Exhibit 10.9
EXECUTION COPY
SECTION 9711 COAL ACT LIABILITIES
ASSUMPTION AGREEMENT
     This SECTION 9711 COAL ACT LIABILITIES ASSUMPTION AGREEMENT (“Agreement”)
is made on the 22nd day of October, 2007 by and between Peabody Holding Company,
LLC (“PHC”), a Delaware limited liability company with principal offices at 701
Market Street, St. Louis, MO 63101, Patriot Coal Corporation (“Patriot”), a
Delaware corporation with principal offices at 12312 Olive Boulevard, Suite 400,
St. Louis, Missouri, and, solely with respect to its obligations under Section 7
hereof, Peabody Energy Corporation (“PEC”), a Delaware corporation with
principal offices at 701 Market Street, St. Louis, MO 63101 (each of the
foregoing being sometimes referred to hereinafter individually as “a party” or
jointly as “the parties”).
RECITALS
     WHEREAS, contemporaneously herewith, all of the shares of common stock of
Patriot have been distributed to the stockholders of PEC, PHC’s ultimate parent
company, and Patriot will indirectly own all of the capital stock of certain
Transferred Companies (as defined below); and
     WHEREAS, the Transferred Companies, as defined below, have obligations to
provide healthcare to eligible retirees and their eligible dependents pursuant
to the Coal Act (as defined below); and
     WHEREAS, notwithstanding the transfer of ownership, PHC will remain a
“related person” to the Transferred Companies as the term “related person” is
defined in Section 9701 of the Coal Act; and,
     WHEREAS, as a “related person” within the meaning of the Coal Act to the
Transferred Companies, PHC will remain liable for the provision of healthcare
benefits to eligible retirees and their eligible dependents under the Coal Act;
and
     WHEREAS, PHC and Patriot desire to provide for the continued payment for
the healthcare benefits in accordance with the requirements of certain
provisions of the Coal Act and with the retiree healthcare plans adopted
pursuant to those provisions of the Coal Act;
     WHEREAS, PHC has agreed to assume the liabilities for the provision of such
healthcare benefits; and
     WHEREAS, contemporaneously herewith PHC and Patriot have entered an
Administrative Service Agreement pursuant to which Patriot will take certain
actions necessary and appropriate for the administration of any Coal Act Plans
(as defined below) and delivery of benefits constituting Section 9711 Coal Act
Liabilities (as defined below).
     NOW, THEREFORE, in consideration of the mutual promises, covenants and

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agreements contained herein, the parties do hereby agree as follows:
     Section 1. Defined Terms.
     (a) The term “Coal Act” shall mean the Coal Industry Retiree Health Benefit
Act of 1992, 26 U.S.C. §§ 9701 — 9722, as may be amended, modified or replaced
from time to time.
     (b) The term “Section 9711 Coal Act Liabilities” shall mean amounts the
Transferred Companies are required to pay in order to provide healthcare
benefits to those retirees of the Transferred Companies, identified on
Attachment A hereto, and their eligible dependents who, as of the Effective Date
of this Agreement, were receiving benefits from a health plan maintained by the
Transferred Companies pursuant to Section 9711 of the Coal Act and remain
eligible for such benefits. PHC shall not assume liability for payments to any
individual not listed on Attachment A (other than any eligible dependent of an
individual listed on Attachment A) and for any individual listed on Attachment A
including any eligible dependent who becomes ineligible for such benefits (but
only for costs arising from and after the time such individual becomes
ineligible).
     (c) The term “Coal Act Plan” shall mean a plan for the provision of
benefits in accordance with the Coal Act.
     (d) The term “Effective Date” shall mean the date first hereinabove
entered.
     (e) The term “Patriot Group” shall mean Patriot and the Transferred
Companies, as defined herein.
     (f) The term “Transferred Companies” shall mean Affinity Mining Company,
Colony Bay Coal Company, Eastern Associated Coal, LLC, Martinka Coal Company,
LLC, Mountain View Coal Company, LLC, Peabody Coal Company, LLC, Pine Ridge Coal
Company, LLC, and Sterling Smokeless Coal Company, LLC, and each of their
respective successors.
     Section 2. Assumption of Section 9711 Coal Act Liabilities.
     (a) PHC assumes, and agrees to pay and discharge when due in accordance
herewith, the Section 9711 Coal Act Liabilities.
     (b) Patriot shall instruct each third party administrator to deliver each
invoice with respect to Section 9711 Coal Act Liabilities directly to PHC in
accordance with such third party administrator’s normal billing cycle, and PHC
shall pay each such invoice in full (solely to the extent such amounts relate to
the Section 9711 Coal Act Liabilities) by wire transfer in immediately available
funds when due. PHC shall pay the fees of the third-party administrators of the
medical and prescription drug services to the retirees identified on Attachment
A when due. The parties hereto acknowledge that the current practice is to
include such fees in the last invoice of the month related to such medical or
prescription drug services.
     Section 3. Mutual Cooperation. Each of PHC and Patriot will use their
commercially reasonable efforts to cooperate with each other to give full effect
to the transactions contemplated by this Agreement. If PHC provides written
notice that any amounts were paid under this

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agreement in excess of the actual Section 9711 Coal Act Liabilities, Patriot
will use its commercially reasonable efforts to recover such excess amounts for
PHC’s benefit.
     Section 4. Settlement of Claims. Patriot shall immediately notify PHC when
Patriot or any of its subsidiaries are sued by the UMWA or a former employee or
his or her eligible dependents regarding the Section 9711 Coal Act Liabilities.
Patriot may not settle any such dispute without the prior written consent of
PHC, not to be unreasonably withheld or delayed. If Patriot settles any such
claim without the prior written consent of PHC, then PHC shall not be liable for
reimbursement of any amounts paid by Patriot as a result of such un-consented
settlement under this Agreement.
     Section 5. PHC Right to Pursue a Claim or Defense. If PHC determines that
Patriot or any of the Transferred Companies is failing to pursue with reasonable
diligence a claim or defense related to any Section 9711 Coal Act Liabilities,
it shall notify Patriot in writing of such failure. If Patriot fails or refuses
to pursue such claim or defense diligently within thirty (30) days of such
notice, then PHC at its option may elect to pursue such claim or defense at its
cost in the name of Patriot or the affected Transferred Company. Any contest
assumed by PHC pursuant to this provision shall be conducted by attorneys
employed or retained by PHC (subject to the right of Patriot to participate in
such prosecution or defense at Patriot’s cost) and PHC may settle or compromise
the claim or defense without the consent of Patriot or the affected Transferred
Company, so long as such settlement or compromise does not include any payment
or other obligation of Patriot or its controlled affiliates. PHC, Patriot and
the Transferred Companies shall use their commercially reasonable efforts to
cooperate with each other in the continued prosecution or defense of any such
claim, including the provision of witnesses and production of documents.
     Section 6. Maintenance of Books and Records; Inspection. Patriot shall, at
all times during the continuance of this Agreement, maintain full and complete
books of account and other records with respect to all activities under this
Agreement including, but not limited to, records of all payments made in
connection with, or as a result of, such activities and all contracts entered
and evaluations performed with respect to payment of Section 9711 Coal Act
Liabilities. PHC shall, at all times during the continuance of this Agreement,
have the right to inspect, copy, and/or audit all account books and other
records with respect to this Agreement at Patriot’s offices and during regular
business hours; provided that (i) PHC is not entitled to inspect such books and
records more than once every six months, (ii) PHC shall provide at least
forty-eight (48) hours advance notification, including reasonable detail of the
materials to be reviewed, and (iii) no such inspection or audit shall
unreasonably interfere with the normal and regular conduct of Patriot’s
business.
     Section 7. PEC Guarantee. PEC hereby irrevocably and unconditionally
guarantees the prompt and full payment by PHC of all amounts owed by it under
this Agreement, subject to its right of setoff set forth in the Separation
Agreement, Plan of Reorganization and Distribution, dated as of October 22, 2007
(the “Separation Agreement”) by and between PEC and Patriot. Such guaranty shall
be a guaranty of payment and not merely of collection, and shall not be
conditioned or contingent upon the pursuit of any remedies against PHC. The
liability of PEC under this guaranty shall, to the fullest extent permitted
under applicable law, be absolute, unconditional and irrevocable. PEC hereby
waives any and all notice of the creation, renewal,

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extension or accrual of any of the guaranteed obligations and notice of or proof
of reliance by Patriot upon this guaranty or acceptance of this guaranty. The
guaranteed obligations, and any of them, shall conclusively be deemed to have
been created, contracted or incurred in reliance upon this guaranty. When
pursuing its rights and remedies hereunder against PEC, Patriot shall be under
no obligation to pursue such rights and remedies it may have against PHC or any
right of offset with respect thereto, and any failure by Patriot to pursue such
other rights or remedies or to collect any payments from PHC or to realize upon
or to exercise any such right of offset shall not relieve PEC of any liability
hereunder, and shall not impair or affect the rights and remedies, whether
express, implied or available as a matter of law, of Patriot. PEC irrevocably
waives acceptance hereof, presentment, demand, protest, promptness, diligence,
obligation to protect, secure or perfect any security interest and any notice.
Patriot shall not be obligated to file any claim relating to any guaranteed
obligation in the event that PHC becomes subject to a bankruptcy, reorganization
or similar proceeding, and the failure of Patriot to so file shall not affect
PEC’s obligations hereunder. In the event that any payment to Patriot in respect
of any guaranteed obligation is rescinded or must otherwise be returned for any
reason whatsoever, PEC shall remain liable hereunder with respect to the
guaranteed obligation as if such payment had not been made, and the guaranty
shall be reinstated and shall continue even if otherwise terminated.
     Section 8. Indemnification. PHC agrees that it shall indemnify, defend and
hold harmless Patriot and its respective affiliates and the successors, assigns,
employees, officers, directors and agents of each, from and against any claims,
actions or causes of action, damages, penalties, fines, assessments, attorney
fees or other costs or expenses principally resulting from the failure of PHC to
timely pay and discharge the Section 9711 Coal Act Liabilities.
     Section 9. Resolution of Disputes. Any party or parties to a dispute or
disagreement under this Agreement (“Covered Dispute”) (including but not limited
to any issue as to the arbitrability of such Covered Dispute) may give the other
parties to the Covered Dispute written notice of the Covered Dispute initiating
the provisions hereunder. Within ten days after delivery of the notice of a
Covered Dispute, the receiving parties shall submit to the other a written
response. The notice and the response shall include a statement of each party’s
respective position and a summary of arguments supporting that position and the
name and title of the executive who will represent the claimants and of any
other individual who will accompany such executive in resolving the Covered
Dispute. Within twenty (20) days after delivery of the first notice, such
executives shall meet at a mutually acceptable time and place, and thereafter as
often as they reasonably deem necessary, and shall negotiate in good faith to
attempt to resolve the Covered Dispute. All reasonable requests for information
made by one party to the other will be honored. If the Covered Dispute has not
been resolved by negotiation within thirty (30) days of the first notice of the
Covered Dispute, the parties to the Covered Dispute may, by their mutual
consent, submit the Covered Dispute to arbitration in St. Louis, Missouri.
Arbitration of any Covered Dispute shall be conducted in accordance with the
Commercial Arbitration Rules of the American Arbitration Association in effect
on the date of the first notice of the Covered Dispute. The parties agree to use
3 arbitrators for any Covered Dispute in excess of Two Million Dollars
($2,000,000.00). Any decision of the arbitrator (or arbitrators) agreed upon or
appointed and acting pursuant to this Section 9 shall be final and binding upon
the parties and judgment may be entered thereon, upon the application of any of
the parties, by any court of competent jurisdiction. The arbitrator may also
award reasonable attorney’s fees and the costs of the arbitration to the
prevailing party. This Section 9 shall not preclude any of the parties from
seeking a temporary

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restraining order, preliminary injunction or other temporary injunctive relief
necessary to enforce this Section 9 or protect rights under this Agreement. If
the parties do not mutually agree to arbitrate the Covered Dispute, the Covered
Dispute shall be resolved pursuant to Section 15.08 of the Separation Agreement.
     Section 10. Waiver. The failure of any party to comply with any of its
obligations or agreements or to fulfill any conditions contained in this
Agreement may be excused only by a written waiver from the other parties.
Failure by any party to exercise, or delay by any party in exercising, any right
under this Agreement shall not operate as a waiver thereof, nor shall any single
or partial exercise of any right hereunder by a party preclude any other or
future exercise of that right or any other right hereunder by such party.
     Section 11. Notices. All notices, requests or other communications required
or permitted hereunder shall be given in writing by hand delivery, registered
mail, certified mail or overnight courier, return receipt requested, postage
prepaid, to the party to receive the same at its respective address set forth
below, or at such other address as may from time to time be designated by such
party to the others in accordance with this Section 11.
If to Patriot, to:
Joseph W. Bean
Senior Vice President, General Counsel and Corporate Secretary
Patriot Coal Corporation
12312 Olive Boulevard, Suite 400
St. Louis, MO 63141
Fax:
If to PHC, to:
Alexander Schoch, Esq.
Executive Vice President Law and Chief Legal Officer
Peabody Holding Company, LLC
701 Market Street
St. Louis, MO 63101
Fax: 314-342-3419
All such notices and communications hereunder shall be deemed given when
received, as evidenced by the acknowledgment of receipt issued with respect
thereto by the applicable postal authorities or the signed acknowledgment of
receipt of the person to whom such notice or communication shall have been
addressed or his or her authorized representative.
     Section 12. No Third-Party Beneficiaries. Except for the Transferred
Companies, neither this Agreement nor any provision hereof shall create any
right in favor of or impose any obligation upon any person or entity other than
the parties hereto and their respective successors and permitted assigns.
Without limiting the generality of the foregoing, this Agreement is not intended
to, and does not, create any rights, third party or otherwise, on behalf of the
United Mine Workers of America Combined Benefit Fund, the 1992 Fund, the 1993
Fund, the United Mine

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Workers of America, any retiree or dependent, or any other person or individual.
No third party shall be entitled to any subrogation rights with respect to any
obligation of any party under this Agreement.
     Section 13. Captions and Paragraph Headings. Captions and paragraph
headings are used hereinafter for convenience only and are not a part of this
Agreement and shall not be used in construing it.
     Section 14. Entire Agreement. The making, execution and delivery of this
Agreement by the parties has been induced by no representations, statements,
warranties or agreements other than those herein expressed. Notwithstanding any
provisions in any other agreement, this Agreement, together with the Separation
Agreement and the other agreements contemplated thereby, including without
limitation the Administrative Services Agreement, dated as of October 22, 2007,
by and between PHC and Patriot, embodies the entire understanding of the parties
and their respective subsidiaries and affiliates relating to the matters set
forth herein. This Agreement may be modified only by a written instrument
executed by the parties. The parties make no representation or warranties with
respect to the subject matter of this Agreement not expressly set forth in this
Agreement. This Agreement supersedes and terminates all other discussions,
negotiations, understandings, arrangements and agreements between or among PHC,
Patriot, the Transferred Companies, or any respective affiliated companies,
entities or persons relating to the subject matter hereof.
     Section 15. Assignability. Neither of the parties hereto may assign this
Agreement without the prior written consent of the other parties, which consent
will not be unreasonably withheld or delayed. Any impermissible attempted
assignment of this Agreement without such prior written consent shall be void,
and the party assigning or attempting to assign this Agreement shall remain
bound by and obligated by this Agreement as if no assignment or attempted
assignment had occurred.
     Section 16. Successors and Assigns. This Agreement and the provisions
hereof shall be binding upon and inure to the benefit of the respective
successors and permitted assigns of the parties hereto.
     Section 17. Severability. In the event one or more of the provisions of
this Agreement shall, for any reason, be held invalid, illegal or unenforceable
in any respect, such invalidity, illegality or unenforceability shall not affect
the validity, legality or enforceability of any other provision of this
Agreement, and this Agreement shall be construed as if such invalid, illegal or
unenforceable provision was not a part of this Agreement.
     Section 18. Counterparts. This Agreement may be executed in any number of
duplicate counterparts, each of which shall be deemed an original and all of
which together shall constitute one and the same instrument.
     Section 19. Governing Law. The parties hereto have agreed that the
validity, construction, operation and effect of any and all of the terms and
provisions of this Agreement shall be determined and enforced in accordance with
the laws and regulations of the State of Delaware, without giving effect to
principles of conflicts of law thereunder.

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     IN WITNESS WHEREOF, the parties hereto have caused this Section 9711 Coal
Act Liabilities Assumption Agreement to be duly executed by one of their
respective officers duly authorized and directed as of the date first written
above.

                     
 
                    PEABODY HOLDING COMPANY, LLC       PATRIOT COAL CORPORATION
   
 
                   
By:
  /s/ Richard A. Navarre       By:   /s/ Richard M. Whiting    
 
                   
 
  Name: Richard A. Navarre           Name: Richard M. Whiting    
 
  Title: Executive Vice President           Title: President & Chief Financial
Officer    

         
 
        Solely for purposes of Section 7 hereof: PEABODY ENERGY CORPORATION    
 
       
By:
  /s/ Richard A. Navarre    
 
       
 
  Name: Richard A. Navarre    
 
  Title: Executive Vice President    

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