EXHIBIT 10.1

SUPPLEMENT NO. 2

TO THE

GUARANTEE AND COLLATERAL AGREEMENT

SUPPLEMENT NO. 2 dated as of October 5, 2007 (this “Supplement”), to the
Guarantee and Collateral Agreement dated as of July 30, 2004 (the “Guarantee and
Collateral Agreement”), among FC 2 CORP., a Delaware corporation (“Holdings”),
FOUNDATION COAL CORPORATION, a Delaware Corporation (“Acquisition Corp.”), S2
ACQUISITION CORP., a Delaware Corporation (which, on the Closing Date, shall be
merged with and into, Foundation PA Coal Company, the “Borrower”), each Domestic
Subsidiary of Borrower identified herein (each, a “Subsidiary Party”) and
CITICORP NORTH AMERICA, INC. (“CNAI”), as collateral agent (in such capacity,
the “Collateral Agent”) for the Secured Parties.

A. Reference is made to the Amended and Restated Credit Agreement dated as of
July 7, 2006 (as amended, supplemented, waived or otherwise modified from time
to time, the “Credit Agreement”), Among Foundation Coal Corporation (“Holdings”)
as the Parent Guarantors, Foundation PA Coal Company, LLC as Borrower, the
Subsidiary Guarantors (including the Limited Liability Company), the Lenders
party thereto from time to time, the Issuing Banks party thereto from time to
time, Citicorp North America Inc., as Administrative Agent for the Lenders, Bank
of America, N.A., LaSalle Bank National Association, PNC Bank, National
Association, and the Royal Bank of Scotland PLC, each as Co-Documentation
Agents, and Citigroup Global Markets Inc. as sole Syndication Agent and sole
Lead Arranger.

B. Capitalized terms used herein and not otherwise defined herein shall have the
meanings assigned to such terms in the Credit Agreement and the Guarantee and
Collateral Agreement referred to therein.

C. The Guarantors have entered into the Guarantee and Collateral Agreement in
order to induce the Lenders to make Loans and each Issuing Bank to issue Letters
of Credit. Section 7.15 of the Guarantee and Collateral Agreement provides that
additional Subsidiaries may become Subsidiary Parties under the Guarantee and
Collateral Agreement by execution and delivery of an instrument in the form of
this Supplement. The undersigned Subsidiary (the “New Subsidiary”) is executing
this Supplement in accordance with the requirements of the Credit Agreement to
become a Subsidiary Party under the Guarantee and Collateral Agreement in order
to induce the Lenders to make additional Loans and each Issuing Bank to issue
additional Letters of Credit and as consideration for Loans previously made and
Letters of Credit previously issued.

Accordingly, the Collateral Agent and the New Subsidiary agree as follows:

SECTION 1. In accordance with Section 7.15 of the Guarantee and Collateral
Agreement, the New Subsidiary by its signature below becomes a Subsidiary

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Party and a Guarantor under the Guarantee and Collateral Agreement with the same
force and effect as if originally named therein as a Subsidiary Party and a
Guarantor, and the New Subsidiary hereby (a) agrees to all the terms and
provisions of the Guarantee and Collateral Agreement applicable to it as a
Subsidiary Party and Guarantor thereunder and (b) represents and warrants that
the representations and warranties made by it as a Guarantor thereunder are true
and correct, in all material respects, on and as of the date hereof. In
furtherance of the foregoing, the New Subsidiary, as security for the payment
and performance in full of the Obligations (as defined in the Guarantee and
Collateral Agreement), does hereby create and grant to the Collateral Agent, its
successors and assigns, for the ratable benefit of the Secured Parties, their
successors and assigns, a security interest in and Lien on all the New
Subsidiary’s right, title and interest in and to the Collateral (as defined in
the Guarantee and Collateral Agreement) of the New Subsidiary. Each reference to
a “Subsidiary Party” or a “Guarantor” in the Guarantee and Collateral Agreement
shall be deemed to include the New Subsidiary. The Guarantee and Collateral
Agreement is hereby incorporated herein by reference.

SECTION 2. The New Subsidiary represents and warrants to the Collateral Agent
and the other Secured Parties that this Supplement has been duly authorized,
executed and delivered by it and constitutes its legal, valid and binding
obligation, enforceable against it in accordance with its terms, subject to
(i) the effects of bankruptcy, insolvency, moratorium, reorganization,
fraudulent conveyance or other similar laws affecting creditors’ rights
generally, (ii) general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law) and
(iii) implied covenants of good faith and fair dealing.

SECTION 3. This Agreement may be executed in two or more counterparts, each of
which shall constitute an original but all of which when taken together shall
constitute but one contract. This Supplement shall become effective when (a) the
Collateral Agent shall have received a counterpart of this Supplement that bears
the signature of the New Subsidiary and (b) the Collateral Agent has executed a
counterpart hereof.

SECTION 4. The New Subsidiary hereby represents and warrants that (a) set forth
on Schedule I attached hereto is a true and correct schedule of the location of
any and all Article 9 Collateral of the New Subsidiary, (b) set forth on
Schedule II attached hereto is a true and correct schedule of all the Pledged
Securities of the New Subsidiary and (c) set forth under its signature hereto,
is the true and correct legal name of the New Subsidiary, its jurisdiction of
formation and the location of its chief executive office.

SECTION 5. Except as expressly supplemented hereby, the Guarantee and Collateral
Agreement shall remain in full force and effect.

SECTION 6. THIS SUPPLEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER
THIS SUPPLEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS
OF THE STATE OF NEW YORK.

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SECTION 7. In the event any one or more of the provisions contained in this
Supplement should be held invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions contained
herein and in the Guarantee and Collateral Agreement shall not in any way be
affected or impaired thereby. The parties shall endeavor in good-faith
negotiations to replace the invalid, illegal or unenforceable provisions with
valid provisions the economic effect of which comes as close as possible to that
of the invalid, illegal or unenforceable provisions.

SECTION 8. All communications and notices hereunder shall be in writing and
given as provided in Section 7.01 of the Guarantee and Collateral Agreement.

SECTION 9. The New Subsidiary agrees to reimburse the Collateral Agent for its
reasonable out-of-pocket expenses in connection with this Supplement, including
the reasonable fees, disbursements and other charges of counsel for the
Collateral Agent.

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IN WITNESS WHEREOF, the New Subsidiary and the Collateral Agent have duly
executed this Supplement to the Guarantee and Collateral Agreement as of the day
and year first above written.

FOUNDATION PA COAL TERMINAL,
LLC

By:   /s/ Frank J. Wood  

Name:

  Frank J. Wood   Title:   Vice President

Legal Name: Foundation PA Coal
Terminal, LLC

Jurisdiction of Formation: Delaware Location of Chief Executive Office:

999 Corporate Boulevard, Suite 300,
Linthicum Heights, MD 21090

CITICORP NORTH AMERICA, INC., as
Collateral Agent

By:   /s/ Mason McGurrin  

Name:

  Mason McGurrin   Title:   Vice President