Exhibit 10.1

 

RESTRUCTURING SUPPORT AGREEMENT

 

This RESTRUCTURING SUPPORT AGREEMENT (together with all exhibits, schedules and
attachments hereto, as amended, supplemented or otherwise modified from time to
time in accordance with the terms hereof, this “Agreement”), dated as of
January 10, 2016, is among:

 

(a)                                 Arch Coal, Inc. (“Arch Coal”);

 

(b)                                 the direct and indirect wholly-owned
subsidiaries that are guarantors under the First Lien Credit Agreement (as
defined below) (the “Guarantors” and, together with Arch Coal, collectively, the
“Company”);

 

(c)                                  each of the undersigned term lenders (the
“Consenting Lenders”) under that certain Amended and Restated Credit Agreement,
dated as of June 14, 2011 (as amended, restated, supplemented or otherwise
modified from time to time, the “First Lien Credit Agreement”), among Arch Coal,
as borrower, the Guarantors, the lenders party thereto (the “First Lien
Lenders”), and Wilmington Trust National Association, as successor term loan
administrative agent and successor collateral agent under the First Lien Credit
Agreement (in such capacities, the “First Lien Agent”);

 

The Company and the Consenting Lenders are each referred to herein as a “Party”
and collectively are referred to herein as the “Parties”.

 

RECITALS

 

WHEREAS, the Parties wish to reorganize and recapitalize the Company in
accordance with a pre-arranged chapter 11 plan of reorganization (the “Plan”)
that implements a restructuring (the “Restructuring”) on the terms and
conditions set forth in the term sheet attached hereto as Exhibit A (as amended,
supplemented or otherwise modified from time to time in accordance with the
terms hereof, the “Term Sheet”);

 

WHEREAS, in order to effectuate the Restructuring, the Company intends to file
petitions commencing (the date of commencement being the “Petition Date”)
voluntary cases (the “Bankruptcy Cases”) under chapter 11 of Title 11 of the
United States Code (the “Bankruptcy Code”) with the United States Bankruptcy
Court for the Eastern District of Missouri (the “Bankruptcy Court”); and

 

WHEREAS, this Agreement is the product of arm’s-length, good faith negotiations
among the Parties.

 

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

 

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AGREEMENT

 

Section 1.                                          Certain Definitions.  As
used in this Agreement, the following terms have the following meanings:

 

(a)                                 “Claim” means any “claim” (as such term is
defined in section 101(5) of the Bankruptcy Code) against Arch Coal or any of
its subsidiaries.

 

(b)                                 “DIP Credit Agreement” means the credit
agreement to be in form and substance consistent with the DIP Term Sheet among
Arch Coal, Inc., the guarantors party thereto, the lenders from time to time
party thereto and Wilmington Trust, National Association, as administrative
agent, as may be amended from time to time in accordance with the terms
thereof.  For the avoidance of doubt, the ability to amend or modify the form of
DIP Credit Agreement attached hereto as Exhibit C shall be governed by the terms
thereof notwithstanding anything to the contrary contained in this Agreement as
though the same had been executed on or prior to the date hereof.

 

(c)                                  “DIP Facility” means the $275 million term
loan credit facility under the DIP Credit Agreement.

 

(d)                                 “DIP Term Sheet” means the DIP Term Sheet
attached hereto as Exhibit B; provided, however, that, upon execution of the DIP
Credit Agreement, all references to the DIP Term Sheet herein shall be deemed
references to the DIP Credit Agreement.

 

(e)                                  “First Lien Lender Group” means the ad hoc
group of lenders under the First Lien Credit Agreement represented by Paul,
Weiss, Rifkind, Wharton & Garrison LLP and Kaye Scholer LLP.

 

(f)                                   “Majority Consenting Lenders” means
Consenting Lenders holding in the aggregate more than 66 2/3% of the aggregate
principal amount of Loans (as defined in the First Lien Credit Agreement) held
by the Consenting Lenders.

 

(g)                                  “Outside Date” means November 15, 2016.

 

(h)                                 “Transaction Expenses” means all reasonable
and documented out-of-pocket fees and expenses of the First Lien Agent and the
First Lien Lender Group (which fees and expenses in respect of professionals
shall be limited to the fees and expenses of Paul, Weiss, Rifkind, Wharton &
Garrison LLP, Kaye Scholer LLP, Seward & Kissel, LLP, Houlihan Lokey, Inc., one
local counsel for each of the First Lien Agent and the First Lien Lender Group, 
and one operations or similar consultant (should the First Lien Lender Group and
the lenders under the DIP Facility decide to engage one)) in connection with
this Agreement, the Restructuring Documents and the transactions contemplated
hereby and thereby.

 

Section 2.                                          Definitive Documentation.

 

2.01.                     Term Sheet.  The Plan shall embody the terms contained
in, and shall be consistent with, the terms and conditions of the Restructuring
set forth in the Term Sheet, which Term Sheet and all schedules thereto are
expressly incorporated by reference and made part of

 

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this Agreement as if fully set forth herein.  Except as otherwise provided
herein, neither this Agreement nor the Term Sheet nor any provision hereof or
thereof may be modified, amended, waived or supplemented except in accordance
with Section 6.17 hereof.

 

2.02.                     Restructuring Documents.

 

(a)                                 The definitive documents and agreements
governing the Restructuring (collectively, the “Restructuring Documents”) shall
consist of the following: (a) the DIP Credit Agreement and related
documentation, including the motion seeking approval of the DIP Facility and
authority to use cash collateral and grant adequate protection and the interim
and final orders to be entered by the Bankruptcy Court approving such motion
(respectively, the “Interim DIP Order” and the “Final DIP Order” and, together,
the “DIP Order”), each as described in the DIP Term Sheet; (b) the motion
seeking authority for the Company to assume this Agreement pursuant to sections
105(a) and 365 of the Bankruptcy Code and perform its obligations hereunder (the
“RSA Assumption Motion”) and the order to be entered by the Bankruptcy Court
approving the RSA Assumption Motion (the “RSA Assumption Order”); (c) the Plan
(and all exhibits and supplements thereto consistent with the Term Sheet), it
being acknowledged and agreed that a condition precedent to consummation of the
Plan shall be that this Agreement remains in full force and effect; (d) the
disclosure statement with respect to such Plan (the “Disclosure Statement”), the
other solicitation materials in respect of the Plan (such materials,
collectively, the “Solicitation Materials”), the motion to approve the
Disclosure Statement and Solicitation Materials and the order to be entered by
the Bankruptcy Court approving the Disclosure Statement and Solicitation
Materials as containing, among other things, “adequate information” as required
by section 1125 of the Bankruptcy Code (the “Disclosure Statement Order”);
(e) the order to be entered by the Bankruptcy Court confirming the Plan (the
“Confirmation Order”) and pleadings in support of entry of the Confirmation
Order; (f) those motions and proposed court orders that the Company files on or
after the Petition Date and seeks to have heard on an expedited basis at the
“first day hearing” (the “First Day Pleadings”); and (g) such other documents,
pleadings, agreements or supplements as may be reasonably necessary or advisable
to implement the Restructuring.

 

(b)                                 Each of the Restructuring Documents shall
contain terms and conditions consistent in all material respects with this
Agreement and the Term Sheet, and shall otherwise be in form and substance
reasonably satisfactory to each of the Company and the Majority Consenting
Lenders; it being acknowledged and agreed that the DIP Term Sheet and the form
of DIP Credit Agreement attached hereto as Exhibit C is satisfactory to each
Consenting Lender and the Company.

 

Section 3.                                          Support of Restructuring.

 

3.01.                     Agreements of the Parties.

 

(a)                                 Agreement to Support and Vote.  Each Party
agrees that, subject to the terms of this Agreement (including the terms and
conditions set forth in the Term Sheet and, in the case of the Company,
Section 6.03 hereof), it shall take such steps as are reasonably necessary to
support, achieve approval of and consummate the Restructuring (it being
understood that the Consenting Lenders shall not be required to undertake any
cost or expense in

 

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furtherance of the foregoing that is not paid by the Company pursuant to
Section 6.15 hereof), including, without limitation:

 

(i)                                     negotiating the Restructuring Documents
in good faith with each other and executing and/or delivering the Restructuring
Documents (to the extent such Party is a party thereto);

 

(ii)                                 in the case of the Company, supporting and
using commercially reasonable efforts to (A) complete the Restructuring and all
transactions contemplated under this Agreement, including, without limitation,
those described in the Term Sheet (and once filed, the Plan) in accordance with
the deadlines specified in Section 5 below, (B) take any and all reasonably
necessary actions in furtherance of the Restructuring and the transactions
contemplated under this Agreement, including, without limitation, as set forth
in the Term Sheet (and once filed, the Plan), (C) obtain any and all required
regulatory and/or third-party approvals necessary to consummate the
Restructuring and (D) operate its business in the ordinary course based on
historical practices and the operations contemplated in the Company’s existing
business plan (as may be updated in the ordinary course from time to time in
consultation with the First Lien Lender Group, the “Business Plan”);

 

(iii)                             in the case of the Consenting Lenders, timely
exercising any voting or approval rights under the First Lien Credit Agreement,
governing documents or otherwise to direct the First Lien Agent (or other party,
as applicable) to take such actions reasonably necessary to cause and support
the consummation of the Restructuring;

 

(iv)                              in the case of the Consenting Lenders, subject
to receipt by such Consenting Lenders of a Disclosure Statement and other
Solicitation Materials in respect of the Plan, and approval by the Bankruptcy
Court of such Disclosure Statement and Solicitation Materials as consistent with
section 1125 of the Bankruptcy Code, timely voting, or causing to be voted,
their Claims (including any Post-Effective Date Claims (as defined below)) to
accept the Plan, by delivering their duly executed and completed ballots
accepting the Plan; provided that such vote may be immediately revoked and
deemed void ab initio by such Consenting Lender upon termination of this
Agreement pursuant to the terms hereof; and

 

(v)                                 in the case of the Consenting Lenders,
refraining from changing, revoking or withdrawing (or causing such change,
revocation or withdrawal of) such vote or consent described in subsections
(iii) and (iv) hereof.

 

(b)                                 Agreement Not to Interfere.  Each Party
agrees, in the case of the Company, subject to Section 6.03 hereof, that it will
not: (i) object to, delay, postpone, challenge, reject, oppose or take any other
action that would reasonably be expected to prevent, interfere with, delay or
impede, directly or indirectly, in any material respect, the approval,
acceptance or implementation of the Restructuring on the terms set forth in the
Term Sheet; (ii) directly or indirectly solicit, propose, file with the
Bankruptcy Court, vote for or otherwise support or approve any plan of
reorganization, sale, proposal or offer of dissolution, winding up, liquidation,
reorganization, merger or restructuring of the Company or its indebtedness other
than the Plan (in each case, an “Alternative Transaction”); (iii) negotiate,
enter into, consummate or otherwise participate in any Alternative Transaction
or take any other action,

 

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including, but not limited to, initiating any legal proceeding or enforcing
rights as holders of Claims, that is materially inconsistent with, or that would
reasonably be expected to prevent or materially delay consummation of, the
Restructuring; and (iv) in the case of the Consenting Lenders, object to or
oppose, or support any other person’s efforts to object to or oppose, any
motions filed by the Company that are not inconsistent with this Agreement,
including any request by the Company to extend its exclusive periods to file the
Plan and solicit acceptances thereof.  Notwithstanding the foregoing or anything
else in this Agreement, the Company, directly or indirectly through any of its
representatives or advisors, may participate in negotiations or discussions with
any third party that has made an unsolicited proposal that the Company
determines in accordance with Section 6.03 hereof could lead to an Alternative
Transaction or expressed an interest in making a proposal that the Company
determines in accordance with Section 6.03 hereof could lead to an Alternative
Transaction (and the Company may, but is not obligated to, furnish to such third
party non-public information relating to the Company pursuant to an executed
confidentiality agreement); provided, however, that, if the Company receives an
unsolicited proposal or expression of interest (whether orally or in writing)
that the Company determines in accordance with Section 6.03 hereof could lead to
an Alternative Transaction, the Company shall (x) promptly notify counsel to the
First Lien Lender Group of the receipt of such proposal or expression of
interest, with such notice to include the material terms thereof, including the
identity of the person or group of persons making such proposal or expression of
interest (whether orally or in writing) and (y) thereafter, keep counsel to the
First Lien Lender Group informed of any negotiations, discussions, amendments,
modifications or other changes relating to such proposal or expression of
interest; and provided, further, that the Company shall not enter into any
confidentiality agreement with a party proposing an Alternative Transaction
without first requiring that such party consents to identifying and providing to
counsel to the First Lien Lender Group the information contemplated under this
Section 3.01(b).  The Company shall promptly furnish counsel to the First Lien
Lender Group with copies of any written offer relating to an Alternative
Transaction.

 

(c)                                  Good Faith Cooperation; Further Assurances;
Restructuring Documentation.  The Parties shall cooperate with each other in
good faith and shall coordinate their activities (to the extent practicable and
subject to the terms hereof) in respect of all matters concerning the
implementation and consummation of the Restructuring.  Notwithstanding anything
to the contrary contained herein, the agreement of the Parties to consummate the
Restructuring shall be subject to the completion of all necessary definitive
documentation, including the Restructuring Documents.  The Company acknowledges
and agrees that it will provide advance draft copies of all Restructuring
Documents and any other material motions, applications and other documents that
the Company intends to file with the Bankruptcy Court at least two (2) business
days prior to the date when the Company intends to file any such pleading or
other document (and, if not reasonably practicable, as soon as reasonably
practicable prior to filing) to counsel to the First Lien Lender Group and shall
consult to the extent practicable under the circumstances then present in good
faith with such counsel regarding the form and substance of any such proposed
filing; provided, however, that, subject to any applicable confidentiality
restrictions, the Company shall deliver unredacted versions of any sealed
documents or pleadings or any documents or pleadings for which the Company is
seeking or intends to seek sealed treatment to counsel to the First Lien Lender
Group on a “Professional Eyes Only” basis.

 

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(d)                                 Direction to First Lien Agent.  Each
Consenting Lender agrees that this Agreement shall be deemed a direction to the
First Lien Agent: (i) to take all actions consistent with this Agreement to
support pursuit of and consummation of the Restructuring and the transactions
contemplated by the definitive documents relating thereto; (ii) to the extent
applicable to it, to take or refrain from taking such actions as are set forth
in Sections 3.01(b) and 3.01(c) above, consistent with the Consenting Lenders’
obligations set forth herein; and (iii) to use all authority under the First
Lien Credit Agreement to bind all First Lien Lenders party thereto to the
Restructuring and any definitive documents relating thereto, including the
Restructuring Documents, to the extent applicable.

 

(e)                                  Participation in the Bankruptcy Cases.  The
foregoing clauses (a) through (e) of this Section 3 will not limit any Party’s
rights to (i) appear and participate as a party in interest in any matter to be
adjudicated in the Bankruptcy Cases, so long as such appearance and the
positions advocated in connection therewith are not inconsistent with this
Agreement, or (ii) enforce any rights under this Agreement.

 

Section 4.                                          Representations, Warranties,
and Covenants.  Each of the applicable Parties represents, warrants, and
covenants as to itself only, severally and not jointly, to each other Party, as
of the Effective Date, as follows (each of which is a continuing representation,
warranty, and covenant):

 

4.01.                     Enforceability.  It is validly existing and in good
standing under the laws of the state of its organization, and this Agreement is
a legal, valid, and binding obligation of such Party, enforceable against it in
accordance with its terms, except as may be limited by applicable laws relating
to or limiting creditors’ rights generally (including the Bankruptcy Code) or by
equitable principles or a ruling of the Bankruptcy Court and, with respect to
the Company from and after the Petition Date, subject to Bankruptcy Court
approval.

 

4.02.                     No Consent or Approval.  Except as expressly provided
in this Agreement or in the Bankruptcy Code (including, with respect to the
Company from and after the Petition Date, the approval of the Bankruptcy Court),
no registration or filing with, consent or approval of, or notice to, or other
action is required by any other person or entity in order for it to carry out
the Restructuring in accordance with the Term Sheet or to perform its respective
obligations under this Agreement.

 

4.03.                     Power and Authority.  It has all requisite power and
authority to enter into this Agreement and, subject to the Company obtaining
necessary Bankruptcy Court approvals from and after the Petition Date, to carry
out the Restructuring and to perform its respective obligations under this
Agreement.

 

4.04.                     Authorization.  The execution and delivery of this
Agreement and the performance of its obligations hereunder have been duly
authorized by all necessary action on its part (subject with respect to the
Company from and after the Petition Date, the approval of the Bankruptcy
Court).  The Company further represents and warrants that the respective boards
of directors (or such other governing body) for Arch Coal and each of the
Guarantors has approved, by all requisite action, all of the terms of the
Restructuring set forth in the Term Sheet.

 

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4.05.                     No Conflict.                              The
execution, delivery and performance by it of this Agreement does not:
(a) violate any provision of law, rule or regulation applicable to it or its
certificate of incorporation or by-laws (or other organizational document); or
(b) conflict with, result in a breach of, or constitute (with due notice or
lapse of time or both) a default under, any material contractual obligation to
which it is a party.

 

4.06.                     Ownership by Parties.

 

(a)         Consenting Lender Representations and Warranties.  Each Consenting
Lender represents and warrants to each of the other Parties that, as of the date
such Party executes this Agreement, Transferee Joinder or Additional Party
Joinder, as applicable: (i) it either (1) is the sole legal and beneficial owner
of the aggregate principal amount of Claims set forth on its signature page, in
each case free and clear of any pledge, lien, security interest, charge, claim,
proxy, voting restriction, right of first refusal or other limitation on
disposition of any kind, in each case that is reasonably expected to adversely
affect such Consenting Lender’s performance of its obligations contained in this
Agreement, or (2) has investment or voting discretion or control with respect to
discretionary accounts for the holders or beneficial owners of the aggregate
principal amount of Claims set forth on its signature page and has the power and
authority to bind the beneficial owner(s) of such Claims to the terms of this
Agreement; (ii) it has full power and authority to vote on and consent to all
matters concerning the Claims set forth on its signature page and to exchange,
assign, and transfer such Claims; (iii) it is either (1) a qualified
institutional buyer as defined in Rule 144A of the Securities Act, or (2) an
institutional accredited investor as defined in Rule 501(a)(1), (2), (3) or
(7) under the Securities Act; (iv) any securities acquired by a Consenting
Lender in connection with the Restructuring described herein and in the Term
Sheet will be acquired for investment purposes and not with a view to
distribution; (v) it has made no prior assignment, sale, participation, grant,
conveyance or other Transfer of, and has not entered into any other agreement to
assign, sell, participate, grant, convey or otherwise Transfer, in whole or in
part, any portion of its right, title, or interests in any Claims that is
inconsistent with the representations and warranties of such Consenting Lender
herein or would render such Consenting Lender otherwise unable to comply with
this Agreement and perform its obligations hereunder; and (vi) it is not relying
on the Company for any legal or financial advice.

 

(b)         Company Representation and Warranties.  The Company represents and
warrants that: (i) Arch Coal is the direct or indirect record and beneficial
holder of all of the equity interests in each other Guarantor signatory hereto;
(ii) all of such equity interests have been duly authorized and are validly
issued, fully paid and non-assessable, free and clear of any liens, claims and
encumbrances of any kind (other than liens, claims and encumbrances granted for
the benefit of the First Lien Lenders under the First Lien Credit Agreement, or
as permitted under the First Lien Credit Agreement) and have been issued in
compliance with applicable law; (iii) none of the equity interests in the
Company are subject to, or have been issued in violation of, preemptive or
similar rights; and (iv) no voting trusts, proxies, or other agreements or
understandings exist with respect to the voting equity interests of any Company
signatory hereto.

 

For purposes of this Section 4.06, “equity interests” means any: (a) partnership
interests; (b) membership interests or units; (c) shares of capital stock;
(d) other interest or participation that confers on a person the right to
receive a share of the profits and losses of, or distribution of

 

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assets of, the issuing entity; (e) subscriptions, calls, warrants, options, or
commitments of any kind or character relating to, or entitling any person or
entity to purchase or otherwise acquire membership interests or units, capital
stock, or any other equity securities; (f) securities convertible into or
exercisable or exchangeable for partnership interests, membership interests or
units, capital stock, or any other equity securities; or (g) other interest
classified as an equity security.

 

4.07.                     Restrictions on Transfers.

 

(a)                                 Transfer of Claims.  Each Consenting Lender
party hereto agrees that it shall not, directly or indirectly, in whole or in
part, sell, contract to sell, give, assign, participate, hypothecate, pledge,
encumber, grant a security interest in, offer, sell any option or contract to
purchase, or otherwise transfer or dispose of, any economic, voting or other
rights in or to, by operation of law or otherwise (each, a “Transfer”) any of
its Claims or any right or interest (voting or otherwise) therein (including
granting any proxies, depositing any Claims into a voting trust or entering into
a voting agreement with respect to any Claims); provided, however, that any
Consenting Lender may Transfer any of its Claims or Post-Effective Date Claims
(as defined below) to any person or entity (so long as such Transfer is not
otherwise prohibited by any order of the Bankruptcy Court) that (i) agrees in
writing, in substantially the form attached hereto as Exhibit D (a “Transferee
Joinder”), to be bound by the terms of this Agreement (each such transferee, a
“Transferee Lender”) or (ii) is a Consenting Lender, provided, that upon any
purchase, acquisition or assumption by any Consenting Lender of any Claims, such
Claims shall automatically be deemed to be subject to the terms of this
Agreement.  Subject to the terms and conditions of any order of the Bankruptcy
Court, the transferring Consenting Lender shall provide Arch Coal and the First
Lien Agent with a copy of any Transferee Joinder executed by such Transferee
Lender within two (2) business days following such execution in which event
(A) the Transferee Lender shall be deemed to be a Consenting Lender hereunder
with respect to all of its owned or controlled Claims and rights or interests
(voting or otherwise) and (B) the transferor Lender shall be deemed to
relinquish its rights (and be released from its obligations) under this
Agreement solely to the extent of such transferred Claims.  With respect to
Claims held by the relevant Transferee Lender upon consummation of a Transfer,
such Transferee Lender is deemed to make all of the representations and
warranties of a Consenting Lender set forth in this Agreement.  Any Transfer of
any Consenting Lender’s claim that does not comply with the foregoing shall be
deemed void ab initio and the Company and each other Consenting Lender shall
have the right to enforce the voiding of such Transfer.  The restrictions in
this Section 4.07 are in addition to any Transfer restrictions in the First Lien
Credit Agreement and, in the event of a conflict, the Transfer restrictions
contained in this Agreement shall control.

 

(b)                                 Qualified Marketmaker Transfers. 
Notwithstanding the provisions of Section 4.07(a) hereof: (i) a Consenting
Lender may Transfer any right, title, or interest in its Claims to an entity
that is acting in its capacity as a Qualified Marketmaker without the
requirement that the Qualified Marketmaker be or become a Consenting Lender only
if such Qualified Marketmaker has purchased such Claims with a view to immediate
resale of such Claims (by purchase, sale, assignment, transfer, participation or
otherwise) as soon as reasonably practicable, and in no event later than the
earlier of (A) one (1) business day prior to any voting deadline established by
the Bankruptcy Court with respect to the Plan (solely if such Qualified
Marketmaker acquires such Claims prior to such voting deadline) and (B) twenty
(20) business

 

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days of its acquisition to a Transferee Lender that is or becomes a Consenting
Lender (by executing a Transferee Joinder in accordance with Section 4.07(a));
and (ii) to the extent that a Consenting Lender is acting in its capacity as a
Qualified Marketmaker, it may Transfer or participate any right, title, or
interest in any Claims that the Qualified Marketmaker acquires from a holder of
such Claims who is not a Consenting Lender without the requirement that the
transferee be or become a Consenting Lender.  Notwithstanding the foregoing,
(w) if at the time of a proposed Transfer of any Claim to the Qualified
Marketmaker in accordance with the foregoing, the date of such proposed Transfer
is the voting deadline established by the Bankruptcy Court with respect to the
Plan, the proposed transferor Consenting Lender shall first vote such Claim in
accordance with the requirements of Section 3.01(a) hereof prior to any Transfer
or (x) if, after a transfer in accordance with this Section 4.07(b), a Qualified
Marketmaker is holding a Claim on the voting deadline established by the
Bankruptcy Court with respect to the Plan, such Qualified Marketmaker shall vote
such Claim in accordance with the requirements of Section 3.01(a) hereof.  For
these purposes, a “Qualified Marketmaker” means an entity that: (y) holds itself
out to the market as standing ready in the ordinary course of its business to
purchase from customers and sell to customers claims against the Company and its
affiliates (including debt securities or other debt) or enter into with
customers long and short positions in claims against the Company and its
affiliates (including debt securities or other debt), in its capacity as a
dealer or market maker in such claims against the Company and its affiliates;
and (z) is in fact regularly in the business of making a market in claims
against issuers or borrowers (including debt securities or other debt).  A
Qualified Marketmaker acting in such capacity may purchase, sell, assign,
transfer, or participate any Claims against or interests in the Company other
than Claims held by a Consenting Lender without any requirement that the
transferee be or become subject to this Agreement.

 

4.08.                     Additional Claims.  Nothing herein shall be construed
to restrict a right to acquire Claims after the Effective Date (defined below). 
To the extent any Consenting Lender acquires any Claims after the Effective Date
(such Claims, the “Post-Effective Date Claims”), each such Consenting Lender
agrees that such acquired Post-Effective Date Claims shall be automatically
subject to this Agreement and that such Consenting Lender shall be bound by and
subject to this Agreement with respect to such acquired Post-Effective Date
Claims.  A Consenting Lender may sell or assign any Post-Effective Date Claims,
subject to Section 4.07, and provided that any Post-Effective Date Claims that
are sold or assigned shall remain subject to this Agreement.

 

4.09.                     Additional Lender Parties.  Any First Lien Lender may,
at any time after the Effective Date, become a party to this Agreement as a
Consenting Lender (an “Additional Lender Party”) by executing a joinder
agreement substantially in the form attached as Exhibit E hereto, pursuant to
which such Additional Lender Party will agree to be bound by the terms of this
Agreement as a Consenting Lender hereunder.

 

Section 5.                                          Termination.

 

5.01.                     Mutual Termination.  This Agreement and the
obligations hereunder may be terminated by mutual written consent to terminate
this Agreement among: (i) the Company and (ii) the Majority Consenting Lenders.

 

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5.02.                     Consenting Lender Termination.  This Agreement and the
obligations hereunder may be terminated by the Majority Consenting Lenders
immediately upon the occurrence or, to the extent notice is specifically
required as set forth below, upon the giving of notice thereof to the Company at
any time after the occurrence, and during the continuation of, any of the
following events (each, a “Consenting Lender Termination Event”), which
Consenting Lender Termination Event may be waived in accordance with
Section 6.17 hereof; provided, however, that, prior to the entry of the RSA
Assumption Order, the occurrence of a Consenting Lender Termination Event shall
result in the automatic termination of this Agreement and the obligations
hereunder unless waived in accordance with Section 6.17 hereof:

 

(a)                                 the Bankruptcy Court shall have entered an
order dismissing any of the Bankruptcy Cases or converting any of the Bankruptcy
Cases to a case or cases under chapter 7 of the Bankruptcy Code;

 

(b)                                 an order denying confirmation of the Plan
shall have been entered by the Bankruptcy Court or the Confirmation Order shall
have been reversed, vacated or otherwise materially modified in a manner
inconsistent with this Agreement or the Plan without the prior written consent
of the Majority Consenting Lenders;

 

(c)                                  any court of competent jurisdiction shall
have entered a judgment or order declaring the Restructuring, this Agreement, or
any material portion hereof to be unenforceable or illegal and such judgment or
order is not stayed, dismissed, vacated or modified within five (5) business
days following notice thereof to the Company by the Majority Consenting Lenders;
provided, however, that (i) if such entry has been made at the request of any of
the Consenting Lenders, then a Consenting Lender Termination Event shall not be
deemed to have occurred with respect to such judgment or order other than as may
be explicitly set forth in such order or judgment and (ii) in the case of a
stay, upon such judgment or order becoming unstayed and five (5) business days’
notice thereof to the Company by the Majority Consenting Lenders, a Consenting
Lender Termination Event shall be deemed to have occurred;

 

(d)                                 5:00 P.M. Eastern Time on January 15, 2016,
if on or before such date the Petition Date has not occurred;

 

(e)                                  Arch Coal or any Guarantor makes an
assignment for the benefit of creditors;

 

(f)                                   Arch Coal or any Guarantor makes any
interest payment provided for under any of the indentures for the second lien or
the unsecured notes issued by Arch Coal or any Guarantor;

 

(g)                                  the Company fails to comply with or achieve
the following deadlines:

 

(i)                                     no later than five (5) days after the
Petition Date, entry of the Interim DIP Order, which Interim DIP Order shall be
in form and substance reasonably satisfactory to the Majority Consenting
Lenders;

 

(ii)                                  no later than ten (10) days after the
Petition Date, file the RSA Assumption Motion; and

 

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(iii)                             no later than forty-five (45) days after the
Petition Date, entry of the RSA Assumption Order, which RSA Assumption Order
shall be in form and substance reasonably satisfactory to the Majority
Consenting Lenders;

 

(iv)                              no later than forty-five (45) days after the
Petition Date, entry of the Final DIP Order, which Final DIP Order shall be in
form and substance reasonably satisfactory to the Majority Consenting Lenders;

 

(v)                                 no later than sixty (60) days after the
Petition Date, delivery to the First Lien Lender Group of an updated business
plan that is reasonably acceptable to the Majority Consenting Lenders;

 

(vi)                              no later than ninety (90) days after the
Petition Date, the filing of the Plan and Disclosure Statement, which Plan and
Disclosure Statement shall provide for the consummation of the Restructuring
provided for in the Term Sheet and each of which otherwise shall be in form and
substance reasonably satisfactory to the Majority Consenting Lenders;

 

(vii)                           no later than sixty (60) days after the filing
of the Plan with the Bankruptcy Court, obtain approval of the Disclosure
Statement Order, which Disclosure Statement Order shall be in form and substance
reasonably satisfactory to the Majority Consenting Lenders;

 

(viii)                        no later than ninety (90) days after entry of the
Disclosure Statement Order, obtain entry of the Confirmation Order, which
Confirmation Order shall be in form and substance reasonably satisfactory to the
Majority Consenting Lenders; and

 

(ix)                              no later than fifteen (15) days after entry of
the Confirmation Order by the Bankruptcy Court substantial consummation (as
defined in section 1101 of the Bankruptcy Code) of the Plan shall have occurred;

 

(h)                                 the filing by the Company of any motion or
pleading with the Bankruptcy Court that is not consistent in all material
respects with this Agreement and the Term Sheet, and such motion or pleading is
not withdrawn within five (5) business days’ notice thereof by the Majority
Consenting Lenders to the Company (or, in the case of a motion that has already
been approved by an order of the Bankruptcy Court at the time the Company is
provided with such notice by the Majority Consenting Lenders, such order is not
stayed, reversed or vacated within five (5) business days of such notice);
provided, however, that, in the case of a stay, upon such judgment or order
becoming unstayed and five (5) business days’ notice thereof to the Company by
the Majority Consenting Lenders, a Consenting Lender Termination Event shall be
deemed to have occurred;

 

(i)                                     the Bankruptcy Court grants relief that
is inconsistent in any material respect with this Agreement or the Restructuring
and such inconsistent relief is not dismissed, vacated or modified to be
consistent with this Agreement and the Restructuring within five (5) business
days following notice thereof to the Company by the Majority Consenting Lenders;

 

(j)                                    the occurrence of an “Event of Default”
(as defined in the DIP Credit Agreement) under the DIP Facility that has not
been waived or timely cured in accordance

 

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therewith; provided, however, that if such occurrence is primarily the result of
a breach by any Consenting Lender, then such Consenting Lender shall not be
entitled to exercise the Consenting Lender Termination Event with respect to
such occurrence;

 

(k)                                 any of the following shall have occurred: 
(a) the Company or any affiliate of the Company shall have filed any motion,
application, adversary proceeding or cause of action (1) challenging the
validity, enforceability, perfection or priority of, or seeking avoidance or
subordination of the Claims of the First Lien Lenders or the liens securing such
Claims, or (2) otherwise seeking to impose liability upon or enjoin the First
Lien Lenders; or (b) the Company or any affiliate of the Company shall have
supported any application, adversary proceeding or cause of action referred to
in the immediately preceding clause (a) filed by a third party, or consents to
the standing of any such third party to bring such application, adversary
proceeding or cause of action;

 

(l)                                     the Company withdraws or revokes the
Plan or files, publicly proposes or otherwise supports, or fails to actively
oppose, any (i) Alternative Transaction or (ii) amendment or modification to the
Restructuring containing any terms that are materially inconsistent with the
implementation of, and the terms set forth in, the Term Sheet unless such
amendment or modification is otherwise consented to in accordance with
Section 6.17 hereof;

 

(m)                             on or after the Effective Date, the Company
engages in any merger, consolidation, disposition, acquisition, investment,
dividend, incurrence of indebtedness or other similar transaction outside the
ordinary course of business, other than: (i) the commencement of the Bankruptcy
Cases or other bankruptcy or similar proceeding; or (ii) following the Petition
Date, as permitted under the DIP Facility;

 

(n)                                 an extraordinary event occurs that is not
contemplated in either (i) the Business Plan or (ii) the Company’s most recent
13-Week Projection (as defined in the DIP Credit Agreement) provided to the
Prepetition Agent pursuant to the DIP Order, and, in each case, such event has
or could reasonably be expected to have a material adverse effect on the
business, assets, financial condition or prospects of the Company; provided,
however, that, prior to the entry of the Interim DIP Order, the 13-Week
Projection referred to in clause (ii) hereof shall refer to the 13-week cash
flow forecast dated December 4, 2015 provided to certain of the First Lien
Lenders;

 

(o)                                 the Restructuring Documents and any
amendments, modifications or supplements thereto filed by the Company include
terms that are not consistent in all material respects with this Agreement and
the Term Sheet and such filing has not been modified or withdrawn within five
(5) business days after notice thereof has been given by the Majority Consenting
Lenders to the Company;

 

(p)                                 the material breach by the Company of any of
the undertakings, representations, warranties or covenants of the Company set
forth in this Agreement, and such breach shall continue unremedied for a period
of five (5) business days after notice thereof has been given by the Majority
Consenting Lenders, to the Company;

 

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(q)                                 the Bankruptcy Court shall have entered an
order pursuant to Section 1104 of the Bankruptcy Code appointing a trustee,
receiver or an examiner with expanded powers to operate and manage any of the
Company’s businesses;

 

(r)                                    the Company loses the exclusive right to
file and solicit acceptances of a chapter 11 plan; or

 

(s)                                   the failure of the Company to pay the fees
and expenses of the First Lien Agent and the First Lien Lender Group in
accordance with this Agreement and the DIP Order, which failure shall continue
unremedied for a period of three (3) business days after notice thereof has been
given by the Majority Consenting Lenders to the Company.

 

The Company hereby acknowledges and agrees that the termination of this
Agreement and the obligations hereunder as a result of a Consenting Lender
Termination Event, and the delivery of any notice by the Majority Consenting
Lenders pursuant to any of the provisions of this Section 5.02 shall not violate
the automatic stay imposed in connection with the Bankruptcy Cases.

 

5.03.                     Term Sheet or Plan Termination.  Notwithstanding
anything herein to the contrary, this Agreement and the obligations hereunder
may be terminated as to any Consenting Lender by such Consenting Lender if the
treatment set forth in the “First Lien Deficiency Claims; Second Lien Debt
Claims; Unsecured Bondholder Claims and Other General Unsecured Claims” section
of the Term Sheet (or the corresponding provisions of the Plan) is amended or
modified in accordance with 6.17 hereof by Consenting Lenders holding in the
aggregate less than 80% of the aggregate principal amount of Loans held by the
Consenting Lenders.

 

5.04.                     Outside Date Termination.  This Agreement and the
obligations hereunder may be terminated as to any Consenting Lender by such
Consenting Lender if the substantial consummation (as defined in section 1101 of
the Bankruptcy Code) of the Plan has not occurred by the Outside Date.

 

5.05.                     Company Termination.  This Agreement and the
obligations hereunder may be terminated by the Company upon the giving of notice
thereof to the Consenting Lenders upon the occurrence of any of the following
events (a “Company Termination Event”), which Company Termination Event may be
waived in accordance with Section 6.17 hereof:

 

(a)                                 the Bankruptcy Court shall enter an order
dismissing the Bankruptcy Cases or converting the Bankruptcy Cases to cases
under chapter 7 of the Bankruptcy Code;

 

(b)                                 the Confirmation Order is reversed, vacated
or otherwise materially modified in a manner inconsistent with this Agreement or
the Plan without the consent of the Company;

 

(c)                                  any court of competent jurisdiction enters
a judgment or order declaring the Restructuring, this Agreement, or any material
portion hereof to be unenforceable or illegal and such judgment or order is not
dismissed, vacated or modified within five (5) business days following notice
thereof to the Company by Majority Consenting Lenders;

 

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(d)                                 any of the covenants of the Consenting
Lenders in this Agreement is breached in any material respect by (i) any
Consenting Lender and such breach has a material adverse effect on the Company
or the ability to consummate the Restructuring or (ii) Consenting Lenders
holding in the aggregate more than 50% of the aggregate principal amount of the
Loans held by the Consenting Lenders, and, in each case, such breach is not
cured within five (5) business days after receipt of notice from the Company to
the Consenting Lenders of such breach; or

 

(e)                                  the board of directors of Arch Coal
reasonably determines in good faith, after consulting with outside legal
counsel, that the continued performance by the Company under this Agreement
would be inconsistent with the exercise of its fiduciary duties under, or
contravene, applicable law, including because the board’s fiduciary duties
require it to direct the Company to accept a proposal for an Alternative
Transaction; provided that Arch Coal provides written notice of such
determination (along with a detailed explanation of the reasoning that led to
the determination) to the Consenting Lenders within five (5) business days after
the date thereof.

 

5.06.                     Effect of Termination.  Upon termination of this
Agreement, (a) this Agreement shall be of no further force and effect and each
Party shall be released from its commitments, undertakings and agreements under
or related to this Agreement, and shall have the rights and remedies that it
would have had it not entered into this Agreement, and shall be entitled to take
all actions, whether with respect to the Restructuring or otherwise, that it
would have been entitled to take had it not entered into this Agreement; (b) any
and all consents or votes tendered by the Parties prior to such termination
shall be deemed, for all purposes, to be null and void from the first instance
and shall not be considered or otherwise used in any manner by the Parties in
connection with this Agreement, the Restructuring, the Plan or otherwise; and
(c) if Bankruptcy Court permission shall be required for a Consenting Lender to
change or withdraw (or cause to be changed or withdrawn) its vote in favor of
the Plan, no Party to this Agreement shall oppose any attempt by such Party to
change or withdraw (or cause to be changed or withdrawn) such vote.  Nothing in
this Section 5.06 shall relieve any Party from (i) liability for such Party’s
breach of such Party’s obligations hereunder or (ii) obligations under this
Agreement that expressly survive termination of this Agreement pursuant to
Section 6.28 hereof.

 

Section 6.                                          Miscellaneous.

 

6.01.                     Agreement Effective Date.  This Agreement shall become
effective and binding upon each of the Parties as of the date (the “Effective
Date”) when (a) the First Lien Agent and the Company each have received executed
signature pages to this Agreement from (i) the Company, and (ii) First Lien
Lenders holding in the aggregate more than 50% of the aggregate principal amount
of the Loans; and (b) the Company shall have paid all outstanding invoices for
Transaction Expenses as provided for in Section 6.15 hereof.

 

6.02.                     No Solicitation. This Agreement is not and shall not
be deemed to be a solicitation for votes for the acceptance of the Plan (or any
other chapter 11 plan) for the purposes of sections 1125 and 1126 of the
Bankruptcy Code or otherwise or a solicitation to tender or exchange any
securities.  The acceptance of the Plan by the Consenting Lenders will

 

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not be solicited until the Consenting Lenders have received the Disclosure
Statement and related ballots, all as approved by the Bankruptcy Court.

 

6.03.                     Company Fiduciary Duties.  Notwithstanding anything to
the contrary contained herein, nothing in this Agreement shall require the
Company or any directors, officers or members of the Company, in such person’s
capacity as a director, officer or member of the Company, to take any action, or
to refrain from taking any action, that would breach, or be inconsistent with,
its or their fiduciary obligations under applicable law, and (ii) to the extent
that such fiduciary obligations require the Company or any directors, officers
or members of the Company to take any such action, or refrain from taking any
such action, they may do so without incurring any liability to any Party under
this Agreement; provided, however, that nothing in this Section 6.03 shall be
deemed to amend, supplement or otherwise modify, or constitute a waiver of, any
Consenting Lender Termination Event that may arise as a result of any such
action or omission.

 

6.04.                     Purpose of Agreement.  Each of the Parties
acknowledges and agrees that this Agreement is being executed in connection with
negotiations concerning the Restructuring.

 

6.05.                     Complete Agreement.  This Agreement is the entire
agreement between the Parties with respect to the subject matter hereof and
supersedes any prior agreements, oral or written, between the Parties with
respect thereto, to the maximum extent they relate in any way to the subject
matter hereof; provided that the Parties acknowledge that any confidentiality
agreements (if any) heretofore executed between the Company and any Consenting
Lender shall continue in full force and effect in accordance with and only to
the extent of their respective terms.  No claim of waiver, modification, consent
or acquiescence with respect to any provision of this Agreement shall be made
against any Party, except on the basis of a written instrument executed by or on
behalf of such Party.

 

6.06.                     Admissibility of this Agreement.  Each Party agrees
that this Agreement, the Term Sheet and all documents, agreements and
negotiations relating thereto (including any prior drafts of any of the
foregoing) shall not, pursuant to Rule 408 of the Federal Rules of Evidence, any
applicable state rules of evidence and any other applicable law, foreign or
domestic, be admissible into evidence or constitute an admission or agreement in
any proceeding involving a Party; provided, however, that the final execution
versions of this Agreement and the Exhibits thereto may be admissible into
evidence or constitute an admission or agreement in any proceeding to enforce
the terms of this Agreement, obtain entry of the RSA Assumption Order by the
Bankruptcy Court and/or support the solicitation, confirmation and consummation
of the Restructuring.

 

6.07.                     Representation by Counsel.  Each Party acknowledges
that it has been represented by counsel (or had the opportunity to be so
represented and waived its right to do so) in connection with this Agreement and
the transactions contemplated by this Agreement.  Accordingly, any rule of law
or any legal decision that would provide any Party with a defense to the
enforcement of the terms of this Agreement against such Party based upon lack of
legal counsel shall have no application and is expressly waived.  This Agreement
is the product of arms’ length negotiations among the Parties and its provisions
shall be interpreted in a neutral manner and one intended to effect the intent
of the Parties.  None of the Parties shall have any

 

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term or provision construed against such Party solely by reason of such Party
having drafted the same.

 

6.08.                     Independent Due Diligence and Decision-Making.  Each
Party confirms that its decision to execute this Agreement has been based upon
its independent investigation of the operations, businesses, financial and other
conditions and prospects of the Company.

 

6.09.                     Several, Not Joint, Obligations.  The agreements,
representations, and obligations of the Parties under this Agreement are, in all
respects, several and not joint, including among the various Consenting Lenders.

 

6.10.                     Parties, Succession and Assignment.  This Agreement
shall be binding upon, and inure to the benefit of, the Parties and their
respective successors, assigns, heirs, executors, administrators and
representatives.  No rights or obligations of any Party under this Agreement may
be assigned or transferred to any other person or entity except as otherwise
expressly provided herein.  Nothing in this Agreement, express or implied, shall
give to any person or entity, other than the Parties (and those permitted
assigns under Section 4.07), any benefit or any legal or equitable right, remedy
or claim under this Agreement.

 

6.11.                     No Waiver of Participation and Reservation of Rights. 
Except as expressly provided in this Agreement, nothing herein is intended to,
nor does, in any manner waive, limit, impair, or restrict any right of any Party
or the ability of each of the Parties to protect and preserve its rights,
remedies and interests, including without limitation, Claims against and
interests in the Company.  If the Restructuring is not consummated, or following
the occurrence of a Consenting Lender Termination Event, a Company Termination
Event or the termination of this Agreement, nothing herein shall be construed as
a waiver by any Party of any or all of such Party’s rights, and the Parties
expressly reserve any and all of their respective rights.

 

6.12.                     No Third-Party Beneficiaries.  This Agreement shall
not confer any rights or remedies upon any person other than the Parties and
their respective successors and permitted assigns, except as expressly set forth
in this Agreement.

 

6.13.                     Specific Performance.  Each Party hereto recognizes
and acknowledges that a breach by it of any covenants or agreements contained in
this Agreement would cause the other Parties to sustain damages for which such
Parties would not have an adequate remedy at law for money damages, and
therefore each Party hereto agrees that in the sole event of any breach, the
other Parties shall be entitled to seek the remedy of specific performance and
injunctive or other equitable relief (including attorney’s fees and costs) to
enforce such covenants and agreements, in addition to any other remedy to which
such nonbreaching Party may be entitled, at law or in equity, without the
necessity of proving the inadequacy of money damages as a remedy, including an
order of the Bankruptcy Court requiring any Party to comply promptly with any of
its obligations hereunder.  Each Party further agrees that no other Party or any
other person shall be required to obtain, furnish or post any bond or similar
instrument in connection with or as a condition to obtaining any remedy referred
to in this Section 6.13, and each Party (a) irrevocably waives any right it may
have to require the obtaining, furnishing or posting of any such bond or similar
instrument and (b) shall cooperate fully in any attempt by the other Party to
obtain such equitable relief.

 

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6.14.                     Remedies Cumulative.  All rights, powers, and remedies
provided under this Agreement or otherwise available in respect hereof at law or
in equity shall be cumulative and not alternative, and the exercise of any
right, power, or remedy thereof by any Party shall not preclude the simultaneous
or later exercise of any other such right, power, or remedy by such Party.

 

6.15.                     Transaction Expenses.  To the extent not paid pursuant
to the DIP Order or the First Lien Credit Agreement, the Company agrees to pay
on demand (and in any event no later than ten (10) days following receipt of an
invoice) the Transaction Expenses, without the need for any party to file a fee
application or otherwise seek Bankruptcy Court approval of such Transaction
Expenses (whether incurred prior to, on or after the Petition Date), but subject
to any procedural requirements set forth in the DIP Order.  All such Transaction
Expenses incurred and invoiced up to the Petition Date shall be paid in full
prior to the Petition Date (without deducting any retainers).

 

6.16.                     Counterparts.  This Agreement may be executed and
delivered in any number of counterparts, each of which, when executed and
delivered, shall be deemed an original, and all of which together shall
constitute the same agreement. Delivery of an executed copy of this Agreement
shall be deemed to be a certification by each person executing this Agreement on
behalf of a Party that such person and Party has been duly authorized and
empowered to execute and deliver this Agreement and each other Party may rely on
such certification.  Delivery of any executed signature page of this Agreement
by telecopier, facsimile or electronic mail shall be as effective as delivery of
a manually executed signature page of this Agreement.

 

6.17.                     Amendments and Waivers.

 

(a)                                 Any amendment or modification of any term or
provision of this Agreement or the Restructuring and any waiver of any term or
provision of this Agreement or of the Restructuring or of any default,
misrepresentation, or breach of warranty or covenant hereunder shall not be
valid unless the same shall be (i) in writing and signed by the Company and the
Majority Consenting Lenders or (ii) confirmed by email by both counsel to the
Company and counsel to the First Lien Lender Group representing that it is
acting with the authority of the Majority Consenting Lenders; provided, however,
that any amendment or modification to the definition of “Outside Date” or to
Sections 5.03 or 5.04 shall not be valid without the prior written consent of
each Consenting Lender.

 

(b)                                 In determining whether any consent or
approval has been given or obtained by the Majority Consenting Lenders, any
Loans held by any then-existing Consenting Lender, as applicable, that is in
material breach of its covenants, obligations or representations under this
Agreement shall be excluded from such determination, and the Loans held by such
Consenting Lender, as applicable, shall be treated as if they were not
outstanding.

 

(c)                                  Any waiver shall not be deemed to extend to
any prior or subsequent default, misrepresentation, or breach of warranty or
covenant hereunder or affect in any way any rights arising by virtue of any
prior or subsequent default, misrepresentation, or breach of warranty or
covenant.

 

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(d)                                 The failure of any Party to exercise any
right, power or remedy provided under this Agreement or otherwise available in
respect hereof at law or in equity, or to insist upon compliance by any other
Party with its obligations hereunder shall not constitute a waiver by such Party
of its right to exercise any such or other right, power or remedy or to demand
such compliance.

 

(e)                                  Notwithstanding anything to the contrary in
this Section 6.17, no amendment, modification or waiver of any term or provision
of this Agreement or the Restructuring shall be effective with respect to any
Consenting Lender without such Consenting Lender’s prior written consent to the
extent such amendment, modification or waiver (i) materially affects such
Consenting Lender (in its capacity as a First Lien Lender) in a manner that is
disproportionately adverse to such Consenting Lender in relation to the other
Consenting Lenders or (ii) imposes a material obligation, cost or liability upon
such Consenting Lender.

 

(f)                                   Notwithstanding the foregoing provisions
of this Section 6.17, no written waiver shall be required of the Company in the
case of a waiver of a Consenting Lender Termination Event.

 

6.18.                     Notices.  All notices hereunder shall be in writing
and delivered by email, facsimile, courier or registered or certified mail
(return receipt requested) to the email address, address or facsimile number (or
at such other address or facsimile number as shall be specified by like notice)
as set forth on Exhibit F hereto.  Any notice, if mailed and properly addressed
with postage prepaid or if properly addressed and sent by pre-paid courier
service, shall be deemed given when received; any notice, if transmitted by
facsimile or email, shall be deemed given when sent, provided that if such
notice or other communication is not sent during the normal business hours of
the recipient, such notice or communication shall be deemed to have been given
at the opening of business on the next business day for the recipient.

 

6.19.                     Construction.  Unless otherwise specified, references
in this Agreement to any Section or clause refer to such Section or clause as
contained in this Agreement.  The words “herein,” “hereof” and “hereunder” and
other words of similar import in this Agreement refer to this Agreement as a
whole, and not to any particular Section or clause contained in this Agreement. 
Wherever from the context it appears appropriate, each term stated in either the
singular or plural shall include the singular and the plural, and pronouns
stated in the masculine, feminine or neuter gender shall include the masculine,
feminine and neuter genders.  The words “including,” “includes” and “include”
shall be deemed to be followed by the words “without limitation”.

 

6.20.                     Ratification; Waiver of Defenses; and Release.

 

(a)         The Company hereby: (i) acknowledges that, as of the Effective Date,
(w) Arch Coal is indebted and liable to the First Lien Lenders in an aggregate
amount equal to the principal sum of $1,886,125,000.00, in respect of loans made
by the First Lien Lenders pursuant to and in accordance with the First Lien
Credit Agreement plus accrued but unpaid interest (which shall continue to
accrue at the rate identified in the First Lien Credit Agreement), plus the
costs and expenses, including any attorneys’, accountants’, appraisers’ and
financial advisors’ fees, in each case, that are chargeable or reimbursable
under the Loan Documents, plus all other

 

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Obligations (as such term is defined in the First Lien Credit Agreement) owing
under the First Lien Credit Agreement (collectively, the “Existing Obligations)
all without offset, counterclaims or defenses of any kind; and (ii) admits the
validity and enforceability of the First Lien Credit Agreement and the other
Loan Documents, including the validity and enforceability of the liens and
security interests granted thereunder.  Each Guarantor hereby confirms and
acknowledges that, as of the Effective Date, it is validly indebted for the
payment in full of all Existing Obligations, which it has guaranteed, without
defense, counterclaim, offset, cross-complaint or demand of any kind or nature
whatsoever.  Except as specifically set forth herein, nothing shall alter,
amend, modify or extinguish the obligation of the Company to repay the Existing
Obligations. The RSA Assumption Order shall provide that with respect to all
other parties in interest, including, without limitation, any official committee
of unsecured creditors appointed in the Bankruptcy Cases and any other person or
entity acting on behalf of the Company, this Section 6.20(a) shall be binding on
such parties at the time and to the extent provided for in the applicable
paragraphs of the DIP Order.

 

(b)         Release.  Arch Coal and each Guarantor (each, a “Releasing Party”
and collectively, the “Releasing Parties”), does hereby remise, release and
discharge, and shall be deemed to have forever remised, released and discharged,
the First Lien Agent and each of the First Lien Lenders, and each of their
respective subsidiaries, officers, directors, managers, principals, employees,
agents, financial advisors, attorneys, accountants, investment bankers,
consultants, representatives and other professionals and the respective
successors and assigns thereof, in each case, in their respective capacity as
such (collectively hereinafter the “Released Parties”), from any and all
obligations and liabilities to the Releasing Parties (and their successors and
assigns) and from any and all claims, counterclaims, demands, debts, accounts,
contracts, liabilities, actions and causes of action arising prior to the
Effective Date of any kind, nature or description, whether known or unknown,
matured or unmatured, foreseen or unforeseen or liquidated or unliquidated,
arising in law or equity or upon contract or tort or under any state or federal
law or otherwise, arising out of or related to the First Lien Credit Agreement
or any of the other Loan Documents (as defined in the First Lien Credit
Agreement),  the obligations owing and the financial obligations made
thereunder, the negotiation thereof and of the deal reflected thereby, and the
obligations and financial obligations made thereunder, in each case that Arch
Coal or any of the Guarantors at any time had, now have or may have, or that
their successors or assigns hereafter can or may have against any of the
Released Parties for or by reason of any act, omission, matter, cause or thing
whatsoever arising at any time on or prior to the Effective Date.  The RSA
Assumption Order shall provide that, with respect to all other parties in
interest, including, without limitation, any official committee of unsecured
creditors appointed in the Bankruptcy Cases and any other person or entity
acting on behalf of the Company, this Section 6.20(b) shall be binding on such
parties at the time and to the extent set forth in the applicable paragraphs of
the DIP Order.

 

6.21.                     Severability.  Any term or provision of this Agreement
that is invalid or unenforceable in any situation in any jurisdiction shall not
affect the validity or enforceability of or the validity or enforceability of
the offending term or provision in any other situation or in any other
jurisdiction the remaining terms and provisions hereof.

 

6.22.                     Headings.  The headings of all sections of this
Agreement are inserted solely for the convenience of reference and are not a
part of and are not intended to govern, limit or aid in

 

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the construction or interpretation of any term or provision hereof and shall not
affect in any way the meaning or interpretation of this Agreement.

 

6.23.                     Incorporation of Schedules and Exhibits.  The exhibits
and schedules attached hereto and identified in this Agreement are incorporated
herein by reference and made a part hereof.

 

6.24.                     WAIVER OF TRIAL BY JURY.  EACH PARTY HERETO
IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY.

 

6.25.                     Submission to Jurisdiction.  By its execution and
delivery of this Agreement, subject to the commencement of the Bankruptcy Cases,
each of the Parties hereby irrevocably and unconditionally submits to the
exclusive jurisdiction of the Bankruptcy Court for purposes of any action, suit
or proceeding arising out of or relating to this Agreement or any of the
transactions contemplated hereby.  At any time prior to the filing of the
Bankruptcy Cases, each of the Parties hereby irrevocably and unconditionally
submits to the exclusive jurisdiction of the state or federal courts located
within in the Borough of Manhattan, the City of New York in the State of New
York for purposes of any action, suit or proceeding arising out of or relating
to this Agreement or any of the transactions contemplated hereby.  Each Party
irrevocably waives, to the fullest extent permitted by applicable laws, any
objection it may have now or hereafter to the venue of any action, suit or
proceeding brought in such courts or to the convenience of the forum.

 

6.26.                     GOVERNING LAW.  THIS AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK
WITHOUT GIVING EFFECT TO ANY CHOICE OR CONFLICT OF LAW PROVISION OR RULE
(WHETHER OF THE STATE OF NEW YORK OR ANY OTHER JURISDICTION) THAT WOULD CAUSE
THE APPLICATION OF THE LAWS OF ANY JURISDICTION OTHER THAN THE STATE OF NEW
YORK.

 

6.27.                     Conflicts.  In the event the terms and conditions set
forth in the Term Sheet and in this Agreement are inconsistent, the Term Sheet
shall control.  In the event of any conflict among the terms and provisions of
the Plan, this Agreement and the Term Sheet, the terms and provisions of the
Plan shall control.  In the event of any conflict among the terms and provisions
of the Confirmation Order, the Plan, this Agreement and the Term Sheet, the
terms of the Confirmation Order shall control.  Notwithstanding the foregoing,
nothing contained in this Section 6.27 shall affect, in any way, the
requirements set forth herein for the amendment of this Agreement.

 

6.28.                     Survival.  Notwithstanding the termination of this
Agreement pursuant to Section 5 hereof, the agreements and obligations of the
Parties in this Section 6 and Section 5.06 shall survive such termination and
shall continue in full force and effect in accordance with the terms hereof.

 

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Section 7.                                          Disclosure.  The Consenting
Lenders hereby consent to the disclosure of the execution and contents of this
Agreement by the Company in the RSA Assumption Motion, the Plan, the Disclosure
Statement, the other documents required to implement the Restructuring and any
filings by the Company with the Bankruptcy Court or the Securities and Exchange
Commission or as required by law or regulation; provided, however, that the
Company shall not, without the applicable Consenting Lender’s prior consent,
(a) use the name of any Consenting Lender or its controlled affiliates,
officers, directors, managers, stockholders, members, employees, partners,
representatives and agents in any press release or public filing or (b) disclose
the holdings of any Consenting Lender to any person; provided, that, the Company
shall be permitted to disclose at any time the aggregate principal amount of,
and aggregate percentage of, the Claims held by the Consenting Lenders.  The
Company and counsel to the First Lien Lender Group shall (a) consult with each
other before issuing any press release or otherwise making any public statement
or filing with respect to the transactions contemplated by this Agreement,
(b) provide to the other for review a copy of any such press release or public
statement or filing and (c) not issue any such press release or make any such
public statement or filing prior to such consultation and review and the receipt
of the prior consent of the other Party, unless required by applicable law or
regulations of any applicable stock exchange or governmental authority, in which
case, the Party required to issue the press release or make the public statement
or filing shall, prior to issuing such press release or making such public
statement or filing, use its commercially reasonable efforts to allow the other
Party reasonable time to comment on such press release or public statement or
filing to the extent practicable.  The Company shall cause the signature
pages attached to this Agreement to be redacted so as to exclude the identities
of the Consenting Lenders and amount of Claims held by each Consenting Lender to
the extent this Agreement is filed on the docket maintained in the Bankruptcy
Cases, posted on the Company’s website(s), or otherwise made publicly available.

 

[SIGNATURE PAGES FOLLOW]

 

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