Document:

EX-10.1

Exhibit 10.1

PURCHASE AND SALE AGREEMENT

BY AND AMONG

THE NORTH AMERICAN COAL CORPORATION

OXBOW PROPERTY COMPANY L.L.C.

AND

RED RIVER MINING COMPANY,

AS SELLERS,

AND

CLECO POWER LLC

SOUTHWESTERN ELECTRIC POWER COMPANY

AND

DOLET HILLS LIGNITE COMPANY, LLC

AS PURCHASERS

APRIL 29, 2009

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	 	 	Page
	ARTICLE I DEFINITIONS
	 	 	2	 
	 
	 	 	 	 
	1.1 Definitions
	 	 	2	 
	 
	 	 	 	 
	ARTICLE II PURCHASE AND SALE OF OLC INTERESTS AND PURCHASED ASSETS; PURCHASE PRICE
	 	 	10	 
	 
	 	 	 	 
	2.1 Purchase and Sale of OLC Interests
	 	 	10	 
	2.2 Purchase and Sale of Purchased Assets
	 	 	10	 
	2.3 Retained Assets
	 	 	10	 
	2.4 Assumed Liabilities
	 	 	10	 
	2.5 Purchase Price
	 	 	11	 
	2.6 Payment of Purchase Price
	 	 	12	 
	2.7 Certain Financial Statements
	 	 	12	 
	 
	 	 	 	 
	ARTICLE III CLOSING AND DELIVERIES
	 	 	12	 
	 
	 	 	 	 
	3.1 Closing
	 	 	12	 
	3.2 Deliveries by Sellers
	 	 	13	 
	3.3 Deliveries by Purchasers
	 	 	15	 
	 
	 	 	 	 
	ARTICLE IV REPRESENTATIONS AND WARRANTIES OF SELLERS
	 	 	16	 
	 
	 	 	 	 
	4.1 Organization of Sellers
	 	 	16	 
	4.2 Foreign Qualification
	 	 	16	 
	4.3 Authority of Sellers
	 	 	16	 
	4.4 No Conflict or Violation
	 	 	16	 
	4.5 Title to RRMC Interests and OLC Interests
	 	 	17	 
	4.6 Title to Purchased Assets and Mining Reserves
	 	 	17	 
	4.7 Legal Requirements and Orders
	 	 	18	 
	4.8 Leases
	 	 	18	 
	4.9 Contracts
	 	 	19	 
	4.10 Owned Real Property
	 	 	20	 
	4.11 Permits
	 	 	20	 
	4.12 Reserve Data
	 	 	21	 
	4.13 Environmental Matters
	 	 	21	 
	4.14 Employees
	 	 	22	 
	4.15 Employee Benefit Plans
	 	 	22	 
	4.16 Brokers
	 	 	23	 
	4.17 Litigation
	 	 	23	 
	4.18 Taxes
	 	 	23	 
	4.19 No Other Representations or Warranties
	 	 	23	 
	 
	 	 	 	 
	ARTICLE V REPRESENTATIONS AND WARRANTIES OF EACH PURCHASER
	 	 	24	 
	 
	 	 	 	 
	5.1 Organization and Authority
	 	 	24	 
	5.2 No Conflict or Violation
	 	 	24	 

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	 	 	Page
	5.3 Litigation
	 	 	25	 
	5.4 Purchase for Investment
	 	 	25	 
	5.5 Brokers
	 	 	25	 
	5.6 Independent Investigation; No Reliance
	 	 	25	 
	5.7 Financing
	 	 	26	 
	 
	 	 	 	 
	ARTICLE VI CERTAIN COVENANTS AND AGREEMENTS
	 	 	26	 
	 
	 	 	 	 
	6.1 Interim Operations
	 	 	26	 
	6.2 Reasonable Access
	 	 	27	 
	6.3 Filings
	 	 	28	 
	6.4 Commercially Reasonable Efforts; Further Assurances
	 	 	28	 
	6.5 Notice of Events
	 	 	28	 
	6.6 Transfer Taxes
	 	 	29	 
	6.7 Apportionment of Property Taxes
	 	 	29	 
	6.8 Reclamation Bond
	 	 	29	 
	6.9 Transfer of Mine Permit and Other Permits
	 	 	30	 
	6.10 Certain Provisions Relating to Consents
	 	 	30	 
	6.11 Coal Sales to ADA-ES, Inc.
	 	 	31	 
	6.12 Termination of Lignite Supply and Transportation Agreement
	 	 	31	 
	6.13 Concurrent Effectiveness of Consulting Agreement and
Surface Use Agreement
	 	 	31	 
	6.14 Non-Competition
	 	 	31	 
	6.15 Certain Employee Matters
	 	 	32	 
	6.16 Casualty or Condemnation
	 	 	32	 
	6.17 Access to Oxbow Mine Records
	 	 	33	 
	6.18 No Negotiations
	 	 	34	 
	 
	 	 	 	 
	ARTICLE VII CONDITIONS TO CLOSING
	 	 	34	 
	 
	 	 	 	 
	7.1 Conditions to the Obligations of Sellers
	 	 	34	 
	7.2 Conditions to the Obligations of Each Purchaser
	 	 	35	 
	7.3 Frustration of Closing Conditions
	 	 	36	 
	 
	 	 	 	 
	ARTICLE VIII TERMINATION OF AGREEMENT
	 	 	36	 
	 
	 	 	 	 
	8.1 Right to Terminate
	 	 	36	 
	8.2 Automatic Termination
	 	 	36	 
	8.3 Effect of Termination
	 	 	36	 
	 
	 	 	 	 
	ARTICLE IX SURVIVAL OF REPRESENTATIONS AND WARRANTIES
	 	 	37	 
	 
	 	 	 	 
	9.1 Survival
	 	 	37	 
	 
	 	 	 	 
	ARTICLE X INDEMNIFICATION
	 	 	38	 
	 
	 	 	 	 
	10.1 Indemnification by Sellers
	 	 	38	 
	10.2 Indemnification by Purchasers
	 	 	38	 

ii

 

TABLE OF CONTENTS

	 	 	 	 	 
	 	 	Page
	10.3 Matters Involving Third Parties
	 	 	39	 
	10.4 Limitations on Indemnification Payments to Seller Indemnitees
	 	 	39	 
	10.5 Limitations on Indemnification Payments to Purchaser Indemnitees
	 	 	40	 
	10.6 Exclusive Remedy
	 	 	41	 
	10.7 Specific Performance
	 	 	41	 
	10.8 Mitigation
	 	 	41	 
	10.9 Seller Letter of Credit
	 	 	41	 
	 
	 	 	 	 
	ARTICLE XI NOTICES
	 	 	44	 
	 
	 	 	 	 
	11.1 Notices
	 	 	44	 
	 
	 	 	 	 
	ARTICLE XII MISCELLANEOUS PROVISIONS
	 	 	45	 
	 
	 	 	 	 
	12.1 WAIVER OF JURY TRIAL
	 	 	45	 
	12.2 Amendments
	 	 	45	 
	12.3 Assignment and Parties in Interest
	 	 	45	 
	12.4 Public Announcements
	 	 	46	 
	12.5 Expenses
	 	 	46	 
	12.6 Entire Agreement
	 	 	46	 
	12.7 Descriptive Headings
	 	 	46	 
	12.8 Counterparts
	 	 	46	 
	12.9 GOVERNING LAW; CONSENT TO JURISDICTION
	 	 	46	 
	12.10 Construction
	 	 	47	 
	12.11 Waiver of Remedies
	 	 	47	 
	12.12 Severability
	 	 	47	 

 iii

 

 

TABLE OF CONTENTS

EXHIBITS

	 	 	 
	Exhibit A

	 	Consultative Services Agreement
	Exhibit B

	 	Surface Use Agreement
	Exhibit C-1

	 	RRMC Contribution Agreement
	Exhibit C-2

	 	NACC Contribution Agreement
	Exhibit D

	 	Lease Assignment
	Exhibit E-1

	 	Warranty Deed
	Exhibit E-2

	 	Special Warranty Deed
	Exhibit F

	 	Assignment of Membership Interests
	Exhibit G

	 	Bill of Sale
	Exhibit H

	 	Assignment and Assumption Agreement
	Exhibit I

	 	Improvements Deed
	Exhibit J

	 	OLC Amended and Restated Limited Liability Company Agreement
	Exhibit K

	 	Irrevocable Standby Letter of Credit
	Exhibit L

	 	Mine Permit Transfer Agreement
	Exhibit M

	 	Non-Compete Area

SCHEDULES

	 	 	 
	Schedule 1.1(A)

	 	Retained Interests Leases
	Schedule 1.1(B)

	 	Persons with Sellers’ Knowledge
	Schedule 2.6

	 	Payment of Purchase Price
	Schedule 3.2(i)

	 	Seller Consents
	Schedule 3.2(j)

	 	Resignations
	Schedule 4.4

	 	No Conflict or Violation
	Schedule 4.6(a)

	 	Equipment and Machinery
	Schedule 4.6(d)

	 	Special Warranty Properties
	Schedule 4.7

	 	Legal Requirements and Orders
	Schedule 4.8

	 	Leases
	Schedule 4.9

	 	Contracts
	Schedule 4.10(a)

	 	Owned Real Property
	Schedule 4.11

	 	Permits
	Schedule 4.13

	 	Environmental Matters
	Schedule 4.14

	 	RRMC Employees and Administrative Employees
	Schedule 4.17

	 	Litigation
	Schedule 5.2

	 	Purchaser Consents
	Schedule 6.1

	 	Interim Operations

 -iv-

 

 

PURCHASE AND SALE AGREEMENT

     This PURCHASE AND SALE AGREEMENT (this “Agreement”) is made and entered into as of April 29,
2009, by and among The North American Coal Corporation, a Delaware corporation (“NACC”), Oxbow
Property Company L.L.C., a Louisiana limited liability company and a wholly-owned subsidiary of
NACC (“OPC”), and Red River Mining Company, a joint venture between NACC and OPC that is organized
under the laws of the State of Texas (“RRMC” and together with NACC and OPC, “Sellers” and each, a
“Seller”), and Cleco Power LLC, a Louisiana limited liability company (“CLECO”), Southwestern
Electric Power Company, a Delaware corporation (“SWEPCO”), and Dolet Hills Lignite Company, LLC, a
Delaware limited liability company and a wholly-owned subsidiary of SWEPCO (“DHLC” and together
with CLECO and SWEPCO, “Purchasers” and each, a “Purchaser,” and Purchasers, together with Sellers,
“Parties” and each, a “Party”).

RECITALS

     WHEREAS, RRMC owns and operates a surface lignite coal mine situated in Red River Parish,
Louisiana known as the Oxbow Mine (the “Oxbow Mine”), including (i) (a) all Real Property (as
defined herein), surface rights, coal reserves, mining rights, reversionary interests, other real
property interests (whether lease, fee, servitude or otherwise), all documents evidencing such real
property interests (including the documents located at NACC’s Bismarck, North Dakota office), and
all stockpiles, but expressly excluding the CLECO Stockpile (as defined herein), all Retained
Interests (as defined herein) and all buildings, fixtures and other improvements located on the
Real Property, and (b) the Mine Permit (as defined herein) (collectively, the “Mining Reserves”);
and (ii) all of the buildings, fixtures and other improvements, equipment, machinery, contracts,
data (including the geological data located at NACC’s warehouse in Dallas, Texas), Permits (other
than the Mine Permit), inventory (other than stockpiles), third-party software licenses known as
TerraModel, Caterpillar Maintenance, ICP for Windows, AutoCad and Carlson, and other rights and
tangible and intangible assets of any kind and character relating thereto or used in connection
therewith, wherever located, but expressly excluding the Mining Reserves, the Retained Interests
and the Retained Assets (as defined herein) (collectively, the “Purchased Assets”).

     WHEREAS, at or immediately prior to the Closing (as defined herein), Sellers shall have formed
Oxbow Lignite Company, LLC, a Delaware limited liability company (“OLC”).

     WHEREAS, as part of the Closing, pursuant to the RRMC Contribution Agreement (as defined
herein), RRMC shall transfer to OLC all of its right, title and interest in and to the Mining
Reserves in exchange for all of the membership interests in OLC.

     WHEREAS, as part of the Closing, pursuant to the NACC Contribution Agreement (as defined
herein), OLC shall issue to NACC an aggregate one percent (1%) of all outstanding membership
interests in OLC (all of such outstanding membership interests held by RRMC and NACC, the “OLC
Interests”), in exchange for a cash contribution in an amount equal to 1.0101% of the Mining
Reserves Purchase Price (as defined herein), rounded to the nearest whole Dollar (the “NACC
Contribution Amount”).

 

 

     WHEREAS, CLECO and SWEPCO each desire to purchase 50% of the OLC Interests and NACC and RRMC
are willing to sell the OLC Interests at the Closing on the terms and conditions set forth in this
Agreement.

     WHEREAS, DHLC desires to purchase the Purchased Assets and RRMC is willing to sell the
Purchased Assets on the terms and conditions set forth in this Agreement.

     WHEREAS, the Parties desire, at the Closing, to terminate the Lignite Supply and
Transportation Agreement (as defined herein) simultaneously with DHLC’s purchase of the Purchased
Assets, at which time NACC and DHLC will enter into the Consulting Agreement (as defined herein),
pursuant to which NACC will provide certain mutually agreed upon services to DHLC on the terms and
conditions therein.

     WHEREAS, RRMC and OLC desire, at the Closing, to enter into the Surface Use Agreement (as
defined herein) with respect to the Retained Interests.

     NOW, THEREFORE, in consideration of the premises, the mutual covenants and agreements
contained herein and other good and valuable consideration, the receipt and sufficiency of which
hereby are acknowledged, the Parties agree as follows:

ARTICLE I

DEFINITIONS

1.1 Definitions. The following defined terms shall have the following meanings:

     “ADA” has the meaning set forth in Section 6.11.

     “ADA Agreement” has the meaning set forth in Section 6.11.

     “Administrative Employees” has the meaning set forth in Section 4.14(a).

     “Affiliate” of, or Person “affiliated with,” a specified Person, is a Person that directly, or
indirectly through one or more intermediaries, controls or is controlled by, or is under common
control with, the Person specified. For purposes of this definition, “control” means the power
through equity ownership, contract or otherwise, to direct or cause the direction of the affairs of
a Person.

     “Agreement” means this Agreement including the Exhibits and all Schedules hereto.

     “Assets Assignment Agreement” has the meaning set forth in Section 3.2(g).

     “Assets Proration Amount” has the meaning set forth in Section 2.5(c).

     “Assets Purchase Price” has the meaning set forth in Section 2.5(a).

     “Assumed Liabilities” has the meaning set forth in Section 2.4.

     “Bill of Sale” has the meaning set forth in Section 3.2(f).

-2-

 

     “Business Day” means a day, other than a Saturday or a Sunday, on which commercial banks are
not required or authorized to close in the State of Texas.

     “Claims” has the meaning set forth in Section 10.9(a).

     “Claims Notice” has the meaning set forth in Section 10.9(b).

     “Claims Dispute” has the meaning set forth in Section 10.9(c).

     “CLECO” has the meaning set forth in the preamble hereto.

     “CLECO Confidentiality Agreement” has the meaning set forth in Section 8.3.

     “CLECO Stockpile” means the coal sold to CLECO and stockpiled at the Oxbow Mine pursuant to
the Lignite Spot Sales Agreement.

     “CLECO Stockpile Accrual Amount” means the aggregate payments made by CLECO to RRMC for
maintenance and reclamation of the CLECO Stockpile, but not the building of the CLECO Stockpile,
pursuant to Section 3 of the Lignite Spot Sales Agreement.

     “Closing” has the meaning set forth in Section 3.1.

     “Closing Date” has the meaning set forth in Section 3.1.

     “Closing Date Coal Stockpile Amount” has the meaning set forth in Section 2.5(b).

     “Closing Statement” has the meaning set forth in Section 3.2(p).

     “Coal Stockpile Overage Value” has the meaning set forth in Section 2.5(b).

     “Coal Stockpile Underage Value” has the meaning set forth in Section 2.5(b).

     “Code” means the Internal Revenue Code of 1986, as amended.

     “Commercially Reasonable Efforts” means efforts which (i) would be within the contemplation of
a reasonable Person in the position of a Party at the time of executing and delivering this
Agreement, (ii) are designed to enable a Party to satisfy a condition to, or otherwise assist in
the consummation of, the transactions contemplated herein, or to perform its obligations under this
Agreement, and (iii) do not require the performing Party to expend any funds or assume liabilities
other than expenditures and liabilities which are customary and reasonable in nature and amount for
transactions like those contemplated by this Agreement.

     “Consent” means any consent, approval, authorization, qualification, notice, waiver or
registration required to be obtained from, filed with or delivered to any Person in connection with
the consummation of the transactions contemplated hereby.

     “Consulting Agreement” means that certain Consultative Services Agreement, dated the Closing
Date, between NACC and DHLC, in the form attached hereto as Exhibit A.

-3-

 

     “Contracts” has the meaning set forth in Section 4.9.

     “Damaged Portion” has the meaning set forth in Section 6.16.

     “Damages” means any and all losses, Liabilities (excluding contingent Liabilities), claims,
fines, deficiencies, damages, obligations, payments (including those arising out of any settlement,
judgment or compromise relating to any Proceeding), reasonable costs and expenses (including
interest and penalties due and payable with respect thereto and reasonable attorneys’ and
accountants’ fees and any other reasonable out-of-pocket expenses incurred in investigating,
preparing, defending, avoiding or settling any Proceeding), in each case that are due and payable,
including any of the foregoing arising under, out of or in connection with any Proceeding, judgment
or award of any arbitrator of any kind, or any Legal Requirement, Order or contract,
provided, however, that “Damages” shall not include any adjustment for Taxes that
may be assessed on payments made to an Indemnified Party or Tax benefits received by an Indemnified
Party.

     “DHLC” has the meaning set forth in the preamble hereto.

     “Drawing” has the meaning set forth in Section 10.9(a).

     “Employee Benefit Plan” means (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, 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, currently effective or terminated) and any trust, escrow, or similar agreement related
thereto, whether or not funded, that are sponsored or maintained by NACC or RRMC and in which any
current RRMC Employee or Administrative Employee participates in respect of their service to NACC,
RRMC or any of their respective Affiliates.

     “Employer” has the meaning set forth in Section 6.15(a).

     “Environment” means soil, land surface or subsurface strata, surface waters (including
navigable waters, ocean waters, streams, ponds, drainage basins, reservoirs, and wetlands), ground
waters, stream sediments, ambient air (including indoor air), plant and animal life, and any other
environmental medium or natural resource.

     “Environmental Law” means any Legal Requirement or Order with respect to the protection of
human health and safety and the Environment, including any Hazardous Materials, drinking water,
groundwater, wetlands, landfills, open dumps, storage tanks, underground storage tanks, solid
waste, waste water, storm water runoff, waste emissions or wells. Without limiting the generality
of the foregoing, the term will encompass each of the following statutes, and the regulations
promulgated thereunder, in each case as in effect as of Closing: (i) the Comprehensive
Environmental Response, Compensation and Liability Act of 1980 (codified in scattered sections of
26 U.S.C., 33 U.S.C., 42 U.S.C. and 42 U.S.C. § 9601, et seq.); (ii) the Resource Conservation and
Recovery Act of 1976 (42 U.S.C. § 6901, et seq.); (iii) the Hazardous Materials Transportation Act
(49 U.S.C. § 5101, et seq.); (iv) the Toxic Substances Control Act (15 U.S.C. § 2061, et seq.); (v)
the Oil Pollution Act (33 U.S.C. § 2701, et seq.); (vi)

-4-

 

the Clean Water Act (33 U.S.C. § 1251, et seq.); (vii) the Clean Air Act and Amendments (42
U.S.C. § 7401, et seq.); (viii) the Safe Drinking Water Act (21 U.S.C. § 349); 42 U.S.C. § 201 and
§ 300f, et seq.); (ix) the National Environmental Policy Act of 1969 (42 U.S.C. § 4321); (x) the
Superfund Amendment and Reauthorization Act of 1986 (codified in scattered sections of 10 U.S.C.,
29 U.S.C., 33 U.S.C. and 42 U.S.C.); (xi) Title III of the Superfund Amendment and Reauthorization
Act (42 U.S.C. § 11,001, et seq.); (xii) the Surface Mining Control and Reclamation Act of 1977 (30
U.S.C. §§ 1201, et seq.); and (xiii) the Louisiana Surface Mining and Reclamation Act (La. Rev.
Stat. Ann. § 30-901 et seq.).

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

     “Exhibits” means, collectively, the various Exhibits referred to in this Agreement.

     “Expected Coal Stockpile Amount” means 40,000 Tons.

     “Final Order” has the meaning set forth in Section 10.9(d).

     “General Enforceability Exceptions” has the meaning set forth in Section 4.3.

     “Governmental Agency” means: (i) any federal, state, county, parish, local or municipal
government or political subdivision thereof; (ii) any governmental or administrative agency,
authority, board, bureau, commission, department or instrumentality; or (iii) any court or
administrative tribunal.

     “Hazardous Materials” means any element, substance, chemical, compound or mixture whether
solid, liquid or gaseous: (i) that is subject to regulation of any kind by any Governmental Agency
with regard to protection of the Environment or (ii) the Release, exposure, presence or existence
to or of which shall at any time give rise to any Damages relating to the Environment.

     “Improvements Deed” has the meaning set forth in Section 3.2(h).

     “Indemnified Party” has the meaning set forth in Section 10.3(a).

     “Indemnifying Party” has the meaning set forth in Section 10.3(a).

     “Interests Assignment Agreement” has the meaning set forth in Section 3.2(e).

     “Interview Period” has the meaning set forth in Section 6.15(a).

     “Issuing Bank” means Citibank, N.A. or any other commercial bank in the United States with a
comparable credit rating as determined at the time of issuance or renewal or extension of the
Letter of Credit.

     “Joint Venture Agreement” means that certain Joint Venture Agreement, dated as of September 1,
1988 between NACC and OPC (as successor-in-interest to Phillips Coal Company), as amended by the
First Amendment to the Joint Venture Agreement dated as of December 14, 1992, by the Second
Amendment to the Joint Venture Agreement dated as of January 1, 1995, and by the Third Amendment to
the Joint Venture Agreement dated as of March 29, 1996.

-5-

 

     “Lease Assignment” has the meaning set forth in Section 3.2(c).

     “Leased Real Property” has the meaning set forth in Section 4.8.

     “Leases” has the meaning set forth in Section 4.8.

     “Legal Requirement” means any statute, law, rule, regulation, constitution, ordinance, common
law, or treaty of any Governmental Agency.

     “Letter of Credit” has the meaning set forth in Section 3.2(n).

     “Letter of Credit Claims” has the meaning set forth in Section 10.9(a).

     “Liability” means any liability or obligation of any kind, character or description, whether
known or unknown, asserted or unasserted, absolute or contingent, accrued or unaccrued, liquidated
or unliquidated and due or to become due.

     “Lien” means any mortgage, lien, security interest, charge, easement, Lease, sublease,
covenant, right of way, option, claim, restriction or encumbrance of any kind.

     “Lignite Spot Sales Agreement” means that certain Lignite Spot Sales Agreement dated as of
January 23, 2009, by and between CLECO and RRMC, as amended.

     “Lignite Supply and Transportation Agreement” means that certain Lignite Supply and
Transportation Agreement dated effective January 1, 1995, by and among CLECO, SWEPCO and RRMC, as
amended by that certain First Amendment to the Lignite Supply and Transportation Agreement dated
effective March 1, 1999, that certain Second Amendment to Lignite Supply and Transportation
Agreement dated effective January 1, 2000, that certain Third Amendment to Lignite Supply and
Transportation Agreement dated effective December 31, 2003, that certain Fourth Amendment to
Lignite Supply and Transportation Agreement dated effective February 9, 2004 and that certain Fifth
Amendment to Lignite Supply and Transportation Agreement dated effective January 1, 2006.

     “LOC” means the Louisiana Office of Conservation.

     “Mine Permit” means the Surface Mining and Reclamation Permit No. LSM-1-A issued by the LOC to
RRMC.

     “Mine Permit Transfer Agreement” has the meaning set forth in Section 3.2(o).

     “Minimum Letter of Credit Period” has the meaning set forth in Section 10.9(a).

     “Mining Reserves” has the meaning set forth in the recitals hereto.

     “Mining Reserves Proration Amount” has the meaning set forth in Section 2.5(c).

     “Mining Reserves Purchase Price” has the meaning set forth in Section 2.5(a).

     “NACC” has the meaning set forth in the preamble hereto.

-6-

 

     “NACC Contribution Agreement” has the meaning set forth in Section 3.2(b).

     “NACC Contribution Amount” has the meaning set forth in the recitals hereto.

     “Non-Compete Area” has the meaning set forth in Section 6.14.

     “OLC” has the meaning set forth in the recitals hereto.

     “OLC Interests” has the meaning set forth in the recitals hereto.

     “OPC” has the meaning set forth in the preamble hereto.

     “Order” means any award, decision, injunction, judgment, order, ruling, subpoena, or verdict
entered, issued, made, or rendered by any court, administrative agency or other Governmental Agency
or by any arbitrator.

     “Outside Date” has the meaning set forth in Section 8.2.

     “Owned Real Property” has the meaning set forth in Section 4.10(a).

     “Oxbow Mine” has the meaning set forth in the recitals hereto.

     “Parties” and “Party” have the meanings set forth in the preamble hereto.

     “Permit” means any permit, approval, authorization, license, variance, registration or
permission that is required by a Governmental Agency under any applicable Legal Requirement or
Order for the ownership and operation of the Mining Reserves and the Purchased Assets and the
development, construction and operation of the Oxbow Mine, including the permits held by RRMC, and
including specifically the Mine Permit.

     “Permitted Liens” means: (i) mechanics’, carriers’, workmen’s, repairmen’s or other like Liens
arising or incurred in the ordinary course of business, Liens arising under original purchase price
conditional sales contracts and equipment Leases with third parties entered into in the ordinary
course of business and Liens for property Taxes, in each case, to the extent securing amounts that
are not due and payable; (ii) other imperfections of title or encumbrances, if any, that,
individually or in the aggregate, do not materially impair, and would not reasonably be expected
materially to impair, the value of the Mining Reserves or the Purchased Assets or the continued use
and operation of the Oxbow Mine as presently operated and as intended to be operated pursuant to
the Mine Permit; (iii) leases, subleases and similar agreements, and Liens of any developer,
landlord or other third party on property over which Sellers have easement rights or on any Leased
Real Property and subordination or similar agreements relating thereto, set forth in Schedule
4.8; (iv) leases, mineral reservations and conveyances, easements, covenants, rights-of-way and
other similar restrictions of record; (v) any conditions that may be shown by a current, accurate
survey or physical inspection of the Real Property made prior to the Closing; (vi) the Retained
Interests; (vii) all Liens against the Retained Interests or the Retained Assets; (viii) zoning,
building and other similar restrictions; and (ix) any Lien on any Leased Real Property existing at
the time of RRMC’s acquisition of its leasehold interest in such Leased Real Property other than
any Lien created by any Seller or any of their respective Affiliates.

-7-

 

     “Person” means any individual, partnership, corporation, trust, association, limited liability
company, Governmental Agency or any other entity.

     “Proceeding” means any judicial, administrative, investigative or arbitral actions, suits or
proceedings by or before any Governmental Agency or arbitrator.

     “Proration Statement” has the meaning set forth in Section 2.5(c).

     “Purchased Assets” has the meaning set forth in the recitals hereto.

     “Purchase Price” has the meaning set forth in Section 2.5(a).

     “Purchaser” and “Purchasers” have the meanings set forth in the preamble hereto.

     “Purchaser Consents” has the meaning set forth in Section 5.2.

     “Purchaser Indemnitees” has the meaning set forth in Section 10.1.

     “Real Property” means the Owned Real Property and the Leased Real Property.

     “Real Property Deeds” has the meaning set forth in Section 3.2(d).

     “Release” means any spilling, leaking, pumping, pouring, emitting, emptying, discharging,
injecting, storing, escaping, leaching, migrating, dumping, burying, abandoning or disposing into
the Environment or any threat thereof.

     “Reserve Data” has the meaning set forth in Section 4.12.

     “Retained Assets” means: (i) all mined or processed coal from the Oxbow Mine sold or to be
sold and delivered by RRMC to any third-party purchaser, in each case prior to the Closing, other
than the CLECO Stockpile; (ii) all assets related to any Employee Benefit Plan in which the RRMC
Employees participate; (iii) cash and receivables, including receivables from third party sales,
held by Sellers, other than the CLECO Stockpile Accrual Amount; (iv) RRMC’s corporate record books
and minute books; (v) all insurance policies owned or maintained by RRMC, and, subject to the
provisions of Section 6.16, claims and other rights to receive payments thereunder; (vi)
all refunds, claims for refunds or credits of Taxes of RRMC; (vii) RRMC’s Tax returns (including
all related schedules, records, files and other documents and all other records required by
applicable Legal Requirements to be maintained to support such Tax returns), and other Tax records
of RRMC; (viii) any files and records relating to the RRMC Employees; (ix) Microsoft Office
products, Microsoft Project Standard and McAfee Virus Shield and all other third party software
installed on RRMC computers other than those expressly set forth in the definition of “Purchased
Assets;” (x) RRMC’s rights under this Agreement and the other agreements and instruments executed
and delivered by RRMC in connection with this Agreement and the transactions contemplated hereby
and thereby; and (xi) the non-transferable Permit listed as item 3 on Schedule 4.11.

     “Retained Interests” shall mean (i) all of RRMC’s right, title and interest in and to the
Lease listed on Schedule 1.1(A), and (ii) the reservations of all of RRMC’s right, title
and interest in and to oil, gas and other liquid or gaseous hydrocarbons set forth in the Real
Property

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Deeds. The Retained Interests under clause (ii) of the foregoing sentence are intended to
constitute a mineral servitude on the Owned Real Property under the Louisiana Mineral Code,
Louisiana Revised Statutes Title 31 (2000).

     “Retained Liabilities” means (i) all Liabilities arising under or related to the Mining
Reserves and the Purchased Assets prior to the Closing Date, including all accounts payable as of
the Closing Date and mine reclamation activities required under applicable Legal Requirements to be
completed prior to the Closing Date; (ii) all other Liabilities of RRMC that are not assumed by OLC
under the Lease Assignment, the Mine Permit Transfer Agreement or the Real Property Deeds or by
DHLC under the Assets Assignment Agreement, the Bill of Sale or the Improvements Deed; (iii) all
Liabilities arising under or related to the Retained Assets and the Retained Interests; (iv) all
Liabilities of RRMC under this Agreement and the other agreements and instruments executed and
delivered by RRMC in connection with this Agreement and the transactions contemplated hereby and
thereby; (v) all Liabilities arising under or related to all Employee Benefit Plans of any Seller
or any of their respective Affiliates, including Sellers’ Defined Benefit Plans; and (vi) all
maintenance and reclamation activities with respect to the CLECO Stockpile required under
applicable Legal Requirements to be completed prior to the Closing Date.

     “RRMC” has the meaning set forth in the preamble hereto.

     “RRMC Contribution Agreement” has the meaning set forth in Section 3.2(b).

     “RRMC Employees” has the meaning set forth in Section 4.14(a).

     “Schedules” means, collectively, the various Schedules referred to in this Agreement.

     “Seller” and “Sellers” have the meanings set forth in the preamble hereto.

     “Seller Consents” has the meaning set forth in Section 3.2(i).

     “Seller Indemnitees” has the meaning set forth in Section 10.2.

     “Sellers’ Defined Benefit Plans” has the meaning set forth in Section 4.15(a).

     “Sellers’ Knowledge” means the extent of the actual and current knowledge as of the date of
this Agreement or the Closing Date, as applicable, of the Persons listed in Schedule 1.1(B)
without any implication of verification or investigation concerning such knowledge other than
reasonable inquiry by the Persons listed on Schedule 1.1(B) made in contemplation of the
transactions contemplated by this Agreement of the RRMC Employees and Administrative Employees
charged with responsibility for the particular subject matter to which the knowledge is pertinent.

     “Sellers’ Reclamation Bond” has the meaning set forth in Section 6.8.

     “Subsidiary” of any Person means another Person, an amount of the voting securities, other
voting ownership or voting partnership interests of which is sufficient to elect at least a
majority of its board of directors or other governing body (or, if there are no such voting

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interests, 50% or more of the equity interests of which) is owned directly or indirectly by
such first Person or by another subsidiary of such first Person.

     “Surface Use Agreement” means that certain Surface Use Agreement, dated the Closing Date,
between RRMC and OLC, in the form attached hereto as Exhibit B.

     “SWEPCO” has the meaning set forth in the preamble hereto.

     “SWEPCO Confidentiality Agreement” has the meaning set forth in Section 8.3.

     “Tax” or “Taxes” means all federal, state, local and foreign taxes, charges, fees, levies,
imposts, duties or other assessments, including, without limitation, income, gross receipts,
excise, employment, sales, use, transfer, license, payroll, franchise, severance, stamp,
occupation, windfall profits, environmental (including taxes under Code Section 59A), premium,
federal highway use, commercial rent, customs duties, capital stock, paid up capital, profits,
withholding, social security, single business and unemployment, disability, real property, personal
property, registration, ad valorem, value added, alternative or add-on minimum, estimated, or other
tax or governmental fee of any kind whatsoever, imposed or required to be withheld by any
Governmental Agency, including any interest, penalties or additions thereto, whether disputed or
not.

     “Ton” means 2,000 pounds avoirdupois.

     “Transferred Employees” has the meaning set forth in Section 6.15(a).

ARTICLE II

PURCHASE AND SALE OF OLC INTERESTS AND PURCHASED ASSETS; PURCHASE PRICE

2.1 Purchase and Sale of OLC Interests. On the terms and subject to the conditions set
forth in this Agreement, at the Closing, each of NACC and RRMC shall sell, assign, transfer, convey
and deliver to each of SWEPCO and CLECO and its respective successors and assigns forever, free and
clear of any Liens (other than Permitted Liens), and each of SWEPCO and CLECO shall purchase and
acquire from NACC and RRMC, 50% of each of NACC’s and RRMC’s right, title and interest in and to
the OLC Interests.

2.2 Purchase and Sale of Purchased Assets. On the terms and subject to the conditions set
forth in this Agreement, at the Closing, RRMC shall sell, assign, transfer, convey and deliver the
Purchased Assets to DHLC and its successors and assigns forever, free and clear of any Liens (other
than Permitted Liens), and DHLC shall purchase and acquire from RRMC, all of RRMC’s right, title
and interest in and to the Purchased Assets.

2.3 Retained Assets. Notwithstanding anything in this Agreement to the contrary, RRMC
shall retain, and DHLC will in no way be construed to have purchased or acquired any interest
whatsoever in the Retained Assets.

2.4 Assumed Liabilities. On the terms and subject to the conditions set forth in this
Agreement, at the Closing, DHLC shall assume and become responsible for, and shall thereafter

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pay, perform and discharge as and when due the Liabilities arising under or related to the
Purchased Assets to the extent arising from, or relating to, periods of time after the Closing as
described in Section 3.1, and Purchasers shall cause OLC to assume and become responsible
for, and thereafter pay, perform and discharge as and when due the Liabilities arising under or
related to the Mining Reserves to the extent arising from, or relating to, periods of time after
the Closing as described in Section 3.1; provided, however, that for the avoidance of
doubt, (i) no Liabilities shall be assigned to or assumed by DHLC other than those expressly
assigned and assumed under the Assets Assignment Agreement, the Bill of Sale or the Improvements
Deed, or by OLC other than those expressly assigned and assumed under the Lease Assignment, the
Mine Permit Transfer Agreement or the Real Property Deeds (the “Assumed Liabilities”), and (ii) the
Assumed Liabilities shall expressly include RRMC’s maintenance and reclamation obligations with
respect to the CLECO Stockpile not required under applicable Legal Requirements to be completed
prior to the Closing Date. The Assumed Liabilities will not include, and DHLC will not assume, any
Retained Liabilities. The Retained Liabilities will be retained by and remain the obligation of
RRMC.

2.5 Purchase Price.

	 	(a)	 	The aggregate purchase price for the OLC Interests and the Purchased Assets
(the “Purchase Price”) is the sum of Forty One Million Five Hundred Thousand Dollars
($41,500,000) plus the NACC Contribution Amount, subject to adjustment pursuant
to Section 2.5(b) and (c) below. At the Closing, (i) each of SWEPCO
and CLECO shall pay NACC and RRMC the sum of (A) Twelve Million Eight Hundred Fifty
Thousand Dollars ($12,850,000) (for an aggregate of Twenty Five Million Seven Hundred
Thousand Dollars ($25,700,000), subject to adjustment pursuant to Sections
2.5(b) and (c) below (the “Mining Reserves Purchase Price”), plus
(B) one-half (1/2) of the NACC Contribution Amount, for the purchase of the OLC
Interests; and (ii) DHLC shall pay RRMC Fifteen Million Eight Hundred Thousand Dollars
($15,800,000), subject to adjustment pursuant to Section 2.5(c) below (the
“Assets Purchase Price”), for the purchase of the Purchased Assets.
	 
	 	(b)	 	Not later than three (3) Business Days prior to the Closing Date, RRMC shall
cease all transportation of mined coal from the mine pit to the coal stockpile and may,
but shall not be obligated to, transport such coal to the CLECO Stockpile. Not later
than two (2) Business Days prior to the Closing Date, RRMC shall deliver to Purchasers
the results of a coal stockpile survey, conducted by RRMC consistent with recent past
practices of the approximate number of Tons of stockpiled coal (other than the CLECO
Stockpile) that will be included in the Mining Reserves on the Closing Date (the
“Closing Date Coal Stockpile Amount”). Sellers shall provide Purchasers with
reasonable notice prior to such survey, and Purchasers shall be entitled to have one or
more representatives observe such survey. If the Closing Date Coal Stockpile Amount is
less than the Expected Coal Stockpile Amount, then the Purchase Price will be reduced
by an amount equal to the product of (i) the Expected Coal Stockpile Amount
minus the Closing Date Coal Stockpile Amount times (ii) $20.16 per Ton
(the “Coal Stockpile Underage Value”). If the Closing Date Coal Stockpile Amount is

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	 	 	 	greater than the Expected Coal Stockpile Amount, then the Purchase Price will be
increased by an amount equal to the product of (A) the Closing Date Coal Stockpile
Amount minus the Expected Coal Stockpile Amount times (ii) $20.16 per Ton
(the “Coal Stockpile Overage Value”).
	 
	 	(c)	 	Not later than two (2) Business Days prior to the Closing Date Sellers shall
deliver to Purchasers a statement itemizing the prorations described in Section
6.7 and the credit to DHLC equal to the CLECO Stockpile Accrual Amount as of the
Closing Date. Purchasers shall review such proration statement prior to the Closing
Date and the Parties shall agree to a final proration statement as of the Closing Date
(the “Proration Statement”). The net amount shown owing by RRMC to DHLC or by DHLC to
RRMC, as applicable, on the Proration Statement, is referred to herein as the “Assets
Proration Amount.” The net amount shown owing by CLECO and SWEPCO to RRMC or by RRMC
to CLECO and SWEPCO, as applicable, on the Proration Statement is referred to herein as
the “Mining Reserves Proration Amount.”

2.6 Payment of Purchase Price. At the Closing, (a) each of CLECO and SWEPCO shall pay to
Sellers its 50% share of (i) the Mining Reserves Purchase Price, (ii) plus the Coal
Stockpile Overage Value or minus the Coal Stockpile Underage Value, as applicable, and
(iii) plus or minus the Mining Reserves Proration Amount, as applicable; and (b)
DHLC shall pay to Sellers (i) the Assets Purchase Price, (ii) plus or minus the
Assets Proration Amount, as applicable, in each case by wire transfer in immediately available
federal funds to the accounts designated by Sellers in Schedule 2.6.

2.7 Certain Financial Statements. No later than two (2) Business Days prior to the Closing
Date, Sellers shall deliver to Purchasers unaudited, pro forma balance sheets of OLC, one prepared
in accordance with United States generally accepted accounting principles, consistently applied,
and the other prepared on a tax-basis, each as of the Closing Date.

ARTICLE III

CLOSING AND DELIVERIES

3.1 Closing.

	 	(a)	 	The closing of the transactions contemplated hereby (the “Closing”) will take
place within five Business Days after the satisfaction or waiver of each of the
conditions set forth in ARTICLE VII (other than those conditions that are to be
satisfied at Closing), or on such other date as the Parties mutually agree in writing
(the “Closing Date”) at the offices of Bracewell & Giuliani LLP, 1445 Ross Avenue,
Suite 3800, Dallas, Texas 75202-2711. Legal title, equitable title and risk of loss
with respect to the OLC Interests and the Purchased Assets will be deemed transferred
to or vested in the applicable Purchaser, and the transactions contemplated by this
Agreement will be deemed effective for Tax, accounting and other computational
purposes, and the Parties will treat the Closing as if it had occurred, as of 11:59
p.m. (Central Time) on the Closing Date.

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	 	(b)	 	At or immediately prior to the Closing, Sellers will form OLC on behalf of RRMC
and the following additional steps will occur in the following order as part of the
Closing: (i) RRMC shall transfer to OLC all of its right, title and interest in and to
the Mining Reserves in exchange for all of the membership interests in OLC; (ii) NACC
shall immediately thereafter contribute the NACC Contribution Amount in exchange for 1%
of the membership interests in OLC; (iii) in exchange for payment of the Mining
Reserves Purchase Price (as adjusted in Sections 2.5 and 2.6, as
applicable), each of CLECO and SWEPCO shall purchase an aggregate 50% of the OLC
Interests (for the avoidance of doubt, each of CLECO and SWEPCO shall purchase one-half
of the OLC Interests held by each of NACC and RRMC); and (iv) in exchange for the
Assets Purchase Price (as adjusted in Sections 2.5 and 2.6, as
applicable), DHLC shall purchase the Purchased Assets from RRMC. Closing shall not be
deemed to have occurred until all steps have been completed. All other proceedings to
be taken by all Parties at the Closing will be deemed to have been taken simultaneously
and no such other proceedings will be deemed to have been taken until all have been
taken.
	 
	 	(c)	 	Notwithstanding any provision of this Agreement to the contrary, the Parties
acknowledge and agree that, at Closing, the Mining Reserves and the Purchased Assets
may and are permitted to differ from those existing upon execution and delivery of this
Agreement to the extent resulting from (i) Seller’s operation of the Oxbow Mine in
accordance with, as permitted by, and as not prohibited by, the provisions of
Section 6.1, and (ii) the occurrence of Closing despite a casualty pursuant to
Sections 6.16(a)(i), 6.16(b)(i), or 6.16(c)(i) or a
condemnation proceeding pursuant to Section 6.16(d)(i).

3.2 Deliveries by Sellers. At the Closing, Sellers, at Sellers’ sole cost, shall deliver
or cause to be delivered to the applicable Purchaser or Purchasers the following items:

	 	(a)	 	Possession of the Mining Reserves and the Purchased Assets, including the real
estate documents for the Oxbow Mine located at NACC’s Bismarck, North Dakota office and
the geological data for the Oxbow Mine located at NACC’s warehouse in Dallas, Texas;
	 
	 	(b)	 	An original of a contribution agreement, substantially in the form of
Exhibit C-1, duly executed by RRMC and OLC (the “RRMC Contribution Agreement”),
and an original of a contribution agreement, substantially in the form of Exhibit
C-2, duly executed by NACC, RRMC and OLC (the “NACC Contribution Agreement”);
	 
	 	(c)	 	An original of an assignment and assumption of Leases with respect to the
Leases set forth on Schedule 4.8 conveyed by RRMC to OLC substantially in the
form of Exhibit D, duly executed by RRMC and OLC (the “Lease Assignment”);
	 
	 	(d)	 	An original of a warranty deed with respect to the parcels of Owned Real
Property conveyed by RRMC to OLC (other than such property described in Schedule
4.6(d)), substantially in the form of Exhibit E-1, and an original of a
special

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	 	 	 	warranty deed with respect to the parcels of Owned Real Property described in
Schedule 4.6(d) conveyed by RRMC to OLC, substantially in the form of
Exhibit E-2, each duly executed by RRMC and OLC (collectively, the “Real
Property Deeds”);
	 
	 	(e)	 	An original of an assignment of membership interests with respect to the OLC
Interests in favor of each of CLECO and SWEPCO substantially in the form of Exhibit
F, duly executed by NACC and RRMC (the “Interests Assignment Agreement”);
	 
	 	(f)	 	An original of a bill of sale to DHLC, in substantially the form of Exhibit
G, duly executed by RRMC (the “Bill of Sale”);
	 
	 	(g)	 	An original of an assignment and assumption agreement with DHLC, in
substantially the form of Exhibit H, duly executed by RRMC (the “Assets
Assignment Agreement”);
	 
	 	(h)	 	An original of an act of sale with respect to all buildings, fixtures and other
improvements located on the Real Property, in substantially the form of Exhibit
I, duly executed by RRMC (the “Improvements Deed”);
	 
	 	(i)	 	Each of the Consents required to be obtained by Sellers set forth on
Schedule 3.2(i) (the “Seller Consents”);
	 
	 	(j)	 	Written resignations of each officer of OLC set forth on Schedule
3.2(j);
	 
	 	(k)	 	The original company record books of OLC, including an original executed
Amended and Restated Limited Liability Company Agreement of OLC substantially in the
form of Exhibit J, duly executed by NACC and RRMC;
	 
	 	(l)	 	An original of the Consulting Agreement, duly executed by NACC;
	 
	 	(m)	 	An original of the Surface Use Agreement, duly executed by RRMC;
	 
	 	(n)	 	An original of a letter of credit, substantially in the form of Exhibit
K and with such other changes as may be reasonably required by the Issuing Bank, in
the stated amount of Four Million One Hundred Fifty Thousand Dollars ($4,150,000) and
expiring 364 days after the Closing Date (subject to renewal or replacement in
accordance with Section 10.9(a)), duly executed by the Issuing Bank (the
“Letter of Credit”);
	 
	 	(o)	 	An original of a mine permit transfer agreement, substantially in the form of
Exhibit L, duly executed by RRMC and OLC (the “Mine Permit Transfer
Agreement”);
	 
	 	(p)	 	An original of a Closing statement (the “Closing Statement”), reflecting the
total amount payable by each Purchaser to Sellers at Closing pursuant to Section
2.6, duly executed by Sellers;

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	 	(q)	 	A certificate of the Secretary of State of the jurisdiction of incorporation or
formation, as applicable, as to the good standing of each Seller in such jurisdiction
dated within 15 days of the Closing Date;
	 
	 	(r)	 	A certificate of the Secretary of each Seller, given by him or her on behalf of
the delivering Seller and not in his or her individual capacity, certifying as to
(i) such Seller’s certificate of incorporation and bylaws, in the case of NACC, or such
Seller’s articles of organization and limited liability company agreement, in the case
of OPC, or the Joint Venture Agreement, in the case of RRMC, and (ii) resolutions duly
adopted by the Board of Directors of such Seller, in the case of NACC, by the Board of
Managers of such Seller, in the case of OPC, or by NACC and OPC as joint venturers of
RRMC, authorizing the execution and delivery of this Agreement by such Seller and its
performance of the transactions contemplated hereby;
	 
	 	(s)	 	A non-foreign person affidavit for each Seller that complies with the
requirements of Section 1445 of the Code; and
	 
	 	(t)	 	Such other documents and instruments as Purchasers reasonably request,
including vehicle titles, to consummate the transactions contemplated hereby.

3.3 Deliveries by Purchasers. At the Closing, the applicable Purchaser or Purchasers, at
its or their sole cost, shall deliver or cause to be delivered to Sellers the following items:

	 	(a)	 	The Assets Purchase Price or its 50% share of the Mining Reserves Purchase
Price, each as adjusted pursuant to Sections 2.5 and 2.6, as
applicable, paid as designated by Sellers in accordance with Schedule 2.6;
	 
	 	(b)	 	A certificate of the Secretary of State of the jurisdiction of incorporation or
formation, as applicable, as to the good standing of each Purchaser in such
jurisdiction dated within 15 days of the Closing Date;
	 
	 	(c)	 	An original of the Interests Assignment Agreement, duly executed by CLECO and
SWEPCO;
	 
	 	(d)	 	An original of the Bill of Sale, duly executed by DHLC;
	 
	 	(e)	 	An original of the Assets Assignment Agreement, duly executed by DHLC;
	 
	 	(f)	 	An original of the Improvements Deed, duly executed by DHLC;
	 
	 	(g)	 	An original of the Consulting Agreement, duly executed by DHLC;
	 
	 	(h)	 	An original of the Surface Use Agreement, duly executed by OLC;
	 
	 	(i)	 	An original of the Closing Statement, duly executed by each Purchaser;
	 
	 	(j)	 	A certificate of the Secretary of each Purchaser, given by him or her on behalf
of such Purchaser and not in his or her individual capacity, certifying as to (i) such

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	 	 	 	Purchaser’s articles of organization and limited liability company agreement, in the
case of CLECO and DHLC, or such Purchaser’s certificate of incorporation and bylaws,
in the case of SWEPCO, and (ii) resolutions duly adopted by the Board of Managers of
such Purchaser, in the case of CLECO and DHLC, or by the Board of Directors of such
Purchaser, in the case of SWEPCO, authorizing the execution and delivery of this
Agreement by such Purchaser and its performance of the transactions contemplated
hereby;

	 	(k)	 	Consent from (or pre-approval by) LOC to transfer of the Mine Permit; and
	 
	 	(l)	 	Such other documents and instruments as Sellers reasonably request to
consummate the transactions contemplated hereby.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF SELLERS

     Each Seller, jointly and severally, represents and warrants to Purchasers as follows:

4.1 Organization of Sellers. NACC is a corporation duly incorporated, validly existing,
and in good standing under the Legal Requirements of the State of Delaware. OPC is a limited
liability company duly formed and existing under the Legal Requirements of the State of Louisiana.
OPC has in effect an election to be taxed as a corporation pursuant to Regulation § 301.7701-3 of
the Code. RRMC is a joint venture duly formed under the Legal Requirements of the State of Texas
and is not in dissolution. Each Seller has full power and authority to execute, deliver and
perform this Agreement (and all documents required to be executed and delivered by each Seller at
Closing) and to consummate the transactions contemplated by this Agreement (and such documents).
OLC has not made an election under Section 754 of the Code. RRMC made an election under Section
754 of the Code with respect to the tax year ended December 31, 2000, and such election remains in
effect.

4.2 Foreign Qualification. Each of NACC and RRMC is also qualified to do business in the
State of Louisiana.

4.3 Authority of Sellers. The execution, delivery and performance by each Seller of this
Agreement (and all documents required to be executed and delivered by each Seller at Closing) and
the consummation of the transactions contemplated hereby and thereby have been duly and validly
authorized by all necessary corporate or limited liability company (as applicable) action on the
part of such Seller, and this Agreement constitutes the legal, valid and binding obligation of each
Seller, enforceable in accordance with its terms, except as such enforcement may be limited by
applicable bankruptcy, insolvency, moratorium, or similar Legal Requirements from time to time in
effect which affect creditors’ rights generally, and by legal and equitable limitations on the
enforceability of specific remedies (the “General Enforceability Exceptions”).

4.4 No Conflict or Violation. Except as may be avoided or cured by obtaining the Seller
Consents and except as set forth on Schedule 4.4, neither the execution and delivery of
this Agreement by Sellers (and all documents required to be executed and delivered by each Seller
at Closing), the consummation of the transactions contemplated hereby or thereby, nor the

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fulfillment of the terms and compliance with the provisions hereof or thereof, will, directly or
indirectly (with or without notice or lapse of time):

	 	(a)	 	contravene, conflict with, or result in a violation of: (i) any provision of
the certificate of incorporation or bylaws of NACC, the articles of organization or
limited liability company agreement of OPC, the Joint Venture Agreement, or the limited
liability company agreement of OLC, or (ii) any resolution or consent adopted by the
Board of Directors or the stockholders of NACC, the Board of Managers or the members of
OPC, or by NACC and OPC as joint venturers of RRMC, or the Board of Managers or the
members of OLC;
	 
	 	(b)	 	contravene, conflict with or result in a violation of any Legal Requirement or
Order applicable to any Seller or OLC, or give any Governmental Agency or other Person
the right to challenge any of the transactions contemplated hereby;
	 
	 	(c)	 	whether or not with due notice or lapse of time or both, (i) result in the
imposition or creation of any Lien upon the OLC Interests or the Purchased Assets, or
(ii) result in a default or give rise to any right of termination, cancellation, or
acceleration under any note, bond, mortgage, indenture, or other financing instrument,
or Contract to which any Seller is a party or by which any Seller, the Oxbow Mine, the
Purchased Assets, or the Mining Reserves are bound;
	 
	 	(d)	 	to Sellers’ Knowledge, give any Governmental Agency or other Person the right
to challenge any of the transactions contemplated hereby; or
	 
	 	(e)	 	require the Consent, approval, or authorization of, or registration or filing
with, any Governmental Agency or other Person.

4.5 Title to RRMC Interests and OLC Interests.

	 	(a)	 	NACC and OPC own and possess all right, title and interests in and to all
interests in RRMC free and clear of all Liens, other than Permitted Liens, and no other
Person has the right or obligation to acquire any interest in RRMC.
	 
	 	(b)	 	At Closing, NACC and RRMC will own and possess all right, title and interest in
and to the OLC Interests free and clear of all Liens, other than Permitted Liens. At
Closing, NACC and RRMC will have the right, power and capacity to convey, transfer,
assign and deliver the OLC Interests free and clear of any Liens, other than Permitted
Liens, and no other Person will have the right or obligation to acquire any ownership
interest in the OLC Interests.

4.6 Title to Purchased Assets and Mining Reserves.

	 	(a)	 	RRMC has good and valid title to all of the Purchased Assets, free and clear of
all Liens, other than Permitted Liens. Schedule 4.6(a) sets forth a complete
listing of the machinery and equipment included in the Purchased Assets. At the
Closing, DHLC will acquire good and valid title to the Purchased Assets, free and clear
of all Liens, other than Permitted Liens.

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	 	(b)	 	RRMC has the right, power and capacity to convey, transfer, assign and deliver
the Mining Reserves to OLC at Closing. Sellers have made available to Purchasers all
documents in their possession relating to title to the Mining Reserves. No Person has
the right or obligation to acquire any of RRMC’s ownership interest in the Mining
Reserves, other than with respect to those portions of Owned Real Property identified
in Schedule 4.10(a).
	 
	 	(c)	 	At Closing, the Owned Real Property, other than such property described in
Schedule 4.6(d), will be free and clear of all Liens, except Permitted Liens.
	 
	 	(d)	 	Schedule 4.6(d) identifies those portions of the Owned Real Property
that may be subject to lawful claims of Persons not claiming by, through or under OLC
or any Seller or any of their respective Affiliates. At Closing, the Owned Real
Property described in Schedule 4.6(d) will be free and clear of all Liens,
except Permitted Liens; provided that for purposes of this Section 4.6(d),
“Permitted Liens” includes any lawful claim of any Person not claiming by, through or
under OLC or any Seller or any of their respective Affiliates.
	 
	 	(e)	 	At Closing, the Leases will be free and clear of all Liens, except Permitted
Liens; provided that for purposes of this Section 4.6(e), “Permitted Liens”
includes any lawful claim of any Person not claiming by, through or under RRMC, any
other Seller or any of their respective Affiliates.

4.7 Legal Requirements and Orders. Except as set forth on Schedule 4.7, the Oxbow
Mine has been operated by Sellers in compliance with all applicable Legal Requirements and Orders.

4.8 Leases. Schedule 4.8 lists and describes all coal leases, coal subleases, and
all other leases or subleases of real property (together with any amendments, supplements, and
other modifications thereto, each a “Lease,” and collectively, the “Leases” and the real property
subject to such Leases, the “Leased Real Property”) held by RRMC, other than Leases included in the
Retained Interests set forth on Schedule 1.1(A). RRMC has made available to Purchasers
correct and complete copies of the Leases listed in Schedule 4.8. Except as set forth on
Schedule 4.8, with respect to each such Lease:

	 	(a)	 	each Lease is a valid and binding agreement of RRMC, enforceable by RRMC in
accordance with its terms, subject to the General Enforceability Exceptions, and, to
Sellers’ Knowledge, each Lease is a valid and binding agreement of the other parties
thereto;
	 
	 	(b)	 	RRMC has fulfilled all material obligations required to have been performed by
it pursuant to each Lease;
	 
	 	(c)	 	RRMC is not in breach of or in default under any of the Leases and, to Sellers’
Knowledge, there is no event or condition that with notice or the passage of time, or
both, will be a breach or default of any Lease by RRMC;

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	 	(d)	 	to Sellers’ Knowledge, there is no existing breach or default by any other
party to any Lease, and no event has occurred that, with the passage of time or giving
of notice or both, would constitute a default by such other party or would permit
termination, modification or acceleration thereunder by any lessor;
	 
	 	(e)	 	RRMC is in material compliance with and enjoying quiet possession under each
Lease;
	 
	 	(f)	 	RRMC has paid in full all ad valorem property Taxes and other assessments
levied on any of the Leases (if required under any Lease) that have heretofore become
due and payable, and there are no agreements for payment to be deferred beyond the
statutory due date;
	 
	 	(g)	 	RRMC has not received any written notice of assessments for public improvements
or condemnation against any real property covered by any Lease and, to Sellers’
Knowledge, no such assessments or condemnation is contemplated; and
	 
	 	(h)	 	Except for the Seller Consents, no Consent of any lessor is required in
connection with the assignment of any Lease to OLC or the sale of the OLC Interests to
CLECO and SWEPCO.

4.9 Contracts. Schedule 4.9 sets forth all material contracts of RRMC (other than:
(i) agreements between Sellers or any of them and Purchasers or any of them; (ii) the Joint Venture
Agreement; (iii) Leases; (iv) contracts with third party vendors that obligate Sellers to pay less
than $50,000 in the aggregate to which RRMC is a party or is made exclusively for the benefit of
RRMC or for the Oxbow Mine; (v) contracts constituting or solely related to the Retained Interests
or Retained Assets; and (vi) the Employee Benefit Plans) (each a “Contract,” collectively
“Contracts”), including all guaranties, debt, loans, deeds of trust, security agreements, joint
venture agreements, partnership agreements or services agreements. Sellers have made available to
Purchasers correct and complete copies of each Contract (including written summaries setting forth
the terms of any oral Contract). Except as set forth on Schedule 4.9:

	 	(a)	 	each Contract is a valid and binding agreement of RRMC, enforceable by RRMC in
accordance with its terms, except as such enforcement may be limited by General
Enforceability Exceptions, and, to Sellers’ Knowledge, each Contract is a valid and
binding agreement of the other parties thereto;
	 
	 	(b)	 	RRMC has fulfilled all material obligations required to have been performed by
it pursuant to each Contract;
	 
	 	(c)	 	RRMC is not in breach of or in default under any of the Contracts and, to
Sellers’ Knowledge, there is no event or condition that with notice or the passage of
time, or both, will be a breach or default of any Contract by RRMC;
	 
	 	(d)	 	to Sellers’ Knowledge, there is no existing breach or default by any other
party to any Contract, and no event has occurred that, with the passage of time or
giving

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of notice or both, would constitute a default by such other party or would permit
termination, modification or acceleration thereunder by such other party; and

	 	(e)	 	no Consent of any party to any Contract is required in connection with the
assignment of any Contract to DHLC.

4.10 Owned Real Property.

	 	(a)	 	Schedule 4.10(a) discloses all real property owned by RRMC
(collectively, the “Owned Real Property”). Except as set forth on Schedule
4.10(a), RRMC does not own any real property and no Person (other than RRMC) has
the right of use or occupancy of any portion of the Owned Real Property or any option,
first refusal or first opportunity right or other interest with respect to any portion
of the Owned Real Property.
	 
	 	(b)	 	RRMC has not received any written notice of assessments for public improvements
or condemnation against any Owned Real Property and, to Seller’s Knowledge, no such
assessments or condemnation is contemplated.

4.11 Permits. Schedule 4.11 is a list of each Permit, including its expiration
date. All Permits, except as noted on Schedule 4.11, are in full force and effect and no
Proceeding is pending or, to Sellers’ Knowledge, threatened, to revoke or limit any such Permit.
Except as set forth on Schedule 4.11:

	 	(a)	 	RRMC is, and at all times since December 31, 2002 has been, in compliance with
all of the terms and requirements of each Permit listed in Schedule 4.11;
	 
	 	(b)	 	Since December 31, 2002, RRMC has not received any notice or written
communication from any Governmental Agency or any other Person regarding: (i) any
actual, alleged, possible, or potential violation of or failure to comply with any term
or requirement of any such Permit or (ii) any actual, proposed, possible, or potential
revocation, withdrawal, suspension, cancellation, termination of, or modification to
any such Permit, nor is there any basis for such notice or other communication, and to
Sellers’ Knowledge, there has been no such oral notice or other oral communication
since December 31, 2002;
	 
	 	(c)	 	all applications required to have been filed for the renewal of such Permits
have been duly filed on a timely basis with the appropriate Governmental Agencies, and
all other filings required to have been made with respect to such Permits have been
duly made on a timely basis with the appropriate Governmental Agencies; and
	 
	 	(d)	 	except for provisions which prohibit the transfer or assignment of a Permit
without the approval of a Governmental Agency, neither the execution and delivery of
this Agreement by RRMC, the consummation of the transactions contemplated hereby, nor
the fulfillment and compliance with the provisions hereof, will directly or indirectly
(with or without notice or lapse of time): (i) contravene, conflict with, or result in
a violation of any of the terms or

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requirements of, or give any Governmental Agency the right to revoke, withdraw,
suspend, cancel, terminate, or modify, any Permit or (ii) contravene, conflict with,
or result in a violation or breach of any provision of, or give any Person the right
to declare a default or exercise any remedy under, or to accelerate the maturity or
performance of, or to cancel, terminate, or modify, any Permit.

4.12 Reserve Data. Sellers have made available to Purchasers copies of geological surveys
and data, logs, test hole locations, monitoring well locations, reserve data, coal measurements,
coal samples, lithologic data, coal reserve calculations, mine plans, equipment productivity and
cost data, engineering studies, seismic records, shot points, field notes, interpretations and
programs and all other seismic, technical, geological and geophysical information, data, reports,
samples and studies prepared by or on behalf of Sellers or within the possession, custody or
control of Sellers with respect to the Real Property as of June 30, 2008 (“Reserve Data”). The
Reserve Data has been based upon information obtained in the ordinary course of business of
Sellers.

4.13 Environmental Matters. Notwithstanding any other representation or warranty contained
in this ARTICLE IV, the representations and warranties contained in this Section
4.13 and the representations and warranties contained in Section 4.11 relating to
Permits constitute the sole representations and warranties of Sellers relating to any Environmental
Law. Except as set forth on Schedule 4.13: (a) Neither Sellers nor, to Sellers’
Knowledge, any other Person has generated, manufactured, stored, transported, treated, recycled,
disposed of or otherwise handled in any way any Hazardous Materials on, beneath or about the Real
Property that has resulted in or is reasonably likely to result in any Damages, to or against RRMC
or OLC; (b) there has not been a Release of Hazardous Materials into the Environment on, beneath or
about the Real Property during the operation of the Oxbow Mine by RRMC or, to Sellers’ Knowledge,
prior to such operation by RRMC, that has resulted in or is reasonably likely to result in any
Damages to or against RRMC or OLC; (c) Sellers have not received any notice, complaint, Order,
directive or action from any Governmental Agency or Person relating to Hazardous Materials,
Environmental Law, or Liabilities with respect to the Real Property that has resulted in or is
reasonably likely to result in any Damages to or against RRMC or OLC or in a prohibition or
restriction on the use of the Leases or Owned Real Properties as contemplated by the Mine Permit;
(d) to Sellers’ Knowledge, the Real Property does not constitute a habitat for any species
designated as threatened or endangered pursuant to the Endangered Species Act, 16 U.S.C. §1531 et
seq.; (e) Sellers have not installed any underground or above-ground storage tanks or subsurface
structures on or under the Real Property and, to Seller’s Knowledge, no other Person has done so;
(f) the Real Property is not subject to any private or governmental Lien or claim relating to
Hazardous Materials or violations of Environmental Law other than Permitted Liens; (g) no part of
the Real Property has been designated as land unsuitable for surface coal mining operations or as
areas where such mining operations are prohibited or limited by the Surface Mining Control and
Reclamation Act of 1977, 30 U.S.C. §1272 or the Louisiana Surface Mining and Reclamation Act, La.
Rev. Stat. Ann. 30 §922 or, to Seller’s Knowledge, other applicable Environmental Laws; and (h) the
Oxbow Mine, the Real Property, and RRMC are and have been during the past six (6) years in
compliance in all material respects with all applicable Environmental Laws, including without
limitation any requirement of such Environmental Laws to obtain, maintain, and comply with any
Permit.

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4.14 Employees.

	 	(a)	 	Schedule 4.14 sets forth a list of the names, job titles and job duties
of (i) all employees of RRMC (the “RRMC Employees”) and (ii) those employees of NACC
who are currently providing administrative services to RRMC (the “Administrative
Employees”).
	 
	 	(b)	 	With respect to the RRMC Employees and Administrative Employees, during the
last 12 months, there has been no mass layoff, plant closing or shutdown that
implicates the Worker Adjustment & Retraining Notification Act of 1988, as amended, or
any similar Legal Requirement.
	 
	 	(c)	 	None of Sellers nor any Affiliate of a Seller is a party to, or is bound by,
the terms of any collective bargaining agreement or any other contract with any labor
union or employee representative of any of the RRMC Employees or Administrative
Employees.
	 
	 	(d)	 	There is no material litigation pending or, to Sellers’ Knowledge, threatened
between (i) Sellers or any of its Affiliates and (ii) any RRMC Employee, Administrative
Employee or any employee representatives (including unions and any bargaining unit) of
any of the RRMC Employees or Administrative Employees. To Sellers’ Knowledge, there
are no union organizational efforts presently being made involving any of the RRMC
Employees or Administrative Employees.
	 
	 	(e)	 	Except as disclosed on Schedule 4.14, there are no employment contracts
between any of Sellers or their Affiliates and any of the RRMC Employees or
Administrative Employees.

4.15 Employee Benefit Plans.

	 	(a)	 	Sellers and certain Affiliates of Sellers have made contributions to or have
been required to make contributions to “defined benefit plans” as defined in
Section 3(35) of ERISA or pension plans subject to the funding standards of Section 302
of ERISA or Section 412 of the Code (“Sellers’ Defined Benefit Plans”). No liability
under Section 302 or 303 of ERISA, Section 412 of the Code or Title IV or ERISA has
been incurred by any Seller, any Affiliate of any Seller or any corporation, trade,
business, or entity that is now or has been at any time under common control with any
Affiliate of any Seller (within the meaning of Section 414(b), (c), (m) or (o) of the
Code or Section 4001 of ERISA) for failure to timely make any contribution payment
required with respect to any of Seller’s Defined Benefit Plans. None of Sellers nor
any Affiliates of Sellers have made a contribution or have been required to make a
contribution to a “multiemployer plan” as defined in Section 3(37) of ERISA or
Section 414(f) of the Code or a “multiple employer plan” within the meaning of
Section 210(a) of ERISA or Section 413(c) of the Code. No service rendered by any RRMC
Employee or Administrative Employee during the past six (6) years for any Seller or any
Affiliate of any Seller is taken into account for purposes of calculating

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	 	 	 	withdrawal liability, within the meaning of Section 4201 of ERISA, with respect to
any “multiemployer plan” as defined in Section 3(37) of ERISA or Section 414(f) of
the Code.

	 	(b)	 	With respect to each group health plan benefiting any RRMC Employee or
Administrative Employee, RRMC and NACC, as applicable, have materially complied with
the continuation coverage requirements of Section 4980B of the Code and Part 6 of
Subtitle B of Title I of ERISA.
	 
	 	(c)	 	Each Employee Benefit Plan that is intended to be qualified within the meaning
of Section 401 of the Code has received a favorable determination letter as to its
qualification that is current as of the Closing Date and nothing has occurred (or
failed to occur) that could reasonably be expected to result in the revocation of such
letter.

4.16 Brokers. All negotiations relative to this Agreement and the transactions
contemplated hereby have been carried on by Sellers without the participation of any other Person
acting on their behalf in such manner as to give rise to any valid claim by any such Person against
Purchasers or their Affiliates for a finder’s fee, brokerage commission or other similar payment
based on an arrangement with Sellers or their Affiliates.

4.17 Litigation. Except as disclosed on Schedule 4.17, (a) there are no actions,
causes of action, claims, suits, Proceedings, Orders pending or, to Sellers’ Knowledge threatened,
against any Seller in connection with the operation of the Oxbow Mine, the Mining Reserves, the
Purchased Assets or the OLC Interests, or that seek to restrain or enjoin the consummation of the
transactions contemplated hereby, at law, in equity, or before or by any Governmental Agency, and
(b) to Sellers’ Knowledge, no event has occurred and no condition exists that is reasonably likely
to give rise to, or serve as the basis for, any such action, cause of action, claim, suit,
Proceeding, or Order.

4.18 Taxes. Except for Taxes referred to in Section 6.6, (i) Sellers have timely
paid, or will timely pay, all Taxes that include or relate to the Mining Reserves or the Purchased
Assets that will have been required to be paid on or prior to the Closing Date, and (ii) Sellers
have made, or will prior to Closing make, adequate provision to pay when due all Taxes that include
or relate to the Mining Reserves or the Purchased Assets after the Closing Date pursuant to
Section 6.7.

4.19 No Other Representations or Warranties. EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES
CONTAINED IN THIS ARTICLE IV (AS MODIFIED BY THE SCHEDULES HERETO), NEITHER SELLERS NOR ANY
OF THEIR RESPECTIVE AFFILIATES, EMPLOYEES OR REPRESENTATIVES ARE MAKING OR HAVE MADE ANY
REPRESENTATIONS OR WARRANTIES OF ANY SORT TO OR FOR THE BENEFIT OF PURCHASERS, WHETHER ORAL OR
WRITTEN, EXPRESS OR IMPLIED, INCLUDING (I) ANY WARRANTY OF MERCHANTABILITY OR OF FITNESS FOR ANY
PURPOSE OR INTENDED USE OR (II) THE PRESENCE OR ABSENCE OF ANY APPARENT OR HIDDEN DEFECTS, AND
SELLERS EXPRESSLY DISCLAIM ANY SUCH OTHER REPRESENTATIONS AND WARRANTIES, AND EXCEPT TO THE EXTENT
PROVIDED IN SECTION 10.1, EACH OF THE PURCHASERS HEREBY WAIVES ANY RIGHT TO THE RETURN OF
ALL OR ANY PART OF THE PURCHASE PRICE OR TO A

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REDUCTION OF THE PURCHASE PRICE AND ANY WARRANTY OF FITNESS IT MAY HAVE IN REDHIBITION PURSUANT TO
LOUISIANA CIVIL CODE ARTICLES 2520 THROUGH 2548 INCLUSIVE IN CONNECTION WITH THE PURCHASE AND SALE
OF THE MINING RESERVES AND THE PURCHASED ASSETS. WITHOUT LIMITING THE FOREGOING, SELLERS MAKE NO
REPRESENTATIONS OR WARRANTIES TO PURCHASERS REGARDING (A) THE CONDITION OF THE PURCHASED ASSETS,
(B) THE ACCURACY OR COMPLETENESS OF THE RESERVE DATA, (C) THE ESTIMATES OF THE QUANTITY OR QUALITY
OF THE RECOVERABLE COAL RESERVES WITHIN THE REAL PROPERTY OR ANY AREA THEREOF, OR (D) THE PROBABLE
SUCCESS OR PROFITABILITY OF THE OXBOW MINE, AND ANY RELIANCE ON OR USE OF THE SAME SHALL BE AT
PURCHASERS’ SOLE RISK.

ARTICLE V

REPRESENTATIONS AND WARRANTIES OF EACH PURCHASER

     Each Purchaser, with respect to itself only and not with respect to any other Purchaser
(except that the representation and warranties of DHLC are made jointly and severally by SWEPCO),
represents and warrants to Sellers as follows:

5.1 Organization and Authority. CLECO is a limited liability company duly formed and
existing under the Legal Requirements of the State of Louisiana. SWEPCO is a corporation duly
incorporated, validly existing and in good standing under the Legal Requirements of the State of
Delaware. DHLC is a limited liability company duly formed and existing under the Legal
Requirements of the State of Delaware. Such Purchaser has full power and authority to execute,
deliver and perform this Agreement (and all documents required to be executed and delivered by such
Purchaser at Closing) and to consummate the transactions contemplated by this Agreement (and such
documents). The execution, delivery and performance by such Purchaser of this Agreement (and all
documents required to be executed and delivered by such Purchaser at Closing) and the consummation
of the transactions contemplated hereby and thereby have been duly and validly authorized by all
necessary corporate or limited liability company (as applicable) action on the part of such
Purchaser, and this Agreement constitutes the legal, valid and binding obligation of such
Purchaser, enforceable in accordance with its terms, except as such enforcement may be limited by
the General Enforceability Exceptions.

5.2 No Conflict or Violation. Except as may be avoided or cured by obtaining the Consents
to be obtained by such Purchaser as set forth in Schedule 5.2 (the “Purchaser Consents”),
neither the execution and delivery of this Agreement by such Purchaser (and all documents required
to be executed and delivered by such Purchaser at Closing), the consummation of the transactions
contemplated hereby or thereby, nor the fulfillment of the terms and compliance with the provisions
hereof or thereof will directly or indirectly (with or without notice or lapse of time):

	 	(a)	 	contravene, conflict with, or result in a violation of (i) any provision of the
articles of organization or limited liability company agreement either CLECO or DHLC,
or the certificate of incorporation or bylaws of SWEPCO, or (ii) any resolution adopted
by the Board of Managers or the members of either CLECO or DHLC, or the Board of
Directors or the stockholders of SWEPCO;

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	 	(b)	 	contravene, conflict with, or result in a violation of any Legal Requirement or
Order applicable to such Purchaser, or give any Governmental Agency or other Person the
right to challenge any of the transactions contemplated hereby or thereby; or
	 
	 	(c)	 	require the Consent, approval, or authorization of, or registration or filing
with, any Governmental Agency.

5.3 Litigation. There are no actions, causes of action, claims, suits, Proceedings, Orders
pending or, to the knowledge of such Purchaser threatened against such Purchaser, at law, in
equity, or before or by any Governmental Agency that seek to restrain or enjoin the consummation of
the transactions contemplated hereby.

5.4 Purchase for Investment. CLECO and SWEPCO are purchasing the OLC Interests for their
own account and not with a view to, or for sale in connection with, any distribution thereof.

5.5 Brokers. All negotiations relative to this Agreement and the transactions contemplated
hereby have been carried on by such Purchaser without the intervention of any other Person acting
on its behalf in such manner as to give rise to any valid claim by any such Person against Sellers
or their Affiliates for a finder’s fee, brokerage commission or other similar payment based on an
arrangement with such Purchaser or its Affiliates.

5.6 Independent Investigation; No Reliance. In connection with its investment decision,
such Purchaser and/or its representatives has inspected and conducted such reasonable independent
review, investigation and analysis (financial and otherwise) of the Oxbow Mine as desired by such
Purchaser. Such Purchaser has had an opportunity to ask questions and receive answers to its
satisfaction from Sellers and their representatives regarding the Oxbow Mine, and such Purchaser is
capable of evaluating the risks and merits of its decision to purchase the OLC Interests or the
Purchased Assets, as applicable, and of protecting its own interests in connection therewith. The
purchase of the OLC Interests or the Purchased Assets, as applicable, by such Purchaser and the
consummation of the transactions contemplated hereby by such Purchaser are not done in reliance
upon any representation or warranty by, or information from, Sellers or any of their respective
Affiliates, employees or representatives of any sort, whether oral or written, express or implied,
including any implied warranty of merchantability or of fitness for a particular purpose, except
for the representations and warranties specifically and expressly set forth in ARTICLE IV
(as modified by the Schedules hereto), and such Purchaser acknowledges that Sellers expressly
disclaim any other representations and warranties. Such purchase and consummation are instead done
entirely on the basis of such Purchaser’s own investigations, analyses, judgments and assessments
of the present and potential value and earning power of the Oxbow Mine as well as those
representations and warranties by Sellers specifically and expressly set forth in ARTICLE
IV (as modified by the Schedules hereto). Such Purchaser acknowledges that Sellers have not
made any representations or warranties to such Purchaser regarding the probable success or
profitability of the Oxbow Mine. Such Purchaser further acknowledges that neither Sellers nor any
other Person has made any representation or warranty, express or implied, as to the accuracy or
completeness of any information regarding Sellers, the OLC Interests, the Purchased Assets, the
Oxbow Mine, the transactions contemplated by this Agreement and the coal reserves at the Real
Property not specifically and expressly set forth in ARTICLE IV (as modified by the
Schedules hereto), including in respect of the Reserve Data or

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the quality or quantity of the coal reserves at the Real Property, and none of Sellers or any other
Person will have or be subject to any Liability to such Purchaser or any other Person resulting
from the distribution to such Purchaser or its representatives or Purchaser’s use of any such
information, distributed on behalf of Sellers or relating to the OLC Interests, the Purchased
Assets or the Oxbow Mine or other publications or data room information provided to such Purchaser
or its representatives, or any other document or information in any form provided to such Purchaser
or its representatives, including management presentations, in connection with the purchase and
sale of the OLC Interests or the Purchased Assets, as applicable, and the transactions contemplated
hereby.

5.7 Financing. Such Purchaser has sufficient funds available to deliver its portion of the
Purchase Price and to consummate the transactions contemplated by this Agreement.

ARTICLE VI

CERTAIN COVENANTS AND AGREEMENTS

6.1 Interim Operations. Except for the transactions described in Schedule 6.1 or
as otherwise expressly provided in this Agreement, between the date of this Agreement and the
Closing, RRMC, in relation to the Purchased Assets and the Mining Reserves, shall: (i) carry on its
business in the ordinary course of business consistent with recent past practices and the Mine
Permit, including exercising prudent industry practices with respect to the maintenance, repair and
replacement of equipment, maintenance of the spare parts inventory and performance of reclamation
responsibilities; (ii) use Commercially Reasonable Efforts to preserve intact its current business
organization, mining activities and properties until the Closing Date, and maintain the relations
and good will with its suppliers, customers, landlords, creditors, agents, and others having
business relationships with RRMC; (iii) maintain all current insurance policies covering the Mining
Reserves and the Purchased Assets; and (iv) promptly notify Purchasers of any major loss, major
damage, major mechanical breakdown or other major casualty involving any of the Mining Reserves or
the Purchased Assets (including any major mechanical breakdown of any major equipment such as the
dragline) that occurs with respect to the Oxbow Mine.

     Without limiting the generality of the foregoing, except for the transactions described in
Schedule 6.1, from the date hereof until the Closing Date, without the prior written
consent of Purchasers, RRMC shall not:

	 	(a)	 	to the extent secured by any Mining Reserves or Purchased Assets, borrow or
agree to borrow any funds or incur, or become subject to, any obligation or liability,
or issue any note, bond, or other debt security, or guarantee any indebtedness for
borrowed money or capitalized lease obligation except obligations and liabilities
incurred in the ordinary course of business, none of which exceed $10,000 individually
or $100,000 in the aggregate;
	 
	 	(b)	 	sell, transfer or otherwise dispose of, or agree to sell, transfer or otherwise
dispose of any Mining Reserves or Purchased Assets having a value individually (or in
the aggregate for related items) in excess of $5,000, other than sales of coal sold in
the ordinary course of business, or cancel or otherwise terminate, or agree to cancel
or otherwise terminate any Permit;

-26-

 

	 	(c)	 	enter into any material Lease or Contract (or series of related Leases or
Contracts) included in any Mining Reserves or Purchased Assets or make or permit any
material amendment to or terminate, accelerate, modify or cancel any material Lease or
Contract (other than permitting any material Lease or Contract to expire in accordance
with its terms) or breach in any material respect any provision of any material Lease
or Contract;
	 
	 	(d)	 	merge or consolidate RRMC with any other Person;
	 
	 	(e)	 	mortgage, pledge or subject to any Lien any Mining Reserves or Purchased
Assets, other than Permitted Liens;
	 
	 	(f)	 	make any capital investment in, any loan to, or any acquisition of the
securities or assets of, any other Person (or series of related capital investments,
loans, and acquisitions) in an amount in excess of $25,000 that would become an Assumed
Liability;
	 
	 	(g)	 	cancel, compromise, waive or release any right or claim (or series of related
rights and claims) with respect to the Mining Reserves or the Purchased Assets;
	 
	 	(h)	 	except as may be required for RRMC to fulfill its obligations under the Lignite
Spot Sales Agreement, increase or decrease in any material respect (i) the rate at
which lignite is mined, (ii) in-pit inventory, (iii) the rate at which stockpiled coal
is delivered to the purchasers thereof, or (iv) the rate at which mined areas are
reclaimed, or amend or modify any mine plan under the Mine Permit;
	 
	 	(i)	 	enter into any collective bargaining agreement, written or oral, or modify the
terms of any existing such Contract;
	 
	 	(j)	 	hire any employee, or fire or otherwise make any change in employment terms of
any of the RRMC Employees or the Administrative Employees, other than (i) increases in
salaries and wages and changes in Employee Benefit Plans made, in either case, in the
ordinary course of business, or as required by Legal Requirements or Orders, (ii)
terminations of employment for cause, and (iii) as may be required for RRMC to fulfill
its obligations under the Lignite Spot Sales Agreement; or
	 
	 	(k)	 	enter into any commitment, agreement, arrangement or understanding with respect
to any of the foregoing.

6.2 Reasonable Access. From the date hereof until the Closing Date or the earlier
termination of this Agreement, and subject to all applicable Legal Requirements or Orders, upon
reasonable prior written notice, each Purchaser and its representatives shall have reasonable
access, during normal business hours, to the Oxbow Mine and the Oxbow Mine records located there,
as well as the Oxbow Mine records located elsewhere, so that each Purchaser may, at its sole cost
and expense, make such inspections as it may reasonably require. Such inspections shall not
unreasonably interfere with the operations of the Oxbow Mine and each Purchaser shall restore and
return the Oxbow Mine to the same condition as existed prior to such inspection by

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such Purchaser. Notwithstanding anything contained in this Agreement to the contrary, Sellers are
not required to provide any information or access that they believe could violate any applicable
Legal Requirement or Order, including antitrust laws, or the terms of any confidentiality agreement
or confidentiality provisions in any contract, impact any privilege, including the attorney/client
privilege (except with respect to title opinions or any other title materials), or otherwise be
competitively sensitive.

6.3 Filings. Each Seller and Purchaser shall cooperate in furnishing information required
for: (a) determining whether any action has occurred by or in respect of, or filing with, any
Governmental Agency in connection with the consummation of the transactions contemplated by this
Agreement and (b) taking such actions or making any such filings. Following the Closing, each
Seller and Purchaser shall prepare and file any application, report or other filing required to be
submitted to any other Governmental Agency in connection with the transactions contemplated hereby,
the filing fees of which shall be borne by the applicable Purchaser or Purchasers.

6.4 Commercially Reasonable Efforts; Further Assurances. Between the date of this
Agreement and the Closing Date, each Seller and Purchaser will use its Commercially Reasonable
Efforts to cause the conditions in ARTICLE VII applicable to it to be satisfied. Each
Seller and Purchaser agrees that it will execute and deliver such other instruments and take such
other steps after the Closing Date as may be necessary to perfect the transfer of the OLC Interests
to CLECO and SWEPCO and the Purchased Assets to DHLC and to otherwise effectuate all of the
provisions of, and the transactions contemplated by, this Agreement and any documents delivered
pursuant hereto.

6.5 Notice of Events.

	 	(a)	 	During the period from the date of this Agreement to the Closing Date or the
earlier termination of this Agreement, each Purchaser shall promptly notify Sellers in
writing if it becomes aware of (i) the occurrence, or non-occurrence, of any event of
which it has knowledge, which has caused, or could reasonably be expected to cause, any
representation or warranty made by such Purchaser to be untrue or inaccurate in any
material respect at any time after the date of this Agreement and prior to the Closing
Date; and (ii) any material failure on Purchasers’ part to comply with or satisfy any
covenant, condition or agreement to be complied with or satisfied by such Purchaser
hereunder. In addition, each Purchaser shall promptly notify Sellers if such Purchaser
obtains knowledge that any of the representations and warranties of Sellers in this
Agreement and the Schedules hereto (including the updated Schedules) are not true and
correct in all material respects, or if such Purchaser obtains knowledge of any
material errors in, or omissions from, the Schedules (including the updated Schedules)
to this Agreement.
	 
	 	(b)	 	During the period from the date of this Agreement to the Closing Date or the
earlier termination of this Agreement, Sellers shall promptly notify Purchasers in
writing if (i) in Sellers’ Knowledge, there is an occurrence, or non-occurrence, of any
event, which has caused, or could reasonably be expected to cause, any representation
or warranty made by Sellers to be untrue or inaccurate in any

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	 	 	 	material respect at any time after the date of this Agreement and prior to the
Closing Date, provided that Sellers shall not be obligated to notify Purchasers of
any such event that is permitted under, or has been approved by Purchasers pursuant
to, Section 6.1; and (ii) any material failure on Sellers’ part to comply
with or satisfy any covenant, condition or agreement to be complied with or
satisfied by Sellers hereunder. Sellers may, by notice in accordance with the terms
of this Agreement, supplement the Schedules, as appropriate, with respect to any
matter that arises or becomes known by Sellers after the date hereof and that would
have been required to be set forth or described in the Schedules had such matter
existed or been known to Sellers as of the date of this Agreement. Any such update
shall be made promptly after such matter arises or becomes known to Sellers. For
all purposes of this Agreement, including for purposes of determining whether the
conditions set forth in Section 7.2 have been fulfilled, the Schedules shall
be deemed to include only that information contained therein on the date of this
Agreement and shall be deemed to exclude all information contained in any supplement
or amendment to the Schedules (which shall be subject to a claim for indemnity upon
termination hereof), but if the Closing shall occur, then all matters disclosed
pursuant to any such supplement or amendment at or prior to the Closing shall be
waived and Purchasers shall not be entitled to make a claim thereon pursuant to the
terms of this Agreement or otherwise.

6.6 Transfer Taxes. Any sales, recording, transfer, use or other similar Taxes or fees
imposed as a result of the transfer of the Mining Reserves to OLC, or the sale of the OLC Interests
to CLECO and SWEPCO or the Purchased Assets to DHLC pursuant to this Agreement shall be borne by
the applicable Purchaser or Purchasers. Each Seller and Purchaser shall timely prepare and timely
file all Tax returns with respect to any such sales, transfer, use or other similar Taxes. Each
Purchaser shall provide copies of all relevant sales tax exemption certificates with respect to the
Mining Reserves or the Purchased Assets to Sellers at the Closing.

6.7 Apportionment of Property Taxes. Taxes and assessments on the Real Property or Taxes
on tangible personal property shall be prorated between OLC and RRMC or DHLC and RRMC, as
applicable, in each case as of the Closing Date and based upon the last available invoice or
information, and Sellers shall not be responsible for any increased assessments on any Real
Property or tangible personal property after the Closing Date. All such prorations shall be
allocated so that items relating to time periods ending on or prior to the Closing Date shall be
allocated to RRMC, and items relating to time periods beginning after the Closing Date shall be
allocated to OLC or DHLC, as applicable; provided, however, that any real property
Tax shall be allocated in accordance with Section 164(d) of the Code.

6.8 Reclamation Bond. Promptly following the execution and delivery of this Agreement and,
in any event, within fifteen (15) days thereof, CLECO and SWEPCO shall file or cause to be filed
with the LOC an application to replace the then existing reclamation performance bond applicable to
the Real Property and required by the Mine Permit (“Sellers’ Reclamation Bond”) with a reclamation
performance bond for which Sellers shall have no obligation to the LOC or any surety. Thereafter
CLECO and SWEPCO shall take or cause to be taken such actions and execute, acknowledge and deliver,
or cause to be executed, acknowledged and delivered, such instruments, documents, transfers,
assignments, conveyances and assurances as may be required

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or desirable for replacing and releasing the Sellers’ Reclamation Bond; provided, that
prior to the Closing, CLECO and SWEPCO shall only be required to use Commercially Reasonable
Efforts to accomplish the foregoing.

6.9 Transfer of Mine Permit and Other Permits. Promptly following the execution and
delivery of this Agreement and, in any event, within fifteen (15) days thereof, CLECO and SWEPCO
shall file or cause to be filed with the LOC a request for transfer of the Mine Permit to OLC and
approval by the LOC of the change in ownership of OLC contemplated by this Agreement. Thereafter
CLECO and SWEPCO shall use Commercially Reasonable Efforts to take or cause to be taken such
actions and execute, acknowledge and deliver, or cause to be executed, acknowledged and delivered,
such instruments, documents, transfers, assignments, conveyances and assurances as may be required
or desirable for transferring the Mine Permit and obtaining such LOC approval of the change in
ownership of OLC. Sellers agree to fully and immediately upon request use Commercially Reasonable
Efforts to cooperate with Purchasers in accomplishing the transfer of the Mine Permit and any other
Permit the transfer of which may be required or desirable in order to effect the purposes of this
Agreement.

6.10 Certain Provisions Relating to Consents. Each Seller shall use its Commercially
Reasonable Efforts to obtain the Seller Consents required to be obtained by it, and each Purchaser
shall use its Commercially Reasonable Efforts to obtain the Purchaser Consents required to be
obtained by it. To the extent that any Contract, Lease or Permit is deemed to be transferred by
Sellers to OLC or DHLC, as applicable pursuant to this Agreement but is not capable of being so
transferred without the Consent of a third party (including a Governmental Agency) and such Consent
is not obtained prior to Closing, or if such deemed transfer would constitute a breach or a
violation of such Contract, Lease or Permit or of any Legal Requirement, nothing in this Agreement
or any other document delivered hereunder will constitute a transfer or an attempted transfer
thereof, but this provision does not relieve Sellers of using Commercially Reasonable Efforts to
obtain such Consents necessary to transfer such Contract, Lease or Permit. If any such Consent is
not obtained, or if an attempted assignment or assumption would be ineffective or would adversely
affect the rights or increase the obligations of any Party or any of its Affiliates with respect to
any such Contract, Lease or Permit, so that OLC or DHLC, as applicable, would not, in fact, receive
the rights, or assume the obligations with respect thereto as the same exist prior to such
attempted assignment or assumption, then the Parties shall use Commercially Reasonable Efforts to
enter into such reasonable cooperative arrangements as may be reasonably acceptable to the Parties
(including sublease, agency, management, indemnity or payment arrangements and enforcement at the
cost and for the benefit of OLC or DHLC, as applicable of any and all rights against an involved
third party) to provide for or impose upon OLC or DHLC, as applicable the benefits of such Mining
Reserves or Purchased Assets or the obligations of such Assumed Liability, as the case may be, and
any transfer or assignment to OLC or DHLC, as applicable, of any such Mining Reserves or Purchased
Assets, or any assumption by OLC or DHLC, as applicable, of any such Assumed Liability, which shall
require such Consent that is not obtained, shall be made subject to such Consent being obtained.
If the Parties cannot agree on any such arrangement, or any such arrangement would not be
reasonably practicable or obtainable, to provide OLC or DHLC, as applicable, with all the material
benefits of such Mining Reserves or Purchased Assets or all the material obligations of such
Assumed Liability, then such Mining Reserves or Purchased Assets or Assumed Liability, as the case
may be, shall be excluded from the transactions under this Agreement and shall be deemed to be an

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Retained Asset or Retained Liability, as the case may be, and the Parties shall negotiate in good
faith an equitable adjustment in the Asset Purchase Price or Mining Reserves Purchase Price, as
applicable, with respect thereto.

6.11 Coal Sales to ADA-ES, Inc. If after the Closing Date, OLC, DHLC or any of their
successors or assigns sells coal mined or unmined coal reserves from the Real Property or any other
land located within the permit boundaries of the Oxbow Mine (as they existed as of the Closing Date
and as set forth on the attached Exhibit M) to ADA-ES, Inc., a Colorado corporation, or any
of its Affiliates, successors or assigns (collectively, “ADA”), and such agreement pursuant to
which the sales occur (including any purchase order or sales confirmation) (each, an “ADA
Agreement”) is entered into within two (2) years of the Closing Date, then DHLC shall, or
Purchasers shall cause OLC to, as applicable, pay, within fifteen (15) days after receipt of sales
proceeds from ADA, to Sellers an amount equal to the product of (a) fifty cents ($0.50) per Ton
times (b) the number of Tons of coal sold to ADA, during a time period beginning upon the
effectiveness of such ADA Agreement and terminating upon the earlier to occur of the expiration of
the terms of such ADA Agreement or ten (10) years from the effectiveness of such ADA Agreement. In
the event that Sellers have cause for reasonable suspicion of any such sales, Sellers shall have
the right during normal business hours to audit the sales records (including invoices) and weighing
records of OLC and DHLC, or their successors or assigns, if applicable, to determine the amount of
payments due under this Section 6.11. In such case, Sellers’ access and its (and its
Affiliates’ and representatives’) examinations shall be at Sellers’ sole cost and expense.

6.12 Termination of Lignite Supply and Transportation Agreement. NACC, CLECO and SWEPCO
hereby agree that, as of the Closing Date, the Lignite Supply and Transportation Agreement shall
terminate and shall be of no further force and effect, and no party shall have any further
liability to any other party thereunder other than obligations accrued prior to such termination,
except for CLECO’s and SWEPCO’s obligation to pay an early termination payment (which RRMC hereby
waives effective as of Closing).

6.13 Concurrent Effectiveness of Consulting Agreement and Surface Use Agreement. Each
Seller and each Purchaser hereby acknowledges and agrees that the Consulting Agreement and the
Surface Use Agreement shall be effective and enforceable as of the Closing Date.

6.14 Non-Competition. For the period beginning with the Closing Date through the twenty
(20) year anniversary of the Closing Date, neither Sellers nor any of their respective Affiliates
shall, directly or indirectly, (a) enter into, engage in, consult, manage or otherwise participate
in the operation of any business within the Non-Compete Area (as defined herein) which competes
with the operation of the Oxbow Mine as conducted as of the Closing Date, or (b) acquire any
surface, mineral (other than oil or gas) or coal mining interests within the Non-Compete Area.
Nothing contained in this Section 6.14 shall prohibit any Seller or any of their Affiliates
from acquiring or holding at any one time a passive investment of less than five percent (5.0%) of
the outstanding shares of capital stock of any publicly traded corporation that may compete with
the operation of the Oxbow Mine as conducted as of the Closing Date within the Non-Compete Area.
For purposes of this Section 6.14, the “Non-Compete Area” shall be the current Oxbow Mine
permit boundaries and the non-compete area outside the border of the Oxbow Mine permit boundaries
depicted in the attached Exhibit M, including the corridor of land between Oxbow Mine and
the Dolet Hills mine.

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6.15 Certain Employee Matters.

	 	(a)	 	Offer of Employment to RRMC and Administrative Employees. During the
period ending sixty (60) days after the date of this Agreement (“Interview Period”)
Sellers shall provide DHLC (or an Affiliate of DHLC) (the “Employer”) reasonable access
to the RRMC Employees and the Administrative Employees for purposes of conducting
employment interviews with such persons. No later than ten (10) Business Days after
the Interview Period, the Employer may offer employment to each RRMC Employee and
Administrative Employee, contingent on Closing and effective as of the Closing Date.
All offers of employment shall be made in accordance with applicable Legal Requirements
and may be terminated at will. RRMC Employees and Administrative Employees who accept
such offer of employment with the Employer are referred to herein as “Transferred
Employees”.
	 
	 	(b)	 	Employment-Related Liabilities. Effective as of the Closing, (i) the
employment of each Transferred Employee with Sellers shall cease and (ii) except as
required by Legal Requirements, each Transferred Employee will cease active
participation in, and any benefit accrual under, each of the Employee Benefit Plans.
No Purchaser and no Affiliate of any Purchaser shall have any liability or obligation
whatsoever under the Employee Benefit Plans, nor shall any Purchaser or any Affiliate
of any Purchaser assume the sponsorship of any such Employee Benefit Plan. Sellers
shall be solely liable to satisfy all obligations to provide COBRA continuation
coverage under any group health plan maintained by Sellers or any Affiliate of Sellers,
including, but not limited to all liability relating to qualifying events (as defined
in Code Section 4980B) occurring prior to the Closing Date.
	 
	 	(c)	 	No Third-Party Beneficiaries. No provision in this Section
6.15 shall (i) create any third-party beneficiary or other rights in any employee
or former employee (including any beneficiary or dependent thereof) of RRMC, NACC or
any other Person other than the Parties and their respective successors and permitted
assigns, (ii) constitute or create an employment agreement or (iii) constitute or be
deemed to constitute an amendment to any Employee Benefit Plan.

6.16 Casualty or Condemnation. If, before the Closing Date, all or any portion of the
Oxbow Mine is damaged or destroyed (the “Damaged Portion”) (whether by fire, theft, vandalism or
other casualty) or is subject to or threatened with any condemnation or eminent domain proceeding,
in whole or in part, Sellers shall notify Purchasers promptly in writing of such fact, and the
following provisions shall apply.

	 	(a)	 	If the fair market value of the Damaged Portion or the cost of repair of the
Damaged Portion is less than fifteen percent (15%) of the Purchase Price, Sellers
shall, at their option, either (i) reduce the Purchase Price by the lesser of the fair
market value of the Damaged Portion (such value to be determined as of the date
immediately prior to such damage or destruction), or the estimated cost to repair or
restore the same, or (ii) bear the costs of repairing or restoring the Damaged Portion
and, at Sellers’ election, delay the Closing and suspend any right to

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	 	 	 	terminate this Agreement for a reasonable time necessary to accomplish the same.
Any failure of a condition to Closing related to any such damage or destruction of
which Sellers shall have so notified Purchasers shall be deemed not to exist,
provided that Sellers exercise their election pursuant to the preceding sentence
within a reasonable period of time.
	 
	 	(b)	 	If the lesser of the fair market value of the Damaged Portion or the cost of
repair of the Damaged Portion is greater than fifteen percent (15%) of the Purchase
Price, then Purchasers may elect either to (i) require Sellers upon the Closing to
transfer to Purchasers the proceeds (or the right to the proceeds) of applicable
insurance to which Sellers or any Affiliate of Sellers may be entitled and proceed with
the transactions contemplated by this Agreement, or (ii) within thirty (30) days after
such damage or destruction, terminate this Agreement.
	 
	 	(c)	 	If the duration to restore such damage or destruction is estimated to be
greater than one hundred and eighty (180) calendar days, then Purchasers may elect
either to (i) require Sellers to proceed to Closing, and upon the Closing, transfer to
the applicable Purchaser or Purchasers the proceeds (or the right to the proceeds) of
applicable insurance to which Sellers or any Affiliate of Sellers may be entitled, or
(ii) within thirty (30) days after such damage or destruction, terminate this
Agreement.
	 
	 	(d)	 	If, before the Closing Date, all or any portion of the Oxbow Mine becomes
subject to or is threatened with any condemnation or eminent domain proceeding, and
such taking would reasonably be expected to result in a material adverse effect on the
business, operations, financial condition, revenue-generating capacity or physical
condition of the Oxbow Mine, taken as a whole, then Purchasers may, at their option,
(i) require Sellers to proceed to Closing, and upon the Closing, transfer to the
applicable Purchaser or Purchasers the proceeds (or the right to the proceeds) of any
claim, settlement, or proceeds thereof to which Sellers or any Affiliate of Sellers may
be entitled, or (ii) within thirty (30) days following such notice, terminate this
Agreement.
	 
	 	(e)	 	If Purchasers require Sellers to proceed to Closing pursuant to paragraphs (c)
or (d) above, then Purchasers shall be deemed to have waived their rights and remedies
with respect to any breaches of representations or warranties by Sellers that are
caused by Purchasers’ requiring Sellers to proceed to Closing thereunder.

6.17 Access to Oxbow Mine Records.

	 	(a)	 	For a period of seven (7) years after the Closing Date, no Party will dispose
of any books, records, documents or information reasonably relating to the Mining
Reserves or the Purchased Assets (including, as to Sellers, the accounting books and
records and files and records relating to the RRMC employees that are Retained Assets)
without first giving notice to the other Parties and permitting the other Parties to
retain or copy such books, records, documents and information as it may select. During
such period, each Party (i) will permit the other Parties to examine and make copies,
at the examining Party’s expense, of such books,

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	 	 	 	records, documents and information for any reasonable purpose, including any
litigation, or the preparation of income or other Tax returns and (ii) provide to
the other Parties, upon reasonable notice, such reasonable access to any of the
Oxbow Mine or other pertinent locations and all individuals who regularly work or
worked at or in support of the Oxbow Mine during normal business hours as the
examining Party may request in any such notice for any reasonable purpose;
provided, however, that all such examinations shall occur and all
such access shall be provided at times and places reasonably set by the Party to
whom such request is made, and in no event shall the examining Party interfere with
such other Party’s operations.
	 
	 	(b)	 	If privileged and/or attorney work product documents or information, including
communications between a Party and its counsel, are disclosed to the examining Party in
the books, records, documents or other information examined, the examining Party agrees
(i) such disclosure is inadvertent, (ii) such disclosure will not constitute a waiver,
in whole or in part, of any privilege or work product, (iii) such information will
constitute confidential information subject to the provisions of the SWEPCO
Confidentiality Agreement and the CLECO Confidentiality Agreement, and (iv) it will
promptly return all copies of such privileged and/or attorney work product portions of
such books, records, documents or other information in its possession.

6.18 No Negotiations. Other than as expressly permitted by Section 6.1 of this
Agreement, prior to the Closing, none of Sellers or their respective Affiliates shall, directly or
indirectly, solicit or entertain, or cause or allow any other Person to solicit or entertain, any
offer to acquire any ownership interest in RRMC, OLC, the Mining Reserves or the Purchased Assets
or any portion thereof, or provide information to others concerning the potential purchase and sale
of any ownership interest in RRMC, OLC, the Mining Reserves or the Purchased Assets, or enter into
any negotiation or agreement that provides for the acquisition of any portion of any ownership
interest in RRMC, OLC, the Mining Reserves or the Purchased Assets by any Person other than
Purchasers.

ARTICLE VII

CONDITIONS TO CLOSING

7.1 Conditions to the Obligations of Sellers. The obligations of Sellers to consummate the
transactions contemplated by this Agreement are subject to the satisfaction or waiver (if permitted
by applicable Legal Requirement) at or prior to the Closing of each of the following additional
conditions:

	 	(a)	 	The representations and warranties of each Purchaser set forth in this
Agreement will be true and correct in all respects (provided that any representation or
warranty of a Purchaser contained herein that is subject to a materiality or similar
qualification will not be so qualified for purposes of determining the existence of any
breach thereof on the part of such Purchaser) as of the Closing Date as though made on
and as of the Closing Date (except to the extent such representations and warranties
speak as of an earlier date), except for such breaches that would not, individually or
in the aggregate with any other breaches on the part of such

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	 	 	 	Purchaser, materially and adversely affect the ability of such Purchaser to
consummate the transactions contemplated by this Agreement.
	 
	 	(b)	 	Each of the agreements and covenants of each Purchaser to be performed and
complied with by such Purchaser pursuant to this Agreement prior to the Closing Date
will have been duly performed and complied with in all material respects.
	 
	 	(c)	 	Each Purchaser will have delivered to Sellers the items required to be
delivered by such Purchaser pursuant to Section 3.3.
	 
	 	(d)	 	Since the date of this Agreement, there must not have been commenced and be
continuing any Proceeding (i) involving any challenge to, or seeking damages or other
relief in connection with, any of the transactions contemplated by this Agreement, or
(ii) that may have the effect of preventing, delaying, making illegal, or otherwise
interfering with any of the transactions contemplated by this Agreement.

7.2 Conditions to the Obligations of Each Purchaser. The obligations of each Purchaser to
consummate the transactions contemplated by this Agreement are subject to the satisfaction or
waiver (if permitted by applicable Legal Requirement) at or prior to the Closing of each of the
following additional conditions:

	 	(a)	 	The representations and warranties of Sellers set forth in this Agreement will
be true and correct in all respects (provided that any representation or warranty of
Sellers contained herein that is subject to a materiality or similar qualification will
not be so qualified for purposes of determining the existence of any breach thereof on
the part of Sellers) as of the Closing Date as though made on and as of the Closing
Date (except to the extent such representations and warranties speak as of an earlier
date), except for such breaches that would not, individually or in the aggregate with
any other breaches on the part of Sellers, reasonably be expected to have a material
adverse effect on the OLC Interests, the Mining Reserves or the Purchased Assets.
	 
	 	(b)	 	Each of the agreements and covenants of Sellers to be performed and complied
with by Sellers pursuant to this Agreement prior to or as of the Closing Date will have
been duly performed and complied with in all material respects.
	 
	 	(c)	 	Sellers will have delivered to such Purchaser the items required to be
delivered to such Purchaser pursuant to Section 3.2.
	 
	 	(d)	 	Each Purchaser shall have obtained the Purchaser Consents required to be
obtained by it.
	 
	 	(e)	 	Since the date of this Agreement, there must not have been commenced and be
continuing any Proceeding (i) involving any challenge to, or seeking damages or other
relief in connection with, any of the transactions contemplated by this Agreement, or
(ii) that may have the effect of preventing, delaying, making

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	 	 	 	illegal, or otherwise interfering with any of the transactions contemplated by this
Agreement.
	 
	 	(f)	 	Sellers shall not have executed any agreement with ADA or any third party
pursuant to which coal from the Oxbow Mine is committed to be sold after the Closing
Date.

7.3 Frustration of Closing Conditions. No Purchaser nor any Seller may rely on the failure
of any condition set forth in Section 7.1, or Section 7.2, as the case may be, to
be satisfied if such failure was caused by such Party’s failure to comply with its obligations to
consummate the transactions contemplated by this Agreement as required by and subject to
Section 6.3 or Section 6.4.

ARTICLE VIII

TERMINATION OF AGREEMENT

8.1 Right to Terminate. Notwithstanding any other provision of this Agreement, this
Agreement may be terminated at any time prior to the Closing Date:

	 	(a)	 	by the mutual written consent of Purchasers and Sellers;
	 
	 	(b)	 	by Purchasers, on the one hand, or Sellers, on the other hand, upon written
notice to the other Parties, if a Governmental Agency of competent jurisdiction has
issued an Order permanently enjoining or otherwise prohibiting the consummation of the
transactions contemplated by this Agreement, and such Order has become final and
non-appealable; provided, however, that Purchaser or Seller seeking to
terminate this Agreement pursuant to this clause (b) has used its Commercially
Reasonable Efforts to remove such Order;
	 
	 	(c)	 	by Purchasers, on the one hand, or Sellers, on the other hand, upon written
notice to the other Parties, if any condition to such a Purchaser’s or Seller’s
obligations to consummate the transactions contemplated hereby is incapable of being
satisfied on or prior to the Outside Date; provided, however, that the
right to terminate this Agreement pursuant to this Section 8.1(c) is not
available to a Purchaser or Seller whose breach of its obligations under this Agreement
has been the cause of, or resulted in, the inability of such condition to be satisfied;
or
	 
	 	(d)	 	by Purchasers upon written notice to Sellers pursuant to Section 6.16.

8.2 Automatic Termination. This Agreement shall automatically terminate, with no further
action required by either Purchasers or Sellers, if the transactions contemplated by this Agreement
have not been consummated on or prior to September 30, 2009 (the “Outside Date”).

8.3 Effect of Termination. In the event of termination of this Agreement pursuant to
Section 8.1 or Section 8.2, no Party will have any liability or any further
obligation to any other Party, except as provided in this Section 8.3 and except that
nothing herein releases, or may be construed as releasing, any Party from (a) any Damage to any
other Party arising out of the breaching Party’s material breach in the performance of any of its
covenants arising under this

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Agreement, (b) obligations under that certain Confidentiality Agreement, dated June 9, 2008, as
amended July 1, 2008, among Sellers and CLECO (“CLECO Confidentiality Agreement”), or (c)
obligations under that certain Confidentiality Agreement, dated June 9, 2008, as amended July 1,
2008, among Sellers and SWEPCO (“SWEPCO Confidentiality Agreement”). The obligations of the
Parties under this Section 8.3, and ARTICLE XII will survive any termination of
this Agreement.

ARTICLE IX

SURVIVAL OF REPRESENTATIONS AND WARRANTIES

9.1 Survival. The representations, warranties, covenants and agreements of Sellers and
Purchasers, as applicable, contained in this Agreement will survive the Closing Date but only to
the extent specified below:

	 	(a)	 	All covenants and agreements contained in this Agreement will survive the
Closing Date in accordance with their respective terms.
	 
	 	(b)	 	The representations and warranties contained in this Agreement will survive the
Closing Date until the twelve (12) month anniversary of the Closing Date, at which
point such representations and warranties and any claim for indemnification by
Purchasers or Sellers, as applicable, on account thereof will expire and terminate,
except for pending claims identified in writing on or before such date to a Party
obligated to provide indemnification under ARTICLE X; provided,
however, that: (i) the representations and warranties contained in
Section 4.1 (Organization of Sellers), Section 4.3 (Authority of
Sellers), Section 4.5(b) (Title to OLC Interests), Section 4.6 (Title
to Purchased Assets and Mining Reserves), and Section 4.16 (Brokers) shall
survive indefinitely; (ii) the representations and warranties contained in Section
4.18 (Taxes) shall survive until the expiration of the applicable statute of
limitations (including any extension of such statute of limitations); and (iii) the
representations and warranties contained in Section 5.1 (Organization and
Authority) and Section 5.5 (Brokers) shall survive indefinitely.
	 
	 	(c)	 	Except to the extent set forth in Sections 9.1(b), all claims for
indemnification based on an inaccuracy in or a misrepresentation of or a breach of a
representation or warranty must be asserted within thirty (30) days after the date of
the expiration or termination of the respective survival periods set forth in this
Section 9.1. Any claim for indemnification based on an inaccuracy in or a
misrepresentation of or a breach of a representation or warranty not made in writing
within thirty (30) days after the date of the expiration or termination of the
applicable survival period will be irrevocably and unconditionally released and waived,
whether or not a longer period would be permitted by applicable Legal Requirements.

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ARTICLE X

INDEMNIFICATION

10.1 Indemnification by Sellers. Subject to limitations stated in ARTICLE IX and
hereafter, Sellers hereby agree, jointly and severally, to indemnify, defend and hold harmless
Purchasers and their respective shareholders, directors, officers and employees, including the
shareholders, members, directors, officers and employees of any Subsidiary (including OLC) or
Affiliate of Purchasers (collectively, “Purchaser Indemnitees”), from and against, and will pay to
Purchaser Indemnitees the amount of, any Damages (including without limitation any strict
liabilities) incurred by any Purchaser Indemnitees, arising out of the following:

	 	(a)	 	any breach of any representation or warranty made by Sellers in this Agreement;
	 
	 	(b)	 	any breach by Sellers or any of them of any covenant or obligation of Sellers
in this Agreement; and
	 
	 	(c)	 	the Retained Liabilities.

10.2 Indemnification by Purchasers. Subject to limitations stated in ARTICLE IX
and hereafter, CLECO, on the one hand, and SWEPCO and DHLC, on the other hand, hereby agree,
severally and not jointly (and, as between SWEPCO and DHLC, jointly and severally), to indemnify,
defend and hold harmless Sellers and their respective shareholders, directors, officers, and
employees, including the shareholders, members, directors, officers, and employees of any
Subsidiary or Affiliate of Sellers (collectively, “Seller Indemnitees”), from and against, and will
pay to Seller Indemnitees the amount of, any Damages incurred by any Seller Indemnitees, arising
out of the following:

	 	(a)	 	any breach of any representation or warranty made by such Purchaser(s) in this
Agreement;
	 
	 	(b)	 	any breach by such Purchaser(s) of any covenant or obligation of such
Purchaser(s) in this Agreement;
	 
	 	(c)	 	Sellers’ Reclamation Bond after the Closing, including delays or failures in
pursuing the release thereof;
	 
	 	(d)	 	the Assumed Liabilities; and
	 
	 	(e)	 	all Liabilities relating to final reclamation and abandonment of the Oxbow
Mine.

     For the avoidance of doubt, and notwithstanding anything to the contrary contained herein, (i)
CLECO’s indemnity obligations to the Seller Indemnitees under this Section 10.2 are limited
to Damages arising out of: its own breaches under paragraphs (a) or (b) above, the matters
described in paragraph (c) above, the matters described in paragraph (d) above and the matters
described in paragraph (e) above; and (ii) SWEPCO’s and DHLC’s indemnity obligations to the Seller
Indemnitees under this Section 10.2 are limited to, on a joint and several basis, Damages
arising out of: their own breaches under paragraphs (a) or (b) above, the matters

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described in paragraph (c) above, the matters described in paragraph (d) above and the matters
described in paragraph (e) above.

10.3 Matters Involving Third Parties.

	 	(a)	 	If any third party notifies a Party entitled to indemnification under
Section 10.1 or Section 10.2 (the “Indemnified Party”) with respect to
any matter that may give rise to a claim for indemnification against the other Party
(the “Indemnifying Party”) under this ARTICLE X, then the Indemnified Party
shall use reasonable efforts to notify the Indemnifying Party thereof promptly and in
any event within ten (10) days after receiving any written notice from a third party;
provided, however, that no delay on the part of the Indemnified Party in
notifying the Indemnifying Party shall relieve the Indemnifying Party from any
obligation hereunder unless, and then solely to the extent that, the Indemnifying Party
is actually prejudiced thereby.
	 
	 	(b)	 	The Indemnifying Party shall defend the Indemnified Party against the matter
with counsel of its choice reasonably satisfactory to the Indemnified Party.
	 
	 	(c)	 	The Indemnified Party may retain separate counsel at its sole cost and expense
(except that the Indemnifying Party shall be responsible for the reasonable fees and
expenses of one separate co-counsel for all Indemnified Parties to the extent the
Indemnified Party is advised, in writing by its counsel, that the counsel the
Indemnifying Party has selected has a conflict of interest).
	 
	 	(d)	 	The Indemnifying Party shall reimburse the Indemnified Party for the reasonable
costs of defense or investigation for the period prior to the Indemnifying Party’s
assumption of the defense.
	 
	 	(e)	 	The Indemnified Party shall not consent to the entry of a judgment or enter
into any settlement with respect to any matter that may give rise to a claim for
indemnification without the written consent of the Indemnifying Party, which consent
may not be unreasonably withheld or delayed; provided, however, that if the
Indemnifying Party has failed to respond to a claim for indemnification required to be
provided pursuant to this ARTICLE X for fifteen (15) days after a request
therefor, then the Indemnified Party may take any such action without the consent of
the Indemnifying Party.
	 
	 	(f)	 	The Indemnifying Party shall not consent to the entry of a judgment with
respect to any matter that may give rise to a claim for indemnification or enter into
any settlement that does not include a provision whereby the plaintiff or claimant in
the matter releases the Indemnified Party from all Liability with respect thereto for
the sole remedy of payment without the written consent of the Indemnified Party (not to
be unreasonably withheld or delayed).

10.4 Limitations on Indemnification Payments to Seller Indemnitees. Notwithstanding
anything in this Agreement to the contrary, the right of the Seller Indemnitees to indemnification
is limited as follows:

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	 	(a)	 	The Seller Indemnitees’ right to indemnification pursuant to Section
10.2 on account of any Damages will be reduced by all insurance or other third
party indemnification proceeds actually received by the Seller Indemnitees. The Seller
Indemnitees shall use Commercially Reasonable Efforts to claim and recover any Damages
suffered by the Seller Indemnitees under any such insurance policies or other third
party indemnities. The Seller Indemnitees shall remit to the applicable Purchaser or
Purchasers any such insurance or other third party proceeds that are paid to the Seller
Indemnitees with respect to Damages for which the Seller Indemnitees have been
previously compensated pursuant to Section 10.2.
	 
	 	(b)	 	The Seller Indemnitees will not be entitled to indemnification pursuant to
Section 10.2 for diminution in value, or for lost income, revenues or profits,
or for consequential, incidental, exemplary, punitive or special damages.
	 
	 	(c)	 	No Seller Indemnitees shall be entitled to be compensated more than once for
the same Damages.

10.5 Limitations on Indemnification Payments to Purchaser Indemnitees. Notwithstanding
anything herein to the contrary, the right of the Purchaser Indemnitees to indemnification is
limited as follows:

	 	(a)	 	Subject to Section 10.5(f), the Purchaser Indemnitees will be entitled
to indemnification from Sellers collectively pursuant to Section 10.1(a) on
account of any Damages to the extent (but only to the extent) that the aggregate amount
of all Damages suffered by the Purchaser Indemnitees exceeds (i) $250,000 in the case
of CLECO and SWEPCO collectively as owners of OLC, or (ii) $250,000 in the case of
DHLC, and then only to the extent of such excess up to an aggregate amount of (x)
$10,280,000 in the case of CLECO and SWEPCO collectively as owners of OLC, and (y)
$6,320,000 in the case of DHLC, in Damages (such that a maximum aggregate amount equal
to Sixteen Million Six Hundred Thousand Dollars ($16,600,000) is potentially available
to the Purchaser Indemnitees in respect of any such Damages).
	 
	 	(b)	 	The Purchaser Indemnitees’ right to indemnification pursuant to Section
10.1 on account of any Damages will be reduced by all insurance or other third
party indemnification proceeds actually received by the Purchaser Indemnitees. The
Purchaser Indemnitees shall use Commercially Reasonable Efforts to claim and recover
any Damages suffered by the Purchaser Indemnitees under any such insurance policies or
other third party indemnities. The Purchaser Indemnitees shall remit to Sellers any
such insurance or other third party proceeds that are paid to the Purchaser Indemnitees
with respect to Damages for which the Purchaser Indemnitees have been previously
compensated pursuant to Section 10.1.
	 
	 	(c)	 	The Purchaser Indemnitees will not be entitled to indemnification pursuant to
Section 10.1 for diminution in value, multiples of earnings or cash flows, or
for lost income, revenues or profits, or for consequential, incidental, exemplary,
punitive or special damages.

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	 	(d)	 	Subject to Section 10.5(f), the Purchaser Indemnitees will not be
entitled to assert any claims for Damages under Section 10.1(a) or
10.1(b) with respect to any individual item or matter, or items or matters
arising out of substantially similar facts and circumstances, unless the threshold
amount set forth in Section 10.5(a) has been surpassed and the amount of
Damages with respect to each such item(s) or matter(s) exceeds Twenty Five Thousand and
No/100 Dollars ($25,000).
	 
	 	(e)	 	No Purchaser Indemnitees shall be entitled to be compensated more than once for
the same Damages.
	 
	 	(f)	 	Notwithstanding anything to the contrary contained in this Agreement, the
monetary limitations set forth in Sections 10.5(a) and 10.5(d) shall
not apply to claims for indemnification based upon any breach by Sellers of Section
4.1 (Organization of Sellers), Section 4.3 (Authority of Sellers),
Section 4.4 (No Conflict or Violation), Section 4.5(b) (Title to OLC
Interests), Section 4.6 (Title to Purchased Assets and Mining Reserves),
Section 4.16 (Brokers) or Section 4.18 (Taxes).

10.6 Exclusive Remedy. Notwithstanding anything to the contrary set forth in this
Agreement, the Parties agree that, from and after the Closing, the sole and exclusive remedies of
the Parties for any Damages based upon, arising out of or otherwise in respect of the matters set
forth in this Agreement (including representations, warranties, covenants and agreements) and the
transactions contemplated hereby, whether based in contract or tort, are the indemnification and
reimbursement obligations of the Parties set forth in this ARTICLE X. The provisions of
this Section 10.6 shall not, however, prevent or limit a cause of action under Section
10.7 to obtain an injunction or injunctions to prevent breaches of this Agreement or to enforce
specifically the terms and provisions hereof. To the extent included within the scope of the
representations and warranties in Section 4.11 or Section 4.13 and the indemnities
provided in Section 10.1 hereof, the Purchaser Indemnitees expressly waive any and all
rights and remedies against Sellers under all Environmental Laws in connection with any Damages
relating to this Agreement or the transactions contemplated hereby.

10.7 Specific Performance. Each Party’s obligation under this Agreement is unique. If any
Party should breach its covenants under this Agreement, the Parties each acknowledge that it would
be extremely impracticable to measure the resulting Damages; accordingly, the nonbreaching Party or
Parties, in addition to any other available rights or remedies they may have under the terms of
this Agreement, shall be entitled to specific performance and/or to obtain an injunction or
injunctions to prevent breaches of this Agreement, and each Party expressly waives the defense that
a remedy in damages will be adequate.

10.8 Mitigation. Any indemnitee shall take all reasonable steps to mitigate its Damages
upon and after becoming aware of any event or condition that would reasonably be expected to give
rise to any Losses that may be indemnifiable hereunder.

10.9 Seller Letter of Credit.

	 	(a)	 	NACC shall deliver the Letter of Credit at Closing and cause the Letter of
Credit to remain outstanding until the later of (i) three hundred ninety-five (395)
days

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	 	 	 	following the Closing (consisting of the initial three hundred sixty-four (364) day
period covered by the Letter of Credit originally issued at Closing and the
thirty-one (31) day period covered by a replacement Letter of Credit or renewal of
the original Letter of Credit) (the “Minimum Letter of Credit Period”) and (ii) the
resolution and receipt by Purchaser Indemnitees of payment for any claims made under
this ARTICLE X (“Claims”) and pending on the last day of the Minimum Letter
of Credit Period (such Claims, the “Letter of Credit Claims”), including receipt of
payment following a Final Order issued with respect to any such Claims (if
applicable); provided, that, at all times after the Minimum Letter of Credit Period,
the stated amount of the Letter of Credit may be reduced to an amount not to exceed
one hundred fifty percent (150%) of the aggregate amount of all Damages claimed by
Purchasers under Claims Notice(s) with respect to then pending Letter of Credit
Claims. The Letter of Credit shall contain a provision for at least thirty (30)
days’ advance notice to Purchasers of any non-renewal, expiration or earlier
termination of the Letter of Credit so as to allow Purchasers sufficient time to
exercise their rights thereunder if NACC fails to extend or replace the Letter of
Credit. If any Claim or Claims Dispute exists on the date that is thirty (30) days
prior to any expiration date of the Letter of Credit, no later than such thirtieth
(30th) day prior to each expiration date of the Letter of Credit, NACC shall cause
the renewal or extension of the Letter of Credit for an additional consecutive term
of ninety (90) days. If the Letter of Credit is not renewed or extended as required
herein, Purchasers shall have the right to make a drawing (a “Drawing”) immediately
under the Letter of Credit (x) in the case of the required extension or renewal of
the Letter of Credit originally issued at Closing for an additional consecutive term
of thirty-one (31) days, equal to the full stated amount thereof, and (y) in the
case an extension or renewal required by the immediately preceding sentence, in an
amount equal to the lesser of (A) the full stated amount thereof and (B) one hundred
fifty percent (150%) of the aggregate amount of all Damages claimed by Purchasers
under the Claims Notice(s) with respect to such pending Claim(s). The proceeds of
such Drawing, if any, shall be held in an interest bearing escrow account with
Issuing Bank as escrow agent with instructions to pay Claims made by Purchaser
Indemnitees, such instructions to be in a form reasonably satisfactory to NACC.
Cash held in such escrow account may be deposited in a fund fully insured by an
agency of the United States government or consisting of short-term United States
Treasury obligations, with all investment income thereon to be taxable to, and to
accrue for the benefit of, NACC, and NACC shall be entitled to quarterly account
sweeps for recovery of interest earned on such cash. NACC hereby grants to
Purchasers a present and continuing first priority security interest in all cash
which has been transferred to the Issuing Bank as escrow agent pursuant to this
Section 10.9(a).

	 	(b)	 	As soon as reasonably practicable after a Purchaser Indemnitee has knowledge of
any Claim, such Purchaser Indemnitee shall give written notice of such Claim to Sellers
(a “Claims Notice”). The Claims Notice shall describe the Claim in reasonable detail
and shall indicate the amount (estimated, if necessary and to the extent feasible) of
the Damages asserted or which may be asserted by reason thereof. In the case of any
estimated Damages contained in a Claims Notice, such

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	 	 	 	Purchaser Indemnitee shall provide a subsequent Claims Notice once such Damages have
been determined.

	 	(c)	 	If Sellers dispute such Claim, Sellers shall give written notice to such
Purchaser Indemnitee (a “Claims Dispute”), which shall describe the Claims Dispute in
reasonable detail and shall indicate the amount of any portion of the Claim that is
undisputed, if any, within thirty (30) days following receipt by Sellers of the Claims
Notice regarding such Claim. If Sellers deliver such a Claims Dispute, the Claim must
be resolved as provided in Section 10.9(d) below. If no Claims Dispute is
received by such Purchaser Indemnitee within such thirty (30)-day period, then the
amount of Damages claimed by such Purchaser Indemnitee as set forth in the Claims
Notice will be deemed established for purposes of this Agreement and if, at the end of
such thirty (30)-day period, Sellers have not made payment to such Purchaser Indemnitee
of an amount equal to such Damages, such Purchaser Indemnitee shall be entitled to
request a Drawing for Damages in the amount claimed in the applicable Claims Notice.
If the Claims Dispute is solely based on the amount of Damages involved in the Claim,
then the undisputed amount of Damages claimed by such Purchaser Indemnitee as set forth
in the Claims Notice will be deemed established for purposes of this Agreement and if,
at the end of such thirty (30)-day period, Sellers have not made payment to such
Purchaser Indemnitee of such undisputed amount, such Purchaser Indemnitee shall be
entitled to request a Drawing for Damages in the amount claimed in the applicable
Claims Notice.
	 
	 	(d)	 	If Sellers timely provide a Claims Dispute to any Claims Notice in accordance
with Section 10.9(c), and the dispute is not otherwise resolved by such
Purchaser Indemnitee and Sellers, the Purchaser Indemnitee may seek an order, judgment
or decree from a court of competent jurisdiction that sets forth an amount of Damages
owed by Sellers to such Purchaser Indemnitee. Once such order, judgment or decree
becomes final and nonappealable (a “Final Order”), Sellers shall, within ten (10)
Business Days of the issuance of such Final Order, make payment to such Purchaser
Indemnitee of the amount of such Damages in compliance with such Final Order. If
Sellers have not made such payment, then the Purchaser Indemnitee may request a Drawing
for Damages in the amount of such Damages.
	 
	 	(e)	 	Notwithstanding anything to the contrary contained herein, in no event shall a
Drawing for Damages be made in an amount that is greater than the maximum amount then
available to be drawn under the Letter of Credit. In addition, the Letter of Credit
shall be permanently reduced by the amount of such Drawing and Sellers shall have no
obligation to increase the amount of the Letter of Credit. Each Drawing presented to
the Issuing Bank shall be made in accordance with the terms of the Letter of Credit.
	 
	 	(f)	 	Upon receipt by any Purchaser Indemnitee of the proceeds of any Drawing, all
indemnification obligations of Sellers for Damages for which such Purchaser Indemnitee
is entitled to be indemnified for such Claim under this ARTICLE X

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	 	 	 	shall be discharged in an amount equal to the amount of such proceeds so received.

	 	(g)	 	Purchasers agree to take all actions requested by Sellers to release the Letter
of Credit (or funds held in escrow pursuant to Section 10.9(a)) upon the later
of (i) the end of the Minimum Letter of Credit Period and (ii) the resolution and
receipt by Purchaser Indemnitees of payment for all Claims pending on the last day of
the Minimum Letter of Credit Period, including receipt of payment following a Final
Order issued with respect to any such Claims (if applicable).

ARTICLE XI

NOTICES

11.1 Notices. All notices, demands or other communications to be given or delivered under
or by reason of the provisions of this Agreement shall be in writing and shall be deemed to have
been given: (a) when delivered personally to the recipient; (b) when sent to the recipient by
telecopy (receipt electronically confirmed by sender’s telecopy machine) or by electronic mail if
received during normal business hours of the recipient, otherwise on the next Business Day; (c) one
(1) Business Day after the date when sent to the recipient by reputable express courier service
(charges prepaid); or (d) seven (7) Business Days after the date when mailed to the recipient by
certified or registered mail, return receipt requested and postage prepaid. Such notices, demands
and other communications shall be sent to Sellers and to Purchasers at the addresses indicated
below:

	 	 	 
	If to Sellers:

	 	The North American Coal Corporation
	 

	 	14785 Preston Road, Suite 1100
	 

	 	Dallas, Texas 75254-7891
	 

	 	Attention: Vice President-Law and
	 

	 	Administration, and Secretary
	 

	 	Facsimile: (972) 387-1031
	 

	 	Email: tom.koza@nacoal.com
	 
	 	 
	with a copy to:

	 	Jones Day
	 

	 	901 Lakeside Avenue
	 

	 	Cleveland, Ohio 44114
	 

	 	Attention: Michael Marting
	 

	 	Facsimile: (216) 579-0212
	 

	 	Email: mgmarting@jonesday.com
	 
	 	 
	If to SWEPCO or DHLC:

	 	Dolet Hills Lignite Company
	 

	 	First Floor
	 

	 	377 Hwy 522
	 

	 	Mansfield, LA 71052
	 

	 	Facsimile: (318) 872 - 4778
	 

	 	Attention: General Manager
	 

	 	Email: djmeyer@aep.com
	 
	 	 
	with a copy to:

	 	American Electric Power Service Corporation

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	 	1 Riverside Plaza
	 

	 	Columbus, OH 43215
	 

	 	Facsimile: (614) 716-2014
	 

	 	Attention: Office of the General Counsel
	 

	 	Email: rgryan@aep.com
	 
	 	 
	If to CLECO:

	 	Cleco Power LLC
	 

	 	963 Power Plant Rd.
	 

	 	Mansfield, LA 71052
	 

	 	Facsimile: (318) 871-3227
	 

	 	Attention: Director — Lignite Fuels
	 

	 	Email: Brad.McGahan@cleco.com
	 
	 	 
	with a copy to:

	 	Cleco Corp.
	 

	 	P.O. Box 5000
	 

	 	Pineville, LA 71361-5000
	 

	 	Facsimile: (318) 484-7685
	 

	 	Attention: Associate General Counsel
	 

	 	Email: Mark.Pearce@Cleco.com
	 
	 	 
	and with a copy to:

	 	James A. Stuckey
	 

	 	Phelps Dunbar, L.L.P.
	 

	 	365 Canal Street, Suite 2000
	 

	 	New Orleans, LA 70130-7534
	 

	 	Facsimile: (504) 568-9130, 568-9007
	 

	 	Email: stuckeyj@phelps.com

or to such other address as any Party may, from time to time, designate in writing delivered
pursuant to the terms of this Section 11.1.

ARTICLE XII

MISCELLANEOUS PROVISIONS

12.1 WAIVER OF JURY TRIAL. THE PARTIES HEREBY WAIVE TRIAL BY JURY IN ANY ACTION OR
PROCEEDING ARISING OUT OF OR IN ANY WAY PERTAINING TO THIS AGREEMENT. EACH PURCHASER HEREBY
AUTHORIZES EACH SELLER TO FILE THIS PROVISION WITH THE CLERK OR JUDGE OR ANY COURT HEARING ANY SUCH
CLAIM. THE WAIVER IS KNOWINGLY AND VOLUNTARILY MADE BY THE PARTIES.

12.2 Amendments. The terms, provisions and conditions of this Agreement may not be
changed, modified or amended in any manner except by an instrument in writing duly executed by all
of the Parties.

12.3 Assignment and Parties in Interest. No Purchaser or Seller may assign or transfer,
directly or indirectly, the whole or any part of this Agreement, or any of the rights or
obligations hereunder without the prior written consent of the other Parties, which consent shall
not be unreasonably withheld. Any attempted assignment prohibited by this Agreement without the

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other Parties’ prior written consent shall be null and void from the beginning and of no effect.
Subject to this Section 12.3, all of the provisions of this Agreement shall inure to the
benefit of and be binding upon the Parties and their respective successors and assigns.

12.4 Public Announcements. No press or other public announcement, or public statement or
comment in response to any inquiry, relating to the transactions contemplated by this Agreement
shall be issued or made by any Purchaser or Seller without consultation with the other Parties;
provided that a press release or other public announcement, regulatory filing, statement or comment
made without such consultation shall not be in violation of this Section 12.4 if it is made
in order to comply with any Legal Requirement or stock exchange policies and in the reasonable
judgment of the Party or its Affiliate making such release or announcement, based upon advice of
counsel, prior review and consultation, despite reasonable efforts to undertake the same, would
prevent dissemination of such release or announcement in a timely enough fashion to comply with
such Legal Requirement or policies; and provided further that in all instances prompt notice from
the releasing Party to the other Parties shall be given with respect to any such release,
announcement, statement or comment.

12.5 Expenses. Except as expressly provided otherwise in this Agreement, each Party shall
bear all of its legal, accounting, engineering, consulting, investment banking and other costs and
expenses incurred by it or on its behalf in connection with the transactions contemplated by this
Agreement.

12.6 Entire Agreement. This Agreement, together with the CLECO Confidentiality Agreement
and SWEPCO Confidentiality Agreement, constitutes the entire agreement among the Parties with
respect to the subject matter hereof, supersedes and is in full substitution for any and all prior
agreements and understandings among them relating to such subject matter, and no Party shall be
liable or bound to any other Party in any manner with respect to such subject matter by any
warranties, representations, indemnities, covenants, or agreements except as specifically set forth
herein and therein. The Exhibits and Schedules to this Agreement are hereby incorporated and made
a part hereof and are an integral part of this Agreement.

12.7 Descriptive Headings. The descriptive headings of the several sections of this
Agreement are inserted for convenience only and shall not control or affect the meaning or
construction of any of the provisions hereof.

12.8 Counterparts. This Agreement may be executed in any number of counterparts and each
such executed counterpart (including electronically transmitted counterparts) shall be, and shall
be deemed to be, an original, but all of which shall constitute, and shall be deemed to constitute,
in the aggregate but one (1) and the same instrument.

12.9 GOVERNING LAW; CONSENT TO JURISDICTION.

	 	(a)	 	THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LEGAL
REQUIREMENTS OF THE STATE OF TEXAS APPLICABLE TO CONTRACTS MADE AND PERFORMED THEREIN.

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	 	(b)	 	ANY ACTION OR PROCEEDING SEEKING TO ENFORCE ANY PROVISION OF, OR BASED ON ANY
RIGHT ARISING OUT OF, THIS AGREEMENT MAY BE BROUGHT AGAINST ANY OF THE PARTIES IN THE
COURTS OF THE STATE OF TEXAS, DALLAS COUNTY, OR, IF IT HAS OR CAN ACQUIRE JURISDICTION,
IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF TEXAS, AND EACH OF THE
PARTIES CONSENTS TO THE NON-EXCLUSIVE JURISDICTION OF SUCH COURTS (AND OF THE
APPROPRIATE APPELLATE COURTS) IN ANY SUCH ACTION OR PROCEEDING AND WAIVES ANY OBJECTION
TO VENUE LAID THEREIN. PROCESS IN ANY ACTION OR PROCEEDING REFERRED TO IN THE
PRECEDING SENTENCE MAY BE SERVED ON ANY PARTY ANYWHERE IN THE WORLD.

12.10 Construction. The language used in this Agreement will be deemed to be the language
chosen by the Parties to express their mutual intent, and no rule of strict construction will be
applied against any Party. Without limiting the generality of the foregoing, the Parties agree
that, in any action or Proceeding arising out of or relating to this Agreement, this Agreement
shall be interpreted neutrally and shall not be interpreted in favor of any Party. Any references
to any federal, state, local or foreign statute or law will also refer to all rules and regulations
promulgated thereunder, unless the context requires otherwise. Unless the context otherwise
requires: (a) a term has the meaning assigned to it by this Agreement; (b) including means
“including but not limited to;” (c) “or” is disjunctive but not exclusive; (d) words in the
singular include the plural, and in the plural include the singular; (e) provisions apply to
successive events and transactions; and (f) “$” means the currency of the United States of America.

12.11 Waiver of Remedies. The failure of any Party to insist in any one or more instances
upon strict performance of any of the provisions of this Agreement or to take advantage of any of
its rights hereunder shall not be construed as a waiver of any such provisions or the
relinquishment of any such rights, but the same shall continue and remain in full force and effect.

12.12 Severability. If any one or more of the provisions contained in this Agreement or in
any other instrument referred to herein, is, for any reason, held to be invalid, illegal or
unenforceable in any respect, and unless such provision is a material part of this Agreement, such
invalidity, illegality or unenforceability shall not affect any other provision of this Agreement
or any other such instrument. Furthermore, in lieu of any such invalid or unenforceable term or
provision, the Parties intend that there shall be added as a part of this Agreement a provision as
similar in terms to such invalid or unenforceable provision as may be possible and be valid and
enforceable.

[Signatures appear on following page.]

-47-

 

     IN WITNESS WHEREOF, Sellers and Purchasers have executed and delivered this Agreement as of
the date first set forth above.

	 	 	 	 	 
	 	SELLERS:

THE NORTH AMERICAN COAL CORPORATION

 
	 	By:  	/s/  Robert L. Benson
 	 
	 	 	Robert L. Benson 	 
	 	 	President and Chief Executive Officer 	 
	 

	 	 	 	 	 
	 	OXBOW PROPERTY COMPANY L.L.C.

 	 
	 	By:  	/s/  Thomas A. Koza
 	 
	 	 	Thomas A. Koza 	 
	 	 	Manager 	 
	 

	 	 	 	 	 
	 	RED RIVER MINING COMPANY

 	 
	 	By:  	/s/ Michael J. Gregory
 	 
	 	 	Michael J. Gregory 	 
	 	 	Management Committee Member 	 
	 

Signature Page — Oxbow Mine PSA

 

 

	 	 	 	 	 
	 	PURCHASERS:

CLECO POWER LLC

 	 
	 	By:  	/s/  Stephen M. Carter
 	 
	 	 	Stephen M. Carter 	 
	 	 	VP Regulated Generation 	 
	 

	 	 	 	 	 
	 	SOUTHWESTERN ELECTRIC POWER COMPANY

 	 
	 	By:  	/s/
Paul Chodak III
 	 
	 	 	Name:  	Paul Chodak III 	 
	 	 	Title:  	President & COO 	 
	 

	 	 	 	 	 
	 	DOLET HILLS LIGNITE COMPANY, LLC

 	 
	 	By:  	/s/
Timothy K. Light 	 
	 	 	Name:  	Timothy K. Light 	 
	 	 	Title:  	Vice President 	 
	 

Signature Page — Oxbow Mine PSAEX-10.1

Exhibit 10.1

THIS DOCUMENT CONSTITUTES PART OF A PROSPECTUS COVERING SECURITIES

THAT HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933

Administrative Regulations for the

Long-Term Incentive Compensation Program

under the United States Steel Corporation 2005 Stock Incentive Plan

As amended by the Compensation & Organization Committee

On April 27, 2009, the Effective Date

	1.	 	Administration. The Compensation & Organization Committee (the “Committee”)
shall administer the Long-Term Incentive Compensation Program (the “Program”) under
and pursuant to its authority as provided in Section 3 of the United States Steel Corporation
2005 Stock Incentive Plan (the “Plan”).

	 	A.	 	Delegation of Authority. The Committee may delegate to a designated
individual (the “Stock Plan Officer”) and to other Officer-Directors and the
executive directly responsible for corporate human resources (collectively, the
“Senior Officers”) its duties under the Program subject to such conditions and
limitations as the Committee shall prescribe, except that only the Committee may
designate and grant Awards to Participants. The Committee hereby delegates to the
Stock Plan Officer all authority necessary or desirable to administer the Program,
including the authority to “consent” upon termination and the authority to delegate all
or any portion of the delegated authorities; provided, however, that such authority is
limited as follows: (i) only the Committee may (a) designate and grant Awards to
Participants (provided that grants to non-executives may be made through a delegated
process to one or more Committee members from time to time under rules established by
the Committee in advance of such grants), (b) approve the vesting of Options,
Restricted Stock, Restricted Stock Units or Performance Awards, (c) adjust the number
of Shares pursuant to Section 8 of the Plan, (d) approve or amend the form of Awards,
(e) amend outstanding Awards, (f) determine the Performance Goals, measures and other
terms associated with Performance Awards or (g) modify or amend these Administrative
Regulations (the “Regulations”), including any appendices and schedules attached
hereto, and (ii) no delegate of the Stock Plan Officer’s authority may delegate his or
her authority. Without limiting the foregoing, the Stock Plan Officer is hereby
directed to (x) administer Awards under the Plan, (y) determine whether any Participant
has violated any terms and conditions set forth in the Award Agreement so as to warrant
cancellation of an Award and upon making such determination, cancel such Award, and (z)
maintain appropriate records and establish necessary procedures related to the Plan.
	 
	 	B.	 	Definitions. Unless otherwise defined herein, capitalized terms used
herein shall have the meanings set forth in the Plan. The terms “Stock Plan Officer”
and “Committee” shall be read as being one and the same; provided, however, the
preceding (i) does not apply where necessary to give meaning to the terms, (ii) does
not limit the authority of the Committee or increase the authority of the Stock Plan
Officer, and (iii) requires that the Stock Plan Officer have the requisite

 

 

	 	 	 	authority (as defined above and/or pursuant to any current Committee resolution) in
the context in which the term “Committee” is used.

	 	C.	 	Compensation Consultant. The Committee may engage a compensation
consultant to assess the competitiveness of various target Award levels and advise the
Committee.

	2.	 	Participation/Eligibility. All management employees of the Corporation, its
Subsidiaries and affiliates are eligible to participate in the Program upon designation by the
Committee or Senior Officers (“Participants”).

	 	A.	 	Executive Management. Employees designated by the Committee to be
Executive Management are hereby designated to be Participants. Grants to individuals
designated to be Executive Management must be approved by the Committee.
	 
	 	B.	 	Rights. No Participant or other employee shall have any claim to be
granted an Award under the Program, and nothing contained in the Program or any Award
Agreement shall confer upon any Participant any right to continue in the employ of the
Corporation, its Subsidiaries or affiliates or interfere in any way with the right of
the Corporation, its Subsidiaries or affiliates to terminate a Participant’s employment
at any time.

	3.	 	Components of Long-Term Incentives. Award grants may be made in the following forms:
Options, Restricted Stock, Other Stock-Based Awards (including without limitation,
Restricted Stock Units), and Performance Awards.
	 
	4.	 	Options.

	 	A.	 	Award Grants/Grant Price. The Committee may grant Options to
Participants. All Options will be nonstatutory stock options. The exercise price per
Share of the Options shall be no less than 100% of the Fair Market Value of the Shares
on the date of grant of the Option.
	 
	 	B.	 	Term. Each Option shall state the period or periods of time during
which it may be exercised, in whole or in part. The term of an Option may not exceed
ten years.
	 
	 	C.	 	Vesting. Unless otherwise determined by the Committee, Option grants
shall vest ratably over three years (1/3 on each of the first, second and third grant
date anniversaries), each such year to be considered a “Vesting Year”.
	 
	 	D.	 	Exercise of Options.

	 	(1)	 	Effective Date of Exercise. The date of exercise of an
Option shall be the business day on which the notice of exercise and payment
for Shares being purchased are received by the Stock Plan Officer.

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	 	(2)	 	Payment for Shares Purchased. Unless otherwise
determined by the Committee, payment of the purchase price shall be made, at
the election of the Participant, in cash or by delivering Shares owned by the
Participant or withholding of shares to be acquired upon exercise in accordance
with procedures established by the Stock Plan Officer and valued at Fair Market
Value on the date of exercise, or a combination thereof.

	 	(a)	 	Overpayment in Shares. If the Fair
Market Value of Shares delivered or withheld in payment of the purchase
price exceeds the purchase price, a certificate, or its equivalent,
representing the whole number of excess Shares together with a check,
or its equivalent, representing the Fair Market Value of any excess
partial Share shall be delivered to the Participant.
	 
	 	(b)	 	Underpayment in Shares. If the Fair
Market Value of Shares delivered or withheld in payment of the purchase
price is less than the purchase price, the difference shall be
delivered by the Participant in cash immediately upon notification of
such difference.
	 
	 	(c)	 	Requirements Relating to Previously Owned
Shares. Shares delivered in payment of the purchase price shall be
duly endorsed for transfer to the Corporation. If Shares so delivered
are not registered in the name of the Participant individually, the
Participant shall also provide evidence acceptable to the Stock Plan
Officer that such Shares are beneficially owned by the Participant
individually.

	 	E.	 	Post-Termination of Employment Exercise.

	 	(1)	 	Death and Disability. Unless otherwise determined by
the Committee, all Options vest immediately upon the Participant’s death during
employment or termination of employment by reason of Disability. Vested
options remain exercisable for three years following the date of Death or
termination of employment by reason of Disability, as applicable, or, if less,
until the original expiration date.

	 	(a)	 	“Disability” shall be determined, for
all purposes under the Program, by reference to Section 409A of the
Internal Revenue Code of 1986, as amended (“Section 409A”).

	 	(2)	 	Retirement and Termination with Consent. Unless
otherwise determined by the Committee, a prorated number of the Options
scheduled to vest during the Vesting Year will vest, based upon the number of
complete months worked during the Vesting Year in which the Participant’s
termination of employment occurs by reason of Retirement or Termination with
Consent. The prorated award will be calculated upon such

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	 	 	 	termination and will vest at the next vesting date. The remaining unvested
Option grants are forfeited immediately upon termination. Vested options
remain exercisable for three years following such termination or, if less,
until the original expiration date.

	 	(a)	 	Example: If the 1/3 ratable vesting for
Vesting Year 3 is 1000 shares for Award 1, 1000 shares for Award 2, and
1000 shares for Award 3 and if the Participant terminates employment by
reason of Retirement six months following the Award 3 grants, the
Participant is entitled to vesting of 1/2 of all grants that would have
vested at the end of the Vesting Year during which he or she retires
(Vesting Year 3 in this example), or 1500 shares. This example focuses
only on the shares that would vest during Vesting Year 3; however,
another 3000 shares would have vested in the aggregate following
Vesting Years 1 and 2, for a total of 4500 shares vesting under the
Awards 1, 2 and 3. The 1500 shares would vest upon the next scheduled
vesting date following termination. The post-termination exercise
period would be measured for three years following the date of
termination, even though the final pro rata tranche does not vest upon
termination.
	 
	 	(b)	 	“Retirement” shall mean, for all
purposes under the Program, the applicable Participant’s termination of
employment after having satisfied the age, service and/or other
requirements necessary to commence an immediate pension under either:
(i) the applicable defined benefit pension plan for the Participant’s
home country, regardless of whether the Participant is a participant in
such pension plan, or (ii) in the case of a home country for which
there is no applicable defined benefit plan, the applicable local law
or regulation; provided, however, such term does not include, unless
the Committee consents with knowledge of the specific facts, retirement
under circumstances in which the Participant accepts employment with a
company that owns, or is owned by, a business that competes with the
Corporation, or its Subsidiaries or affiliates. Further, to the extent
necessary under applicable local law, Retirement may have such other
meaning adopted by the Committee and set forth in the applicable Award
Agreement.
	 
	 	(c)	 	“Termination” shall mean the applicable
employee’s termination of employment other than by Retirement, death or
Disability.
	 
	 	(d)	 	“Termination with Consent” shall mean
Termination at any age with the consent of the Committee. Consent
shall be deemed to be given if the employee incurs a break in
continuous service due to layoff or disability as defined under the
Corporation’s defined benefit pension plan, regardless of whether the
employee is participating in such plan.

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	 	(e)	 	“Termination without Consent” shall
mean Termination at any age without the consent of the Committee.

	 	(3)	 	Termination without Consent and Termination for Cause.
Unless otherwise determined by the Committee, vested and unvested Options are
forfeited if termination of employment is due to Termination without Consent or
Termination for Cause.
	 
	 	(4)	 	Termination in connection with a Change of Control.
Notwithstanding the provisions of the Plan, Options shall not become fully
exercisable immediately upon a Change of Control. However, and notwithstanding
the foregoing provisions of these Regulations, if a Termination, other than for
Cause or a voluntary termination in the absence of Good Reason, occurs either
(x) following a Potential Change of Control and, subsequently, a Change of
Control occurs within 24 months following such Termination or (y) within 24
months following a Change of Control, then no Options shall have been, nor
shall any Options be, forfeited upon such Termination; rather, all Options
shall vest immediately upon the occurrence of the Change of Control, in the
case of (x), or the Termination, in the case of (y). Such vested Options shall
remain exercisable for the remainder of their respective terms.

	 	(a)	 	“Good Reason” shall mean, without the
Participant’s express written consent, the occurrence after a Change of
Control of the Corporation, or after and at the request of or as a
result of actions by a third party who has taken steps reasonably
calculated to effect a Change of Control or after the first day of but
during a Potential Change of Control period (each an “Applicable
Event”), of any one or more of the following:

	 	(i)	 	the assignment to the Participant
of duties inconsistent with the Participant’s position
immediately prior to the Applicable Event or a reduction or
adverse alteration in the nature of the Participant’s position,
duties, status or responsibilities from those in effect
immediately prior to the Applicable Event;
	 
	 	(ii)	 	a reduction by the Corporation in
the Participant’s annualized and monthly or semi-monthly rate of
base salary (as increased to incorporate the Participant’s
foreign assignment premium, if any) as in effect on the
Applicable Event or as the same shall be increased from time to
time;
	 
	 	(iii)	 	the Corporation’s requiring the
Participant to be based at a location in excess of fifty (50)
miles from the location where the Participant is based
immediately prior to the Applicable Event;
	 
	 	(iv)	 	the failure by the Corporation to
continue, substantially as in effect immediately prior to the
Applicable Event, all of

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	 	 	 	the Corporation’s employee benefit, incentive compensation,
bonus, stock option and stock award plans, programs,
policies, practices or arrangements in which the Participant
participates (or substantially equivalent successor plans,
programs, policies, practices or arrangements) or the failure
by the Corporation to continue the Participant’s
participation therein on substantially the same basis, both
in terms of the amount of benefits provided and the level of
the Participant’s participation relative to other
participants, as existed immediately prior to the Applicable
Event; and

	 	(v)	 	any purported termination by the
Corporation of the Participant’s employment that is not effected
pursuant to a written notice indicating, in reasonable detail
the facts and circumstances claimed to provide a basis for
termination of the Participant’s employment for Cause, which in
the absence of such notice shall be ineffective.

	 	 	 	The Participant’s right to terminate his or her employment pursuant
to this Subsection shall not be affected by the Participant’s
incapacity due to physical or mental illness or eligibility for
Retirement. The Participant’s continued employment shall not
constitute consent to, or a waiver of rights with respect to, any
circumstance constituting Good Reason hereunder. The Participant’s
determination of the existence of Good Reason shall be final and
conclusive unless such determination is not made in good faith and
is made without reasonable belief in the existence of Good Reason.

	 	F.	 	Adjustment upon Change of Control. The Adjustment provisions of
Section 8.01 of the Plan shall apply in the event of any Change of Control, such that
the Options shall continue in adjusted and/or substituted form following the Change of
Control.

	 	(1)	 	Change of Control. For the purposes of these
Regulations, the term “Change of Control” shall mean a change in control of a
nature that would be required to be reported in response to Item 6(e) of
Schedule 14A of Regulation 14A promulgated under the Securities Exchange Act of
1934, as amended (the “Exchange Act”), whether or not the Corporation is then
subject to such reporting requirement; provided, that, without limitation, such
a change in control shall be deemed to have occurred if:

	 	(a)	 	any person (as such term is used in Sections
13(d) and 14(d) of the Exchange Act) (a “Person”) is or becomes the
“beneficial owner” (as defined in Rule 13d-3 under the Exchange Act),
directly or indirectly, of securities of the Corporation (not including
in the amount of the securities beneficially owned by such person any

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	 	 	 	such securities acquired directly from the Corporation or its
affiliates) representing twenty percent (20%) or more of the combined
voting power of the Corporation’s then outstanding voting securities;
provided, however, that for purposes of this Agreement the term
“Person” shall not include (1) the Corporation or any of its
subsidiaries, (2) a trustee or other fiduciary holding securities
under an employee benefit plan of the Corporation or any of its
subsidiaries, (3) an underwriter temporarily holding securities
pursuant to an offering of such securities, (4) a corporation owned,
directly or indirectly, by the stockholders of the Corporation in
substantially the same proportions as their ownership of stock of the
Corporation, or (5) any individual, entity or group involved in the
acquisition of the Corporation’s voting securities in connection with
which, pursuant to Rule 13d-1 promulgated pursuant to the Exchange
Act, such individual, entity or group is permitted to, and actually
does, report its beneficial ownership on Schedule 13G (or any
successor Schedule); provided that, if any such individual,
entity or group subsequently becomes required to or does report its
beneficial ownership on Schedule 13D (or any successor Schedule),
then, for purposes of this paragraph, such individual, entity or
group shall be deemed to have first acquired, on the first date on
which such individual, entity or group becomes required to or does so
report, beneficial ownership of all of the Corporation’s then
outstanding voting securities beneficially owned by it on such date;
and provided, further, however, that for purposes of this
paragraph (a), there shall be excluded any Person who becomes such a
beneficial owner in connection with an Excluded Transaction (as
defined in (c) below); or

	 	(b)	 	the following individuals (the “Incumbent
Board”) cease for any reason to constitute a majority of the number of
directors then serving: individuals who, on the date hereof, constitute
the Board and any new director (other than a director whose initial
assumption of office is in connection with an actual or threatened
election contest including, but not limited to, a consent solicitation,
relating to the election of directors of the Corporation) whose
appointment or election by the Board or nomination for election by the
Corporation’s stockholders was approved or recommended by a vote of at
least two-thirds (2/3) of the directors then still in office who either
were directors on the date hereof or whose appointment, election or
nomination for election was previously so approved or recommended; or

	 	(c)	 	there is consummated a merger or consolidation
of the Corporation or any direct or indirect subsidiary thereof with
any other

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	 	 	 	corporation (a “Business Combination”), other than a merger or
consolidation (an “Excluded Transaction”) which would result in:

	 	(i)	 	at least a majority of the
members of the board of directors of the resulting or surviving
entity (or any ultimate parent thereof) in such Business
Combination (the “New Board”) consisting of individuals
(“Continuing Directors”) who were members of the Incumbent Board
(as defined in subparagraph (b) above) immediately prior to
consummation of such Business Combination or were appointed,
elected or recommended for appointment or election by members of
the Incumbent Board prior to consummation of such Business
Combination (excluding from Continuing Directors for this
purpose, however, any individual whose election or appointment,
or recommendation for election or appointment, to the New Board
was at the request, directly or indirectly, of the entity which
entered into the definitive agreement providing for such
Business Combination with the Corporation or any direct or
indirect subsidiary thereof), unless the Board
determines, prior to such consummation, that there does not
exist a reasonable assurance that, for at least a two-year
period following consummation of such Business Combination, at
least a majority of the members of the New Board will continue
to consist of Continuing Directors and individuals whose
election, or nomination for election by shareholders of the
resulting or surviving entity (or any ultimate parent thereof)
in such Business Combination, would be approved by a vote of at
least a majority of the Continuing Directors and individuals
whose election or nomination for election has previously been so
approved; or
	 
	 	(ii)	 	a Business Combination that in
substance constitutes a disposition of a division, business
unit, or subsidiary; or

	 	(d)	 	the shareholders of the Corporation approve a
plan of a complete liquidation or dissolution of the Corporation or
there is consummation of a sale or other disposition of all or
substantially all of the assets of the Corporation, other than to a
corporation with respect to which, following such sale or other
disposition, more than 50% of the combined voting power of the then
outstanding voting securities of such corporation entitled to vote
generally in the election of directors is then beneficially owned,
directly or indirectly, by all or substantially all of the individuals
and entities who were the beneficial owners of the Corporation’s then
outstanding voting securities immediately prior to such sale or

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	 	 	 	other disposition in substantially the same proportion as their
ownership, immediately prior to such sale or other disposition, of
the Corporation’s then outstanding voting securities.

	 	(2)	 	Potential Change of Control. For the purposes of these
Regulations a “Potential Change of Control of the Corporation” and “Potential
Change of Control” shall be deemed to have occurred, if:

	 	(a)	 	the Corporation enters into an agreement, the
consummation of which would result in the occurrence of a Change of
Control of the Corporation;
	 
	 	(b)	 	any person (including the Corporation) publicly
announces an intention to take or to consider taking actions which if
consummated would constitute a Change of Control of the Corporation;
	 
	 	(c)	 	any person becomes the beneficial owner,
directly or indirectly, of securities of the Corporation representing
15% or more of the combined voting power of the Corporation’s then
outstanding securities (not including in the amount of the securities
beneficially owned by such Person any such securities acquired directly
from the Corporation or its affiliates); or
	 
	 	(d)	 	the Board adopts a resolution to the effect
that, for purposes of awards under this Program, a Potential Change of
Control of the Corporation has occurred.

	5.	 	Restricted Stock.

	 	A.	 	Restricted Stock Grants. The Committee may grant Restricted Stock to
Participants. A Participant must endorse in blank and return to the Corporation a
stock power for each Restricted Stock grant.
	 
	 	B.	 	Restrictions. During the restriction period a Participant may not
sell, transfer, assign, pledge or otherwise encumber or dispose of Shares of the
Restricted Stock. During the restriction period a Participant shall have all rights
and privileges of a stockholder, including the right to vote the Shares and to receive
dividends, except as noted in the preceding sentence and except that any dividends
payable in stock shall be subject to the restrictions. At the expiration of the
restriction period, a stock certificate free of all restrictions for the number of
Shares of Restricted Stock vested shall be registered in the name of, and delivered to,
the Participant or, subject to the termination provisions below, to the Participant’s
estate.
	 
	 	C.	 	Vesting. The Committee shall determine the restriction period,
provided that (i) Restricted Stock grants which are time-based shall vest ratably over
a period of not less than three years (1/3 on each of the first, second and third grant
date anniversaries), each such year to be considered “Vesting Year” and (ii) Restricted
Stock grants which are performance-based shall vest over a period of not less than one
year.

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	 	D.	 	Termination of Employment.

	 	(1)	 	Death and Disability. Unless otherwise determined by
the Committee, all Shares of Restricted Stock vest immediately upon the
Participant’s death during employment or termination of employment by reason of
Disability.
	 
	 	(2)	 	Retirement and Termination with Consent. Unless
otherwise determined by the Committee, a prorated number of the shares of
Restricted Stock scheduled to vest during the Vesting Year will vest, based
upon the number of complete months worked during the Vesting Year in which the
Participant’s termination of employment occurs by reason of Retirement or
Termination with Consent. The prorated award will be calculated upon
termination and will vest upon the date of termination. The remaining unvested
shares are forfeited immediately upon termination.

	 	(a)	 	Example: If the 1/3 ratable vesting for
Vesting Year 3 is 1000 shares for Award 1, 1000 shares for Award 2, and
1000 shares for Award 3 and if the Participant terminates employment by
reason of Retirement six months following the Award 3 grants, the
Participant is entitled to vesting of 1/2 of all grants that would have
vested at the end of the Vesting Year during which he or she retires
(Vesting Year 3 in this example), or 1500 shares. This example focuses
only on the shares that would vest during Vesting Year 3; however,
another 3000 shares would have vested in the aggregate following
Vesting Years 1 and 2, for a total of 4500 shares vesting under the
Awards 1, 2 and 3. The 1500 shares would vest upon the date of
termination.

	 	(3)	 	Termination without Consent and Termination for Cause.
Unless otherwise determined by the Committee, unvested shares of Restricted
Stock are forfeited if termination of employment is due to Termination without
Consent or Termination for Cause.

	 	E.	 	Change of Control. Notwithstanding the provisions of the Plan, shares
of Restricted Stock shall not vest immediately upon a Change of Control. However, and
notwithstanding the foregoing provisions of these Regulations, if a Termination, other
than for Cause or a voluntary termination in the absence of Good Reason, occurs either
(x) following a Potential Change of Control and, subsequently, a Change of Control
occurs within 24 months following such Termination or (y) within 24 months following a
Change of Control, then no shares of Restricted Stock shall have been, nor shall any
shares of Restricted Stock be, forfeited upon such Termination; rather, all shares of
Restricted Stock shall vest immediately upon the occurrence of the Change of Control,
in the case of (x), or the Termination, in the case of (y).

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	6.	 	Other Stock-Based Awards: Restricted Stock Units.

	 	A.	 	Restricted Stock Unit Grants. The Committee may grant Other
Stock-Based Awards in the form of Restricted Stock Units to Participants. As
determined by the Committee, consistent with the purposes of the Plan, Restricted Stock
Units shall not be granted in lieu of salary, cash bonus fees or other payments.
	 
	 	B.	 	Restrictions. During the restriction period a Participant may not
sell, transfer, assign, pledge or otherwise encumber or dispose of the Restricted Stock
Units. During the restriction period a Participant shall have none of the rights and
privileges of a stockholder, however, the Participant may be entitled to receive a
payment (in cash or Shares) or credit equal to the cash dividends paid on one Share for
each Share represented by a Restricted Stock Unit held by such Participant (a “dividend
equivalent”); provided, however, the dividend equivalents shall not be paid to, or
vested in, the Participant unless and to the extent the underlying Restricted Stock
Units are vested. Any dividend equivalent paid in Shares shall be paid in the form of
additional whole and/or fractional Restricted Stock Units, subject to the same
restrictions and vesting conditions as the underlying Restricted Stock Units and
settled in the same manner. At the expiration of the restriction period, a stock
certificate free of all restrictions for the number of Shares equivalent to the number
of vested Restricted Stock Units (including any dividend equivalents, in the case of
dividend equivalents paid in Shares) shall be registered in the name of, and delivered
to, the Participant or, subject to the termination provisions below, to the
Participant’s estate. In the case of dividend equivalents paid in cash, a cash payment
will be made at the end of the restriction period equal to the dividends paid on a
number of Shares equivalent to the number of vested Restricted Stock Units.
	 
	 	C.	 	Vesting. The Committee shall determine the restriction period,
provided that (i) Restricted Stock Unit grants which are time-based shall vest ratably
over a period of not less than three years (1/3 on each of the first, second and third
grant date anniversaries), each such year to be considered a “Vesting Year” and
(ii) Restricted Stock Unit grants which are performance-based shall vest over a period
of not less than one year.
	 
	 	D.	 	Termination of Employment.

	 	(1)	 	Death and Disability. Unless otherwise determined by
the Committee, all Restricted Stock Units vest immediately upon the
Participant’s death during employment or termination of employment by reason of
Disability.
	 
	 	(2)	 	Retirement and Termination with Consent. Unless
otherwise determined by the Committee, a prorated number of the Restricted
Stock Units scheduled to vest during the Vesting Year will vest, based upon the
number of complete months worked during the Vesting Year in which the
Participant’s termination of employment occurs by reason of Retirement, or
Termination with Consent, which is to be calculated upon termination

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	 	 	 	and delivered, subject to the following, upon termination. In the case of
any payment considered to be based upon separation from service, and not
compensation the Participant could receive without separating from service,
then such amounts may not be paid until the first business day of the
seventh month following the date of Participant’s termination if Participant
is a “specified employee” under Section 409A of the Code upon his separation
from service. The remaining unvested shares are forfeited immediately upon
termination.

	 	(a)	 	Example: If the 1/3 ratable vesting for
Vesting Year 3 is 1000 shares for Award 1, 1000 shares for Award 2, and
1000 shares for Award 3 and if the Participant terminates employment by
reason of Retirement six months following the Award 3 grants, the
Participant is entitled to vesting of 1/2 of all grants that would have
vested at the end of the Vesting Year during which he or she retires
(Vesting Year 3 in this example), or 1500 shares. This example focuses
only on the shares that would vest during Vesting Year 3; however,
another 3000 shares would have vested in the aggregate following
Vesting Years 1 and 2, for a total of 4500 shares vesting under the
Awards 1, 2 and 3. The 1500 shares would vest upon the date of
termination.

	 	(3)	 	Termination without Consent and Termination for Cause.
Unless otherwise determined by the Committee, unvested Restricted Stock Units
are forfeited if termination of employment is due to Termination without
Consent or Termination for Cause.

E.      Change of Control. Notwithstanding the provisions of the Plan, shares of Restricted
Stock shall not vest immediately upon a Change of Control. However, and notwithstanding the
foregoing provisions of these Regulations, if a Termination, other than for Cause or a voluntary
termination in the absence of Good Reason, occurs either (x) following a Potential Change of
Control and, subsequently, a 409A Change of Control occurs within 24 months following such
Termination or (y) within 24 months following a Change of Control, then no Restricted Stock Units
shall have been, nor shall any Restricted Stock Units be, forfeited upon such Termination; rather,
all Restricted Stock Units shall vest immediately upon the occurrence of the 409A Change of
Control, in the case of (x), or the Termination, in the case of (y).

	 	(1)	 	409A Change of Control. For the purposes of these
Regulations, the term “409A Change of Control” shall mean a change in ownership
or effective control of the Corporation or in the ownership of a substantial
portion of its assets within the meaning of Section 409A of the Code that also
constitutes a Change of Control.

	7.	 	Performance Awards.

	 	A.	 	Performance Periods. Each Performance Period will be approximately
three years in length and may overlap with the Performance Periods for the prior year
and

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	 	 	 	subsequent year Performance Award grants, if any. Each Performance Period will
begin on the third business day following the public release of the Corporation’s
earnings for the first quarter of the calendar year during which the Performance
Period begins and shall end on the twelfth business day following the public release
of the Corporation’s earnings for the first quarter of the third calendar year
succeeding the calendar year during which the Performance Period begins (the
approximate three year period is referred to herein as the “Performance
Period”).

	 	B.	 	Performance Goal Establishment/Grant Mechanics. The Committee shall
establish and approve the Performance Goal and the relevant peer group (the “Peer
Group”) for performance comparison purposes at the beginning of each Performance
Period. Unless otherwise determined by the Committee at the beginning of the relevant
Performance Period, the Performance Goal shall be based upon the total shareholder
return performance measure, and the Corporation’s total shareholder return shall be
compared to the total shareholder return of the Peer Group for the Performance Period.
	 
	 	C.	 	Performance Award Grants. At the beginning of each Performance Period,
the Committee may grant Performance Awards to Participants for such Performance Period
and shall identify for such grants the amount which may be earned based upon the level
of achievement attained (the “Target” award, in the case of attainment of the
target level of performance).
	 
	 	D.	 	Performance Vesting.

	 	(1)	 	Payout Calculation. Payout shall be based upon the
relative Annualized Total Shareholder Return (“Annualized TSR”) over
the Performance Period.

	 	(a)	 	Annualized TSR = ((Final Price + all dividends
paid during the relevant Performance Period)/Initial Price)^(1/3)-1.
	 
	 	(b)	 	Initial Price = the Average Measurement Period
Price relative to the public release of earnings for first quarter of
the calendar year of grant.
	 
	 	(c)	 	Final Price = the Average Measurement Period
Price relative to the public release of earnings for the first quarter
of the third calendar year succeeding the year of grant.
	 
	 	(d)	 	Average Measurement Period Price = The average
of the Fair Market Values for each of the ten days during the ten
business day period beginning on the third business day following the
public release of earnings for the first quarter of a calendar year.

13

 

	 	(e)	 	Stock prices may be determined using (a) any
reputable online stock-quote service, such as Yahoo! Finance or
Bloomberg, or (b) the financial pages of The Wall Street
Journal.

	 	(2)	 	Payout Basis. Payout will be based upon the
Corporation’s calculated Annualized TSR compared to the statistical Annualized
TSR for the Peer Group (“Comparative TSR”) using the whole company
ranking method (i.e., including the Corporation within the array of companies
for which TSR is compared). Awards will be evaluated based upon the following
comparison:

	 	(a)	 	Comparative TSR = 25th percentile —> 50% of
Target (the Threshold/Minimum Award).
	 
	 	(b)	 	Comparative TSR = 50th percentile —> 100%
of Target (the Target Award).
	 
	 	(c)	 	Comparative TSR = 75th percentile and above
—> 200% of Target (the Cap/Maximum Award).
	 
	 	(d)	 	Interpolation will be used to determine actual
awards for performance that correlates to an award between Minimum and
Maximum Award levels.
	 
	 	(e)	 	Award payout will follow the end of the
Performance Period (and in no event later than 21/2 months following the
end of the calendar year in which the Performance Period ends, as
provided in the Plan) and the Committee’s written certification of
achievement of Performance Goals, payable in the form of Shares. In
the case of any payment considered to be based upon separation from
service, and not compensation the Participant could receive without
separating from service, then such amounts may not be paid until the
first business day of the seventh month following the date of
Participant’s termination if Participant is a “specified employee”
under Section 409A of the Code upon his separation from service.

	 	(3)	 	Peer Group Adjustments. At the commencement of the
Performance Period, the Committee may determine that specific guidance be
considered in connection with possible adjustments to the Peer Group involved
in the calculation of the Corporation’s comparative performance with respect to
the Performance Goal during the Performance Period. Any such determination
will be in addition to, or will amend if it conflicts with, the following
guidelines, which will be used in connection with the calculation:

	 	(a)	 	If a Peer Group Company becomes bankrupt, the
bankrupt company will remain in the Peer Group positioned at one level
below the lowest performing non-bankrupt Peer Group Company.

14

 

	 	 	 	In the case of multiple bankruptcies, the bankrupt companies will be
positioned below the non-bankrupt companies in reverse chronological
order by bankruptcy date.

	 	(b)	 	If a Peer Group Company is acquired by another
company or entity, including through a management buy-out or
going-private transaction, the acquired Peer Group Company will be
removed from the Peer Group for the entire Performance Period; provided
that if the acquired company became bankrupt prior to its acquisition
it shall be treated as provided in (a), above.

	 	(c)	 	If a Peer Group Company sells, spins-off, or
disposes of a portion of its business, the selling Peer Group Company
will remain in the Peer Group for the Performance Period unless such
disposition(s) results in the disposition of more than 50% of the
company’s total assets during the Performance Period.

	 	(d)	 	If a Peer Group Company acquires another
company, the acquiring Peer Group Company will remain in the Peer Group
for the Performance Period.

	 	(e)	 	If the price of a Peer Group Company’s stock is
not available on a consistent, reliable basis due to delisting on all
major stock exchanges and over-the-counter markets, such delisted Peer
Group Company will be removed from the Peer Group for the entire
Performance Period; provided that, if the Peer Group Company becomes
bankrupt prior to the end of the Performance Period, it shall be
treated as in (a), above.

	 	(f)	 	If the Corporation’s and/or any Peer Group
Company’s stock splits, such company’s TSR performance will be adjusted
for the stock split so as not to give an advantage or disadvantage to
such company by comparison to the other companies, using the principles
set forth in Section 8 of the Plan.

	 	(4)	 	Negative Discretion. The Committee retains negative
discretion to reduce any and all Performance Awards to an amount below the
amount that would be payable as a result of performance measured against the
Performance Goals, except with respect to Performance Awards paid pursuant to a
Change of Control. The Committee may not increase Performance Awards above the
amount payable as a result of performance measured against the Performance
Goals.
	 
	 	(5)	 	Termination of Employment.

	 	(a)	 	Death and Disability. Unless otherwise
determined by the Committee, a prorated value of the Performance Award
will vest based upon the date of death during employment or termination
of

15

 

	 	 	 	employment by reason of Disability during the Performance Period in
accordance with the following schedule, to be calculated and
delivered at the end of the relevant Performance Period, provided
that the relevant performance goals are achieved and subject to the
Committee’s negative discretion:

	 	 	 	 	 
	Date of Death or Termination for Disability	 	% Vested
	Prior to 1/3 completion of Performance Period
	 	 	0	%
	On or after 1/3 and before 2/3 completion of Performance Period
	 	 	50	%
	On or after 2/3 completion of Performance Period
	 	 	100	%

	 	(b)	 	Retirement and Termination with
Consent. Unless otherwise determined by the Committee, a prorated
value of the Performance Award will vest based upon the number of
complete months worked during the Performance Period, in the event of a
Participant’s termination of employment by reason of Retirement, or
Termination with Consent, to be calculated and delivered at the end of
the relevant Performance Period, provided that the relevant performance
goals are achieved and subject to the Committee’s negative discretion.
In the case of any payment considered to be based upon separation from
service, and not compensation the Participant could receive without
separating from service, then such amounts may not be paid until the
first business day of the seventh month following the date of
Participant’s termination if Participant is a “specified employee”
under Section 409A of the Code upon his separation from service.

	 	(i)	 	Example: If the Target number of
Shares is 1000 shares for Performance Period 1 Awards, 1000
shares for Performance Period 2 Awards, and 1000 shares for
Performance Period 3 Awards and if the Participant terminates
employment by reason of Retirement six months following the
first day of Performance Period 3, the Participant is entitled
to vesting of 5/6’s of the Performance Period 1 awards, 1/2 of the
Performance Period 2 awards, and 1/6 of the Performance Period 3
awards (or 1500 shares), subject to the Committee’s
determination of the payout basis for each Performance Period.
That is, the above example assumes that the Committee had
determined the Performance Goals had been met at least to the
100% of Target level and that the payout basis was 100% of
Target for each period. (Again, the Committee retains its
negative discretion with respect to each Performance Period and

16

 

	 	 	 	with respect to each Participant and payments, if any, will
be made following the relevant Performance Period.)

	 	(c)	 	Termination without Consent and Termination
for Cause. Unless otherwise determined by the Committee,
Performance Awards will be forfeited immediately if a Participant’s
termination of employment is due to Termination without Consent or
Termination for Cause.

	 	(6)	 	Potential Change of Control. Notwithstanding the foregoing provisions
of the Regulations, if a Termination, other than for Cause or a voluntary termination
in the absence of Good Reason, occurs following a Potential Change of Control and,
subsequently, a 409A Change of Control occurs within 24 months following such
Termination, then the Performance Award of such Participant shall vest immediately at
the actual performance level achieved over the abbreviated Performance Period,
calculated in accordance with the provisions of Section 7.D.(7) below, without regard
to the Participant’s continued employment or termination thereof or the Committee’s
negative discretion.
	 
	 	(7)	 	Change of Control. Notwithstanding any provisions of the Plan or the
foregoing provisions of the Regulations, if a Change of Control occurs, (i) the
Performance Period shall automatically end, (ii) the actual performance level for the
abbreviated Performance Period shall be measured against the established Performance
Goals, without the Committee’s negative discretion, the performance criteria shall be
deemed satisfied only to the extent that actual performance was achieved (the result is
the “Achieved Performance Award”), and the balance of the Performance Award, if any,
shall be forfeited, and (iii) the Achieved Performance Award shall remain subject to
forfeiture until the third anniversary of the date of grant of the Performance Award if
the Participant terminates employment after the Change of Control but before the third
anniversary of the date of grant; provided, however, that (i) if a Termination, other
than for Cause or a voluntary termination in the absence of Good Reason, occurs within
24 months following a Change of Control, then the Achieved Performance Award shall not
be forfeited upon such Termination; rather, the Achieved Performance Award shall vest
immediately upon the Termination, (ii) if a Termination by reason of death or
Disability occurs, then the Achieved Performance Award shall not be forfeited upon such
death or Disability; rather, the Performance Award shall vest immediately upon the
Participant’s death during employment or termination of employment by reason of
Disability; and (iii) if a Termination by reason of Retirement or Termination with
Consent occurs, then a prorated portion of the Achieved Performance Award will vest,
based upon the number of complete months worked during the original Performance Period
in relation to the number of whole months in the original Performance Period and the
remainder shall be forfeited.

	 	(a)	 	Price. In the event of a Change of Control, the final
price for purposes of determining the Annualized TSR shall be determined based
on the closing

17

 

	 	 	 	price of the business day immediately preceding the closing date of the
Change of Control.

	 	(b)	 	Original Performance Period. In the event of a Change
of Control, the original Performance Period shall be deemed to end on the third
anniversary of the date of grant of the Performance Award.

18

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