellers) shall share equally all reasonable expenses and fees of the Accounting Firm in connection with the review, dispute and final determination of the Statement and Closing Working Capital. 
(c)    Upon final determination of Closing Working Capital as provided in Section 2.4(b) above, (i) if Closing Working Capital is greater than Target Working Capital, then the Purchase Price shall be increased by the amount of the excess of Closing Working Capital over Target Working Capital (together with Interest), and Buyer shall pay or cause to be paid an amount in cash equal to 

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such excess amount (together with Interest) to the Shareholders’ Representative by bank wire transfer of immediately available funds to an account or accounts designated in writing by the Shareholders’ Representative to Buyer, and (ii) if Closing Working Capital is less than Target Working Capital, then the Purchase Price shall be decreased by the excess of Target Working Capital over Closing Working Capital, and the Shareholders’ Representative shall pay or cause to be paid an amount in cash equal to such shortfall (together with Interest) to Buyer by bank wire transfer of immediately available funds to an account or accounts designated in writing by Buyer.  Any such payment is to be made within five (5) Business Days of the date on which the Closing Working Capital is finally determined pursuant to Section 2.4(b).  In no event will Buyer, the Companies or any of their respective Affiliates have any responsibility or liability for the allocation of any such payment among the Sellers by the Shareholders’ Representative or the distribution of any such payment by the Shareholders’ Representative to the Sellers. “Interest” will be payable at the “prime” rate, as announced by The Wall Street Journal, Eastern Edition, from time to time to be in effect, calculated based on a 365 day year and the actual number of days elapsed. For the avoidance of doubt, Interest shall accrue (i) beginning on the day following the Closing Date and ending on the date of the payment contemplated by this Section 2.4(c) and (ii) at the “prime” rate in effect on the Closing Date. 
(d)    For purposes of complying with the terms set forth in this Section 2.4, each party shall cooperate with and make available to the other party and their respective representatives all information, records, data and working papers, and shall permit access to its facilities and personnel, as may be reasonably required in connection with the preparation and analysis of the Statement and the resolution of any disputes thereunder.
Section 2.5    Allocation of Purchase Price.  The Purchase Price (and all other capitalized costs and any other items treated as additional Purchase Price for U.S. federal income tax purposes) shall be allocated by Company based on their respective fair market values and in accordance with Sections 338 and 1060 of the Code and the regulations thereunder and as further provided under Section 6.8(g) and as adjusted, if necessary, consistent with any Purchase Price adjustment (the “Allocation”); provided that such adjustment will not include adjustments regarding allocations to “net mineral rights/reserves” or “net property and equipment” without the Shareholders’ Representative’s consent.  Buyer and the Shareholders shall each prepare and file, and cause their respective Affiliates to prepare and file, its Tax Returns filed with the IRS or any other Governmental Authority, including Form 8594, on a basis consistent with the Allocation.  Neither Buyer nor the Shareholders shall take any position (whether in audits, Tax Returns or otherwise) that is inconsistent with the Allocation unless required to do so by applicable Law.  In the event that the Allocation is disputed by any Taxing Authority, the party receiving notice of the dispute shall promptly notify the other party hereto, and both the Shareholders and Buyer agree to use their reasonable best efforts to defend such Allocation in any audit or similar proceeding. 
Section 2.6    Shareholder Acknowledgment.  The Shareholders acknowledge and agree that (i) all funds held in the “Reclamation Bond Escrow Account” pursuant to the McWane Agreement, and (ii) any amounts due from Quality Coal Company, Inc. under the Assignment and Assumption Agreement Regarding Slate Creek, dated September 22, 2010 (the “QCC Agreement”), are, in each case, assets of the Companies and will remain assets of the Companies after the Closing. The amounts referenced in clauses (i) and (ii) above are set forth on Schedule 2.6 as of the date of this Agreement.  

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Between the date of this Agreement and the Closing, no Company will remove any funds held in the “Reclamation Bond Escrow Account” pursuant to the McWane Agreement or paid to any Company pursuant to the QCC Agreement other than in the Ordinary Course of Business. At the Closing, (i) the amount of funds held in the “Reclamation Bond Escrow Account” pursuant to the McWane Agreement shall be at least equal to the amount set forth on Schedule 2.6, and (ii) any amounts received pursuant to the QCC Agreement after the Closing Date will remain with the Companies.  
Section 2.7    Refunds and Remittances. 
(a)    Subject to the terms of this Agreement, if, after the Closing Date, any party to this Agreement receives any payment relating to any property of any other party, the receiving party will promptly forward such payment to the appropriate party.
(b)    Subject to Section 6.14, as soon as reasonably possible following the Closing, Buyer shall obtain, or shall cause one or more of the Companies to obtain, a release of all funds held in the First National Cash Account and shall cause all of such funds to be remitted promptly to the Shareholders’ Representative on behalf of the Sellers.
(c)    Upon receipt by Reed Minerals and C&H Mining of any Settlement Payments from the Cooperative due to such Companies with respect to the calendar quarter ending June 30, 2012, Buyer shall remit, or shall cause Reed Minerals or C&H Mining to remit, an amount equal to such payments to the Shareholders’ Representative on behalf of the Sellers within five (5) Business Days after the applicable Company’s receipt thereof. Upon receipt by Reed Minerals and C&H Mining of any Settlement Payments from the Cooperative due to such Companies with respect to any Cooperative Straddle Period, Buyer shall remit, or shall cause Reed Minerals or C&H Mining to remit, an amount equal to the Shareholders’ Pro-Rata Share of such payments to the Shareholders’ Representative on behalf of the Sellers within five (5) Business Days after the applicable Company’s receipt thereof. For purposes of this Section 2.7(c), “Shareholders’ Pro Rata Share” is equal to the quotient of (i) the number of Tons of coal delivered by the Companies to the Cooperative during the period beginning on the first date of the calendar quarter or year to which such payment applies through the Closing Date and (ii) the number of Tons of coal delivered by the Companies to the Cooperative during the calendar quarter or year to which such payment applies.
Section 2.8    Buyer Acknowledgment. Subject to Buyer’s indemnification rights in Article IX (including, without limitation, its indemnification rights pursuant to Section 9.1(a)(i) with respect to any misrepresentation or breach of warranty by the Shareholders under this Agreement), Buyer acknowledges and agrees that (i) all obligations with respect to equipment leases of any of the Companies with third parties that are set forth on Schedule 4.7(a), (ii) all obligations with respect to leases for the Leased Real Property and Right of Access Real Property set forth on Schedules 4.14(b)(i) and (ii) and (iii) all Reclamation obligations of the Companies with respect to areas identified or referenced on Schedule 1.2(c) or covered by Permits referenced on Schedule 4.8(b) will remain obligations of the Companies after the Closing.  
ARTICLE III
CLOSING AND DELIVERIES
Section 3.1    Closing.  The closing of the transactions contemplated by this Agreement 

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(the “Closing”) shall take place at the offices of Bradley Arant Boult Cummings LLP, One Federal Place, 1819 Fifth Avenue North, Birmingham, AL 35203, on August 31, 2012 (the “Closing Date”).  The Closing shall be effective for accounting purposes as of 11:59 p.m., local time, on the Closing Date.
Section 3.2    Deliveries by the Shareholders.  At the Closing (or in the case of clause (g) below, contemporaneously with the execution and delivery of this Agreement), the Shareholders will deliver or cause to be delivered to Buyer the following items:
(a)    any documents that are necessary to transfer to Buyer good and valid title to the Shares, together with all current, original certificates representing the Shares;
(b)    the record books, share ledgers and limited liability company ownership ledgers of each Company;
(c)    copies of the Organizational Documents of each Company, certified by an officer of the applicable Company;
(d)    a certificate of existence and certificate of good standing of each Company issued by the Alabama Secretary of State and Alabama Department of Revenue, respectively, issued as of a recent date;
(e)    a certificate of the Shareholders’ Representative, dated as of the Closing Date and in form and substance reasonably acceptable to Buyer, setting forth in sufficient detail the aggregate amount of (i) any and all Indebtedness of the Companies outstanding as of the Closing (the “Certified Indebtedness”) and (ii) any and all unpaid Selling Expenses; 
(f)    payoff letters for the Certified Indebtedness, in form and substance reasonably acceptable to Buyer, together with appropriate termination statements under the Uniform Commercial Code and other instruments as may be reasonably requested by Buyer to extinguish all Indebtedness of the Companies, and all security interests related thereto, in form and substance reasonably acceptable to Buyer;
(g)    copies of all authorizations required for the trustees of the Trust to approve and enter into the transactions contemplated by this Agreement and the Ancillary Agreements;
(h)    a duly executed counterpart by the Shareholders and the Shareholders’ Representative of the Escrow Agreement;
(i)    a duly executed counterpart by Reed Energy, LLC of the Consulting Agreement;
(j)    duly executed counterparts by Reed Energy, LLC of each Lease Agreement; 
(k)    duly executed counterparts by each of the parties to the Lease Amendments;
(l)    a certificate signed by all the Shareholders to the effect that the conditions set forth in Sections 7.2(b) and (c) have been satisfied;

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(m)    a properly completed non-foreign affidavit of each Seller dated as of the Closing Date, sworn under penalty of perjury and in form and substance reasonably satisfactory to Buyer to prevent Buyer from having to withhold any amount of the Purchase Price under Section 1445 of the Code;
(n)    an Internal Revenue Service Form 8023 (Elections under Section 338 for Corporations Making Qualified Stock Purchases) with respect to each of Reed Minerals, Reed Hauling, Reed Management and C&H Mining, duly executed by each Seller, and any other analogous or corresponding form required to be filed with any state, local or foreign Governmental Authority to effect the Section 338(h)(10) Election;
(o)    a properly completed IRS Form W-9 of each of the Sellers;
(p)    written resignations of corporate directors and officers and, with respect to Reed Management, the managing member (in their capacities as such) as set forth on Schedule 4.1(c);
(q)    all of the Consents set forth on Schedule 7.2(e);
(r)    any forms required by the banks to change the ownership, control or signature of the accounts set forth on Schedule 4.27 from any Company to Buyer; 
(s)    a complete and correct list of all current employees of each Company who are suspended, terminated, laid off, on a leave of absence or otherwise on non-active status from January 1, 2012 through the Closing Date; and
(t)    such other documents and instruments as Buyer shall reasonably request to consummate the transactions contemplated hereby.
Section 3.3    Deliveries by Buyer.  At the Closing, Buyer will deliver or cause to be delivered to the Shareholders’ Representative (or as otherwise directed below) the following items:
(a)    a certificate of an officer of Buyer to the effect that the condition set forth in Section 7.3(b) has been satisfied;
(b)    certificates of good standing of Buyer issued by the Nevada Secretary of State and the Alabama Department of Revenue, and a certificate of existence of Buyer issued by the Alabama Secretary of State, in each case issued as of a recent date;
(c)    copies of the resolutions of the board of directors and sole shareholder of Buyer approving the execution and delivery of this Agreement and the Ancillary Agreements to which it is a party and the consummation of the transactions contemplated hereby and thereby, certified by an officer of Buyer;
(d)    payment of the Purchase Price as provided in Section 2.2(c);
(e)    a duly executed counterpart by Buyer of each Ancillary Agreement to which it is a party; 

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(f)    Company Releases in the form of Exhibit D, duly executed by Buyer and each of the Companies;
(g)    the NACoal Guarantee in the form of Exhibit E, duly executed by NACoal; and
(h)    such other documents and instruments as the Shareholders’ Representative shall reasonably request to consummate the transactions contemplated hereby.
Section 3.4    Intercompany Arrangements.  The Shareholders and Buyer acknowledge and agree that, immediately prior to the Closing, except as provided in this Agreement or any Ancillary Agreement or in Schedule 3.4 hereto, (i) any Contract between a Company, on the one hand, and such Company’s  Shareholders or any of their respective Affiliates (other than such Company), on the other hand, shall be terminated and be of no further force or effect, and (ii) each Company shall be released from any and all of their obligations (financial or otherwise) to its Shareholders and their respective Affiliates.  
ARTICLE IV 
REPRESENTATIONS AND WARRANTIES OF THE SHAREHOLDERS

The Shareholders, jointly and severally, hereby represent and warrant to Buyer as follows:
Section 4.1    Organization, Power and Authority.  
(a)    Each Company is duly organized and validly existing under the Laws of the State of Alabama.  No Company is required to be authorized, qualified or licensed to do business as a foreign corporation or limited liability company in any jurisdiction other than the State of Alabama except where the failure to be qualified would not reasonably be expected to have a Material Adverse Effect.
(b)    Each Company has the corporate or limited liability power and authority to (i) own, operate and lease their respective properties and assets as and where currently owned, operated and leased and (ii) carry on its respective business as currently conducted.
(c)    The authorized shares or membership interests, as applicable, of each Company are set forth on Schedule 4.1(c).  The Shares set forth on Schedule 4.1(c) are issued and outstanding and all such Shares have been duly authorized and validly issued and are fully paid and non-assessable and were issued in compliance with all applicable Laws and any preemptive rights or rights of first refusal of any Person.  There are no outstanding options, warrants, rights, calls, subscriptions, claims of any character, agreements, obligations, convertible or exchangeable securities or other commitments, contingent or otherwise, of any kind obligating any Company to issue, directly or indirectly, any additional shares or membership interests, as applicable, in such Company.  There are no agreements, commitments or contracts currently in effect relating to the issuance, sale, transfer or voting of any equity securities or other securities of any Company.  Schedule 4.1(c) sets forth a true and complete statement of the capitalization of each Company, including a list of the number of Shares owned by each Shareholder opposite such Shareholder’s name.  No Person other than each of the Shareholders has any interest in the equity of any Company.  

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No Company has any Subsidiaries and no Company has any investments in equity interests of any other Person.  The Shareholders have good and marketable title to the Shares, free and clear of all Liens or similar restrictions or limitations, including any restriction on the right to vote, sell or otherwise dispose of the Shares, other than restrictions under applicable securities laws.  Upon the consummation of the transactions contemplated by this Agreement, Buyer will acquire good and valid title to the Shares, free and clear of all Liens or similar restrictions or limitations, including any restriction on the right to vote, sell or otherwise dispose of the Shares, other than restrictions under applicable securities laws.  Schedule 4.1(c) sets forth, by Company, a true and complete list of the directors and officers of each Company that is a corporation and, with respect to Reed Management, the managing member.  
Section 4.2    Validity of Agreements.  Assuming due authorization, execution and delivery by the other parties hereto and thereto, this Agreement constitutes and, when executed and delivered, each of the Ancillary Agreements to which the Shareholders are to be parties, will constitute, the legal, valid and binding obligation of the Shareholders, enforceable against such Shareholders in accordance with its terms, subject to the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium, and other similar Laws relating to or affecting creditors’ rights generally and general equitable principles, whether considered in a proceeding in equity or at law (collectively, the “General Enforceability Exceptions”).  Each of the Shareholders has the requisite legal capacity and full corporate power and authority, as applicable, to execute and deliver this Agreement and the Ancillary Agreements to which it is or will be a party, to perform its obligations hereunder and thereunder, and to consummate the transactions contemplated hereby and thereby to be consummated by it.  The execution, delivery and performance of this Agreement and the Ancillary Agreements, and the consummation of the transactions contemplated hereby and thereby, have been duly and validly authorized by all necessary corporate (or equivalent) action of the Shareholders.
Section 4.3    No Conflicts.  Neither the execution and delivery of this Agreement or the Ancillary Agreements by the Shareholders, nor the performance of the Shareholders’ obligations hereunder or thereunder, will (a) violate, conflict with or result in a breach of any Laws or the Organizational Documents of any of the Shareholders or any Company, (b) assuming that all Consents set forth in Schedule 7.2(e) have been obtained and all filings and notifications described therein and in Schedule 4.3 have been made, violate, conflict with or result in a breach or termination of, or otherwise give any contracting party additional rights or compensation under, or the right to terminate or accelerate, or constitute (with notice or lapse of time, or both) a default under the terms of, any Contract to which any Company is a party or by which any of the assets or property of any Company are bound, (c) result in the creation or imposition of any Lien with respect to any of the assets or properties of any Company, or (d) result in the creation or imposition of any Lien with respect to the Shares, other than, in the case of clauses (b) and (c) above, any such items that would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.
Section 4.4    Consent.  Except as set forth on Schedules 4.3 and  7.2(e), no Consent is required in connection with the execution and delivery by any of the Shareholders of this Agreement or the Ancillary Agreements or the consummation by Sellers of the transactions contemplated hereby or thereby.
Section 4.5    Financial Statements. 

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(a)    Schedule 4.5(a) sets forth complete copies of (i) the audited balance sheets of Reed Minerals and C&H Mining, as of the Most Recent Fiscal Year-end, and the related audited statements of income, cash flow and shareholders’ equity together with the notes thereto, and any other financial information included therewith (collectively, the “Audited Financial Statements”), (ii) the unaudited, compiled balance sheet of Reed Hauling, as of the Most Recent Fiscal Year-end, and the related statements of income, cash flow and shareholders’ equity together with any notes thereto and any other financial information included therewith (collectively, the “Compiled Financial Statements”) and (iii) the unaudited, compiled balance sheets of each Company as of May 31, 2012 (the “Balance Sheet Date”), and the related unaudited statements of income and shareholders’ equity for the five-month period and eight-month period, as applicable, then ended (collectively, the “Interim Financial Statements” and together with the Audited Financial Statements and Compiled Financial Statements, the “Financial Statements”).
(b)    The Financial Statements are complete and correct in all material respects and present fairly, in all material respects, the financial position, results of operations and shareholders’ or members’ equity, as applicable, of each Company at the dates and for the time periods indicated (provided, however, that the Interim Financial Statements and the Compiled Financial Statements are subject to normal year-end adjustments and lack footnotes and other presentation items), subject to the matters set forth on Schedule 4.17, and, except as set forth on Schedule 4.5(b), the Audited Financial Statements have been prepared in accordance with GAAP, consistently applied throughout the period involved.  The Financial Statements were derived from the books and records of the Companies.
Section 4.6    No Material Adverse Changes.  Except as set forth on Schedule 4.6, since the Most Recent Fiscal Year-end, the business and operations of each Company have been conducted in the Ordinary Course of Business and there has not been any Material Adverse Effect.  Without limiting the generality of the foregoing, since the Balance Sheet Date, and except as set forth on Schedule 4.6, no Company nor any of its Affiliates (to the extent relating to such Company):
(a)    sold, assigned, transferred (including transfers to any employees, equityholders, or Affiliates), leased or otherwise disposed of any material amount of assets or properties except for sales of Inventory in the Ordinary Course of Business;
(b)    received any notice of termination of any Contract or suffered any theft or material loss (whether or not covered by insurance) with respect to any material assets or properties;
(c)    cancelled or compromised any debt or claim of value in excess of $25,000, or waived or released any right or claim of value in excess of $25,000;
(d)    mortgaged, pledged, factored, or subjected to any Lien, any assets or properties;
(e)    made any individual expenditure (including capital expenditures) in excess of $100,000;
(f)    suffered any material adverse change in its relations with its employees, sales agents, independent contractors, customers or suppliers, or the Cooperative or the members or 

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customers of the Cooperative;
(g)    transferred, granted, waived or abandoned any rights under, or entered into any settlement regarding the breach or infringement of, any Intellectual Property Rights, or modified any existing rights with respect thereto outside of the Ordinary Course of Business; 
(h)    instituted, settled or agreed to settle any individual Action in excess of $25,000; 
(i)    failed to replenish or record inventories and supplies in a normal and customary manner consistent with its prior practice;
(j)    entered into any transaction or Contract other than in the Ordinary Course of Business, or incurred or committed to any severance pay obligations by reason of this Agreement or the transactions contemplated hereby;
(k)    (i) entered into or amended any employment, retention, severance, change in control or similar agreement or arrangement; (ii) granted any increase in the compensation of any employee, agent, independent contractor or consultant (other than normal compensation increases made in the Ordinary Course of Business) or instituted or adopted any compensation or benefit program, plan or arrangement for employees of any Company or amended any such program, plan or arrangement to increase benefits thereunder in any material respect or (iii) paid or accrued any bonus or deferred compensation for or in respect of, any current or former employee of any Company; 
(l)    declared or paid any dividends or other distributions (in each case, other than cash dividends and distributions) with respect to any of its equity interests or redeemed or purchased, directly or indirectly, any of its equity interests or any options (in each case other than redemptions or purchases made in cash); 
(m)    issued or sold any capital stock or other equity interests (or securities convertible into its equity interests) or split, combined or subdivided its capital stock or other equity interests; 
(n)    made any change in accounting or Tax principles, practices or policies from those utilized in the preparation of the Financial Statements; or
(o)    committed to any of the foregoing.

Section 4.7    Contracts. (1)  Schedule 4.7(a) sets forth all Contracts to which any Company is a party, or by which any of the assets of any Company are bound, that are currently in effect or which contain any ongoing obligation of any Company, and that:
(i)    govern the borrowing of money or the guarantee or the repayment of Indebtedness or granting of Liens on any property or asset of any Company (including any such 

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Contract under which any Company has incurred any Indebtedness);
(ii)    provide for the employment of any Person;
(iii)    contain covenants limiting the freedom of any Company to compete in any line of business or with any Person or in any geographic area or market;
(iv)    are with any directors, managers, officers, employees, or equityholders of any Company or its Affiliates;
(v)    provide for the purchase, maintenance or acquisition, or the sale or furnishing, of materials, supplies, merchandise or equipment (including computer hardware or software or other property or services) involving total payments in excess of $100,000;
(vi)    grant to any Person a first-refusal, first-offer or similar preferential right to purchase or acquire any right, asset or property of any Company;
(vii)    pertain to the purchase or lease of real property or equipment or other personal property involving remaining total payments in excess of $100,000;
(viii)    provide for any offset, countertrade or barter arrangement;
(ix)    involve any distributor, sales representative, broker or advertising arrangement;
(x)    involve a joint venture or joint development arrangement;
(xi)    are with any Governmental Authority;
(xii)    involve management services or consulting services;
(xiii)    involve the acquisition of any business enterprise whether via stock or asset purchase or otherwise; 
(xiv)    provide for indemnification of any Person; and
(xv)    are otherwise material Contracts or Contracts not made in the Ordinary Course of Business.
(b)    To the Shareholders’ Knowledge, except as expressly noted on Schedule 4.7(b), each Contract listed on Schedule 4.7(a) is in full force and effect, and is a valid and binding obligation of the applicable Company, enforceable in accordance with its terms, subject to the General Enforceability Exceptions.  With respect to each Contract listed on Schedule 4.7(a):  (a) no Company nor, to the Shareholders’ Knowledge, any other party thereto is in material default under or in material violation of any such Contract; (b) to the Shareholders’ Knowledge, no event has occurred which, with notice or lapse of time or both, would constitute such a material default or material violation, and none of the Companies or the Shareholders has received any written notice claiming that any Company has committed any such material default or material violation or 

29

indicating the desire or intention of any party thereto to amend, modify, rescind or terminate the same; and (c) no Company has released any material right thereunder.  Except as expressly noted in Schedule 4.7(b), the Shareholders have delivered to Buyer true, correct and complete copies of all such Contracts, together with all amendments, modifications or supplements thereto.
Section 4.8    Compliance with Laws; Permits.  
(a)    Except as set forth on Schedule 4.8(a) and except for fully paid, discharged and settled citations and notices of violation issued by MSHA, the Alabama Surface Mining Commission or the Alabama Department of Environmental Management, during the Reed Ownership Period and, to the Shareholders’ Knowledge, prior to the Reed Ownership Period, each Company has complied in all material respects with all Laws applicable to its respective business, properties, or operations as presently conducted.  No Company has received any notice of or been charged with the violation of any Laws during the Reed Ownership Period or, to the Shareholders’ Knowledge, prior to the Reed Ownership Period. To the Shareholders’ Knowledge, no Company is under investigation with respect to the violation of any Laws. 
(b)    Schedule 4.8(b) contains a list of all Permits which are required for the operation of the business of each Company as presently conducted (“Company Permits”).  Each Company Permit is in full force and effect.  Each Company has (or has the contractual right to operate under as a contract miner, as reflected on Schedule 4.8(b)) all Permits necessary or required for the conduct or operation of its respective business as presently conducted, all of which have been duly made or obtained and are in full force and effect.  Except as set forth on Schedule 4.8(b) and except for fully paid, discharged and settled citations and notices of violation issued by MSHA, the Alabama Surface Mining Commission or the Alabama Department of Environmental Management, no Company is in default or violation, and, to the Shareholders’ Knowledge, no event has occurred which, with notice or the lapse of time or both, would constitute a default or violation, in any material respect under any Company Permit.  There are no Actions pending or, to the Shareholders’ Knowledge, threatened that may result in the revocation, cancellation or suspension, or any adverse modification, of any Company Permit.
Section 4.9    Intellectual Property.  Schedule 4.9 sets forth all patents, trade-marks, trade names, service marks and copyrights that are material to the conduct of the business, as presently conducted, of the Companies (collectively, the “Intellectual Property Rights”).  The Companies own or have the right to use such Intellectual Property Rights and, to the Shareholders’ Knowledge, such Intellectual Property Rights do not infringe in any material way upon any third parties’ intellectual property and proprietary rights.  To the Shareholders’ Knowledge, no event has occurred that would render invalid or unenforceable any such Intellectual Property Rights.
Section 4.10    Litigation and Orders.  Schedule 4.10 sets forth a list, as of the date of this Agreement, of each Action or Order pending or, to the Shareholders’ Knowledge, threatened by or against any Company or Shareholder.  Except as set forth on Schedule 4.10, no Company has, since July 31, 2009, commenced, settled or satisfied any litigation.  All Actions listed on Schedule 4.10 as “settled” have been fully settled, paid and discharged by the Companies and no further Losses of any Company exist with respect to such Actions.
Section 4.11    Taxes.  Except as set forth on Schedule 4.11: 

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(a)    All Tax Returns required to be filed with any Taxing Authority with respect to any Pre-Closing Tax Period within the Reed Ownership Period or, to the Shareholders’ Knowledge, prior to the Reed Ownership Period, by or on behalf of each of the Companies, to the extent required to be filed on or before the Closing Date, have been timely filed in accordance with all applicable Laws.
(b)    All Tax Returns with respect to Pre-Closing Tax Periods within the Reed Ownership Period and, to the Shareholders’ Knowledge, prior to the Reed Ownership Period, are true, correct and complete in all material respects.  No Company is currently a beneficiary of any extension of time within which to file any Tax Return.
(c)    All Taxes owed by each Company (whether or not shown as due and payable on any Tax Return) with respect to the Reed Ownership Period and, to the Shareholders’ Knowledge, with respect to any period prior to the Reed Ownership Period, have been timely paid to the appropriate Taxing Authority.
(d)    Each Company has withheld and timely remitted to the appropriate Taxing Authority all Taxes required to have been withheld and remitted in connection with amounts paid or owing to any employee, independent contractor, creditor, stockholder or other Person, and all Forms W-2, 1099 or other documentation required with respect thereto has been properly completed and timely filed.
(e)    No Tax Return of any Company with respect to any Pre-Closing Tax Period within the Reed Ownership Period or, to the Shareholders’ Knowledge, prior to the Reed Ownership Period, has ever been audited by any Taxing Authority and, with respect to the Reed Ownership Period and, to the Shareholders’ Knowledge, any period prior to the Reed Ownership Period, no change or adjustment has been required by any Taxing Authority.
(f)    No Company has any Tax liabilities (whether due or to become due) with respect to the income, property and operations of such Company except as reflected in the Financial Statements.
(g)    During the Reed Ownership Period and, to the Shareholders’ Knowledge, any period prior to the Reed Ownership Period, no Company has granted, or has had granted on its behalf, any extension or waiver of the statute of limitations period applicable to any Tax Return or within which any Tax may be assessed or collected by any Taxing Authority, which period (after giving effect to such extension or waiver) has not yet expired.
(h)    There is no audit, examination, investigation or other proceeding now pending or, to the Shareholders’ Knowledge, threatened against or with respect to any Company in respect of any Tax.
(i)    There are no Liens for Taxes upon the assets or properties of any Company, except for Permitted Liens.
(j)    During the Reed Ownership Period and, to the Shareholders’ Knowledge, any period prior to the Reed Ownership Period, no Company has been a member of an affiliated, 

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consolidated, combined or unitary group or participated in any other arrangement whereby any income, revenues, receipts, gain or loss was determined or taken into account for Tax purposes with reference to or in conjunction with any income, revenues, receipts, gain, loss, asset or liability of any other Person other than a group of which such Company was the parent.  To the Shareholders’ Knowledge, no Company has any liability for the Taxes of any Person (other than such Company) under Treasury Regulation Section 1.1502-6 (or any similar provision of state, local or foreign Law), as a transferee or successor, by contract, or otherwise.
(k)    To the Shareholders’ Knowledge, there is no jurisdiction (whether foreign or domestic) in which any Company files, or is required to file, a Tax Return relating to income, franchise, gross receipts, license, excise, net worth, property, sales, use or any other Tax at any time for any taxable period not closed by the applicable statute of limitations.
(l)    During the Reed Ownership Period and, to the Shareholders’ Knowledge, any period prior to the Reed Ownership Period, no Company nor any of the Shareholders has received written notice of any claim by a Governmental Authority in a jurisdiction where any Company does not file Tax Returns that such Company is or may be subject to taxation by that Governmental Authority.
(m)    No Company will be required to include any item of income in, or exclude any item of deduction from, taxable income for any period or portion thereof ending after the Closing Date (i) under Section 481 of the Code (or any similar provision of state, local or foreign Law) as a result of change in method of accounting for a Pre-Closing Tax Period, (ii) pursuant to the provisions of any agreement entered into with any Taxing Authority or pursuant to a “closing agreement” as defined in Section 7121 of the Code (or any similar provision of state, local or foreign Law) executed on or prior to the Closing Date, (iii) as a result of any intercompany transactions or any excess loss account described in Section 1.1502-19 of the Treasury Regulations (or any similar provision of state, local or foreign Law), (iv) as a result of the installment method of accounting, the completed contract method of accounting or the cash method of accounting with respect to a transaction that occurred prior to the Closing Date, (v) as a result of any prepaid amount received on or prior to the Closing Date or (vi) as a result of any election under Section 108(i) of the Code with respect to the discharge of any indebtedness on or prior to the Closing Date.
(n)    No Company is a party to any Tax sharing, allocation or indemnity agreement, arrangement or similar Contract.  No power of attorney with respect to any Tax matter is currently in force with respect to any Company that would, in any manner, bind, obligate or restrict Buyer.
(o)    During the Reed Ownership Period and, to the Shareholders’ Knowledge, prior to the Reed Ownership Period, no Company has distributed the stock of another Person, or has not had its stock distributed by another Person, in a transaction that was purported or intended to be governed in whole or in part by Sections 355 or 361 of the Code.
(p)    During the Reed Ownership Period and, to the Shareholders’ Knowledge, prior to the Reed Ownership Period, no Company has been a United States real property holding corporation within the meaning of Section 897(c)(2) of the Code during the applicable period specified in Section 879(c)(1)(A)(ii) of the Code.

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(q)    During the Reed Ownership Period and, to the Shareholders’ Knowledge, any period prior to the Reed Ownership Period, no Company has participated in any “reportable transaction” as defined in Section 6707A of the Code or Treasury Regulation Section 1.6011-4 (or any predecessor provision).
(r)    Each Company has disclosed on its federal income Tax Returns during the Reed Ownership Period and, to the Shareholders’ Knowledge, any period prior to the Reed Ownership Period all positions taken in such Tax Returns that could give rise to a substantial understatement of federal income Tax within the meaning of Section 6662 of the Code. 
(s)    Reed Minerals has been a validly electing S corporation within the meaning of Sections 1361 and 1362 of the Code at all times since January 1, 2008, Reed Hauling has been a validly electing S corporation within the meaning of Sections 1361 and 1362 of the Code at all times since January 1, 2007, and C&H Mining has been a validly electing S corporation within the meaning of Sections 1361 and 1362 of the Code at all times since October 1, 2010.  Reed Minerals, Reed Hauling and C&H Mining have no qualified subchapter S subsidiaries within the meaning of Section 1361(b)(3)(B) of the Code.
(t)    None of Reed Minerals, Reed Hauling, Reed Management and C&H Mining will be liable for any Tax under Sections 1374 or 1375 of the Code or any similar provisions of state, local or foreign Law in connection with the transactions contemplated by this Agreement.
(u)    Reed Management is, and since the date of its formation has been, taxed as an entity disregarded for federal and applicable state and local income Tax purposes.  Neither Reed Management nor, to the Shareholders’ Knowledge, any member of Reed Management has made any election, taken any action or filed or furnished any Tax Return on a basis that is inconsistent with the foregoing.
(v)    None of the Companies’ assets are “tax exempt use property” within the meaning of Section 168(h) and Section 470(c)(2) of the Code.
(w)    Each Company has made available to Buyer for inspection (i) complete and correct copies of all Tax Returns filed by such Company relating to Taxes for all taxable periods for which the applicable statute of limitations has not yet expired and (ii) complete and correct copies of all private letter rulings, revenue agent reports, information document requests, notices of proposed deficiencies, deficiency notices, protests, petitions, closing agreements, settlement agreements, pending ruling requests, and any similar documents, submitted by, received by or agreed to by or on behalf of any Company relating to Taxes for all taxable periods for which the statute of limitations has not yet expired.
Section 4.12    Mining and Environmental Matters.  Except as set forth on Schedule 4.12:
(a)    and except for fully paid, discharged and settled citations and notices of violation issued by MSHA, the Alabama Surface Mining Commission or the Alabama Department of Environmental Management, each Company is and has been during the Reed Ownership Period and, to the Shareholders’ Knowledge, prior to the Reed Ownership Period, in material compliance with all applicable Mining Law and applicable Environmental Law;

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(b)    each Company has obtained, and is in material compliance with, all Environmental or Mining Permits required for the conduct of its business and operations as currently conducted, and the ownership, occupation, operation and use of its Leased Real Property and other property, all such Environmental or Mining Permits are valid and in good standing and any applications for renewal of such Permits have been submitted on a timely basis;
(c)    there are no pending nor, to the Shareholders’ Knowledge, threatened Environmental Claims or other actions to deny, revoke or terminate any Environmental or Mining Permits possessed or applied for by any Company, and, to the Shareholders’ Knowledge, there has not been any such Environmental Claim during the Reed Ownership Period and, to the Shareholders’ Knowledge, prior to the Reed Ownership Period;
(d)    to the Shareholders’ Knowledge, there are no polychlorinated biphenyls or any asbestos or asbestos containing materials located on, under or within the Leased Real Property, and, to the Shareholders’ Knowledge, no Company sells or has sold any product containing asbestos or that utilizes or incorporates asbestos containing materials in any way;
(e)    no Company has received any pending Environmental Claim or notice of any currently threatened Environmental Claim;
(f)    during the Reed Ownership Period and, to the Shareholders’ Knowledge, prior to the Reed Ownership Period, no Company has agreed, and no Company is currently subject, to any outstanding Order under any Environmental Law or Mining Law;
(g)    to the Shareholders’ Knowledge, during the Reed Ownership Period and, to the Shareholders’ Knowledge, prior to the Reed Ownership Period, there has been no Release or threatened Release of any Hazardous Materials at any property currently owned, leased, controlled or operated by any Company in a manner that would reasonably be expected to result in material Liability under any Environmental Law or Mining Law;
(h)    during the Reed Ownership Period and, to the Shareholders’ Knowledge, prior to the Reed Ownership Period, no Company has owned, leased or conducted operations at any location other than the Leased Real Property and those locations referenced in Schedule 4.12(h);
(i)    no Leased Real Property is listed or, to the Shareholders’ Knowledge, is proposed to be listed on the National Priorities List, the Comprehensive Environmental Response, Compensation, and Liability Information System or the National Corrective Action Priority System;
(j)    to the Shareholders’ Knowledge, no Person, including any employee, has impaired health as the result of the operations of any Company or any Release from or on any land, building or other improvement owned, leased, controlled or used in the operation of any Company, other than with respect to impaired health documented by workers’ compensation claims or occurring or resulting from the Ordinary Course of Business;
(k)    to the Shareholders’ Knowledge, no underground storage tanks are or have ever been located on the Leased Real Property;

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(l)    the Shareholders have caused the Companies to provide or make available to Buyer copies of all documents, records and written information in the Companies’ possession or control concerning Environmental Conditions or potential liability under Environmental Laws or Mining Laws, including previously conducted Environmental assessments, compliance audits, asbestos surveys and documents regarding any Releases at, upon or from the Leased Real Property, and Environmental and Mining agency reports and correspondence; 
(m)    all Reclamation performed by or on behalf of any Company during the Reed Ownership Period and, to the Shareholders’ Knowledge, prior to the Reed Ownership Period, has been performed in all material respects in a manner and to the standards that a prudent person with the requisite skill and experience engaged in surface mining would perform such reclamation and meets in all material respects the requirements of the applicable Mining Permit and any associated mine reclamation plan approved by the Surface Mining Commission.  The liability amounts for mine closing and reclamation obligations recorded on the Interim Financial Statements is, to the Shareholders’ Knowledge, equal to or in excess of the amount of such obligations, determined on the basis of such Company’s actual historic reclamation and closure costs and currently planned mine life.  All reclamation bonds affecting the Companies’ operations have been approved as adequate by the required Governmental Authorities to complete Reclamation in accordance with all applicable Permits and Laws;
(n)    to the Shareholders’ Knowledge, none of the Leased Real Property constitutes tribal lands, land subject to treatment as a National Heritage Area, burial lands or cemeteries, land where the Companies’ valid existing rights as defined by the Surface Mining Control and Reclamation Act of 1977, as amended (“SMCRA”), have been challenged, lands that have been challenged as or declared unsuitable for mining under SMCRA or lands designated as critical habitat under the Endangered Species Act; and
(o)    to the Shareholders’ Knowledge, none of the Leased Real Property has any pre-historic or historic archeological sites that could reasonably be expected to impede the use of the Leased Real Property in the manner in which the Companies have historically used the Leased Real Property.
Section 4.13    Insurance.
(a)    Schedule 4.13(a) sets forth a complete and correct list of all currently effective policies of fire, real and personal property (including building, machinery, equipment, inventory and raw materials), workers’ compensation, general liability (including products), pollution/environmental, automobile and other insurance carried by each Company on the date of this Agreement.  Such policies are in full force and effect, and no Company is in default under any of them.
(b)    Schedule 4.13(b) describes, with respect to each Company and any of its respective assets and properties, any self-insurance arrangement, including any reserves established thereunder.
(c)    Schedule 4.13(c) describes each applicable Mine, a list of the reclamation, fidelity or surety bond, and the Permit(s) applicable to such Mine for each location where any of 

35

the Companies has previously conducted mining operations which are now concluded but for which there are still reclamation, fidelity or surety bonds outstanding.  
(d)    Except as set forth on Schedule 4.13(d): (i) all policies of insurance to which any Company is a party (A) are, to the Shareholders’ Knowledge, valid, outstanding and enforceable and (B) are sufficient for compliance with all applicable Laws and Contracts; (ii) no Company has received (A) any refusal of coverage or any notice that a defense will be afforded with reservation of rights or (B) any notice of cancellation or any other indication that any policy of insurance is no longer in full force or effect or that the issuer of any such policy of insurance is not willing or able to perform its obligations thereunder; (iii) each Company has paid all premiums due and payable under each policy of insurance to which it is a party; and (iv) to the Shareholders’ Knowledge, each Company has given notice to the insurer of all claims that may be insured thereby.
Section 4.14    Real Property.
(a)    Except as set forth in Schedule 4.14(a), no Company owns in fee, or, during the Reed Ownership Period, has owned in fee, any real property.
(b)    Except for the Leased Real Property and Right of Access Property, no Company leases, subleases, licenses or has any interests in any real property, and no other real property is controlled or used or held for use by the Companies in connection with or is otherwise necessary to carry on the business of the Companies as presently conducted, including real property leaseholds and subleaseholds, purchase options, easements, licenses, rights to access and rights of way.  Schedule 4.14(b)(i) contains a complete and correct list of all coal leases, coal subleases, licenses, easements and all other leases, subleases or any other agreement (including all amendments, extensions, renewals, guaranties and other agreement with respect thereto) with respect to real property or minerals held by any Company as of the date hereof, other than the Right of Access Leases (each, a “Lease” and the real property subject to such Leases, the “Leased Real Property”).  Schedule 4.14(b)(i) identifies the lessor of each parcel of Leased Real Property according to the applicable Lease and identifies the Mine at which such Leased Real Property is located and any applicable Permit number.  The Leased Real Property and the appurtenant easements include all of the land, buildings, offices, structures, appurtenant easements and other improvements used or held for use in connection with or otherwise required to carry on the business of the Companies as presently conducted.  No Company is in breach or default of any royalty, rental or other payment obligation under any of the Leases.  Each Company is in material compliance with and enjoying quiet possession under each of the Leases.  No Company has received any written notice and no Company is aware of any Action, demand or suit by a lessor or sublessor of any of the Leases claiming a material breach or default thereof or termination of any such Leases.  Subject to the receipt of all Consents, neither the execution and delivery of this Agreement by the Shareholders nor the performance of their obligations hereunder constitutes or will constitute a breach, default or event of default under any such Leases.  The Companies have delivered to Buyer a true and complete copy of each Lease.  Schedule 4.14(b)(ii) contains a complete and correct list of all Right of Access Leases.  “Right of Access Leases” means any and all coal leases, coal subleases, licenses, easements and all other leases, subleases or any other agreement (including all amendments, extensions, renewals, guaranties and other agreement with respect thereto) with respect to real property or minerals held by any Company during the Reed Ownership Period, the (A) terms of 

36

which have expired and which are no longer in force or effect or (B) the expiration of the terms of which are contingent on the release of Reclamation Performance Bonds, except that such Right of Access Leases and/or the applicable Permit have remaining reclamation obligations and associated rights of access (which rights of access and reclamation obligations survive the term of such Right of Access Lease).  “Right of Access Real Property” means the real property subject to the Right of Access Leases.  “Right of Access Leases” do not include any of the Leases or any leases or similar documents that evidenced rights of the Companies with respect to the Former Coal Mines (as defined in Section 4.14(b)(iii)).  Schedule 4.14(b)(ii) identifies the lessor of each parcel of Right of Access Real Property according to the applicable Right of Access Lease and identifies the mine at which such Right of Access Real Property is located and any applicable Permit number.  Except as specifically set forth in Schedule 4.14(b)(ii), the Companies have delivered to Buyer a true and complete copy of each Right of Access Lease.  Schedule 4.14(b)(iii) contains a complete and correct list of all coal mines operated by any Company during the Reed Ownership Period other than coal mines that consist of Leased Real Property or Right of Access Real Property (the “Former Coal Mines”), identifying any applicable Permit numbers, which Former Coal Mines (and associated Permits) have no remaining reclamation obligations.
(c)    Except as set forth on Schedule 4.14(c):
(ii)    to the Shareholders’ Knowledge, there are no Actions in eminent domain or other similar Actions pending or threatened that would have an adverse effect on the use or operation of the Leased Real Property;
(iii)    to the Shareholders’ Knowledge, the present use and operation of the Leased Real Property does not violate any instrument of record or agreement affecting the Leased Real Property;
(iv)    no Company has received any written notice of violation or claimed violation of any applicable building, zoning, subdivision and other land use or similar Laws in connection with the use or operation of the Leased Real Property;
(v)    other than as reflected in the Leases with respect to the Leased Real Property, there are no Contracts to which any Company or any of its Affiliates is a party granting to any Person other than the Companies the right of use or occupancy of any portion of the parcels of the Leased Real Property; and
(vi)    to the Shareholders’ Knowledge, other than as reflected in the Leases with respect to the Leased Real Property, there are no Persons other than the Companies in possession of, or with rights to mine coal from, the Leased Real Property during the term of the applicable Lease with respect to such Leased Real Property.
(d)    No Company has taken any action to disturb the Leased Real Property related to the Reed No. 5 Mine permit. 
(e)    For the avoidance of doubt, no representations or warranties are made in this Agreement with respect to title to any of the Leased Real Property.

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Section 4.15    Mineral Assets; Company Assets.
(a)    Schedule 4.15(a) sets forth a list of all real property currently or during the Reed Ownership Period operated for the purpose of extracting coal (each, a “Mine”), which now is or during the Reed Ownership Period has been owned, leased or operated by a Shareholder or Company and the status of each such Mine.
(b)    The Mines have at all times during the Reed Ownership Period and, to the Shareholders’ Knowledge, prior to the Reed Ownership Period, been operated in compliance with applicable Law in all material respects, except as set forth on Schedules 4.8(a), 4.12, 4.24(c) and 4.24(d).
(c)    To the Shareholders’ Knowledge, the Companies have valid and enforceable leasehold interests in all of the Leased Real Property subject only to Permitted Liens.  The assets currently owned or leased by the Companies include all of the facilities, machinery, equipment and other assets (whether tangible or intangible) used in or necessary for the Companies to conduct the business of the Companies as presently conducted.  
(d)    All geological and reserve data, lithological data, test hole locations, drill hole distribution maps, logs, isopach maps, coal trees and laboratory coal data (the “Drilling Data”) provided by the Companies to Buyer that pertain to the Burton Bend I, Burton Bend II, Burton Bend III, Fishtrap, No Business Creek, Piney Woods, Town Creek and West Sipsey mine areas is accurate in all material respects to the Shareholders’ Knowledge.  The Companies do not possess and, to the Shareholders’ Knowledge, have not possessed or reviewed data or information that indicates that the Drilling Data is unreliable or inaccurate in any material respect.  For the avoidance of doubt, this Section 4.15(d) warrants the accuracy in all material respects of the Drilling Data but is not a warranty of the quantity or quality of the coal reserves with respect to the Leased Real Property.
(e)    The Companies are the only entities through which the Companies’ business is conducted, and the assets and properties currently owned, leased or licensed by the Companies constitute all of the tangible properties necessary to conduct the Companies’ business as it is currently conducted.
Section 4.16    Inventory.  The Inventory is of a quality and quantity useable or saleable in the Ordinary Course of Business, subject only to the reserve for surplus or obsolete inventory set forth in the Financial Statements or the Interim Financial Statements.  All of the Inventories have been valued at the lower of cost or market value on an average cost basis.  Inventories now on hand that were purchased after the date of the Financial Statements were purchased in the Ordinary Course of Business at a cost not exceeding market prices prevailing at the time of purchase.  
Section 4.17    Undisclosed Liabilities.  Except as adequately reflected or reserved against in the Financial Statements, there exist no material Liabilities of any Company that would be required to be reflected on a balance sheet prepared in accordance with GAAP, except (a) Liabilities which have arisen after the Most Recent Fiscal Year-end in the Ordinary Course of Business or (b) as otherwise set forth on Schedule 4.17.
Section 4.18    Customers.  Schedule 4.18 sets forth a correct and complete list of the ten 

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(10) largest customers (“Material Customers”) of the Companies (on a consolidated basis) in terms of sales for the 12-month period ended December 31, 2011 and the first six (6) months of 2012, together with the dollar amount of sales or services provided by the Companies during said period to each Material Customer.  Except as set forth on Schedule 4.18, (a) no Company has received any notice that any of its Material Customers has ceased, or intends to cease after the Closing Date, to use its goods or services or to otherwise terminate or materially reduce its level of purchases to the Companies, and none of the Material Customers has reduced materially its business with the Companies from the levels achieved during the 12-month period ended December 31, 2011, (b) no Company is involved in any claim, dispute or controversy with any Material Customer and (c) no Company is involved in any claim, dispute or controversy with any of its other customers.
Section 4.19    Related Party Transactions.  Except as set forth on Schedule 4.19, no officer, director, limited liability company managing member, stockholder, partner or member of any Company, any member of his or her immediate family or any of their respective Affiliates, including the Shareholders (“Related Persons”), (a) owes any amount to any Company nor does any Company owe any amount to, nor has any Company committed to make any loan or extend or guarantee credit to or for the benefit of, any Related Person, (b) is involved in any business arrangement or other relationship with any Company (whether written or oral), (c) owns any property or right, tangible or intangible, that is used by any Company, (d) has any claim or cause of action against any Company, nor is there any basis therefor, or (e) owns any direct or indirect interest of any kind in, or controls or is a director, officer, employee or partner of, or consultant to, or lender to or borrower from or has the right to participate in the profits of, any Person that is a competitor, supplier, customer, landlord, tenant, creditor or debtor of any Company.
Section 4.20    Labor Matters.
(a)    (i)  No Company is a party to or bound by any union contract, collective bargaining agreement, employment contract, independent contractor agreement, consulting agreement or other similar type of Contract except as set forth on Schedule 4.20(a), (ii) during the Reed Ownership Period and, to the Shareholders’ Knowledge, prior to the Reed Ownership Period, no Company has agreed to recognize any union or other collective bargaining representative, no union or group of employees has made a pending demand for recognition and there are no representation proceedings or petitions seeking a representation proceeding presently pending or, to the Shareholders’ Knowledge, threatened to be brought or filed, with the National Labor Relations Board, and (iii) during the Reed Ownership Period and, to the Shareholders’ Knowledge, prior to the Reed Ownership Period, no union or collective bargaining representative has been certified as representing any employees of any Company, and, to the Shareholders’ Knowledge, no organizational attempt has been made or threatened by or on behalf of any labor union or collective bargaining representative with respect to any employees of any Company.  During the Reed Ownership Period and, to the Shareholders’ Knowledge, prior to the Reed Ownership Period, no Company has experienced any labor strike, dispute, slowdown or stoppage, material grievance, claim of unfair labor practice or any other material labor difficulty.  During the Reed Ownership Period and, to the Shareholders’ Knowledge, prior to the Reed Ownership Period, no Company has committed any unfair labor practice.
(b)    Buyer has been provided with a complete and correct list, by Company, of 

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all employees of each Company, together with a description of their respective job titles and the rate of all regular compensation payable to each such Person in any and all capacities, and any regular or special compensation that will be payable to each such Person in any and all capacities as of the date of this Agreement other than the then-current accrual of regular payroll compensation.  Schedule 4.20(b) sets forth a complete list of all bonus plans or practices of each of the Companies.  No Company employs any employee who cannot be dismissed immediately without notice and, without further liability to such Company, other than with respect to accrued compensation and benefits, subject to applicable employment Laws.  Except as set forth on Schedule 4.20(b) and except as expressly contemplated by this Agreement, to the Shareholders’ Knowledge, no employee of any Company intends to terminate his or her employment prior to or within two (2) years of the Closing.
(c)    Shareholders have delivered to Buyer a complete and correct list of all current and former employees of each Company who have been suspended, terminated, laid off, granted any leave of absence or otherwise placed in any non-active status from January 1, 2012 through the date of this Agreement.  No Company has taken action with respect to employees that could be construed as a “plant closing,” “mass layoff” or “employment loss” within the meaning of the WARN Act during the ninety-day period ending on the Closing Date.
(d)    Except as set forth on Schedule 4.20(d), each Company is, and has been during the six (6) years prior to the date of this Agreement, in compliance in all material respects with all applicable Laws relating to wages, benefits, hours, overtime, terms and conditions of employment, discrimination, equal opportunity, harassment, immigration, disability, workers’ compensation, unemployment insurance, occupational health and safety and the reporting, collection and payment of withholding and/or social contribution Taxes or similar Taxes.
Section 4.21    Employee Plans. 
(a)    Schedule 4.21(a) contains a true and complete list of (i) all “employee benefit plans,” as defined in Section 3(3) of ERISA, (ii) all other severance pay, salary continuation, bonus, incentive, stock option, retirement, pension, welfare benefit, profit sharing or deferred compensation plans, contracts, programs, funds, or arrangements of any kind and (iii) all other employee benefit plans, contracts, programs, funds, or arrangements (whether written or oral, qualified or nonqualified, funded or unfunded, foreign or domestic), and any trust, escrow, or similar agreement related thereto, whether or not funded, in respect of any present or former employees, directors, officers, managers, equityholders, consultants, or independent contractors of each Company or with respect to which any Company has made or is required to make payments, transfers, or contributions, in each case that are currently effective or as to which the Company currently has obligations (all of the above being hereinafter collectively referred to as “Employee Plans”).  No Employee Plan (1) is maintained outside of the United States or (2) is intended to be qualified under Section 401(a) of the Code or has received a determination letter from the IRS.  The Shareholders have caused the Companies to deliver to Buyer true, complete and correct copies of (A) each Employee Plan (or, in the case of any unwritten Employee Plans, descriptions thereof), (B) the most recent summary plan description for each Employee Plan for which such a summary plan description is required, and (C) each trust agreement, group annuity contract or other funding and financing arrangement relating to any Employee Plan.

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(b)    Except as set forth on Schedule 4.21(b), each Employee Plan has been maintained, operated, and administered in compliance in all material respects with its terms and all applicable Laws except as would not have a Material Adverse Effect.  There have been no prohibited transactions or breaches of any of the duties imposed on “fiduciaries” (within the meaning of Section 3(21) of ERISA) by ERISA with respect to the Employee Plans that could result in any Liability or excise tax under ERISA or the Code being imposed on any Company.
(c)    There is no Action or Order (except routine claims for benefits) against or involving any Employee Plan.  To the Shareholders’ Knowledge, there are no threatened Actions against or involving any Employee Plan (except routine claims for benefits).
(d)    Except as set forth on Schedule 4.21(d), the execution and performance of this Agreement will not (i) constitute a stated triggering event under any Employee Plan that will result in any payment (whether of severance pay or otherwise) becoming due from any Company to any current or former officer, employee, director or consultant (or dependents of such Persons), or (ii) accelerate the time of payment or vesting, or increase the amount, of compensation due to any current or former officer, employee, director or consultant (or dependents of such Persons) of any Company.
(e)    No Company nor any member of the Controlled Group currently has, and at no time in the past has had, an obligation to contribute to (i) a “defined contribution plan” as defined in Section 3(34) of ERISA; (ii) a “defined benefit plan” as defined in Section 3(35) of ERISA or a pension plan subject to the funding standards of Section 302 of ERISA or Section 412 of the Code; (iii) a “multiemployer plan” as defined in Section 3(37) of ERISA or Section 414(f) of the Code; or (iv) a “multiple employer plan” within the meaning of Section 210(a) of ERISA or Section 413(c) of the Code.
(f)    With respect to each group health plan benefiting any current or former employee of the Companies or any member of the Controlled Group that is subject to Section 4980B of the Code, each Company and each member of the Controlled Group has complied with the continuation coverage requirements of Section 4980B of the Code and Part 6 of Subtitle B of Title I of ERISA.
(g)    No Employee Plan is or at any time was funded through a “welfare benefit fund” as defined in Section 419(e) of the Code, and no benefits under any Employee Plan are or at any time have been provided through a voluntary employees’ beneficiary association (within the meaning of subsection 501(c)(9) of the Code) or a supplemental unemployment benefit plan (within the meaning of Section 501(c)(17) of the Code).
(h)    All contributions, transfers and payments in respect of any Employee Plan, other than transfers incident to an incentive stock option plan within the meaning of Section 422 of the Code, have been or are fully deductible under the Code.
(i)    All (i) insurance premiums required to be paid with respect to, (ii) benefits, expenses, and other amounts due and payable under, and (iii) contributions, transfers, or payments required to be made to, any Employee Plan prior to the Closing Date will have been paid, made or 

41

accrued on or before the Closing Date.
(j)    With respect to any insurance policy providing funding for benefits under any Employee Plan, there is no Liability of any Company in the nature of a retroactive rate adjustment, loss sharing arrangement, or other actual or contingent Liability, nor would there be any such Liability if such insurance policy was terminated at or after the Closing.
(k)    No Employee Plan provides benefits, including death or medical benefits, beyond termination of service or retirement other than (i) coverage mandated by Law or (ii) accrued but unused vacation pay or (iii) coverage through the last day of the calendar month in which termination of employment occurs.
(l)    Except as provided on Schedule 4.21(l), no Company has agreed or committed to institute any plan, program, arrangement or agreement for the benefit of employees or former employees of any Company other than the Employee Plans, or to make any amendments to any of the Employee Plans.
(m)    Each Company has reserved all rights necessary to amend or terminate each of the Employee Plans without the Consent of any other Person.
(n)    As of the Closing Date, no Employee Plan will provide benefits to any individual who is not a current or former employee of a Company, or the dependents or other beneficiaries of any such current or former employee.
(o)    No amount that could be received (whether in cash or property or the vesting of property) as a result of any of the transactions contemplated by this Agreement by any employee, officer or director of any Company or any of its affiliates who is a “disqualified individual” (as such term is defined in Treasury Regulation Section 1.280G-1) under any employment, severance or termination agreement, other compensation arrangement or Employee Plan currently in effect would be characterized as an “excess parachute payment” (as such term is defined in Section 280G(b)(1) of the Code).
(p)    No Employee Plan is a “nonqualified deferred compensation plan” (within the meaning of Section 409A(d)(1) of the Code) that is subject to Section 409A of the Code.
(q)    To the Shareholders’ Knowledge, with respect to independent contractors who perform services for any of the Companies, all Persons so classified satisfy, and have at all times satisfied, in all material respects the requirements of applicable Law to be so classified, except as set forth on Schedule 4.21(q).
(r)    To the extent a filing is required under applicable Law, each Company has filed an annual report (Form 5500), with all applicable schedules, for each Employee Plan for each applicable plan year since the inception of such Employee Plan.
Section 4.22    Absence of Certain Commercial Practices.  
(a)    None of the Companies or, to the Shareholders’ Knowledge, any other Person 

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acting on behalf of any Company has, directly or indirectly, (i) violated, or, to the Shareholders’ Knowledge, is currently being investigated or has been investigated for violating, the U.S. Foreign Corrupt Practices Act of 1977 or any other similar Law applicable to the conduct of business with Governmental Authorities or given or agreed to give any gift or similar benefit to any employee of any Governmental Authority who is or may be in a position to help or hinder the business of the Companies or assist the Companies in connection with any actual or proposed transaction relating to the Companies, (ii) paid, offered, promised, authorized or agreed to give any monies, gift or other thing of value or benefit to (A) any official or employee of any Governmental Authority (including an official or employee of any public international organization or of any business or enterprise owned by a Governmental Authority), (B) any political party, or employee or director thereof, or (C) any candidate for a political position or any political subdivision for the purpose of:  (1) influencing any act or decision of such Person described in clauses (A)-(C), including a decision to not comply with his/her official duties; (2) inducing such Person described in clauses (A)-(C) to act or fail to act in violation of his/her legal duties; or (3) causing such Person described in clauses (A)-(C) to influence any act or decision of any Governmental Authority in order to obtain or retain business, or direct business toward any Person.
(b)    Each transaction during the prior three (3) years the value of which equals or exceeds $25,000 in connection with the business of the Companies is properly and accurately recorded on the books and records of the Companies.
Section 4.23    No Broker’s, Finder’s or Insider Fees.  Except as set forth on Schedule 4.23, no Person has acted, directly or indirectly, as a broker, finder or financial advisor for the Shareholders or any Company, and no Person has, or immediately following the consummation of the transactions contemplated hereby will have, as a result of any act or omission of any Company or any Shareholder, any right, interest or valid claim against Buyer for any commission, fee or other compensation as a broker, finder or financial advisor in connection with the execution of this Agreement or the Ancillary Agreements or the transactions contemplated hereby or thereby, nor are there any fees or any payments or promises of payment, however characterized, that have been paid or that are or may become payable in connection with the transactions contemplated hereby or thereby to the Shareholders, any Company or any director, officer, manager or employee of any Company or any Affiliate of any of the foregoing.
Section 4.24    MSHA; OSHA.
(a)    The Companies have conducted their respective businesses and operations, and their respective assets have been maintained, in material compliance with MSHA, OSHA or similar Laws, as applicable, except as set forth on Schedule 4.24(a) and except for fully paid, discharged and settled citations and notices of violation issued by MSHA, the Alabama Surface Mining Commission or the Alabama Department of Environmental Management.
(b)    There are no investigations pending or, to the Shareholders’ Knowledge, threatened by any Governmental Authority or other third Person that would result in the imposition of any material Liability on any Company pursuant to MSHA, OSHA or similar Laws.
(c)    Except as set forth on Schedule 4.24(c), no Company owes any assessments, penalties, fines, liens, charges, surcharges, nor are there any other amounts due or owing pursuant 

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to MSHA, OSHA or similar Law, and there have been no imminent danger orders, unwarrantable failure orders, failure to abate orders, or cessation orders, notices of a pattern of violations, or material assessments, under MSHA, OSHA or similar Law received by any of the Companies during the previous three (3) years.
(d)    Schedule 4.24(d) sets forth all reports of MSHA, OSHA or similar Law audits with respect to the business of any Company performed within the previous three (3) years by any Person (including any Company or the Shareholders).  Schedule 4.24(d) sets forth all orders issued under MSHA, OSHA or similar Law, together with any appeals thereof, with respect to the business of the Companies within the previous three (3) years by any Person.
(e)    The Shareholders have caused the Companies to deliver or make available to Buyer copies of all orders and reports under MSHA, OSHA or similar Law with respect to the Companies for the past three years.
Section 4.25    Accounts Receivable.  All accounts receivable, notes receivable, unbilled revenues, reimbursable costs and expenses and other claims for amounts due to any Company (including, for the avoidance of doubt, any accounts receivable due from Quality Coal Company, Inc. under the Assignment and Assumption Agreement Regarding Slate Creek, dated September 22, 2010) (collectively, “Accounts Receivable”) that are reflected on the Financial Statements, the Statement or on the accounting records of the Companies as of the Closing Date represent or will represent valid obligations arising from sales actually made or services actually performed by the Companies in the Ordinary Course of Business.  To the Shareholders’ Knowledge, there is no contest, claim, defense or right of setoff with any account debtor of an Account Receivable relating to the amount or validity of such Account Receivable.  Schedule 4.25 contains a complete and accurate list of all Accounts Receivable as of July 31, 2012, which list sets forth the aging of each such Account Receivable.
Section 4.26    Corporate Records.  
(a)    Each Company has delivered to Buyer true, correct and complete copies of the articles of incorporation (each certified by the Secretary of State or other appropriate official of the applicable jurisdiction of organization) and by-laws (each certified by the secretary, assistant secretary or other appropriate officer of the applicable Company) or comparable organizational documents of each Company in each case as amended and in effect on the date hereof, including all amendments thereto.
(b)    The equity ownership information of each Company previously made available to Buyer is true, correct and complete.
Section 4.27    Bank Accounts.  Schedule 4.27 sets forth a true and complete list of (a) the name and address of each bank with which any Company has an account or safe deposit box, (b) the name of each Person authorized to draw thereon or have access thereto and (c) the account number for each bank account of any Company.
Section 4.28    Quality.  Except as set forth on Schedule 4.28, during the past three (3) years, (a) there have been no material disputes between any of the Companies and a third party relating 

44

to the quality of the coal sold by any of the Companies to such third party, and (b) there have been no discounts agreed to by any of the Companies with respect to any future sales of coal by any of the Companies.
Section 4.29    No Other Representations or Warranties. Except for the representations and warranties contained in this Article IV (including the related Schedules) or as specifically set forth in the Ancillary Agreements, none of the Shareholders or any other Person has made or makes any other express or implied representation or warranty, either written or oral, on behalf of the Shareholders or the Companies.
ARTICLE V 
REPRESENTATIONS AND WARRANTIES OF BUYER

Buyer represents and warrants to the Shareholders that:
Section 5.1    Organization, Power and Authority.  Buyer is a limited liability company duly organized, validly existing and in good standing under the Laws of the State of Nevada and has full limited liability company power and authority to own, operate and lease its properties and assets as and where currently owned, operated and leased and to carry on its business as currently conducted.  Buyer is duly qualified to do business as a foreign corporation and is in good standing in the State of Alabama and in each jurisdiction in which the nature of its business or the location of its properties makes such qualification necessary except where the failure to be qualified would not reasonably be expected to materially and adversely affect the ability of Buyer to consummate the transactions contemplated hereby.
Section 5.2    Validity of Agreements.  Assuming due authorization, execution and delivery by the other parties hereto and thereto, this Agreement constitutes and, when executed and delivered, each of the Ancillary Agreements to which Buyer is to be a party, will constitute, the legal, valid and binding obligation of Buyer, enforceable against Buyer in accordance with its terms, subject to the General Enforceability Exceptions.  Buyer has full limited liability company or corporate power and authority, as applicable, to execute and deliver this Agreement and the Ancillary Agreements to which it is or will be a party, to perform its obligations hereunder and thereunder and to consummate the transactions contemplated hereby and thereby to be consummated by it.  The execution, delivery and performance of this Agreement and the Ancillary Agreements and the consummation of the transactions contemplated hereby and thereby, have been duly and validly authorized by all necessary corporate action of Buyer.
Section 5.3    No Conflict; Consent.  Subject to the receipt of all Consents, including those set forth on Schedule 7.2(e), neither the execution and delivery of this Agreement or the Ancillary Agreements by Buyer, nor the performance of Buyer’s obligations hereunder or thereunder, will (a) violate, conflict with or result in a breach of any Laws or the Organizational Documents of Buyer or (b) violate, conflict with or result in a breach of, constitute a default under, result in the acceleration of, create in any party the right to accelerate, terminate, modify or cancel, or require any notice under any Contract to which Buyer is a party or by which it is bound or to which any of its assets are subject.  Except as set forth on Schedule 7.2(e), no Consent is required in connection with the execution and delivery by Buyer of this Agreement or the Ancillary Agreements or the consummation by Buyer of the transactions contemplated hereby or thereby.

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Section 5.4    Litigation.  As of the date of this Agreement, there is no Action pending against or, to Buyer’s actual knowledge, threatened against or affecting Buyer that challenges or seeks to prevent, enjoin, alter or materially delay the transactions contemplated by this Agreement and the Ancillary Agreements.
Section 5.5    No Broker’s or Finder’s Fees.  Except as set forth on Schedule 5.5, no Person has acted, directly or indirectly, as a broker, finder or financial advisor for Buyer or any of its Affiliates, no Person has or, immediately following the consummation of the transactions contemplated by this Agreement, will have, as a result of any act or omission of Buyer or any of its Affiliates, any right, interest or valid claim against the Shareholders for any commission, fee or other compensation as a broker, finder or financial advisor in connection with the execution of this Agreement or the Ancillary Agreements or the transactions contemplated hereby or thereby.
Section 5.6    Availability of Funds.  Buyer has, and at the Closing will have, sufficient funds available to pay the Purchase Price and any expenses incurred by Buyer in connection with the transactions contemplated by this Agreement.
Section 5.7    Investment Intention.  Buyer is acquiring the Shares for its own account, for investment purposes only and not with a view to the distribution of such Shares.  Buyer understands that the Shares have not been registered under the Securities Act of 1933 and cannot be sold unless subsequently registered under the Securities Act of 1933 or an exemption from such registration is available.
ARTICLE VI 
COVENANTS
Section 6.1    Interim Operations.  From the date hereof until the Closing, except as set forth in Schedule 6.1 or as expressly permitted or required by this Agreement or as otherwise expressly consented to by Buyer in writing, and to the extent not prohibited by applicable Law, the Shareholders shall cause the Companies to:
(a)    conduct their respective businesses in the Ordinary Course of Business and use commercially reasonable efforts to (i) maintain and keep their properties and equipment in the same condition as they were on the date of this Agreement, subject to wear and tear normal to the industries in which the Companies operate, (ii) keep in full force and effect insurance presently maintained (or insurance comparable in amounts and scope of coverage), (iii) perform in all material respects all of their obligations under any Contracts, (iv) maintain their books and records in accordance with past practice, (v) comply in all material respects with all applicable Laws and Permits, (vi) maintain and preserve their business organizations intact and use commercially reasonable efforts to keep available to the Companies the services of present employees, agents and independent contractors of the Companies (and providing prompt notice to Buyer if any employee of a Company indicates he or she intends to leave employment of the Company), and (vii) use commercially reasonable efforts to preserve for the benefit of Buyer all goodwill of the Companies and their relationships with the suppliers, customers and others having business relations with them;
(b)    not change their Organizational Documents or merge or consolidate with or into any other Person;

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(c)    subject to Section 6.1(a), not enter into any Contract described under Section 4.7(a);
(d)    not perform, take any action or incur or, to the extent within the reasonable control of the Companies, permit to exist any of the acts, transactions, events or occurrences of the type described in Section 4.6 that would have been inconsistent with the representations and warranties set forth therein had the same occurred after June 30, 2012 and prior to the date hereof;
(e)    not accelerate the collection of Accounts Receivable or defer the payment of accounts payable other than in the Ordinary Course of Business;
(f)    other than in connection with the reimbursement of expenses in the Ordinary Course of Business, not incur any Indebtedness, accelerate the repayment of any existing Indebtedness, or make any payment with respect to any Indebtedness other than nondiscretionary payments that become due and payable in the Ordinary Course of Business prior to the Closing Date;
(g)    not (i) make any change in the Tax reporting or accounting principles, practices or policies, including with respect to (A) depreciation or amortization policies or rates or (B) the payment of accounts payable or the collection of accounts receivable; (ii) settle or compromise any Tax liability; (iii) make, change or rescind any Tax election; (iv) surrender any right in respect of Taxes; (v) consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of Taxes, or (vi) amend any Tax Return; 
(h)    not (i) increase the salary or other compensation of any employee of any Company outside the Ordinary Course of Business, (ii) increase the coverage or benefits available under any (or create any new) severance pay, termination pay, vacation pay, company awards, salary continuation for disability, sick leave, deferred compensation, bonus or other incentive compensation, insurance, pension or other employee benefit plan or similar arrangement made to, for, or with the employees of any Company or otherwise modify or amend or terminate any Employee Plan or (iii) enter into any deferred compensation, severance, special pay, or similar agreement or arrangement, or any other employment or consulting arrangement not terminable at will with no further Liability, with any employee; 
(i)    not take any actions with respect to shot rock inventory other than in the Ordinary Course of Business; and
(j)    not take any action that would disturb the Leased Real Property related to the Reed No. 5 Mine permit. 
Section 6.2    Reasonable Access.
(a)    Except as otherwise provided herein, from the date hereof until the Closing Date, upon reasonable advance notice furnished by Buyer to Mr. Reed and the Beneficiaries, which notice (notwithstanding Section 11.3) may be furnished either orally or in writing, the Shareholders will cause each Company to permit Buyer and Buyer’s attorneys, consultants, accountants and other representatives to have reasonable access during regular business hours, accompanied by Persons 

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designated by the Shareholders, to each Company’s personnel and all of the Companies’ premises (whether leased or otherwise occupied), properties, employees, books, records (including Tax records), accountants’ working papers (whether of internal or outside accountants), Contracts and documents, and will cause each Company to furnish Buyer with copies of such documents and with such information with respect to the affairs of each Company as Buyer may from time to time reasonably request, provided, however, that Buyer shall not, other than as otherwise set forth in this Agreement, have the right to perform any investigative procedures that involve physical disturbance or damage to the Leased Real Property or Right of Access Real Property (including any Environmental testing or sampling) or any of the other assets of the Companies without the Shareholders’ Representative’s written consent, which consent may be withheld by the Shareholders’ Representative in its sole and absolute discretion; provided further, however, that Buyer shall not have the right to access any documents or information related to the negotiation, execution and implementation of the transactions contemplated by this Agreement or that may be protected by the attorney-client privilege.  Such access shall not interfere in any material respect with the business of the Companies, and Buyer will not disclose such information prior to the Closing except to the extent required by applicable Law.  Any such furnishing of such information to Buyer or any investigation by Buyer shall not affect Buyer’s right to rely on any representations and warranties made in this Agreement or in connection herewith or pursuant hereto.
(b)    For a period of seven (7) years following the Closing Date, Buyer will permit the Shareholders’ Representative or designees of the Shareholders’ Representative to have access upon reasonable notice during normal business hours to the books and records of the Companies (or copies or extracts thereof) with respect to periods or portions of periods ending on or before the Closing Date, as the Shareholders’ Representative may reasonably request in order to comply with applicable Tax Laws and to fulfill the Shareholders’ obligations under this Agreement and the Ancillary Agreements, provided, however, that any such access shall not unreasonably interfere with the conduct of the businesses of the Buyer or any of Buyer’s Affiliates. The Shareholders’ Representative (on behalf of the Shareholders) shall promptly reimburse Buyer for any and all out of pocket costs and expenses (excluding attorneys’ fees and costs, reimbursement for general overhead, salaries and employee benefits) incurred by Buyer, any Affiliate of Buyer or any of their respective representatives in connection with the foregoing.  Any information, books and records or other documents accessed by the Shareholders’ Representative or its designees pursuant to this Section 6.2(b) shall not be used for any purpose other than as expressly permitted by this Section 6.2(b).
Section 6.3    Notification of Certain Matters.  The Shareholders shall give notice to Buyer and Buyer shall give notice to the Shareholders, as promptly as reasonably practicable upon becoming aware of (a) any fact, change, condition, circumstance, event, occurrence or non-occurrence that has caused or is reasonably likely to cause any representation or warranty in this Agreement made by it to be untrue or inaccurate in any respect at any time after the date hereof and prior to the Closing, (b) any material failure on its part to comply with or satisfy any covenant, condition or agreement to be complied with or satisfied by it hereunder or (c) the institution of or the threat of institution of any Action against any of the Shareholders or any Company of any kind, including those related to this Agreement or the transactions contemplated hereby; provided that, except as set forth in the following sentence, the delivery of any notice pursuant to Section 6.3(a) shall not limit or otherwise affect the remedies available hereunder to the party receiving such notice, or the 

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representations or warranties of, or the conditions to the obligations of, the parties hereto.  Unless Buyer has the right to terminate this Agreement pursuant to Section 10.1(d) below by reason of the development and exercises such right within ten (10) Business Days immediately following the end of the cure period referred to in Section 10.1(d) below (or, if sooner, before the Closing Date), the written notification pursuant to this Section 6.3 will be deemed to have amended the Schedules attached hereto, to have qualified the representations or warranties contained in Section 4 above, and to have cured any misrepresentation or breach of warranty that otherwise might have existed hereunder by reason of the development.
Section 6.4    Reasonable Best Efforts.  
(a)    Upon the terms and subject to the conditions set forth in this Agreement, each of the Shareholders and Buyer agrees to use reasonable best efforts to take, or cause to be taken, all actions, and to do, or cause to be done, and to assist and cooperate with the other parties in doing, all things reasonably necessary, proper or advisable to consummate and make effective, in a reasonably expeditious manner, the transactions contemplated hereby and by the Ancillary Agreements and to obtain satisfaction or waiver of the conditions precedent to such transactions, including (i) the obtaining of all necessary actions or nonactions and Consents from Governmental Authorities and the making of all necessary registrations and filings as promptly as practicable and the taking of all steps as may be necessary to obtain a Consent from, or to avoid an Action or proceeding by, any Governmental Authority, (ii) the obtaining of all necessary Consents from third parties (all at the Shareholders’ expense; provided, nothing in this Section 6.4(a) shall require any Company or Shareholder to pay any form of consideration for any such Consents), (iii) the defending of any Actions challenging this Agreement or the Ancillary Agreements or the consummation of the transactions contemplated hereby or thereby, including seeking to have any stay or temporary restraining order entered by any Governmental Authority vacated or reversed, and (iv) the execution and delivery of any additional instruments necessary to consummate the transactions contemplated by, and to fully carry out the purposes of, this Agreement and the Ancillary Agreements.
(b)    To the extent not prohibited by Law, the Shareholders and Buyer shall use reasonable best efforts to furnish to each other all information required for any application or other filing to be made pursuant to any applicable Law in connection with the transactions contemplated by this Agreement.  Each party shall give the other party reasonable prior notice of any communication with, and any proposed understanding, undertaking or agreement with, any Governmental Authority regarding any such filings or any such transaction.  No party shall independently participate in any meeting, or engage in any substantive conversation, with any Governmental Authority in respect of any such filings, investigation or other inquiry without giving the other party prior notice of such meeting.
Section 6.5    Further Assurances.  Following the Closing Date, the Shareholders and Buyer shall, from time to time, execute and deliver such additional instruments, documents, conveyances or assurances and take such other actions as shall be necessary, or otherwise reasonably be requested by Buyer or the Shareholders, to confirm and assure the rights and obligations provided for in this Agreement and the Ancillary Agreements and render effective the consummation of the transactions contemplated hereby and thereby, or otherwise to carry out the intent and purposes of this Agreement.

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Section 6.6    No Shop.  The Shareholders shall not, and shall not authorize or permit any officer, director, manager or employee of any Company, or any investment banker, attorney, accountant or other agent or representative retained by the Shareholders, any Company or any of their respective Affiliates to, directly or indirectly, (i) solicit, initiate or encourage any “other bid,” (ii) consider, accept or enter into any agreement with respect to any other bid or (iii) participate in any discussions or negotiations regarding, or furnish to any Person any information with respect to, or take any other action to facilitate any inquiries or the making of any proposal that constitutes, or may reasonably be expected to lead to, any other bid.  The Shareholders’ Representative shall promptly advise Buyer orally and in writing of any other bid or any inquiry with respect to or which could lead to any other bid and the identity of the Person making any such other bid or inquiry and the material terms thereof.  As used in this Section 6.5, “other bid” shall mean any proposal relating to the acquisition of any or all of the equity interests of any Company, or for a merger, sale of securities, sale, lease or license of substantial assets or similar transaction involving any Company, or for a cost-plus or hybrid cost-plus coal mining service agreement or coal sales agreement for the benefit of any potential customers, other than (A) the transactions contemplated by this Agreement and the Ancillary Agreements and (B) the sale of Inventory in the Ordinary Course of Business.
Section 6.7    Competitive Activity; Nonsolicitation; Confidentiality.  
(a)    Non-Competition.  Each Shareholder agrees that during the Noncompete Period, he, she or it shall not, directly or indirectly, (i) enter into, engage in, consult, manage or otherwise participate in the operation of any business which competes with the businesses of the Companies as conducted during any portion of the Reed Ownership Period through the Closing Date (the “Current Businesses”) within the Restricted Territory; (ii) solicit, divert, entice or otherwise take away any customers, prospective customers, business, cooperative associations, patronage or orders of the Companies with respect to the Current Businesses, or attempt to do so; (iii) solicit orders for, broker, or sell, any coal or other products or services offered or sold by the Companies in connection with the Current Businesses in competition with, or for any business that competes with, the Current Businesses within the Restricted Territory; or (iv) promote or assist, financially, by providing introductions or making marketing efforts for, or otherwise, any Person engaged in any business which competes with the Current Businesses within the Restricted Territory.  Nothing contained in this Section 6.7 shall prohibit (A) any Shareholder from acquiring or holding at any one time a passive investment of less than two percent of the outstanding shares of capital stock of any publicly traded corporation that may compete with the Companies within the Restricted Territory, (B) the continuation of the surface and current mineral leasing businesses of Reed Energy, LLC (including with respect to the Lease Agreements and any other agreement between Reed Energy, LLC and Buyer, NACoal or their respective Affiliates, successors or assigns) and the fuel and lube sales and distribution business of Henry Oil Co., Inc., and the ownership, operation and disposition thereof by one or more of the Shareholders, in each case only to the extent that the business of such companies does not compete with the Current Businesses, including by not leasing, optioning, purchasing or otherwise controlling surface or mineral interests in lands on or under which the Companies intend to conduct mining-related activities within five (5) years in Walker County, Alabama, Jefferson County, Alabama or Tuscaloosa County, Alabama, (C) subject to the immediately preceding clause (B), the employment of the Beneficiaries by Reed Energy, LLC or Henry Oil Co., Inc., (D) the execution, delivery and performance of the Consulting Agreement, (E) any Beneficiary from being a consultant to Nelson Brothers solely with respect to blasting litigation 

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expertise, or (F) any Shareholder from entering into, engaging in, consulting, managing or otherwise participating in the operation of any business that serves solely as an equipment vendor, including to companies in the coal mining industry.  Notwithstanding Section 6.7(a)(B), if the Shareholders desire to lease, option, purchase or control any such surface or mineral interests in such lands, the Shareholders’ Representative may request in writing to Buyer such desire and, in the event that Buyer does not intend to conduct mining-related activities on or under such lands within five (5) years of Shareholders’ written request, Buyer shall not prevent Shareholders from leasing, optioning, purchasing or controlling such lands. 
(b)    Non-Solicitation.  During the Noncompete Period, each Shareholder agrees that he, she or it shall not, directly or indirectly, at any time solicit or induce or attempt to solicit or induce any employee(s), sales representative(s), agent(s), vendor(s) or consultant(s) of the Companies to terminate their employment, representation or other association with the Companies, except that the Shareholders, or any of them, may solicit and employ any of the employees listed on Schedule 6.7(b).
(c)    Non-Disclosure.  From and after the Closing, no Shareholder shall disclose to any Person or use, and the Shareholders shall use their reasonable best efforts to prevent their respective Affiliates and representatives from disclosing to any Person or using, any Business Confidential Information except as required by law or legal process, as reasonably necessary to assert or protect his, her, its or their rights under or with respect to this Agreement or any of the Ancillary Agreements or as reasonably necessary to contest or defend against any claims or other Actions against any of them.  “Business Confidential Information” means any proprietary, non-public information of the Companies that has commercial value or other utility and is related to the Companies, or the unauthorized disclosure of which could be detrimental to the value of the Companies, subject to the following exceptions:  (i) information generally available to the public prior to the Closing (subject to the Shareholders’ compliance with their covenants set forth in Section 6.1); (ii) information that is or becomes generally available to the public through no action by any Company, any Shareholder, or any of their respective employees or representatives; or (iii) information that is later lawfully acquired by any Shareholder or any of their respective representatives from sources other than those related to their prior ownership of the Companies (provided that such source is not under an obligation to keep such information confidential); provided, however, that the Shareholders may disclose Business Confidential Information to their respective representatives in connection with the transactions contemplated by this Agreement and the Ancillary Agreements so long as such representatives are informed by the Shareholders of the nature of the Business Confidential Information and are directed by the Shareholders to hold the Business Confidential Information in confidence, and the Shareholders shall be responsible for any breach of the confidentiality provisions of this Section 6.7 by such representatives.  If, after the Closing, any Shareholder or any of such Shareholder’s representatives or Affiliates is legally required to disclose any Business Confidential Information, such Shareholder shall (A) promptly notify Buyer to permit Buyer, at Buyer’s sole cost and expense, to seek a protective order or take other appropriate action and (B) cooperate as reasonably requested by Buyer in Buyer’s efforts to obtain a protective order or other reasonable assurance that confidential treatment will be accorded such Business Confidential Information, but only at Buyer’s sole cost and expense.  If, after the Closing, and in the absence of a protective order, any Shareholder or any of such Shareholder’s representatives is compelled as a matter of Law to disclose Business Confidential Information to a 

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third party, such Shareholder may disclose (and such Shareholder shall cause any such representative(s) to disclose) to the third party compelling disclosure only the part of such Business Confidential Information as is required by Law to be disclosed; provided, however, that prior to any such disclosure, any such Shareholder will, and will cause any such representative(s), as applicable, to use good faith efforts to advise and consult with Buyer and its counsel as to such disclosure and the nature and wording of such disclosure, to the extent legally permitted. 
(d)    Acknowledgment and Relief.  The Shareholders acknowledge that (i) their respective obligations under this Section 6.7 are reasonable in the context of the Purchase Price and earn-out payments under this Agreement, the nature of Buyer and the Companies and the competitive injuries likely to be sustained by Buyer and the Companies if such Persons were to violate such obligations, (ii) the covenants in this Section 6.7 are adequately supported by consideration from Buyer for the benefit of such Persons, and (iii) the foregoing makes it necessary for the protection of Buyer and the Companies that such Persons uphold their respective obligations under this Section 6.7 for the reasonable time period contained herein.  Accordingly, each Shareholder acknowledges and agrees that the remedy at law available to the Buyer for breach of any of such Person’s obligations under this Section 6.7 would be inadequate; therefore, in addition to any other rights or remedies that the Buyer may have at law or in equity, (i) Buyer may withhold as liquidated damages up to $3,000,000 of Quarterly Earn-out Payments to the Sellers if the Shareholders breach Section 6.7(a) by providing written notice to the Sellers, provided that the Shareholders do not cure the applicable breach within fifteen (15) Business Days from receipt of such notice or Buyer determines that such breach is not capable of cure, but is no longer ongoing and has not damaged any Company business, and (ii) temporary and permanent injunctive relief may be granted in any proceeding which may be brought to enforce any provision contained in this Section 6.7, without the necessity of proof of actual damage.  If it shall be judicially determined that any Shareholder has violated this Section 6.7, then the period applicable to each obligation that such Person has been determined to have violated will automatically be extended by a period of time equal in length to the period during which such violation(s) occurred. 
(e)    Other Agreements.  The obligations and restrictions set forth in this Section 6.7 are in addition to the provisions of any employment, consulting or other agreement between the Buyer and/or the Companies and the Shareholders that may be entered into from time to time and addresses the same or similar subject matter covered by this Section 6.7.  In the event that any restriction set forth in this Section 6.7 is deemed to exceed any limitation on time, geographic scope or other limitation permitted under applicable Law, then such restriction shall be deemed to be reformed such that the maximum time, geographic scope or other limitation permitted under applicable Law shall be deemed to apply.
Section 6.8    Taxes. 
(a)    For purposes of this Agreement, the portion of Tax with respect to the income, property or operations of each Company that is attributable to any Straddle Period will be apportioned between the period of the Straddle Period that extends before the Closing Date through the Closing Date (the “Pre-Closing Straddle Period”) and the period of the Straddle Period that extends from the day after the Closing Date to the end of the Straddle Period (the “Post-Closing Straddle Period”) in accordance with this Section 6.8(a).  The portion of such Tax attributable to the Pre-Closing 

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Straddle Period will (i) in the case of any Taxes other than sales or use taxes, value-added taxes, employment taxes, withholding taxes, and any Tax based on or measured by income, receipts or profits earned during a Straddle Period, be deemed to be the amount of such Tax for the entire taxable period multiplied by a fraction, the numerator of which is the number of days in the Pre-Closing Straddle Period and denominator of which is the number of days in the Straddle Period, and (ii) in the case of any sales or use taxes, value-added taxes, employment taxes, withholding taxes, and any Tax based on or measured by income, receipts or profits earned during a Straddle Period, be deemed equal to the amount that would be payable if the Straddle Period ended on and included the Closing Date.  The portion of Tax attributable to a Post-Closing Straddle Period shall be calculated in a corresponding manner.  To the extent that any Tax for a Straddle Period is based on the greater of a Tax on net income, on the one hand, and a Tax measured by net worth or some other basis not otherwise measured by income, on the other hand, the portion of such Tax related to the Pre-Closing Straddle Period and the Post-Closing Straddle Period will be determined based on the foregoing and based on the manner in which the actual Tax liability for the entire Straddle Period is determined.  In the case of a Tax that is (x) paid for the privilege of doing business during a period (a “Privilege Period”) and (y) computed based on business activity occurring during an accounting period ending prior to the privilege period, any reference to a “Tax period,” a “tax period” or a “taxable period” shall mean such accounting period and not the privilege period.  Proration of property taxes will be made on the basis of the most recent officially certified tax valuation and tax assessment rate for the corresponding assets.  If the valuation or rate pertain to a tax period other than that in which the Closing occurs, such proration will be recalculated at such time as actual tax bills for such period are available, and the parties will cooperate with each other in all respects in connection with such recalculation and pay any sums due in consequence thereof to the party entitled to recover the same within sixty (60) days after notice of the issuance of such actual tax bills.
(b)    Buyer will timely prepare and file (or cause to be timely prepared and filed) with the appropriate Taxing Authorities all Tax Returns of any Company for any Straddle Period (other than any Tax Returns for any Pre-Closing Straddle Period for which the parties have joint responsibility under this Section or for which the Shareholders have filing responsibility under Section 6.8(c)) (the “Buyer Returns”).  Buyer will make available to the Shareholders’ Representative any Buyer Returns with respect to any Straddle Period for review and comment at least 20 days prior to the respective due dates of such Buyer Returns, and the Shareholders Representative will provide Buyer with the Shareholders’ comments no later than 15 days before the respective due dates of such Buyer Returns; provided, however, that in the event such Buyer Returns are due within 30 days of the Closing Date, Buyer will provide such Buyer Returns to the Shareholders Representative at least ten days prior to the respective due date, and the Shareholders Representative will provide Buyer with the Shareholders’ comments no later than seven days before the respective due date of such Buyer Returns.  
Buyer and the Shareholders will jointly prepare and file (or cause to be timely prepared) with the Taxing Authorities all Tax Returns of any Company containing any Pre-Closing Straddle Period.  Not later than five Business Days prior to the actual date of filing of any Tax Return that is required to be filed with respect to a Straddle Period, the Shareholders will pay (or cause to be paid) to Buyer cash in an amount equal to the Taxes allocable to the Pre-Closing Straddle Period (as determined pursuant to Section 6.8(a)) shown on such Tax Return.  

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(c)    The Shareholders will timely prepare and file (or cause to be timely prepared and filed) with the appropriate Taxing Authorities all Tax Returns with respect to the Companies for all Pre-Closing Tax Periods including any Tax Return based upon or measured by income of any Company that extends before the Closing Date and ends on or before the Closing Date (the “Seller Returns”), and will pay (or cause to be paid) all Taxes with respect to the Seller Returns (whether imposed on the Companies or the (direct or indirect) equityholders of any Company or its Affiliates).  Any payment the Shareholders are obligated to make pursuant to Section 6.8(c) with respect to Taxes of the Companies pursuant to Section 1374 of the Code shall be paid first, to the extent there are sufficient funds in the Tax Escrow Account, by release of funds to the Buyer from the Tax Escrow Account by the Escrow Agent pursuant to and upon compliance with the procedures set forth in the Escrow Agreement.  The Shareholders Representative will make available to Buyer any Seller Returns for review and comment at least twenty (20) days prior to the respective due dates of such Seller Returns, and Buyer will provide the Shareholders Representative with Buyer’s comments no later than ten (10) days before the respective due dates of such Seller Returns.  Buyer shall appoint BRJ as Assistant Treasurer after the Closing Date for the sole purpose of signing all Seller Returns.  BRJ shall duly execute all such Seller Returns at least two days before the due date for any such Seller Return.  BRJ’s sole responsibility will be the signing of any such Seller Returns and after all Seller Returns have been filed, Buyer shall remove BRJ as Assistant Treasurer.
(d)    All transfer, documentary, sales, use, stamp, registration, value-added and other such Taxes and fees (including any penalties and interest) imposed on Buyer or any Company in connection with this Agreement (“Transfer Taxes”) will be borne and paid one-half by the Shareholders and one-half by Buyer when due and the party required by applicable law shall, at their own expense, cause to be filed all necessary Tax Returns and other documentation with respect to all such Transfer Taxes.  Each party shall use reasonable best efforts to obtain any available exemptions from such Transfer Taxes and to cooperate with the other party in providing any information or documentation that may be necessary to obtain such exemptions.  Each party shall use its commercially reasonable efforts to obtain any available exemptions from Transfer Taxes.
(e)    In connection with the preparation of Tax Returns, audit examinations, and any administrative or judicial proceedings relating to the Tax liabilities imposed on or with respect to any Company, Buyer and such Company, on the one hand, and the Shareholders, on the other hand, shall cooperate fully with each other, including, without limitation, the furnishing or making available during normal business hours of records, personnel (as reasonably required), books of account, powers of attorney or other materials necessary or helpful for the preparation of such Tax Returns, the conduct of audit examinations or the defense of claims by Taxing Authorities as to the imposition of Taxes.
(f)    This Section 6.8(f) and not Section 9.2 shall control any inquiry, assessment, proceeding or other similar event relating to Taxes of any Company.  The Shareholders’ Representative shall have the right to represent the interests of any Company before the relevant Taxing Authority with respect to any inquiry, assessment, proceeding or other similar event with respect to any Company (a “Tax Matter”) relating solely to any Pre-Closing Tax Period and shall have the right to control the defense, compromise or other resolution of any such Tax Matter, including responding to inquiries, preparing Tax Returns and contesting, defending against and resolving any assessment for additional Taxes or notice of Tax deficiency or other adjustment of 

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Taxes of, or relating to, such Tax Matter; provided, however, (i) Buyer has the right (but not the duty) to participate in the defense of such Tax Matter and to employ counsel, at its own expense, separate from counsel employed by Sellers, and (ii) the Shareholders’ Representative shall not enter into any settlement of or otherwise compromise any such Tax Matter without the prior written consent of Buyer, which consent shall not be unreasonably conditioned, withheld or delayed.  Buyer shall have the right to represent the interests of any Company before the relevant Taxing Authority with respect to any Tax Matter that relates solely to any Post-Closing Tax Period or Straddle Period and has the right to control the defense, compromise or other resolution of any such Tax Matter, including responding to inquiries, filing Tax Returns and contesting, defending against and resolving any assessment for additional Taxes or notice of Tax deficiency or other adjustment of Taxes of, or relating to, such Tax Matter; provided, however, (i) the Shareholders’ Representative shall have the right (but not the duty) to participate in the defense of such Tax Matter and to employ counsel, at its own expense, separate from counsel employed by Buyer, and (ii) Buyer shall not enter into any settlement of or otherwise compromise any such Tax Matter that affects the liability of the Shareholders, whether pursuant to Section 9.1 or otherwise, without the prior written consent of the Shareholders’ Representative, which consent shall not be unreasonably conditioned, withheld or delayed.  
Buyer shall have the right to represent the interests of any Company before the relevant Taxing Authority with respect to any Tax Matter that relates to both a Pre-Closing Tax Period and a Post-Closing Tax Period or Straddle Period (joint audit) and has the right to control the defense, compromise or other resolution of any such Tax Matter, including responding to inquiries, filing Tax Returns and contesting, defending against and resolving any assessment for additional Taxes or notice of Tax deficiency or other adjustment of Taxes of, or relating to, such Tax Matter; provided, however, (i) the Shareholders’ Representative shall have the right to participate in the defense of such Tax Matter to the extent permitted by applicable law and to employ counsel, at its own expense, separate from counsel employed by Buyer, (ii) Buyer shall not enter into any settlement of or otherwise compromise any such Tax Matter that affects the liability of the Shareholders, whether pursuant to Section 9.1 or otherwise, without the prior written consent of the Shareholders’ Representative, which consent shall not be unreasonably conditioned, withheld or delayed, and (iii) with respect to and solely to the extent of a Tax Matter that relates to a Pre-Closing Tax Period, Buyer will represent the Company’s interests and Shareholders’ interests with respect to such Tax Matter in a manner consistent, in all material respects, with the reasonable requests and instructions of the Shareholders’ Representative or its counsel that are communicated in writing to Buyer or Buyer’s counsel, or communicated orally to Buyer’s chief financial officer, to the chief financial officer of Buyer’s parent company, to any officer of Buyer, a Company or any Affiliate thereof who is in charge of the representation of a Company in such Tax Matter, to any representative designated by any of the foregoing, or to Buyer’s counsel, including, without limitation, with respect to positions taken, information presented, defenses offered and other communications to or with the applicable Tax Authority or its representatives.  In the event that Buyer or its representatives fail to materially comply with the immediately preceding sentence, including, without limitation clause (iii) thereof, Buyer shall pay the amount of any increased Tax liability of Sellers or the Company arising from the resolution of such Tax Matter (including, without limitation, as it relates to the Pre-Closing Tax Period), including penalties and interest paid by the Sellers or the Company, and Buyer shall not 

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have a right to recover the amount of such increased Tax liability from Shareholders or the Shareholders’ Representative, and shall not have a right to indemnification by Shareholders under Section 9.1(a) with respect to the amount of such increased Tax liability.  
(g)    The Shareholders and Buyer shall join in making an election under Section 338(h)(10) of the Code (and any corresponding election under state, local, and foreign Tax Law) with respect to the purchase and sale of the Minerals Shares, the Hauling Shares and the C&H Shares hereunder (collectively, the “Section 338(h)(10) Elections”).  In furtherance of the preceding sentence, the Shareholders and Buyer shall jointly prepare the election forms and after the applicable parties have signed the forms as are required by applicable Law to effect the Section 338(h)(10) Elections jointly file them.  The Shareholders shall include any income, gain, loss, deduction, or other Tax item resulting from the Section 338(h)(10) Elections on their Tax Returns to the extent required by applicable Law, and shall take no position inconsistent with treating the purchase by Buyer of the Minerals Shares, the Hauling Shares and the C&H Shares as a transaction to which Section 338(h)(10) applies.  The consideration paid for the Minerals Shares, the Hauling Shares and the C&H Shares hereunder and the liabilities (to the extent included in amount realized for federal income Tax purposes) of Reed Minerals, Reed Hauling and C&H Mining shall be allocated among the Minerals Shares, the Hauling Shares and the C&H Shares and then the assets of Reed Minerals, Reed Hauling and C&H Mining in accordance with their fair market values set forth on Schedule 6.8(g) (the “Allocation Schedule”) and Section 338 of the Code and, as adjusted, if necessary, consistent with any Purchase Price adjustment; provided that such adjustment will not include adjustments regarding allocations to “net mineral rights/reserves” or “net property and equipment” without the Shareholders’ Representative’s consent.  Buyer, the Shareholders and each of their Affiliates shall file all Tax Returns in a manner consistent with such Allocation Schedule, and none of the parties will voluntarily take any position inconsistent with the Allocation Schedule in any inquiry, assessment, audit, action, proceeding or other similar event relating to Taxes.
(h)    All Tax sharing or allocation agreements, arrangements or similar Contracts with respect to or involving any Company will be terminated as of the Closing Date and, after the Closing Date, no Company will be bound thereby or have any liability thereunder.
Section 6.9    Release by the Shareholders; Release by the Companies. 
(a)    Effective as of the Closing, each of the Shareholders, on behalf of themselves and their respective Affiliates, heirs, successors and assigns (collectively, the “Seller Related Persons”), hereby absolutely, unconditionally and irrevocably releases and discharges, fully, finally and forever, each Company, Buyer, and Buyer’s respective Affiliates, agents, representatives, directors, officers and employees (together, the “Buyer Released Parties”) from any and all claims, demands, rights, causes of action, proceedings, orders, remedies, obligations, damages and liabilities of whatsoever kind or character arising as a result of any event or condition, or action or inaction of the Buyer Released Parties, from the beginning of time until the Closing, whether known or unknown, absolute or contingent, both at Law and in equity, which such Seller Related Person ever had, now has, or ever may have, against any Buyer Released Party, including in any Seller Related Person’s capacity as a direct or indirect equityholder of any Company prior to the Closing and pursuant to any Contract between any Seller Related Person and a Buyer Released Party (as to each Seller Related Person, such Seller Related Person’s “Seller Related Person Claims”); provided, 

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however, that Seller Related Person Claims shall not include (i) any claims pursuant to this Agreement or any Ancillary Agreement or other agreement executed at or after the Closing with a Buyer Released Party, (ii) any claims in the Shareholder’s capacity as an employee for vested rights under an employee benefit plan that cannot be waived pursuant to any applicable Law, or (iii) any claims in the Shareholder’s capacity as an officer, director, manager, agent or employee of any of the Companies in connection with rights to indemnification under the Organizational Documents of the Companies, or any of them, or insurance coverage under any directors’ and officers’ liability insurance policies, as contemplated by Section 6.12 below (subject to Sections 9.3(d) and 9.6).
(b)    No Shareholder has filed, and will not file or permit to be filed, any Action against any Buyer Released Party with any Governmental Authority or otherwise, based on events occurring on or prior to the Closing Date in relation to any matter released or purported to be released hereunder.  No Shareholder has assigned, and will not assign, any Seller Related Person Claim and has not authorized, and will not authorize, any other Person to assert any Seller Related Person Claim on its or their behalf.  
(c)    Each of the Shareholders expressly acknowledges that the release provided under this Section 6.9 is intended to include in its effect all claims within the scope of this release that the Shareholders do not know or suspect to exist in their favor at the time of execution hereof, and that this release contemplates the extinguishment of any such claim or claims.
(d)    Each of the Shareholders is aware that statutes exist that render null and void or otherwise affect or may affect releases and discharges of any claims, rights, demands, Liabilities, Actions and causes of action that are unknown to the releasing or discharging party at the time of execution of the release and discharge.  Each of the Shareholders, for itself and the other Seller Related Persons, hereby expressly waives, surrenders and agrees to forego any and all protections, rights or benefits to which the Shareholders otherwise would be entitled by virtue of the existence of any such statute or the common law of any state, province or jurisdiction with the same or similar effect.  Further, it is understood and agreed that the facts in respect of which the release provided under this Section 6.9 is given may turn out to be other than or different from the facts in that respect now known or believed by the Shareholders to be true; and with such understanding and agreement, each of the Shareholders expressly accepts and assumes the risk of facts being other than or different from the assumptions and perceptions as of any date prior to and including the Closing Date, and agrees that this release shall be in all respects effective and shall not be subject to termination or rescission by reason of any such difference in facts.
(e)    The release provided under this Section 6.9 shall extend to and be binding upon each of the Shareholders, and each such Person’s legal successors and assigns, and all other Seller Related Persons, and shall inure to the benefit of all of the Buyer Released Parties.
(f)    Effective as of the Closing, Buyer and each of the Companies, on behalf of themselves and their respective Affiliates, successors and assigns (collectively, the “Company Related Persons”), shall absolutely, unconditionally and irrevocably release and discharge, fully, finally and forever, each of the Shareholders and Anthony Allen (together, the “Seller Released Parties”) from any and all claims, demands, rights, causes of action, proceedings, orders, remedies, obligations, damages and liabilities of whatsoever kind or character arising as a result of any event 

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or condition, or action or inaction of the Seller Released Parties, from the beginning of time until the Closing, whether known or unknown, absolute or contingent, both at Law and in equity, which such Company Related Person ever had, now has, or ever may have, against any Seller Released Party (as to each Company Related Person, such Company Related Person’s “Company Related Person Claims”) pursuant to a Company Release in the form of Exhibit D attached hereto which shall be executed and delivered by and on behalf of each Company as a condition to the Shareholders’ obligations to consummate the transactions hereunder at Closing; provided, however, that Company Related Person Claims shall not include (i) any claims pursuant to this Agreement or any Ancillary Agreement or other agreement executed at or after the Closing with a Seller Released Party, or (ii) any claims resulting from a Seller Released Party’s knowing and intentional fraud or conviction of an intentional criminal act.
Section 6.10    Correspondence.  The Shareholders shall promptly forward to Buyer any mail (including electronic mail) that such Person receives after the Closing Date that is intended for any Company or the owner of any Company.  The Buyer shall, and shall cause the Companies to, promptly forward to the Shareholders’ Representative any mail (including electronic mail) that Buyer or any of the Companies receives after the Closing Date that is intended for any Shareholders other than in the capacity of an officer, director, manager or current owner of any Company or in relation to the Cooperative or other Company business.
Section 6.11    Use of Names.  The Shareholders hereby agree that upon the Closing, Buyer and the Companies shall have the sole right to the use of (a) the names of the Companies and (b) any service marks, trademarks, trade names, d/b/a names, fictitious names, identifying symbols, logos, emblems, signs or insignia (collectively, “Marks”) used or owned exclusively by any or all of the Companies, including any name, mark, trademark, and service mark listed on Schedule 4.9 (collectively, the “Company Marks”); provided, however, that nothing in this Section 6.11 shall prohibit the Shareholders or any of their post-Closing Affiliates from using the name “Reed,” “Reed Energy,” “Reed Energy, LLC” or any Marks related thereto or containing or comprising such name or Marks in business other than the Current Businesses.  Following the Closing, the Shareholders shall not, and shall not permit their respective Affiliates to, use any of the Company Marks.  Following the Closing, Buyer shall not, and shall not permit its Affiliates to, use any name or Marks containing “Reed”, “Reed Energy” or “Reed Energy, LLC” other than the Company Marks; provided, however, that Buyer shall have a reasonable transitional period after the Closing to remove signs at the Leased Real Property that utilize the “Reed Energy” name and to change any Company email addresses that utilize the “Reed Energy” name. In furtherance thereof, as promptly as practicable but in no event later than 90 days following the Closing Date, the Shareholders shall remove, strike over or otherwise obliterate all Company Marks from all vehicles, business cards, schedules, stationery, packaging materials, displays, signs, promotional materials, manuals and forms held by, or under the control of, the Shareholders and their post-closing Affiliates. 
Section 6.12    Indemnification and Insurance.  Buyer agrees that all rights to indemnification or exculpation now existing in favor of the employees, agents, directors, managers or officers of the Companies (the “Company Indemnified Parties”) as provided in the Organizational Documents of the Companies as of December 31, 2011 shall continue in full force and effect in respect of events occurring prior to the date hereof following the Closing Date, subject to Sections 9.3(d) and 9.6 below.  Buyer agrees to cause the Companies to perform all officer and director 

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indemnification obligations to be performed by the Companies under the Organizational Documents to the extent permitted by Alabama law. 
Section 6.13    Personal Guaranties.  Buyer shall provide the Shareholders with reasonable assistance to procure the release on or prior to the Closing Date of each of the personal guaranties and indemnities identified on Schedule 6.13 and, if any such release is not procured on or prior to the Closing Date, then Buyer shall continue to provide the Shareholders with reasonable assistance to procure such release after the Closing Date. Each of Buyer and the Shareholders shall provide reasonable assistance and cooperation to procure the release of any other personal guaranty or indemnity made by any Shareholder prior to the Closing Date to the extent such guaranty or indemnity is a guaranty or indemnity of a Company obligation for any item of Certified Indebtedness or any Contract listed on Schedule 4.7(a), excluding any guaranties with respect to environmental or undisclosed Reclamation liabilities (such personal guaranties and indemnities, together with the personal guaranties and indemnities set forth on Schedule 6.13, the “Personal Guaranties”). Each of Buyer and the Shareholders shall provide prompt notice to the other upon becoming aware of any such Personal Guaranty not identified on Schedule 6.13.  For the avoidance of doubt, Buyer acknowledges that any efforts by the Shareholders to provide the assistance contemplated by this Section 6.13 or other reasonable efforts by or on behalf of the Shareholders to obtain a release of a personal guaranty or indemnity with respect to any Company obligation will not in and of itself be deemed a violation of Sections 6.1 or 6.7 of this Agreement.
Section 6.14    Reclamation Performance Bonds.  Buyer will use reasonable best efforts and the Shareholders will reasonably cooperate with Buyer so that each of the Reclamation Performance Bonds existing at the Closing as to which any Company is a principal shall be replaced with a reclamation performance bond satisfactory to the Alabama Surface Mining Commission as to which Buyer or an Affiliate of Buyer is the principal, and so that the surety for such then existing bond shall release all collateral (which shall be remitted to the Sellers immediately upon release) and to terminate any related Personal Guaranties.  If any reclamation performance bonds are not replaced by December 31, 2012, then Buyer shall reimburse the Shareholders’ Representative for the First National Cash Amount and terminate any and all related Personal Guaranties existing as of December 31, 2012 (but in no event shall such reimbursement be in an amount less than the balance of the First National Cash Amount as of the Closing Date).  In the event that the First National Cash Amount is reduced following the Closing for any reason (whether due to a claim with respect to the Reclamation Performance Bonds or otherwise), the Buyer shall reimburse the Shareholders’ Representative for the full amount of such reduction to the extent not already paid or reimbursed by one or more of the Companies.
ARTICLE VII 
CONDITIONS TO THE OBLIGATIONS OF BUYER AND THE SHAREHOLDERS
Section 7.1    Conditions to Obligations of Each Party.  The respective obligations of the Shareholders and Buyer to consummate the transactions contemplated by this Agreement are subject to there being no Law or Order enacted, entered, enforced or issued preventing the consummation of the transactions contemplated hereby.
Section 7.2    Conditions to Obligations of Buyer.  The obligations of Buyer to consummate the transactions contemplated by this Agreement to be performed at the Closing are subject to the satisfaction or fulfillment of the following conditions precedent, any of which may be waived in 

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whole or in part in writing by Buyer:
(a)    the Shareholders shall have delivered, or caused to be delivered, all of the items required by Section 3.2;
(b)    all representations and warranties of the Shareholders set forth in this Agreement or in any document delivered pursuant hereto (i) shall be true and correct in all respects (in the case of any representation and warranty containing any materiality qualification) or in all material respects (in the case of any representation or warranty without any materiality qualification) when made and (ii) shall be repeated and shall be true and correct in all respects (in the case of any representation and warranty containing any materiality qualification) or in all material respects (in the case of any representation or warranty without any materiality qualification) on and as of the Closing Date.  The Shareholders shall have performed or complied in all material respects with all covenants and agreements contemplated by this Agreement to be performed by the Shareholders at or prior to the Closing Date;
(c)    there shall not have occurred any Material Adverse Effect; 
(d)    effective upon Closing, there shall be no Seller Related Persons who are employed by any Company; 
(e)    Buyer shall have received written Consents from all third parties set forth on Schedule 7.2(e) to effect the transactions contemplated by this Agreement and the Ancillary Agreements; and
(f)    Buyer shall be satisfied that no material Company Permit will be impaired or in any way adversely affected by the consummation of the transactions contemplated by this Agreement and the Ancillary Agreements.
Section 7.3    Conditions to Obligations of the Shareholders.  The obligations of the Shareholders to consummate the transactions contemplated by this Agreement to be performed at the Closing are subject to the satisfaction or fulfillment of the following conditions precedent, any of which may be waived in whole or in part in writing by the Shareholders’ Representative (on behalf of all Shareholders):
(a)    Buyer shall have delivered all of the items required by Section 3.3; and
(b)    all representations and warranties of Buyer set forth in this Agreement or in any document delivered pursuant hereto (i) shall be true and correct in all respects (in the case of any representation and warranty containing any materiality qualification) or in all material respects (in the case of any representation or warranty without any materiality qualification) when made and (ii) shall be repeated and shall be true and correct in all respects (in the case of any representation and warranty containing any materiality qualification) or in all material respects (in the case of any representation or warranty without any materiality qualification) on and as of the Closing Date.  
Section 7.4    Frustration of Closing Conditions.  Neither Buyer nor the Shareholders may rely on the failure of any condition set forth in Section 7.1, Section 7.2, or Section 7.3, as the case may be, 

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to be satisfied if such failure results in whole or in part from such party’s failure to comply with its obligations to consummate the transactions contemplated by this Agreement and the Ancillary Agreements as required by the provisions of this Agreement.
ARTICLE VIII 
EMPLOYEE MATTERS
Section 8.1    Benefits and Compensation.  For the period beginning on the Closing Date through December 31, 2012, Buyer shall provide to the employees of each Company (other than Mr. Reed, the Consultants and any employees who are Seller Related Persons) (the “Company Employees”) compensation and benefits that are substantially comparable in the aggregate to the compensation and benefits provided to such Company Employees immediately prior to the Closing, except for the items set forth on Schedule 8.1.  Notwithstanding the foregoing or any other provision to the contrary, in no event will Buyer be required to provide Company Employees with any defined benefit pension plan, defined contribution retirement plan, retiree medical benefits or any other retiree welfare benefits and any such benefits provided to Company Employees prior to the Closing will not be taken into account when determining whether Buyer has satisfied its obligation set forth in the preceding sentence.
Section 8.2    Prior Service.  Subject to the consent of its insurance carriers, if applicable, Buyer shall recognize each Company Employee’s service with the applicable Company as of the Closing as service with Buyer for purposes of Buyer’s employee welfare benefit plans (including vacation, disability and severance) to the extent such Company Employees participate therein on and after the Closing (the “Buyer’s Plans”).
Section 8.3    Transferred Employees.  Except as otherwise provided elsewhere in this Article VIII, the terms of employment with Buyer or its Affiliates for the Company Employees shall be upon such terms and conditions as Buyer, in its sole discretion, shall determine.  Nothing herein expressed or implied by this Agreement shall confer upon any employee, or legal representative thereof, any rights or remedies, including any right to employment, or for any specified period, of any nature or kind whatsoever, under or by reason of this Agreement.
Section 8.4    No Employment Rights or Third Party Beneficiaries.  No provision of this Article VIII shall (a) create any third party beneficiary or other rights in any employee or former employee (including any beneficiary or dependent thereof) of any Company or any other Person other than the parties hereto and their respective successors and permitted assigns, (b) constitute or create an employment agreement or (c) constitute or be deemed to constitute an amendment to any Employee Plan or any employee benefit plan sponsored or maintained by Buyer or its Affiliates.
ARTICLE IX 
INDEMNIFICATION AND SURVIVAL
Section 9.1    General Indemnification Obligation.
(a)    The Shareholders hereby agree, jointly and severally, to indemnify, defend and hold harmless Buyer, its Affiliates (including the Companies), and their respective directors, officers, managers, employees, Affiliates, shareholders, agents, advisers, representatives, successors and assigns (each, a “Buyer Indemnified Party”) from and against, and pay and reimburse the Buyer Indemnified Parties for, any and all losses, liabilities, claims, obligations, deficiencies, demands, 

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judgments, damages, interest, fines, penalties, claims, suits, actions, causes of action, assessments, awards, costs and expenses (including costs of investigation and defense and attorneys’ and other professionals’ fees), whether or not involving a Third Party Claim, in each case net of any insurance proceeds received from third party insurers and, except for claims for consequential damages for a breach of Section 6.7, in each case excluding any type of punitive, consequential, incidental, indirect, special or exemplary damages or diminution in value (except to the extent such damages are awarded to a third party in connection with a Third Party Claim) (individually, a “Loss” and, collectively, “Losses”):
(i)    based upon, attributable to or resulting from the failure of any of the representations or warranties made by the Shareholders in this Agreement (including any Schedule or Exhibit attached hereto) or under any Ancillary Agreement to be true and correct in all respects at and as of the date hereof and at and as of the Closing Date;
(ii)    based upon, attributable to or resulting from the breach of any covenant or other agreement on the part of the Shareholders under this Agreement (including any Schedule or Exhibit attached hereto) or under any Ancillary Agreement;
(iii)    based upon, attributable to or resulting from any failure to timely or duly form Reed Management; 
(iv)    based upon, attributable to or resulting from the ownership prior to the Closing by any Company of the real property identified on Schedule 4.14(a) or that is required to be identified on Schedule 4.14(a);
(v)    based upon, attributable to or resulting from the Dilworth Facility Lease, dated January 22, 2008, by and between Reed Minerals, McWane Coal Sales and Empire Coke Company, as amended (the “Dilworth Lease”), or any operations conducted by a Company on the Premises (as defined in the Dilworth Lease) prior to the termination of the Dilworth Lease;
(vi)    (A) all Taxes (or the nonpayment thereof) of any Company for any Pre-Closing Tax Period and any Pre-Closing Straddle Period; (B) all Taxes of any member of an affiliated, combined or unitary group of which any Company is or was a member on or prior to the Closing Date, including pursuant to Treasury Regulation Section 1.1502-6 or any analogous or similar state, local or foreign Law; and (C) any and all Taxes of any Person (other than any Company) imposed on any Company as a transferee or successor, by contract or pursuant to any Law, which Taxes relate to an event or transaction occurring on or prior to the Closing Date; and
(vii)    (A) all Taxes of any Company resulting from the Section 338(h)(10) Elections, including, without limitation, any Taxes pursuant to Section 1374 of the Code or any analogous or similar provision of state, local or foreign Law, and (B) any invalidity of the Section 338(h)(10) Elections due to a breach of the representation in Section 4.11(s). 
(b)    Buyer hereby agrees to indemnify, defend and hold harmless the Shareholders and their respective Affiliates, agents, advisers, representatives, heirs, successors and assigns (each, a “Seller Indemnified Party”) from and against, and pay and reimburse the applicable Seller Indemnified Parties for, the amount of any Losses:

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(i)    based upon, attributable to or resulting from the failure of  any representation or warranty made by Buyer in this Agreement (including any Schedule or Exhibit attached hereto) or under any Ancillary Agreement to be true and correct in all respects at the date hereof and as of the Closing Date; 
(ii)    based upon, attributable to or resulting from the breach of any covenant or other agreement on the part of Buyer under this Agreement or any Ancillary Agreement; 
(iii)    all Taxes (or the non-payment thereof) of any Company for any Post-Closing Straddle Period and any Tax period after the Closing Date; and
(iv)    based upon, attributable to or resulting from any action of the Companies, Buyer, NACoal or their respective Affiliates or successors and assigns following the Closing Date with respect to any Personal Guaranties (as defined in Section 6.13).
(c)    The right to indemnification or any other remedy based on representations, warranties, covenants and agreements in this Agreement (including any Schedule or Exhibit attached hereto) or under any Ancillary Agreement shall not be affected by any investigation conducted at any time, or any knowledge acquired (or capable of being acquired) at any time, whether before or after the execution and delivery of this Agreement or the Closing Date, with respect to the accuracy or inaccuracy of, or compliance with, any such representation, warranty, covenant or agreement.  
Section 9.2    Indemnification Procedures.
(a)    A claim for indemnification for any matter not involving a Third Party Claim (a “Direct Claim”) may be asserted by a party seeking indemnification (the “Indemnified Party”) by reasonably prompt written notice to the party from whom indemnification is sought (the “Indemnifying Party”), but in any event not later than sixty (60) days after the Indemnified Party becomes aware of such claim; provided, however, that failure to so notify the Indemnifying Party shall not preclude the Indemnified Party from any indemnification which it may claim in accordance with this Article IX. Such notice by the Indemnified Party shall describe the Direct Claim in reasonable detail, shall include copies of all material written evidence thereof and shall indicate the estimated amount, to the extent practicable, of the Loss that has been or may be sustained by the Indemnified Party.  The Indemnifying Party shall have sixty (60) days after its receipt of such notice to respond to such Direct Claim unless the Indemnifying Party’s notice advises that a more prompt response is reasonably necessary under applicable Law.  If the Indemnifying Party does not so respond within such sixty (60) day period, the Indemnifying Party shall be deemed to have rejected such claim, in which case the Indemnified Party shall be free to pursue such remedies as may be available to the Indemnified Party on the terms and subject to the provisions of this Agreement. 
(b)    In the event that any Action shall be instituted or that any claim or demand shall be asserted by any third party in respect of which indemnification may be sought under Section 9.1 hereof (regardless of the limitations set forth in Section 9.3) (a “Third Party Claim”), the Indemnified Party shall give (or, in the case of a Shareholder, shall cause the Shareholders’ Representative to give) notice thereof (a “Claims Notice”) to the other party.  A Claims Notice shall describe the Third Party Claim in reasonable detail, and shall indicate the amount (estimated, if necessary and to the extent feasible) of the Loss that has been or may be suffered by the Indemnified 

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Party.  No delay in or failure to give a Claims Notice by the Indemnified Party to the Indemnifying Party pursuant to this Section 9.2(b) shall adversely affect any of the other rights or remedies which the Indemnified Party has under this Agreement, or alter or relieve the Indemnifying Party of its obligation to indemnify the Indemnified Party to the extent that such delay or failure has not materially prejudiced the Indemnifying Party.  The Indemnifying Party shall have the right, exercisable by written notice to the Indemnified Party within thirty days of receipt of a Claims Notice from the Indemnified Party of the commencement or assertion of any Third Party Claim in respect of which indemnity may be sought hereunder, to assume and conduct the defense of such Third Party Claim in accordance with the limits set forth in this Agreement with counsel selected by the Indemnifying Party and reasonably acceptable to the Indemnified Party; provided, however, that (i) the Indemnifying Party has sufficient financial resources, in the reasonable judgment of the Indemnified Party, to satisfy the amount of any adverse monetary judgment that is reasonably likely to result; (ii) the Third Party Claim solely seeks (and continues to solely seek) monetary damages; and (iii) the Indemnifying Party expressly agrees in writing that as between the Indemnifying Party and the Indemnified Party, the Indemnifying Party shall be solely obligated to satisfy and discharge the Third Party Claim in accordance with the terms set forth in this Agreement (the conditions set forth in the foregoing clauses (i) through (iii), collectively, the “Litigation Conditions”).  If the Indemnifying Party does not assume the defense of a Third Party Claim in accordance with this Section 9.2(b), the Indemnified Party may continue to defend the Third Party Claim at the expense of the Indemnifying Party.  If the Indemnifying Party has assumed the defense of a Third Party Claim as provided in this Section 9.2(b), the Indemnifying Party will not be liable for any legal expenses subsequently incurred by the Indemnified Party in connection with the defense thereof; provided, however, that if (A) any of the Litigation Conditions cease to be met or (B) the Indemnifying Party fails to take reasonable steps necessary to defend diligently such Third Party Claim, the Indemnified Party may assume its own defense, and the Indemnifying Party shall be liable for all reasonable costs or expenses paid or incurred in connection therewith.  The Indemnifying Party or the Indemnified Party, as the case may be, shall have the right to participate in (but not control), at its own expense, the defense of any Third Party Claim which the other is defending as provided in this Agreement.  The Indemnifying Party, if it shall have assumed the defense of any Third Party Claim as provided in this Agreement, shall not, without the prior written consent of the Indemnified Party, consent to a settlement of, or the entry of any judgment arising from, any such Third Party Claim which (x) does not include as an unconditional term thereof the giving by the claimant or the plaintiff to the Indemnified Party of a complete release from all Liability and Losses in respect of such Third Party Claim, (y) grants any injunctive or equitable relief, or (z) may adversely affect the business of the Indemnified Party.  The Indemnified Party shall have the right to settle any Third Party Claim, the defense of which has not been assumed by the Indemnifying Parties after having been given notice and opportunity to defend in accordance with this Section 9.2(b).  If the Indemnifying Party makes any payment on any Third Party Claim, the Indemnifying Party shall be subrogated, to the extent of such payment, to all rights and remedies of the Indemnified Party to any insurance benefits or other claims of the Indemnified Party with respect to such Third Party Claim. 
(c)    After any final decision, judgment or award shall have been rendered by a Governmental Authority of competent jurisdiction and the expiration of the time in which to appeal therefrom, or a settlement shall have been consummated, or the Indemnified Party and the 

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Indemnifying Party shall have arrived at a mutually binding agreement, in each case with respect to a Third Party Claim hereunder, the Indemnified Party shall forward to the Indemnifying Party notice of any sums due and owing by the Indemnifying Party pursuant to this Agreement with respect to such matter, and the Indemnifying Party shall pay all of such remaining sums so due and owing to the Indemnified Party by bank wire transfer or transfers of immediately available funds (i) in the case of a Buyer Indemnified Party, from the Shareholders to an account designated by the applicable Buyer Indemnified Party to the Shareholders’ Representative within five (5) days after the final determination or settlement thereof, and (ii) in the case of a Seller Indemnified Party, from Buyer to an account designated by the Shareholders’ Representative to Buyer within five (5) days after the final determination or settlement thereof. 
Section 9.3    Limitations on Indemnification; Survival.
(a)    An Indemnifying Party shall not have any liability for indemnification pursuant to Sections 9.1(a)(i) or 9.1(b)(i) unless the aggregate amount of Losses incurred by the Indemnified Parties and indemnifiable thereunder exceeds $312,500 (the “Basket”), in which case the Indemnifying Party shall be required to pay only the amount of all such Losses in excess of the Basket.
(b)    Subject to Section 9.5, the Shareholders shall not be required to indemnify any Persons under Section 9.1(a)(i) for an aggregate amount of Losses exceeding $12,000,000 (the “Cap Amount”); provided that neither the Basket nor the Cap Amount shall apply with respect to Losses related to the failure to be true and correct of any of the Fundamental Representations or with respect to any Losses related to the knowing and intentional fraud of the Shareholders.  For the avoidance of doubt, Losses relating to Sections 9.1(a)(ii) through 9.1(a)(vii) and Losses with respect to the failure to be true and correct of any of the Fundamental Representations do not count towards the Cap Amount.  The Shareholders shall not be required to indemnify any Persons under this Agreement for an aggregate amount of any Losses exceeding the Purchase Price.
(c)    In the event of any failure of any representations or warranties to be true and correct, then for purposes of calculating Losses hereunder, any materiality or Material Adverse Effect qualifications in such representations and warranties shall be disregarded.
(d)    The Shareholders shall have no right of contribution or other recourse against any Company or its respective directors, officers, employees, Affiliates, agents, attorneys, representatives, assigns or successors for any Third Party Claims for which Buyer Indemnified Parties are entitled to indemnification pursuant to Section 9.1(a).
(e)    All of the representations and warranties of the Shareholders and Buyer contained in this Agreement or the Ancillary Agreements, will survive the Closing hereunder and continue in full force and effect for a period of eighteen (18) months thereafter, except that (i) the Fundamental Representations and the representations and warranties contained in Sections 5.1, 5.2, 5.3, 5.5 and 5.7 will not expire, (ii) the representations and warranties contained in Section 4.21 will survive for 90 days after the expiration of the applicable statute of limitations, and (iii) the representations and warranties in Section 4.12 will continue for a period of four (4) years after Closing; provided, however, that any obligations under Sections 9.1(a)(i) and 9.1(b)(i) with respect 

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to any Losses as to which the Person to be indemnified shall have given written notice on a reasonable basis and in good faith (stating in reasonably specific detail the basis of the claim for indemnification) to the Indemnifying Party in accordance with Section 9.2(b) prior to the expiration of the applicable survival period shall not thereafter be barred by the expiration of the applicable survival period and such claims shall survive until finally resolved.  
Section 9.4    Adjustments to Purchase Price.  Any payments made pursuant to Sections 2.3, 2.4 and 9.1 shall be treated as adjustments to the Purchase Price.
Section 9.5    Escrow.  
(a)    Escrow Funds.  On the Closing Date, Buyer shall, on behalf of the Shareholders, pay to Regions Bank, as agent to Buyer and the Shareholders (the “Escrow Agent”), in immediately available funds, (a) to a separate account designated by the Escrow Agent, an amount equal to $3,125,000 (the “General Escrow Amount”), and (b) to a separate account designated by the Escrow Agent, an amount equal to $4,100,000 (the “Tax Escrow Amount”), each in accordance with the terms of this Agreement and the Escrow Agreement, which will be substantially in the form attached as Exhibit A and will be executed at the Closing, by and among Buyer, the Shareholders, the Shareholders’ Representative and the Escrow Agent (the “Escrow Agreement”).  
(b)    General Escrow.  Subject to Section 6.8(c), any payment the Shareholders are obligated to make to any Buyer Indemnified Party pursuant to this Article IX shall be paid first, to the extent there are sufficient funds in the General Escrow Account, by release of funds to the Buyer Indemnified Parties from the General Escrow Account by the Escrow Agent pursuant to and upon compliance with the procedures set forth in the Escrow Agreement and shall accordingly reduce the General Escrow Amount.  If the General Escrow Amount is insufficient to cover any remaining sums due then (i) first, the Shareholders shall, jointly and severally, be required to pay all of such additional sums up to the Maximum Shareholder Amount, if applicable, by wire transfer of immediately available funds, and (ii) then, to the extent the Maximum Shareholder Amount has been paid, Buyer will withhold Quarterly Earn-out Payments for the remainder of such amounts due until the aggregate amounts paid from the General Escrow Amount and paid or withheld pursuant to clauses (i) and (ii) equal the Cap Amount; provided that if it is determined that Buyer is not owed the amount withheld, Buyer will pay to the Shareholders’ Representative the amount owed plus Earn-out Interest from the applicable date of withholding.  Notwithstanding the foregoing,  with respect to claims under this Article IX relating to breaches of Fundamental Representations or claims other than pursuant to Section 9.1(a)(i), the Shareholders shall, jointly and severally, be required to pay all of such sums in excess of the General Escrow Amount and Buyer will not be limited to withholding the amount of the Quarterly Earn-out Payments.  “Earn-out Interest” shall equal Interest plus 3%. On the 12-month anniversary of the Closing Date, the Escrow Agent shall release the General Escrow Amount (to the extent not utilized to pay Buyer for any indemnification claim) to the Shareholders’ Representative, except that the Escrow Agent shall retain an amount (up to the total amount then held by the Escrow Agent) equal to the amount of claims for indemnification under this Article IX  prior to the 12-month anniversary of the Closing Date but not yet resolved (the “Unresolved Claims”).  The General Escrow Amount retained for Unresolved Claims shall be released by the Escrow Agent (to the extent not utilized to pay Buyer for any such claims resolved in favor of Buyer) upon their resolution in accordance with this Article IX and the terms of the 

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Escrow Agreement. 
Section 9.6    Contribution and Waiver.  From and after the Closing, no Shareholder shall seek indemnification or contribution from the Companies (including by reason of the fact that he or it was a director, manager, officer, employee or agent of any such entity or was serving at the request of any such entity as a partner, trustee, director, manager, officer, employee or agent of another entity) for any breaches or in respect of any other payments required to be made by any Shareholder pursuant to this Agreement or the Ancillary Agreements.
Section 9.7    Effect of Investigation.  The representations, warranties and covenants of the Indemnifying Party, and the Indemnified Party’s right to indemnification with respect thereto, shall not be affected or deemed waived by reason of any investigation made by or on behalf of the Indemnified Party or by reason of the fact that the Indemnifying Party knew or should have known that any such representation or warranty is, was or might be inaccurate.
Section 9.8    Exclusive Remedy. Buyer and the Shareholders acknowledge and agree that, except as otherwise provided in Section 6.7, Section 11.11 and Article X of this Agreement, the indemnification provisions in this Article IX shall be the exclusive remedy of Buyer and Shareholders with respect to claims against each other relating to the Companies and the transactions contemplated by this Agreement. 
ARTICLE X 
TERMINATION
Section 10.1    Termination of Agreement.  This Agreement may be terminated:
(a)    by mutual written consent of Buyer and the Shareholders’ Representative at any time prior to the Closing;
(b)    by Buyer or the Shareholders’ Representative, if the Closing has not occurred on or before August 31, 2012 (the “Termination Date”), unless the failure of such consummation shall be due to the failure of the party wishing to terminate (which, in the case of a proposed termination by the Shareholders’ Representative, shall mean the Shareholders) to comply in all material respects with the agreements and covenants contained herein;
(c)    by the Shareholders’ Representative if there shall have been a misrepresentation or breach of any representation, warranty, covenant or agreement on the part of Buyer contained in this Agreement such that the condition set forth in Section 7.3(b) would not be satisfied, and which shall not have been cured prior to the earlier of (i) ten (10) Business Days following notice of such misrepresentation or breach and (ii) the Termination Date;
(d)    by Buyer if there shall have been a misrepresentation or breach of any representation, warranty, covenant or agreement on the part of the Shareholders contained in this Agreement such that the condition set forth in Section 7.2(b) would not be satisfied, and which shall not have been cured prior to the earlier of (i) ten (10) Business Days following notice of such misrepresentation or breach and (ii) the Termination Date; or
(e)    by either the Shareholders’ Representative or Buyer, by written notice to the 

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other, in the event that any Governmental Authority will have issued a final, non-appealable Order, or adopted any applicable Law, in each case, permanently restraining, enjoining or otherwise prohibiting the consummation of the transactions contemplated by this Agreement or the Ancillary Agreements.  
The party desiring to terminate this Agreement pursuant to this Article X shall give written notice of such termination to the other party.
Section 10.2    Effect of Termination.  If any party terminates this Agreement in accordance with Section 10.1, all obligations of the parties under this Agreement will terminate and none of the parties will have any Liability to the other parties hereto other than under this Section 10.2 and Article XI, which provisions will survive termination and remain in full force and effect without any limitation whatsoever; provided, however, that nothing in this Section 10.2 shall relieve any party from Liability for any willful and material breach hereof; provided further, however, that in the event the transactions contemplated by this Agreement are not consummated for any reason other than a termination pursuant to Section 10.1(d), Buyer shall promptly (no later than ten days following the Termination Date) reimburse the Companies for the Reimbursable Fees and an additional amount up to $500,000 in the aggregate for reasonable and documented third-party expenses incurred by the Companies or the Shareholders solely in connection with responding to due diligence requests of Buyer or its Affiliates and the Companies’ reasonable outside legal fees incurred in connection with the preparation and negotiation of the transactions contemplated hereby.  All such third party expenses shall be documented by an invoice provided to Buyer by each such third party, which invoice shall be provided to Buyer as a condition to such payment.
ARTICLE XI 
MISCELLANEOUS
Section 11.1    Waivers and Amendments.  No amendment, modification or discharge of this Agreement (including any Schedule or Exhibit), and no waiver hereunder, shall be valid or binding unless set forth in writing and duly executed by the party against whom enforcement of the amendment, modification, discharge or waiver is sought.  Any such waiver shall constitute a waiver only with respect to the specific matter described in such writing and shall in no way impair the rights of the party granting such waiver in any other respect or at any other time.  Neither the waiver by any party hereto of a breach or of a default under any provisions of this Agreement, nor the failure by any party on one or more occasions to enforce any of the provisions of this Agreement or to exercise any right or privilege hereunder, shall be construed as a waiver of any other breach or default of a similar nature, or as a waiver of any of such provisions, rights or privileges hereunder.
Section 11.2    Shareholders’ Representative.  
(a)    By virtue of the adoption of this Agreement by the Shareholders, and without further action of any Shareholder, each Shareholder shall be deemed to have acknowledged and agreed that the Shareholders’ Representative shall have full power and authority to take all actions under this Agreement and the Escrow Agreement that are to be taken by the Shareholders’ Representative, including retaining counsel, accountants and other agents, representatives and experts, incurring fees and expenses, asserting or pursuing any claim against Buyer, defending any claims by Buyer or any Third Party Claim, consenting to, compromising or settling any such claims, 

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conducting negotiations with Buyer and its representatives regarding such claims, it being understood that the Shareholders’ Representative shall not have any obligation to take any such actions, and shall not have any liability for any failure to take any such actions.  All decisions and actions by the Shareholders’ Representative (to the extent authorized by this Agreement) shall be binding upon all the Shareholders, and no Shareholder shall have the right to object, dissent, protest or otherwise contest the same; provided, however, that the Shareholders’ Representative shall not take any such action where (i) any single Shareholder would be held solely liable for any actual losses, out-of-pocket costs or expenses, liabilities or other damages (without such Shareholder’s prior written consent) or (ii) such action materially and adversely affects the substantive rights or obligations of one Shareholder, or group of Shareholders, without a similar proportionate effect upon the substantive rights or obligations of all the Shareholders, unless each such disproportionately affected Shareholder consents in writing thereto. 
(b)    By virtue of the adoption of this Agreement by the Shareholders, and without further action of any Shareholder, each Shareholder agrees that Buyer shall be entitled to rely on any action taken or omission to act by the Shareholders’ Representative, on behalf of such Shareholder, pursuant to Section 11.2(a), and that such action or omission shall be binding on each Shareholder as fully as if such Shareholder had taken such action or omission.  
(c)    All of the indemnities, immunities and powers granted to the Shareholders’ Representative under this Agreement shall survive the Closing Date.
(d)    A majority of Mr. Reed and the Beneficiaries shall have the right at any time to remove the then-acting Shareholders’ Representative and to appoint a successor Shareholders’ Representative; provided, however, that neither such removal of the then acting Shareholders’ Representative nor such appointment of a successor Shareholders’ Representative shall be effective until the delivery to the Escrow Agent and Buyer of executed counterparts of a writing signed by each such Shareholder or Beneficiary with respect to such removal and appointment, together with an acknowledgement signed by the successor Shareholders’ Representative appointed in such writing that he, she or it accepts the responsibility of successor Shareholders’ Representative and agrees to perform and be bound by all of the provisions of this Agreement and the Escrow Agreement.  Each successor Shareholders’ Representative shall have all of the power, authority, rights and privileges conferred by this Agreement upon the original Shareholders’ Representative, and the term “Shareholders’ Representative” shall be deemed to include any interim or successor Shareholders’ Representative.
Section 11.3    Notices. All notices, requests, consents, demands and other communications required or permitted to be given under this Agreement will be in writing and will be deemed to have been duly given if delivered personally, sent by recognized overnight delivery service, sent by registered or certified mail, return receipt requested, postage prepaid, or sent by facsimile, as follows:
if to Buyer:
TRU Energy Services, LLC
5340 Legacy Drive, Building 1, Suite 300

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Plano, Texas  75024
Attention: Robert L. Benson, President
Facsimile No.:    (972) 387-1031

with a copy to:

The North American Coal Corporation
5340 Legacy Drive, Building 1, Suite 300
Plano, Texas  75024
Attention:  John Neumann, Vice President, General Counsel & Secretary
Facsimile No.: (972) 387-1031 

if to the Shareholders’ Representative, on behalf of the Shareholders:
Robbin Reed Allen
31 Dawn Lane
Jasper, Alabama  35503
Facsimile No.: (205) 384-3296

with a copy to:
Bradley Arant Boult Cummings LLP
One Federal Place
1819 Fifth Avenue North
Birmingham, Alabama  35203
Attention: Tracy Thompson, Esq.
Facsimile No.: (205) 488-6374

or, in each case, at such other address or facsimile number as may be specified in writing to the other party hereto.
All such notices, requests, consents, demands and other communications shall be deemed to have been received (i) if by personal delivery, on the day when delivered, (ii) if by overnight delivery, on the next delivery day, (iii) if by certified or registered mail, on the fifth day after the mailing thereof, and (iv) if by facsimile, the same day such facsimile was sent (with confirmation of delivery).
Section 11.4    Fees and Expenses.  Except to the extent expressly provided otherwise in this Agreement, each party will bear its own costs and expenses (including attorneys’, consultants’, and advisors’ fees and expenses) incurred in connection with this Agreement, the Ancillary Agreements and the transactions contemplated hereby and thereby.  Notwithstanding the foregoing, the Shareholders, on the one hand, and Buyer, on the other hand, shall share equally the costs of all filing fees associated with obtaining any required regulatory approvals.
Section 11.5    Successors and Assigns.  This Agreement will be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns, but neither 

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this Agreement nor any of its rights, interests or obligations may be assigned by any party hereto, including by operation of law, without the prior written consent of the other party, except that Buyer may assign all or any part of its rights, obligations and duties under this Agreement or under any Ancillary Agreement to any one or more of its Affiliates, provided that no such assignment shall in any way release Buyer from any of its Liabilities under this Agreement.
Section 11.6    Third Party Beneficiaries.  This Agreement is not intended, and shall not be construed, to give any Person other than Buyer and the Shareholders, and their respective successors and permitted assigns, any interest or rights (including third party beneficiary rights) with respect to or in connection with any agreement or provision herein or any matter contemplated hereby, other than the Buyer Indemnified Parties and the Seller Indemnified Parties to the extent provided in Article IX, the Seller Released Parties and Buyer Released Parties to the extent provided in Section 6.9, and the Company Indemnified Parties to the extent provided in Section 6.12.
Section 11.7    Consent to Jurisdiction.  Each party irrevocably submits to the jurisdiction of (a) the state courts located in the State of Alabama and (b) the United States District Courts located in the State of Alabama, for the purposes of any Action arising out of this Agreement or any transaction contemplated hereby.  Each party agrees to commence any such Action either in a United States District Court located in the State of Alabama, or if such Action may not be brought in such court for jurisdictional reasons, in a state court located in the State of Alabama.  Each party further agrees that service of any process, summons, notice or document by U.S. registered mail to such party’s respective address set forth in Section 11.3 shall be effective service of process for any Action in the State of Alabama with respect to any matters to which it has submitted to jurisdiction in this Section 11.7.  Each party irrevocably and unconditionally waives any objection to the laying of venue of any Action arising out of this Agreement or the transactions contemplated hereby in (i) a state court located in the State of Alabama, or (ii) a United States District Court located in the State of Alabama, and hereby and thereby further irrevocably and unconditionally waives and agrees not to plead or claim in any such court that any such Action brought in any such court has been brought in an inconvenient forum.
Section 11.8    Governing Law.  This Agreement will be governed by and construed and interpreted in accordance with the laws of the State of Alabama, without regard to its principles of conflicts of laws.
Section 11.9    Waiver of Jury Trial.
(a)    EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE IT HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT IT MAY HAVE TO TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
(b)    EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (i) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, (ii) IT UNDERSTANDS 

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AND HAS CONSIDERED THE IMPLICATIONS OF SUCH WAIVER, (iii) IT MAKES SUCH WAIVER VOLUNTARILY, AND (iv) IT HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT, BY AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS SET FORTH IN THIS SECTION 11.9.
Section 11.10    Severability.  Any term or provision of this Agreement that is invalid or unenforceable in any situation in any jurisdiction will not affect the validity or enforceability (i) of the offending term or provision in any other situation or in any other jurisdiction or (ii) of any other term or provision of this Agreement.
Section 11.11    Specific Performance.  The parties hereto agree that irreparable damage would occur in the event that any of the covenants or agreements of this Agreement or the Ancillary Agreements were not performed in accordance with their specific terms or were otherwise breached.  Accordingly, in addition to any other remedy that they are entitled to pursue under this Agreement or the Ancillary Agreements, the parties will be entitled to seek injunctions to prevent any breach of this Agreement or the Ancillary Agreements and to seek specific enforcement at law or in equity of the terms and conditions of this Agreement and the Ancillary Agreements.
Section 11.12    Entire Agreement.  This Agreement (including the Schedules and Exhibits hereto) and the Ancillary Agreements constitute the entire agreement among the parties hereto with respect to the subject matter hereof, and supersede all prior understandings, agreements, statements, representations, documents, instruments, communications and correspondence, whether written or oral, express or implied, by or among the parties hereto and their respective Affiliates, representatives and agents with respect to the subject matter hereof and thereof.
Section 11.13    Construction.  The parties and their respective counsel have participated jointly in the negotiation and drafting of this Agreement and the Ancillary Agreements.  In the event an ambiguity or question of intent or interpretation arises, this Agreement will be construed as if drafted jointly by the parties and no presumption or burden of proof will arise favoring or disfavoring any party by virtue of the authorship of any of the provisions of this Agreement or the Ancillary Agreements.
Section 11.14    Incorporation of Exhibits and Schedules.  The Exhibits and Schedules identified in this Agreement are incorporated herein by reference and made a part hereof.  There may be included in the Schedules and elsewhere in this Agreement items and information that are not “material,” and such inclusion shall not be deemed to be an acknowledgment or agreement that any such item or information (or any non-disclosed item or information of comparable or greater significance) is “material,” or to affect the interpretation of such term for purposes of this Agreement.  Matters reflected in the Schedules are not necessarily limited to matters required by this Agreement to be disclosed in the Schedules.  No disclosure in the Schedules relating to a possible breach or violation of any Contract, Law or Order shall be construed as an admission or indication that such breach or violation exists or has occurred.  Any capitalized term used in the Schedules and not otherwise defined therein shall have the meaning given to such term in this Agreement.  Any headings set forth in the Schedules are for convenience of reference only and shall not affect the meaning or interpretation of any of the disclosures set forth in the Schedules.
Section 11.15    Headings.  The headings contained in this Agreement are included for 

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convenience only, and will not affect in any way the meaning or interpretation of this Agreement.
Section 11.16    Counterparts.  This Agreement may be executed in one or more counterparts, each of which will be deemed an original, but all of which together will constitute one and the same instrument.  The electronic transmission of any signed original counterpart of this Agreement shall be deemed to be the delivery of an original counterpart of this Agreement.
Section 11.17    No Presumption Against Drafting Party.  Each of Buyer and the Shareholders acknowledges that each party to this Agreement has been represented by counsel in connection with the negotiation and drafting of this Agreement.  Accordingly, any rule of law or any legal decision that would require interpretation of any claimed ambiguities in this Agreement against the drafting party has no application and is expressly waived.
Section 11.18    Announcements.  No party shall issue any press release or make any public announcement relating to the subject matter of this Agreement or the transactions contemplated by this Agreement without the prior approval of the other parties, which approval shall not be unreasonably withheld, unless and only to the extent that such disclosure is required to be made in order to satisfy such party’s obligations under applicable securities Laws of the United States of America.
[Signature page follows this page.]

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IN WITNESS WHEREOF, the parties hereto have executed or caused this Agreement to be executed as of the date first above written. 

	
		
	BUYER:
TRU ENERGY SERVICES, LLC
	SELLERS:
ROBERT J. REED, as shareholder of Reed Minerals, C&H Mining and Reed Hauling, and sole member of Reed Management 

	By: /s/ Robert L. Benson
	/s/ Robert J. Reed

	      Name: Robert L. Benson
	 

	      Title:  President
	 

	 
	THE B&R FAMILY TRUST, as shareholder of Reed Minerals and C&H Mining

	 
	By: /s/ Robbin Reed Allen

	 
	Name: Robbin Reed Allen, as trustee

	 
	 

	 
	BENEFICIARIES:

	 
	 

	 
	ROBBIN REED ALLEN

	 
	/s/ Robbin Reed Allen

	 
	 

	 
	JAMES R. REED

	 
	/s/ James R. Reed

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