exv10w2






EXHIBIT
10.2




EXECUTION COPY




AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT




DATED AS OF FEBRUARY 24, 2010



BY AND AMONG



ARCH RECEIVABLE COMPANY, LLC,

as Seller,



ARCH COAL SALES COMPANY, INC.,

as initial Servicer,



THE VARIOUS CONDUIT PURCHASERS, RELATED COMMITTED PURCHASERS,

LC PARTICIPANTS AND PURCHASER AGENTS FROM TIME TO TIME PARTY 

HERETO,



AND



PNC BANK, NATIONAL ASSOCIATION,

as Administrator and as LC Bank



 









 





TABLE OF CONTENTS




	 	 	 	 	 
	 	 	Page
	ARTICLE I. AMOUNTS AND TERMS OF THE PURCHASES
	 	 	2	 
	Section 1.1 Purchase Facility
	 	 	2	 
	Section 1.2 Making Purchases; Initial Purchase; Initial Assignment and Assumption
	 	 	3	 
	Section 1.3 Purchased Interest Computation
	 	 	8	 
	Section 1.4 Settlement Procedures
	 	 	8	 
	Section 1.5 Fees
	 	 	13	 
	Section 1.6 Payments and Computations, Etc
	 	 	13	 
	Section 1.7 Increased Costs
	 	 	14	 
	Section 1.8 Requirements of Law; Funding Losses
	 	 	15	 
	Section 1.9 Inability to Determine Euro-Rate
	 	 	16	 
	Section 1.10 Taxes
	 	 	17	 
	Section 1.11 Letters of Credit
	 	 	17	 
	Section 1.12 Issuance of Letters of Credit
	 	 	17	 
	Section 1.13 Requirements For Issuance of Letters of Credit
	 	 	18	 
	Section 1.14 Disbursements, Reimbursement
	 	 	18	 
	Section 1.15 Repayment of Participation Advances
	 	 	19	 
	Section 1.16 Documentation
	 	 	20	 
	Section 1.17 Determination to Honor Drawing Request
	 	 	20	 
	Section 1.18 Nature of Participation and Reimbursement Obligations
	 	 	20	 
	Section 1.19 Indemnity
	 	 	22	 
	Section 1.20 Liability for Acts and Omissions
	 	 	22	 
	ARTICLE II. REPRESENTATIONS AND WARRANTIES; COVENANTS; TERMINATION EVENTS
	 	 	24	 
	Section 2.1 Representations and Warranties; Covenants
	 	 	24	 
	Section 2.2 Termination Events
	 	 	24	 
	ARTICLE III. INDEMNIFICATION
	 	 	24	 
	Section 3.1 Indemnities by the Seller
	 	 	24	 
	Section 3.2 Indemnities by the Servicer
	 	 	26	 
	ARTICLE IV. ADMINISTRATION AND COLLECTIONS
	 	 	27	 
	Section 4.1 Appointment of the Servicer
	 	 	27	 






-i-









 




TABLE OF CONTENTS
(continued)




	 	 	 	 	 
	 	 	Page
	Section 4.2 Duties of the Servicer
	 	 	27	 
	Section 4.3 Lock-Box Account Arrangements
	 	 	29	 
	Section 4.4 Enforcement Rights
	 	 	29	 
	Section 4.5 Responsibilities of the Seller
	 	 	30	 
	Section 4.6 Servicing Fee
	 	 	30	 
	Section 4.7 Authorization and Action of the Administrator and Purchaser Agents
	 	 	31	 
	Section 4.8 Nature of Administrator’s Duties; Delegation of Administrator’s Duties;
Exculpatory Duties
	 	 	32	 
	Section 4.9 UCC Filings
	 	 	33	 
	Section 4.10 Agent’s Reliance, Etc
	 	 	33	 
	Section 4.11 Administrator and Affiliates
	 	 	34	 
	Section 4.12 Notice of Termination Events
	 	 	34	 
	Section 4.13 Non-Reliance on Administrator, Purchaser Agents and other Purchasers;
Administrators and Affiliates 
	 	 	35	 
	Section 4.14 Indemnification
	 	 	36	 
	Section 4.15 Successor Administrator
	 	 	36	 
	ARTICLE V. MISCELLANEOUS
	 	 	37	 
	Section 5.1 Amendments, Etc
	 	 	37	 
	Section 5.2 Notices, Etc
	 	 	37	 
	Section 5.3 Successors and Assigns; Assignability; Participations
	 	 	37	 
	Section 5.4 Costs, Expenses and Taxes
	 	 	40	 
	Section 5.5 No Proceedings; Limitation on Payments
	 	 	42	 
	Section 5.6 Confidentiality
	 	 	43	 
	Section 5.7 GOVERNING LAW AND JURISDICTION
	 	 	43	 
	Section 5.8 Execution in Counterparts
	 	 	44	 
	Section 5.9 Survival of Termination; Non-Waiver
	 	 	44	 
	Section 5.10 WAIVER OF JURY TRIAL
	 	 	44	 
	Section 5.11 Entire Agreement
	 	 	44	 
	Section 5.12 Headings
	 	 	45	 
	Section 5.13 Right of Setoff
	 	 	45	 






-ii-









 




TABLE OF CONTENTS
(continued)




	 	 	 	 	 
	 	 	Page
	Section 5.14 Purchaser Groups’ Liabilities
	 	 	45	 
	Section 5.15 Sharing of Recoveries
	 	 	45	 
	Section 5.16 Ratification
	 	 	45	 






-iii-









 





     This AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT (as amended, restated, supplemented
or otherwise modified from time to time, this “Agreement”) is entered into as of February
24, 2010, by and among ARCH RECEIVABLE COMPANY, LLC, a Delaware limited liability company, as
seller (the “Seller”), ARCH COAL SALES COMPANY, INC., a Delaware corporation (“Arch
Sales”), as initial servicer (in such capacity, together with its successors and permitted
assigns in such capacity, the “Servicer”), the various CONDUIT PURCHASERS, RELATED
COMMITTED PURCHASERS, LC PARTICIPANTS and PURCHASER AGENTS from time to time party hereto and PNC
BANK, NATIONAL ASSOCIATION, a national banking association (“PNC”), as administrator (in
such capacity, together with its successors and assigns in such capacity, the
“Administrator”) and as issuer of Letters of Credit (in such capacity, together with its
successors and assigns in such capacity, the “LC Bank”).



     PRELIMINARY STATEMENTS. Certain terms that are capitalized and used throughout this Agreement
are defined in Exhibit I. References in the Exhibits hereto to the “Agreement” refer to
this Agreement, as amended, supplemented or otherwise modified from time to time.



     This Agreement amends and restates in its entirety, as of the Closing Date, the Receivables
Purchase Agreement, dated as of February 3, 2006 (as amended, restated, supplemented or otherwise
modified prior to the date hereof, the “Original Agreement”), among the Seller, the
Servicer, Market Street Funding LLC (“Market Street”) and PNC, as LC Participant,
Administrator and LC Bank. Upon the effectiveness of this Agreement, the terms and provisions of
the Original Agreement shall, subject to this paragraph, be superseded hereby in their entirety.
Notwithstanding the amendment and restatement of the Original Agreement by this Agreement, (i) the
Seller and Servicer shall continue to be liable to PNC, Market Street and any other Indemnified
Party or Affected Person (as such terms are defined in the Original Agreement) for fees and
expenses which are accrued and unpaid under the Original Agreement on the date hereof
(collectively, the “Original Agreement Outstanding Amounts”) and all agreements to
indemnify such parties in connection with events or conditions arising or existing prior to the
effective date of this Agreement and (ii) the security interest created under the Original
Agreement shall remain in full force and effect as security for such Original Agreement Outstanding
Amounts until such Original Agreement Outstanding Amounts shall have been paid in full. Upon the
effectiveness of this Agreement, each reference to the Original Agreement in any other document,
instrument or agreement shall mean and be a reference to this Agreement. Nothing contained herein,
unless expressly herein stated to the contrary, is intended to amend, modify or otherwise affect
any other instrument, document or agreement executed and/or delivered in connection with the
Original Agreement.



     The Seller (i) desires to sell, transfer and assign an undivided percentage interest in a pool
of receivables, and the Purchasers desire to acquire such undivided percentage interest, as such
percentage interest shall be adjusted from time to time based upon, in part, reinvestment payments
that are made by such Purchasers and (ii) may, subject to the terms and conditions hereof, request
that the LC Bank issue or cause the issuance of one or more Letters of Credit.



     In consideration of the mutual agreements, provisions and covenants contained herein, the
sufficiency of which is hereby acknowledged, the parties hereto agree as follows:



 









 





ARTICLE I.

AMOUNTS AND TERMS OF THE PURCHASES





     Section 1.1 Purchase Facility.



     (a) On the terms and subject to the conditions hereof, the Seller may, from time to time
before the Facility Termination Date, (i) ratably (based on the aggregate Commitments of the
Related Committed Purchasers in their respective Purchaser Groups) request that the Conduit
Purchasers, or, only if a Conduit Purchaser denies such request or is unable to fund (and provides
notice of such denial or inability to the Seller, the Administrator and its Purchaser Agent),
ratably request that the Related Committed Purchasers, make purchases of and reinvestments in
undivided percentage ownership interests with regard to the Purchased Interest from the Seller and
(ii) request that the LC Bank issue or cause the issuance of Letters of Credit, in each case
subject to the terms hereof (each such purchase, reinvestment or issuance is referred to herein as
a “Purchase”). Subject to Section 1.4(b) concerning reinvestments, at no time will
a Conduit Purchaser have any obligation to make a Purchase. Each Related Committed Purchaser
severally hereby agrees, on the terms and subject to the conditions hereof, to make purchases of
and reinvestments in undivided percentage ownership interests with regard to the Purchased Interest
from the Seller from time to time from the date hereof to the Facility Termination Date, based on
the applicable Purchaser Group’s Ratable Share of each Purchase requested pursuant to Section
1.2(a) (and, in the case of each Related Committed Purchaser, its Commitment Percentage of its
Purchaser Group’s Ratable Share of such Purchase) and, on the terms of and subject to the
conditions of this Agreement, the LC Bank hereby agrees to issue Letters of Credit in return for
(and each LC Participant hereby severally agrees to make participation advances in connection with
any draws under such Letters of Credit equal to such LC Participant’s Pro Rata Share of such
draws), undivided percentage ownership interests with regard to the Purchased Interest from the
Seller from time to time from the date hereof to the Facility Termination Date. Notwithstanding
anything set forth in this paragraph (a) or otherwise herein to the contrary, under no
circumstances shall any Purchaser make any purchase or reinvestment (including, without limitation,
any mandatory deemed Purchases pursuant to Section 1.1(b)) or issue any Letters of Credit
hereunder, as applicable, if, after giving effect to such Purchase, the (i) aggregate outstanding
amount of the Capital funded by such Purchaser, when added to all other Capital funded by all other
Purchasers in such Purchaser’s Purchaser Group would exceed (A) its Purchaser Group’s Group
Commitment (as the same may be reduced from time to time pursuant to Section 1.1(c)) minus
(B) the related LC Participant’s Pro Rata Share of the LC Participation Amount, (ii) the Aggregate
Capital plus the LC Participation Amount would exceed the Purchase Limit or (iii) the LC
Participation Amount would exceed the aggregate of the Commitments of the LC Participants.



     The Seller may, subject to this paragraph (a) and the other requirements and
conditions herein, use the proceeds of any purchase by the Purchasers hereunder to satisfy its
Reimbursement Obligation to the LC Bank and the LC Participants (ratably, based on the outstanding
amounts funded by the LC Bank and each such LC Participant) pursuant to Section 1.14
below.



2









 





     (b) In the event the Seller fails to reimburse the LC Bank for the full amount of any drawing
under any Letter of Credit on the applicable Drawing Date (out of its own funds available therefor)
pursuant to Section 1.14, then the Seller shall, automatically (and without the requirement of any
further action on the part of any Person hereunder), be deemed to have requested a new purchase
from the Conduit Purchasers or Related Committed Purchasers, as applicable, on such date, on the
terms and subject to the conditions hereof, in an amount equal to the amount of such Reimbursement
Obligation at such time. Subject to the limitations on funding set forth in paragraph (a) above
(and the other requirements and conditions herein), the Conduit Purchasers or Related Committed
Purchasers, as applicable, shall fund such deemed purchase request and deliver the proceeds thereof
directly to the Administrator to be immediately distributed (ratably) to the LC Bank and the
applicable LC Participants in satisfaction of the Seller’s Reimbursement Obligation pursuant to
Section 1.14, below, to the extent of the amounts permitted to be funded by the Conduit Purchasers
or Related Committed Purchasers, as applicable, at such time, hereunder.



     (c) The Seller may, upon at least 30 days’ written notice to the Administrator, terminate the
Purchase Facility in whole or, upon at least 30 days’ written notice to the Administrator, from
time to time, irrevocably reduce in part the unused portion of the Purchase Limit (but not below
the amount that would cause the Aggregate Capital plus the LC Participation Amount to exceed the
Purchase Limit or would cause the Group Capital of any Purchaser Group to exceed its Group
Commitment, in each case after giving effect to such reduction); provided, that each
partial reduction shall be in the amount of at least $5,000,000, or an integral multiple of
$1,000,000 in excess thereof, and that, unless terminated in whole, the Purchase Limit shall in no
event be reduced below $50,000,000. Each reduction in the Commitments hereunder shall be made
ratably among the Purchasers in accordance with their respective Commitment Percentages and their
respective Commitments. The Administrator shall promptly advise the Purchaser Agents of any notice
received by it pursuant to this Section 1.1(c); it being understood that (in addition to
and without limiting any other requirements for termination, prepayment and/or the funding of the
LC Collateral Account hereunder) no such termination or reduction shall be effective unless and
until (i) in the case of a termination, the amount on deposit in the LC Collateral Account is at
least equal to the then outstanding LC Participation Amount and (ii) in the case of a partial
reduction, the amount on deposit in the LC Collateral Account is at least equal to the positive
difference between the then outstanding LC Participation Amount and the Purchase Limit as so
reduced by such partial reduction.




     Section 1.2 Making Purchases; Initial Purchase; Initial Assignment and
Assumption.



     (a) Each Funded Purchase (but not reinvestment) of undivided percentage ownership interests
with regard to the Purchased Interest hereunder may be made on any day upon the Seller’s
irrevocable written notice in the form of Annex B (each, a “Purchase Notice”)
delivered to the Administrator and each Purchaser Agent in accordance with Section 5.2
(which notice must be received by the Administrator and each Purchaser Agent before 11:00 a.m., New
York City time) at least two Business Days before the requested Purchase Date, which notice shall
specify: (A) solely in the case of a Funded Purchase maintained by Capital (other than one made
pursuant to Section 1.14(b)), the amount requested to be paid to the Seller (such amount,
which



3









 




shall not be less than $300,000 (or such lesser amount as agreed to by the Administrator and
each Purchaser Agent) and shall be in integral multiples of $100,000 in excess thereof, being the
Capital relating to the undivided percentage ownership interest then being purchased with respect
to each Purchaser Group), (B) the date of such Funded Purchase (which shall be a Business Day), and
(C) the pro forma calculation of the Purchased Interest after giving effect to the increase in the
Aggregate Capital.




     (b) On the date of each Funded Purchase (but not reinvestment, issuance of a Letter of Credit
or a Funded Purchase pursuant to Section 1.2(e)) of undivided percentage ownership
interests with regard to the Purchased Interest hereunder, each applicable Conduit Purchaser or
Related Committed Purchaser, as the case may be, shall, upon satisfaction of the applicable
conditions set forth in Exhibit II, make available to the Seller in same day funds, at PNC,
account number 1019291244, ABA No. 043-000-096 (or such other account as may be designated in
writing by the Seller to the Administrator and each Purchaser Agent), an amount equal to the
portion of Capital relating to the undivided percentage ownership interest then being purchased by
such Purchaser.



     (c) Effective on the date of each Funded Purchase or other Purchase pursuant to this
Section 1.2 and each reinvestment pursuant to Section 1.4, the Seller hereby sells
and assigns to the Administrator for the benefit of the Purchasers (ratably, based on the sum of
the Capital plus the LC Participation Amount outstanding at such time for each such Purchaser’s
Capital) an undivided percentage ownership interest in: (i) each Pool Receivable then existing,
(ii) all Related Security with respect to such Pool Receivables, and (iii) all Collections with
respect to, and other proceeds of, such Pool Receivables and Related Security.



     (d) To secure all of the Seller’s obligations (monetary or otherwise) under this Agreement and
the other Transaction Documents to which it is a party, whether now or hereafter existing or
arising, due or to become due, direct or indirect, absolute or contingent, the Seller hereby grants
to the Administrator (for the benefit of the Purchasers and their assigns) a security interest in
all of the Seller’s right, title and interest (including any undivided interest of the Seller) in,
to and under all of the following, whether now or hereafter owned, existing or arising: (i) all
Pool Receivables, (ii) all Related Security with respect to such Pool Receivables, (iii) all
Collections with respect to such Pool Receivables, (iv) the Lock-Box Accounts and all amounts on
deposit therein, and all certificates and instruments, if any, from time to time evidencing such
Lock-Box Accounts and amounts on deposit therein, (v) all rights (but none of the obligations) of
the Seller under the Sale Agreements, (vi) all proceeds of, and all amounts received or receivable
under any or all of, the foregoing and (vii) all of its other property (collectively, the “Pool
Assets”). The Seller hereby authorizes the Administrator to file financing statements
describing the collateral covered thereby as “all of the debtor’s personal property or assets” or
words to that effect, notwithstanding that such wording may be broader in scope than the collateral
described in this Agreement. The Administrator (on behalf of the Purchasers and their assigns)
shall have, with respect to the Pool Assets, and in addition to all the other rights and remedies
available to the Administrator and the Purchasers, all the rights and remedies of a secured party
under any applicable UCC.



4









 





     (e) Whenever the LC Bank issues a Letter of Credit pursuant to Section 1.12 hereof,
each LC Participant shall, automatically and without further action of any kind upon the effective
date of issuance of such Letter of Credit, have irrevocably been deemed to make a Funded Purchase
hereunder in the event that such Letter of Credit is subsequently drawn and such drawn amount shall
not have been reimbursed pursuant to Section 1.14 upon such draw in an amount equal to its
Pro Rata Share of such unreimbursed draw. All such Funded Purchases shall be made ratably by the
LC Participants according to their Pro Rata Shares and shall accrue Discount from the date of such
draw. In the event that any Letter of Credit expires or is surrendered without being drawn (in
whole or in part) then, in such event, the foregoing commitment to make Funded Purchases shall
expire with respect to such Letter of Credit and the LC Participation Amount shall automatically
reduce by the amount of the Letter of Credit which is no longer outstanding.



     (f) The Seller may, with the written consent of the Administrator and each Purchaser Agent
(and, in the case of a new related LC Participant, the LC Bank), which consent may be granted or
withheld in their sole discretion, add additional Persons as Purchasers (either to an existing
Purchaser Group or by creating new Purchaser Groups) or cause an existing Related Committed
Purchaser or related LC Participant to increase its Commitment in connection with a corresponding
increase in the Purchase Limit; provided, that the Commitment of any Related Committed
Purchaser or related LC Participant may only be increased with the prior written consent of such
Purchaser. Each new Conduit Purchaser, Related Committed Purchaser or related LC Participant (or
Purchaser Group) shall become a party hereto, by executing and delivering to the Administrator,
each Purchaser Agent and the Seller, an Assumption Agreement in the form of Annex F hereto
(which Assumption Agreement shall, in the case of any new Conduit Purchaser, Related Committed
Purchaser or related LC Participant, be executed by each Person in such new Purchaser’s Purchaser
Group).



     (g) Each Related Committed Purchaser’s and related LC Participant’s obligations hereunder
shall be several, such that the failure of any Related Committed Purchaser or related LC
Participant to make a payment in connection with any purchase hereunder, or drawing under a Letter
of Credit hereunder, as the case may be, shall not relieve any other Related Committed Purchaser or
related LC Participant of its obligation hereunder to make payment for any Funded Purchase or such
drawing. Further, in the event any Related Committed Purchaser or related LC Participant fails to
satisfy its obligation to make a purchase or payment with respect to such drawing as required
hereunder, upon receipt of notice of such failure from the Administrator (or any relevant Purchaser
Agent), subject to the limitations set forth herein, the non-defaulting Related Committed
Purchasers or related LC Participants in such defaulting Related Committed Purchaser’s or related
LC Participant’s Purchaser Group shall fund the defaulting Related Committed Purchaser’s or related
LC Participant’s Commitment Percentage of the related Purchase or drawing pro rata
in proportion to their relative Commitment Percentages (determined without regard to the Commitment
Percentage of the defaulting Related Committed Purchaser or related LC Participant; it
being understood that a defaulting Related Committed Purchaser’s or related LC
Participant’s Commitment Percentage of any Purchase or drawing shall be first funded by the Related
Committed Purchasers or related LC Participants in such defaulting Related Committed Purchaser’s or
related LC Participant’s Purchaser Group and thereafter if there are no other Related Committed
Purchasers or related LC Participants in such



5









 




Purchaser Group or if such other Related Committed Purchasers or related LC Participants are
also defaulting Related Committed Purchasers or related LC Participants, then such defaulting
Related Committed Purchaser’s or related LC Participant’s Commitment Percentage of such Purchase or
drawing shall be funded by each other Purchaser Group ratably and applied in accordance with this
paragraph (g)). Notwithstanding anything in this paragraph (g) to the contrary, no
Related Committed Purchaser or related LC Participant shall be required to make a Purchase or
payment with respect to such drawing pursuant to this paragraph for an amount which would cause the
aggregate Capital of such Related Committed Purchaser or the Pro Rata Share of the LC Participation
Amount of such related LC Participant (after giving effect to such Purchase or payment with respect
to such drawing) to exceed its Commitment.




     (h) Notwithstanding the otherwise applicable conditions precedent to Purchases hereunder, upon
the effectiveness of this Agreement in accordance with its terms, and immediately prior to giving
effect to Section 1.2(i) below, (x) Market Street, as a Conduit Purchaser, shall be deemed
to have outstanding Capital hereunder equal to its outstanding Capital under the Original Agreement
immediately prior to the effectiveness of this Agreement and (y) PNC, as an LC Participant, shall
be deemed to have a Pro Rata Share of the LC Participation Amount equal to 100% of the LC
Participation Amount under the Original Agreement immediately prior to the effectiveness of this
Agreement.



     (i) Immediately upon effectiveness of this Agreement in accordance with its terms and after
giving effect to Section 1.2(h) above:



               (i) Market Street, as a Related Committed Purchaser, hereby assigns and delegates to Credit
Agricole Corporate and Investment Bank New York Branch (“Credit Agricole”), as a Related
Committed Purchaser, $50,000,000 of Market Street’s existing $175,000,000 Commitment and the
related obligation hereunder to make purchases and reinvestments from time to time in accordance
with the terms hereof, and Credit Agricole, as a Related Committed Purchaser, hereby assumes such
$50,000,000 Commitment and such obligation hereunder to make purchases and reinvestments from time
to time in accordance with the terms hereof;



               (ii) Market Street, as a Conduit Purchaser and as a Related Committed Purchaser, hereby
assigns and delegates to Atlantic Asset Securitization LLC (“Atlantic”), as a Conduit
Purchaser, $15,971,429 of the outstanding Capital funded by Market Street through the date hereof,
and Atlantic, as a Conduit Purchaser, hereby accepts such $15,971,429 of outstanding Capital so
assigned; provided, that payment by Atlantic to Market Street of the amount payable by
Atlantic pursuant to the following paragraph shall be a condition precedent to the assignment
effected by this clause (ii); and



               (iii) PNC, as an LC Participant, hereby assigns and delegates to Credit Agricole, as an LC
Participant, $50,000,000 of PNC’s $175,000,000 Commitment, $18,282,796 of PNC’s Pro Rata Share of
the LC Participation Amount and the related obligation hereunder to make participation advances to
the LC Bank from time to time in accordance with the terms hereof, and Credit Agricole, as an LC
Participant, hereby assumes such $50,000,000 Commitment, such $18,282,796 Pro Rata Share of the LC
Participation Amount and such



6









 




obligation hereunder to make participation advances to the LC Bank from time to time in
accordance with the terms hereof.




     As consideration for the assignments and assumptions described in this Section 1.2(i), Atlantic shall pay to Market Street by wire transfer of immediately available funds to the
account specified by Market Street (or by its Purchaser Agent on its behalf) on the date hereof,
$15,971,429. After giving effect to the assignments and assumptions described in Section
1.2(i) and effective as of the Closing Date:




     (A) there shall be two Purchaser Groups as follows, one of which consists of Market
Street, as a Conduit Purchaser and as a Related Committed Purchaser, and PNC, as LC Bank and
as an LC Participant and as Purchaser Agent for such Purchaser Group, and the other of which
consists of Altantic Asset Securitization LLC, as a Conduit Purchaser, and Credit Agricole,
as a Related Committed Purchaser and as an LC Participant and as Purchaser Agent for such
Purchaser Group;




     (B) the Group Commitment of Market Street’s Purchaser Group shall be $125,000,000, and
the Group Commitment of Atlantic’s Purchaser Group shall be $50,000,000;




     (C) the Commitment of Market Street, as a Related Committed Purchaser shall be
$125,000,000, and the Commitment of Credit Agricole, as a Related Committed Purchaser shall
be $50,000,000;




     (D) the Commitment of PNC, as LC Bank and as an LC Participant, shall be $125,000,000
and the Commitment of Credit Agricole, as an LC Participant, shall be $50,000,000;




     (E) the Aggregate Capital shall be $55,900,000, the Capital funded by Market Street
shall be $39,928,571, and the Capital funded by Atlantic shall be $15,971,429;




     (F) the LC Participation Amount shall be $63,989,785, the Pro Rata Share of the LC
Participation Amount of PNC, as an LC Participant, shall be $45,706,989 and the Pro Rata
Share of the LC Participation Amount of Credit Agricole, as an LC Participant, shall be
$18,282,796;




     (G) Atlantic shall have the rights and obligations of a Conduit Purchaser hereunder,
and Credit Agricole shall have the rights and obligations of a Related Committed Purchaser
and LC Participant hereunder, to the extent of the Commitments so assigned to and assumed by
them, respectively;




     (H) Market Street Funding, LLC and PNC shall, to the extent of the assignment by them
pursuant to this Section 1.2(d), be released from the portion of their respective
Commitments and, in the case of PNC, Pro Rata Share of the LC Participation Amount, so
assigned.



7









 





     (j) The parties hereto acknowledge and agree that the assignments and assumptions effected by
Section 1.2(j) shall be deemed to satisfy the requirements of Section 1.2(f) and
Sections 5.3(c) and (e) hereof relating to the execution and delivery of an
Assumption Agreement and a Transfer Supplement and any other requirements hereunder and under the
Original Agreement for assignments of Capital and Commitments.




     Section 1.3 Purchased Interest Computation. The Purchased Interest shall be
initially computed on the Closing Date. Thereafter, until the Facility Termination Date,
such Purchased Interest shall be automatically recomputed (or deemed to be recomputed) on
each Business Day other than a Termination Day. From and after the occurrence of any
Termination Day, the Purchased Interest shall (until the event(s) giving rise to such
Termination Day are satisfied or are waived by the Administrator in accordance with
Section 2.2) be deemed to be 100%. The Purchased Interest shall become zero when (a)
the Aggregate Capital thereof and Aggregate Discount thereon shall have been paid in full,
(b) an amount equal to 100% of the LC Participation Amount shall have been deposited in the
LC Collateral Account, or all Letters of Credit shall have expired and (c) all the amounts
owed by the Seller and the Servicer hereunder to each Purchaser, the Administrator and any
other Indemnified Party or Affected Person are paid in full, and the Servicer shall have
received the accrued Servicing Fee thereon.




     Section 1.4 Settlement Procedures.



     (a) The collection of the Pool Receivables shall be administered by the Servicer in accordance
with this Agreement. The Seller shall provide to the Servicer on a timely basis all information
needed for such administration, including notice of the occurrence of any Termination Day and
current computations of the Purchased Interest.



     (b) The Servicer shall, on each day on which Collections of Pool Receivables are received (or
deemed received) by the Seller or the Servicer:



               (i) set aside and hold in trust (and shall, at the request of the Administrator, segregate in
a separate account approved by the Administrator) for the benefit the Purchasers, out of such
Collections, first, an amount equal to the Aggregate Discount accrued through such day for
each Portion of Capital and not previously set aside, second, an amount equal to the fees set forth
in each Fee Letter accrued and unpaid through such day, and third, to the extent funds are
available therefor, an amount equal to the aggregate of the Purchasers’ Share of the Servicing Fee
accrued through such day and not previously set aside,



               (ii) subject to Section 1.4(f), if such day is not a Termination Day, remit to the
Seller, ratably, on behalf of the Purchasers, the remainder of such Collections. Such remainder
shall, to the extent representing a return on the Aggregate Capital, be automatically reinvested,
ratably, according to each Purchaser’s Capital, in Pool Receivables and in the Related Security,
Collections and other proceeds with respect thereto; provided, that if the Purchased
Interest would exceed 100%, then the Servicer shall not remit such remainder to the Seller or
reinvest, but shall set aside and hold in trust for the Administrator (for the benefit of the
Purchasers) (and shall, at the request of the Administrator, segregate in a separate account



8









 




approved by the Administrator) a portion of such Collections that, together with the other
Collections set aside pursuant to this paragraph, shall equal the amount necessary to reduce the
Purchased Interest to 100% (determined as if such Collections set aside had been applied to reduce
the Aggregate Capital at such time), which amount shall be deposited ratably to each Purchaser
Agent’s account (for the benefit of the its related Purchasers) on the next Settlement Date in
accordance with Section 1.4(c); provided, further, that (x) in the case of
any Purchaser that is a Conduit Purchaser, if such Purchaser has provided notice (a “Declining
Notice”) to its Purchaser Agent and the Administrator that such Purchaser (a “Declining
Conduit Purchaser”) no longer wishes Collections with respect to any Portion of Capital funded
or maintained by such Purchaser to be reinvested pursuant to this clause (ii) or (y) in the
case of any Purchaser that has provided notice (an “Exiting Notice”) to its Purchaser Agent
and the Administrator of its refusal, following any request by the Seller to extend the then
Facility Termination Date, to extend its Commitment hereunder (an “Exiting Purchaser”),
then in either case set forth in clause (x) or (y) above, such Purchaser’s ratable
share (determined according to outstanding Capital) of Collections shall not be reinvested or
remitted to the Seller and shall instead be held in trust for the benefit of such Purchaser and
applied in accordance with clause (iii) below,




               (iii) if such day is a Termination Day (or any day following the provision of a Declining
Notice or an Exiting Notice), set aside, segregate and hold in trust for the benefit of the
Purchasers (and shall, at the request of the Administrator, segregate in a separate account
approved by the Administrator), the entire remainder of such Collections (or in the case of a
Declining Conduit Purchaser or an Exiting Purchaser, an amount equal to such Purchaser’s ratable
share of such Collections based on its Capital; provided, that solely for purposes of
determining such Purchaser’s ratable share of such Collections, such Purchaser’s Capital shall be
deemed to remain constant from the date of the provision of a Declining Notice or an Exiting
Notice, as the case may be, until the date such Purchaser’s Capital has been paid in full; it being
understood that if such day is also a Termination Day, such Declining Conduit Purchaser’s or
Exiting Purchaser’s Capital shall be recalculated taking into account amounts received by such
Purchasers in respect of this parenthetical and thereafter Collections shall be set aside for such
Purchaser ratably in respect of its Capital (as recalculated)); provided, further,
that if amounts are set aside and held in trust on any Termination Day of the type described in
clause (a) of the definition of “Termination Day” (or any day following the provision of a
Declining Notice or an Exiting Notice) and, thereafter, the conditions set forth in
Section 2 of Exhibit II are satisfied or waived by the Administrator and the
Majority Purchaser Agents (or, in the case of a Declining Notice or an Exiting Notice, such
Declining Notice or Exiting Notice, as the case may be, has been revoked by the related Declining
Conduit Purchaser or Exiting Purchaser, respectively, and written notice thereof has been provided
to the Administrator, the related Purchaser Agent and the Servicer), such previously set-aside
amounts shall, to the extent representing a return on the Aggregate Capital (or the Capital of the
Declining Conduit Purchaser or Exiting Purchaser, as the case may be) and ratably in accordance
with each Purchaser’s Capital, be reinvested in accordance with clause (ii) on the day of
such subsequent satisfaction or waiver of conditions or revocation of Declining Notice or Exiting
Notice, as the case may be, and



               (iv) release to the Seller (subject to Section 1.4(f)) for its own account any
Collections in excess of: (w) amounts required to be reinvested in accordance with clause



9









 




(ii) or the proviso to clause (iii) plus (x) the amounts that are required to
be set aside pursuant to clause (i), the provisos to clause (ii) and clause
(iii) plus (y) the Seller’s Share of the Servicing Fee accrued and unpaid through such day and
all reasonable and appropriate out-of-pocket costs and expenses of the Servicer for servicing,
collecting and administering the Pool Receivables plus (z) all other amounts then due and payable
by the Seller under this Agreement to the Purchasers, the Purchaser Agents, the Administrator, and
any other Indemnified Party or Affected Person.




     (c) The Servicer shall, in accordance with the priorities set forth in Section 1.4(d),
deposit into each Purchaser Agent’s account, on each Settlement Date, Collections held for such
Purchaser Agent (for the benefit of its related Purchasers) pursuant to clause (b)(i) or
(f) plus the amount of Collections then held for such Purchaser Agent (for the benefit of
its related Purchasers) pursuant to clauses (b)(ii) and (iii) of
Section 1.4; provided, that if Arch Sales or an Affiliate thereof is the Servicer,
such day is not a Termination Day and the Administrator has not notified Arch Sales (or such
Affiliate) that such right is revoked, Arch Sales (or such Affiliate) may retain the portion of the
Collections set aside pursuant to clause (b)(i) that represents the aggregate of each
Purchasers’ Share of the Servicing Fee. On or prior to the last day of each Settlement Period,
each Purchaser Agent will notify the Servicer by facsimile of the amount of Discount accrued with
respect to each Portion of Capital during such Settlement Period or portion thereof.



     (d) The Servicer shall distribute the amounts described (and at the times set forth) in
clause (c) above as follows:



               (i) if such distribution occurs on a day that is not a Termination Day and the Purchased
Interest does not exceed 100%, first to each Purchaser Agent ratably according to the
Discount accrued during such Yield Period (for the benefit of the relevant Purchasers within such
Purchaser Agent’s Purchaser Group) in payment in full of all accrued Discount with respect to each
Portion of Capital maintained by such Purchasers and all accrued Fees; it being understood that
each Purchaser Agent shall distribute such amounts to the Purchasers within such Purchaser Agent’s
Purchaser Group ratably according to Discount and Fees, respectively, and second, if the Servicer
has set aside amounts in respect of the Servicing Fee pursuant to clause (b)(i) and has not
retained such amounts pursuant to clause (c), to the Servicer (payable in arrears on each
Settlement Date) in payment in full of the aggregate of the Purchasers’ Share of accrued Servicing
Fees so set aside, and



               (ii) if such distribution occurs on a Termination Day or on a day when the Purchased Interest
exceeds 100%, first, if Arch Sales or an Affiliate thereof is not the Servicer, to the
Servicer in payment in full of the Purchasers’ Share of all accrued Servicing Fees, second,
to each Purchaser Agent ratably (based on the aggregate accrued and unpaid Discount and Fees
payable to all Purchasers at such time) (for the benefit of the relevant Purchasers in such
Purchaser Agent’s Purchaser Group) in payment in full of all accrued Discount with respect to each
Portion of Capital funded or maintained by the Purchasers within such Purchaser Agent’s Purchaser
Group and all accrued Fees, third, to each Purchaser Agent ratably according to the
aggregate of the Capital of each Purchaser in each such Purchaser Agent’s Purchaser Group (for the
benefit of the relevant Purchasers in such Purchaser Agent’s



10









 




Purchaser Group) in payment in full of each Purchaser’s Capital (or, if such day is not a
Termination Day, the amount necessary to reduce the Purchased Interest to 100%) (determined as if
such Collections had been applied to reduce the Aggregate Capital); it being understood that each
Purchaser Agent shall distribute the amounts described in the first, second and third clauses of
this Section 1.4(d)(ii) to the Purchasers within such Purchaser Agent’s Purchaser Group
ratably according to Discount, Fees and Capital, respectively, fourth, to the LC Collateral
Account for the benefit of the LC Bank and the LC Participants, the amount necessary to cash
collateralize the LC Participation Amount until the amount of cash collateral held in such LC
Collateral Account equals 100% of the LC Participation Amount (or, if such day is not a Termination
Day, the amount necessary to reduce the Purchased Interest to 100%) (determined as if such
Collections had been applied to reduce the aggregate outstanding amount of the LC Participation
Amount), fifth, if the Aggregate Capital and accrued Aggregate Discount with respect to
each Portion of Capital for all Purchaser Groups have been reduced to zero, and the aggregate of
the Purchasers’ Share of all accrued Servicing Fees payable to the Servicer (if other than Arch
Sales or an Affiliate thereof) have been paid in full, to each Purchaser Agent ratably, based on
the amounts payable to each Purchaser in such Purchaser Agent’s Purchaser Group (for the benefit of
the relevant Purchasers in such Purchaser Agent’s Purchaser Group), the Administrator and any other
Indemnified Party or Affected Person in payment in full of any other amounts owed thereto by the
Seller or the Servicer hereunder, and sixth, to the Servicer (if the Servicer is Arch Sales
or an Affiliate thereof) in payment in full of the aggregate of the Purchasers’ Share of all
accrued Servicing Fees.



After the Aggregate Capital, Aggregate Discount, fees payable pursuant to the Fee Letters and
Servicing Fees with respect to the Purchased Interest, and any other amounts payable by the Seller
and the Servicer to each Purchaser Group, the Administrator or any other Indemnified Party or
Affected Person hereunder, have been paid in full, and (on and after a Termination Day) after an
amount equal to 100% of the LC Participation Amount has been deposited in the LC Collateral
Account, all additional Collections with respect to the Purchased Interest shall be paid to the
Seller for its own account.




     (e) For the purposes of this Section 1.4:



               (i) if on any day the Outstanding Balance of any Pool Receivable is reduced or adjusted as a
result of any defective, rejected, returned, repossessed or foreclosed goods or services, or any
revision, cancellation, allowance, rebate, discount or other adjustment made by the Seller or any
Affiliate of the Seller or the Servicer or any Affiliate of the Servicer, or any setoff or dispute
between the Seller or any Affiliate of the Seller or the Servicer or any Affiliate of the Servicer
and an Obligor, the Seller shall be deemed to have received on such day a Collection of such Pool
Receivable in the amount of such reduction or adjustment and shall immediately pay any and all such
amounts in respect thereof to a Lock-Box Account for the benefit of the Purchasers and their
assigns and for application pursuant to Section 1.4;



               (ii) if on any day any of the representations or warranties in Sections l(j) or
3(a) of Exhibit III is not true with respect to any Pool Receivable, the Seller
shall be deemed to have received on such day a Collection of such Pool Receivable in full and shall
immediately pay any and all such amounts in respect thereof to a Lock-Box Account (or as



11









 




otherwise directed by the Administrator at such time) for the benefit of the Purchasers and
their assigns and for application pursuant to Section 1.4;




               (iii) except as provided in clause (i) or (ii), or as otherwise required by
applicable law or the relevant Contract, all Collections received from an Obligor of any Receivable
shall be applied to the Receivables of such Obligor in the order of the age of such Receivables,
starting with the oldest such Receivable, unless such Obligor designates in writing its payment for
application to specific Receivables; and



               (iv) if and to the extent the Administrator, any Purchaser Agent or any Purchaser shall be
required for any reason to pay over to an Obligor (or any trustee, receiver, custodian or similar
official in any Insolvency Proceeding) any amount received by it hereunder, such amount shall be
deemed not to have been so received by such Person but rather to have been retained by the Seller
and, accordingly, such Person shall have a claim against the Seller for such amount, payable when
and to the extent that any distribution from or on behalf of such Obligor is made in respect
thereof.



     (f) If at any time the Seller shall wish to cause the reduction of Aggregate Capital (but not
to commence the liquidation, or reduction to zero, of the entire Aggregate Capital), the Seller may
do so as follows:



               (i) the Seller shall give the Administrator, each Purchaser Agent and the Servicer written
notice in substantially the form of Annex C (each, a “Paydown Notice”) (A) at least
two Business Days prior to the date of such reduction for any reduction of the Aggregate Capital
less than or equal to $20,000,000 and (B) at least five Business Days prior to the date of such
reduction for any reduction of the Aggregate Capital greater than $20,000,000, in each case such
Paydown Notice shall include, among other things, the amount of such proposed reduction and the
proposed date on which such reduction will commence;



               (ii) (A) on the proposed date of the commencement of such reduction and on each day
thereafter, the Servicer shall cause Collections not to be reinvested until the amount thereof not
so reinvested shall equal the desired amount of reduction or (B) the Seller shall remit to each
Purchaser Agent’s account (for the benefit of the relevant Purchasers in such Purchaser Agent’s
Purchaser Group), in immediately available funds, an amount equal to the desired amount of such
reduction together with accrued and unpaid Aggregate Discount, and Aggregate Discount to accrue
through the next Settlement Date, with respect to such Aggregate Capital, ratably (based on such
Purchaser Agent’s Purchasers’ portion of the Aggregate Capital reduced thereby and portion of the
related Aggregate Discount; and



               (iii) the Servicer shall hold such Collections in trust for the benefit of the Purchasers
ratably (based on their respective Portions of Capital funded thereby) for payment to each such
Purchaser Agent (for the benefit of the relevant Purchasers in such Purchaser Agent’s Purchaser
Group) on the next Settlement Date immediately following the current Settlement Period or such
other date approved by the Administrator and each such Purchaser Agent, and the Aggregate Capital
(together with the Capital of any related Purchaser) shall be



12









 




deemed reduced in the amount to be paid to each such Purchaser Agent (on behalf of its related
Purchasers) only when in fact finally so paid;



provided, that the amount of any such reduction shall be not less than $300,000 and shall
be an integral multiple of $100,000 in excess thereof.





     Section 1.5 Fees. The Seller shall pay to the Administrator, the Purchaser
Agents and the Purchasers certain fees in the amounts and on the dates set forth in one or
more fee letter agreements for each Purchaser Group, in each case entered into from time to
time by and among the Servicer, the Seller and the applicable Purchaser Agent and/or the
Administrator (as any such fee letter agreement may be amended, restated, supplemented or
otherwise modified from time to time, each, a “Fee Letter”).




     Section 1.6 Payments and Computations, Etc.



     (a) All amounts to be paid or deposited by the Seller or the Servicer hereunder or under any
other Transaction Document shall be made without reduction for offset or counterclaim and shall be
paid or deposited no later than noon (New York City time) on the day when due in same day funds to
each account designated by the Purchaser Agents (for the benefit of the Purchasers in such
Purchaser Agent’s Purchaser Group) and/or the Administration Account, as applicable. All amounts
received after noon (New York City time) will be deemed to have been received on the next Business
Day. Amounts payable hereunder to or for the benefit of the Administrator, the Purchasers or the
Purchaser Agents (or their related Affected Persons or Indemnified Parties) shall be distributed as
follows:



               (i) Any amounts to be distributed by or on behalf of the Administrator hereunder to any
Purchaser Agent, Purchaser or Purchaser Group shall be distributed to the account specified in
writing from time to time by the applicable Purchaser Agent to the Administrator, and the
Administrator shall have no obligation to distribute any such amounts unless and until it actually
receives payment of such amounts by the Seller or the Servicer, as applicable, in the
Administration Account. Except as expressly set forth herein (including, without limitation, as
set forth in Section 1.4(b)(iii) with respect to Collections held in trust for Declining
Conduit Purchasers and Exiting Purchasers), the Administrator shall distribute (or cause to be
distributed) such amounts to the Purchaser Agents for the Purchasers within their respective
Purchaser Groups ratably (x) in the case of such amounts paid in respect of Discount and Fees,
according to the Discount and Fees payable to the Purchasers and (y) in the case of such amounts
paid in respect of Capital (or in respect of any other obligations other than Discount and Fees),
according to the outstanding Capital funded by the Purchasers.



               (ii) Except as expressly set forth herein (including, without limitation, as set forth in
Section 1.4(b)(iii) with respect to Collections held in trust for Declining Conduit
Purchasers and Exiting Purchasers), each Purchaser Agent shall distribute the amounts paid to it
hereunder for the benefit of the Purchasers in its Purchaser Group to the Purchasers within its
Purchaser Group ratably (x) in the case of such amounts paid in respect of Discount and Fees,
according to the Discount and Fees payable to such Purchasers and (y) in the case of such



13









 




amounts paid in respect of Capital (or in respect of any other obligations other than Discount
and Fees), according to the outstanding Capital funded by such Purchasers.




     (b) The Seller or the Servicer, as the case may be, shall, to the extent permitted by law, pay
interest on any amount not paid or deposited by the Seller or the Servicer, as the case may be,
when due hereunder, at an interest rate equal to 2.0% per annum above the Base Rate, payable on
demand.



     (c) All
computations of interest under clause (b) and all computations of Discount,
fees and other amounts hereunder shall be made on the basis of a year of 360 (or 365 or 366, as
applicable, with respect to Discount or other amounts calculated by reference to the Base Rate)
days for the actual number of days elapsed. Whenever any payment or deposit to be made hereunder
shall be due on a day other than a Business Day, such payment or deposit shall be made on the next
Business Day and such extension of time shall be included in the computation of such payment or
deposit.




     Section 1.7 Increased Costs.



     (a) If the Administrator, any Purchaser Agent, any Purchaser, any Liquidity Provider or any
other Program Support Provider or any of their respective Affiliates (each an “Affected
Person”) reasonably determines that the existence of or compliance with: (i) any law, rule,
regulation or generally accepted accounting principle or any change therein or in the
interpretation or application thereof, or (ii) any request, guideline or directive from Financial
Accounting Standards Board (“FASB”) (including, without limitation, FAS 166/167), or any
central bank or other Governmental Authority (whether or not having the force of law), affects or
would affect the amount of capital required or expected to be maintained by such Affected Person,
and such Affected Person determines that the amount of such capital is increased by or based upon
the existence of any commitment to make purchases of (or otherwise to maintain the investment in)
Pool Receivables or issue any Letter of Credit related to this Agreement or any related liquidity
facility, credit enhancement facility and other commitments of the same type, then, upon demand by
such Affected Person (with a copy to the Administrator), the Seller shall promptly pay to the
Administrator, for the account of such Affected Person, from time to time as specified by such
Affected Person, additional amounts sufficient to compensate such Affected Person for increased
costs in the light of such circumstances, to the extent that such Affected Person reasonably
determines such increase in capital to be allocable to the existence of any of such commitments.
A certificate as to such amounts submitted to the Seller and the Administrator by such Affected
Person shall be conclusive and binding for all purposes, absent manifest error.



     (b) If, due to either: (i) the introduction of or any change in or in the interpretation of
any law, rule, regulation or generally accepted accounting principle or (ii) compliance with any
request, guideline or directive from FASB (including, without limitation, FAS 166/167) or any
central bank or other Governmental Authority (whether or not having the force of law), there shall
be any increase in the cost to any Affected Person of agreeing to purchase or purchasing, or
maintaining the ownership of, the Purchased Interest (or its portion thereof) in respect of which
Discount is computed by reference to the Euro-Rate, then, upon demand by such Affected



14









 




Person, the Seller shall promptly pay to such Affected Person, from time to time as specified
by such Affected Person, additional amounts sufficient to compensate such Affected Person for
increased costs. A certificate as to such amounts submitted to the Seller and the Administrator by
such Affected Person shall be conclusive and binding for all purposes, absent manifest error.




     (c) For the avoidance of doubt, and not in limitation of the foregoing, any increase in cost
and/or reduction in yield caused by regulatory capital allocation adjustments due to Statements of
Financial Accounting Standards Nos. 166 and 167 (or any future statements or interpretations issued
by FASB or any successor thereto) (collectively, “FAS 166/167”) shall be covered by this
Section 1.7.




     Section 1.8 Requirements of Law; Funding Losses.



     (I) If any Affected Person reasonably determines that the existence of or compliance with:
(a) any law, rule or regulation or any change therein or in the interpretation or application
thereof, or (b) any guideline, request or directive from any central bank or other Governmental
Authority (whether or not having the force of law), in either case, adopted, issued or occurring
after the date hereof:



               (i) does or shall subject such Affected Person to any tax of any kind whatsoever with respect
to this Agreement, any increase in the Purchased Interest (or its portion thereof) or in the amount
of Capital relating thereto, or does or shall change the basis of taxation of payments to such
Affected Person on account of Collections, Discount or any other amounts payable hereunder
(excluding taxes imposed on the overall income of such Affected Person, and franchise taxes imposed
on such Affected Person, by the jurisdiction under the laws of which such Affected Person is
organized or a political subdivision thereof), or



               (ii) does or shall impose, modify or hold applicable any reserve, special deposit, compulsory
loan or similar requirement against assets held by, or deposits or other liabilities in or for the
account of, purchases, advances or loans by, or other credit extended by, or any other acquisition
of funds by, any office of such Affected Person that are not otherwise included in the
determination of the Euro-Rate or the Base Rate hereunder, or



               (iii) does or shall impose on such Affected Person any other condition,


and the result of any of the foregoing is: (A) to increase the cost to such Affected Person of
acting as Administrator, or of agreeing to purchase or purchasing or maintaining the ownership of
undivided percentage ownership interests with regard to, or issuing any Letter of Credit in respect
of, the Purchased Interest (or interests therein) or any Portion of Capital, or (B) to reduce any
amount receivable hereunder (whether directly or indirectly), then, in any such case, upon demand
by such Affected Person, the Seller shall promptly pay to such Affected Person additional amounts
necessary to compensate such Affected Person for such additional cost or reduced amount receivable.
All such amounts shall be payable as incurred. A certificate as to such amounts from such
Affected Person to the Seller and the Administrator shall be conclusive and binding for all
purposes, absent manifest error.







15









 








     (II) The Seller shall compensate each Affected Person, upon written request by such Person for
all losses, expenses and liabilities (including any interest paid by such Affected Person to
lenders of funds borrowed by it to fund or maintain any Portion of Capital hereunder at an interest
rate determined by reference to the Euro-Rate and any loss sustained by such Person in connection
with the re-employment of such funds), which such Affected Person may sustain with respect to
funding or maintaining such Portion of Capital at the Euro-Rate if, for any reason, funding or
maintaining such Portion of Capital at an interest rate determined by reference to the Euro-Rate
does not occur on a date specified therefor.




     Section 1.9 Inability to Determine Euro-Rate.



     (a) If the Administrator (or any Purchaser Agent) determines before the first day of any
Settlement Period (which determination shall be final and conclusive) that, by reason of
circumstances affecting the interbank eurodollar market generally, (i) deposits in dollars (in the
relevant amounts for such Settlement Period) are not being offered to banks in the interbank
eurodollar market for such Settlement Period, (ii) adequate means do not exist for ascertaining the
Euro-Rate for such Settlement Period or (iii) the Euro-Rate does not accurately reflect the cost to
any Purchaser (as determined by such Purchaser or such Purchaser’s Purchaser Agent) of maintaining
any Portion of Capital during such Settlement Period, then the Administrator shall give notice
thereof to the Seller. Thereafter, until the Administrator or such Purchaser Agent notifies the
Seller that the circumstances giving rise to such suspension no longer exist, (a) no Portion of
Capital shall be funded at the Alternate Rate determined by reference to the Euro-Rate and (b) the
Discount for any outstanding Portions of Capital then funded at the Alternate Rate determined by
reference to the Euro-Rate shall, on the last day of the then current Settlement Period, be
converted to the Alternate Rate determined by reference to the Base Rate.



     (b) If, on or before the first day of any Settlement Period, the Administrator shall have been
notified by any Affected Person that such Affected Person has determined (which determination shall
be final and conclusive) that, any enactment, promulgation or adoption of or any change in any
applicable law, rule or regulation, or any change in the interpretation or administration thereof
by a governmental authority, central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by such Affected Person with any guideline, request or
directive (whether or not having the force of law) of any such authority, central bank or
comparable agency shall make it unlawful or impossible for such Affected Person to fund or maintain
any Portion of Capital at the Alternate Rate and based upon the Euro-Rate, the Administrator shall
notify the Seller thereof. Upon receipt of such notice, until the Administrator notifies the
Seller that the circumstances giving rise to such determination no longer apply, (a) no Portion of
Capital shall be funded at the Alternate Rate determined by reference to the Euro-Rate and (b) the
Discount for any outstanding Portions of Capital then funded at the Alternate Rate determined by
reference to the Euro-Rate shall be converted to the Alternate Rate determined by reference to the
Base Rate either (i) on the last day of the then current Settlement Period if such Affected Person
may lawfully continue to maintain such Portion of Capital at the Alternate Rate determined by
reference to the Euro-Rate to such day, or (ii) immediately, if such Affected Person may not
lawfully continue to maintain such Portion of Capital at the Alternate Rate determined by reference
to the Euro-Rate to such day.



16









 






     Section 1.10 Taxes.



          The Seller agrees that any and all payments by the Seller under this Agreement shall be made
free and clear of and without deduction for any and all current or future taxes, stamp or other
taxes, levies, imposts, deductions, charges or withholdings, and all liabilities with respect
thereto, excluding overall income or franchise taxes, in either case, imposed on the Person
receiving such payment by the Seller hereunder by the jurisdiction under whose laws such Person is
organized, operates or where its principal executive office is located or any political subdivision
thereof (all such nonexcluded taxes, levies, imposts, deductions, charges, withholdings and
liabilities being hereinafter referred to as “Taxes”). If the Seller shall be required by
law to deduct any Taxes from or in respect of any sum payable hereunder to any Purchaser, Purchaser
Agent, Liquidity Provider, Program Support Provider or the Administrator, then the sum payable
shall be increased by the amount necessary to yield to such Person (after payment of all Taxes) an
amount equal to the sum it would have received had no such deductions been made. Whenever any
Taxes are payable by the Seller, the Seller agrees that, as promptly as possible thereafter, the
Seller shall send to the Administrator for its own account or for the account of any Purchaser,
Purchaser Agent, Liquidity Provider or other Program Support Provider, as the case may be, a
certified copy of an original official receipt showing payment thereof or such other evidence of
such payment as may be available to the Seller and acceptable to the taxing authorities having
jurisdiction over such Person. If the Seller fails to pay any Taxes when due to the appropriate
taxing authority or fails to remit to the Administrator the required receipts or other required
documentary evidence, the Seller shall indemnify the Administrator and/or any other Affected
Person, as applicable, for any incremental taxes, interest or penalties that may become payable by
such party as a result of any such failure.



          Section 1.11 Letters of Credit.



          Subject to the terms and conditions hereof, the LC Bank shall issue or cause the issuance of
Letters of Credit (“Letters of Credit”) on behalf of Seller (and, if applicable, on behalf
of, or for the account of, the Transferor in favor of such beneficiaries as the Transferor may
elect); provided, however, that the LC Bank will not be required to issue or cause
to be issued any Letters of Credit to the extent that after giving effect thereto the issuance of
such Letters of Credit would then cause (a) the sum of (i) the Aggregate Capital plus (ii) the LC
Participation Amount to exceed the Purchase Limit or (b) the LC Participation Amount to exceed the
aggregate of the Commitments of the LC Participants. All amounts drawn upon Letters of Credit
shall accrue Discount. Letters of Credit that have not been drawn upon shall not accrue Discount.



          Section 1.12 Issuance of Letters of Credit.



     (a) The Seller may request the LC Bank, upon two (2) Business Days’ prior written notice
submitted on or before 11:00 a.m., New York time, to issue a Letter of Credit by delivering to the
Administrator, the LC Bank’s form of Letter of Credit Application (the “Letter of Credit
Application”), substantially in the form of Annex E attached hereto and a Purchase
Notice, substantially in the form of Annex B hereto, in each case completed to the
satisfaction of the Administrator and the LC Bank; and, such other certificates, documents and
other papers and



17









 




information as the Administrator may reasonably request. The Seller also has the right to
give instructions and make agreements with respect to any Letter of Credit Application and the
disposition of documents, and to agree with the Administrator upon any amendment, extension or
renewal of any Letter of Credit.




     (b) Each Letter of Credit shall, among other things, (i) provide for the payment of sight
drafts or other written demands for payment when presented for honor thereunder in accordance with
the terms thereof and when accompanied by the documents described therein and (ii) have an expiry
date not later than twelve (12) months after such Letter of Credit’s date of issuance, extension or
renewal, as the case may be, and in no event later than twelve (12) months after the Facility
Termination Date. For the avoidance of doubt, no Letter of Credit may be extended or renewed to a
date that is later than twelve (12) months after the Facility Termination Date. Each Letter of
Credit shall be subject either to the Uniform Customs and Practice for Documentary Credits (2007
Revision), International Chamber of Commerce Publication No. 600, and any amendments or revisions
thereof adhered to by the LC Bank or the International Standby Practices (ISP98-International
Chamber of Commerce Publication Number 590), and any amendments or revisions thereof adhered to by
the LC Bank, as determined by the LC Bank.



     (c) The Administrator shall promptly notify the LC Bank and each LC Participant, at such
Person’s address for notices hereunder, of the request by the Seller for a Letter of Credit
hereunder, and shall provide the LC Bank and LC Participants with the Letter of Credit Application
and Purchase Notice delivered to the Administrator by the Seller pursuant to paragraph (a),
above, by the close of business on the day received or if received on a day that is not a Business
Day or on any Business Day after 11:00 a.m., New York time, on such day, on the next Business Day.




     Section 1.13 Requirements For Issuance of Letters of Credit.



     The Seller shall authorize and direct the LC Bank to name the Seller or the Transferor as the
“Applicant” or “Account Party” of each Letter of Credit.




     Section 1.14 Disbursements, Reimbursement.



     (a) Immediately upon the issuance of each Letter of Credit, each LC Participant shall be
deemed to, and hereby irrevocably and unconditionally agrees to, purchase from the LC Bank a
participation in such Letter of Credit and each drawing thereunder in an amount equal to such LC
Participant’s Pro Rata Share of the face amount of such Letter of Credit and the amount of such
drawing, respectively.



     (b) In the event of any request for a drawing under a Letter of Credit by the beneficiary or
transferee thereof, the LC Bank will promptly notify the Administrator and the Seller of such
request. Provided that it shall have received such notice, the Seller shall reimburse (such
obligation to reimburse the LC Bank shall sometimes be referred to as a “Reimbursement
Obligation”) the LC Bank prior to 12:00 p.m., New York time, on each date that an amount is
paid by the LC Bank under any Letter of Credit (each such date, a “Drawing Date”) in an
amount equal to the amount so paid by the LC Bank. In the event the Seller fails to reimburse the
LC



18









 




Bank for the full amount of any drawing under any Letter of Credit by 12:00 p.m., New York
time, on the Drawing Date, the LC Bank will promptly notify each LC Participant thereof, and the
Seller shall be deemed to have requested that a Funded Purchase be made by the Purchasers in the
Purchaser Groups for the LC Bank and the LC Participants to be disbursed on the Drawing Date under
such Letter of Credit, subject to the amount of the unutilized portion of the Purchase Limit. Any
notice given by the LC Bank pursuant to this Section may be oral if immediately confirmed in
writing; provided that the lack of such an immediate written confirmation shall not affect
the conclusiveness or binding effect of such oral notice.




     (c) Each LC Participant shall upon any notice pursuant to subclause (b) above make available
to the LC Bank an amount in immediately available funds equal to its Pro Rata Share of the amount
of the drawing, whereupon the LC Participants shall each be deemed to have made a Funded Purchase
in that amount. If any LC Participant so notified fails to make available to the LC Bank the
amount of such LC Participant’s Pro Rata Share of such amount by no later than 2:00 p.m., New York
time on the Drawing Date, then interest shall accrue on such LC Participant’s obligation to make
such payment, from the Drawing Date to the date on which such LC Participant makes such payment (i)
at a rate per annum equal to the Federal Funds Rate during the first three days following the
Drawing Date and (ii) at a rate per annum equal to the rate applicable to Capital on and after the
fourth day following the Drawing Date. The LC Bank will promptly give notice of the occurrence of
the Drawing Date, but failure of the LC Bank to give any such notice on the Drawing Date or in
sufficient time to enable any LC Participant to effect such payment on such date shall not relieve
such LC Participant from its obligation under this subclause (c), provided that such LC
Participant shall not be obligated to pay interest as provided in subclauses (i) and
(ii) above until and commencing from the date of receipt of notice from the LC Bank or the
Administrator of a drawing. Each LC Participant’s Commitment shall continue until the last to
occur of any of the following events: (A) the LC Bank ceases to be obligated to issue or cause to
be issued Letters of Credit hereunder; (B) no Letter of Credit issued hereunder remains outstanding
and uncancelled or (C) all Persons (other than the Seller) have been fully reimbursed for all
payments made under or relating to Letters of Credit.




     Section 1.15 Repayment of Participation Advances.



     (a) Upon (and only upon) receipt by the LC Bank for its account of immediately available funds
from or for the account of the Seller (i) in reimbursement of any payment made by the LC Bank under
a Letter of Credit with respect to which any LC Participant has made a participation advance to the
LC Bank, or (ii) in payment of Discount on the Funded Purchases made or deemed to have been made in
connection with any such draw, the LC Bank will pay to each LC Participant, ratably (based on the
outstanding drawn amounts funded by each such LC Participant in respect of such Letter of Credit),
in the same funds as those received by the LC Bank; it being understood,
that the LC Bank shall retain a ratable amount of such funds that were not the subject of any
payment in respect of such Letter of Credit by any LC Participant.



     (b) If the LC Bank is required at any time to return to the Seller, or to a trustee, receiver,
liquidator, custodian, or any official in any insolvency proceeding, any portion of the payments
made by the Seller to the LC Bank pursuant to this Agreement in reimbursement of a payment made
under the Letter of Credit or interest or fee thereon, each LC Participant shall, on



19









 




demand of the LC Bank, forthwith return to the LC Bank the amount of its Pro Rata Share of any
amounts so returned by the LC Bank plus interest at the Federal Funds Rate, from the date the
payment was first made to such LC Participant through, but not including, the date the payment is
returned by such LC Participant.





     Section 1.16 Documentation.



          The Seller agrees to be bound by the terms of the Letter of Credit Application and by the LC
Bank’s interpretations of any Letter of Credit issued for the Seller and by the LC Bank’s written
regulations and customary practices relating to letters of credit, though the LC Bank’s
interpretation of such regulations and practices may be different from the Seller’s own. In the
event of a conflict between the Letter of Credit Application and this Agreement, this Agreement
shall govern. It is understood and agreed that, except in the case of gross negligence or willful
misconduct by the LC Bank, the LC Bank shall not be liable for any error, negligence and/or
mistakes, whether of omission or commission, in following the Seller’s instructions or those
contained in the Letters of Credit or any modifications, amendments or supplements thereto.





     Section 1.17 Determination to Honor Drawing Request.



          In determining whether to honor any request for drawing under any Letter of Credit by the
beneficiary thereof, the LC Bank shall be responsible only to determine that the documents and
certificates required to be delivered under such Letter of Credit have been delivered and that they
comply on their face with the requirements of such Letter of Credit and that any other drawing
condition appearing on the face of such Letter of Credit has been satisfied in the manner so set
forth.





     Section 1.18 Nature of Participation and Reimbursement Obligations.



          Each LC Participant’s obligation in accordance with this Agreement to make participation
advances as a result of a drawing under a Letter of Credit, and the obligations of the Seller to
reimburse the LC Bank upon a draw under a Letter of Credit, shall be absolute, unconditional and
irrevocable, and shall be performed strictly in accordance with the terms of this Article I under
all circumstances, including the following circumstances:




               (i) any set-off, counterclaim, recoupment, defense or other right which such LC Participant
may have against the LC Bank, the Administrator, the Purchaser Agents, the Purchasers, the Seller
or any other Person for any reason whatsoever;



               (ii) the failure of the Seller or any other Person to comply with the conditions set forth in
this Agreement for the making of a purchase, reinvestments, requests for Letters of Credit or
otherwise, it being acknowledged that such conditions are not required for the making of
participation advances hereunder;



               (iii) any lack of validity or enforceability of any Letter of Credit or any set-off,
counterclaim, recoupment, defense or other right which Seller or the Transferor on behalf



20









 




of which a Letter of Credit has been issued may have against the LC Bank, the Administrator,
any Purchaser, any Purchaser Agent or any other Person for any reason whatsoever;




               (iv) any claim of breach of warranty that might be made by the Seller, the LC Bank or any LC
Participant against the beneficiary of a Letter of Credit, or the existence of any claim, set-off,
defense or other right which the Seller, the LC Bank or any LC Participant may have at any time
against a beneficiary, any successor beneficiary or any transferee of any Letter of Credit or the
proceeds thereof (or any Persons for whom any such transferee may be acting), the LC Bank, any LC
Participant, the Administrator, any Purchaser or any Purchaser Agent or any other Person, whether
in connection with this Agreement, the transactions contemplated herein or any unrelated
transaction (including any underlying transaction between the Seller or any Subsidiaries of the
Seller or any Affiliates of the Seller and the beneficiary for which any Letter of Credit was
procured);



               (v) the lack of power or authority of any signer of, or lack of validity, sufficiency,
accuracy, enforceability or genuineness of, any draft, demand, instrument, certificate or other
document presented under any Letter of Credit, or any such draft, demand, instrument, certificate
or other document proving to be forged, fraudulent, invalid, defective or insufficient in any
respect or any statement therein being untrue or inaccurate in any respect, even if the
Administrator or the LC Bank has been notified thereof;



               (vi) payment by the LC Bank under any Letter of Credit against presentation of a demand, draft
or certificate or other document which does not comply with the terms of such Letter of Credit
other than as a result of the gross negligence or willful misconduct of the LC Bank;



               (vii) the solvency of, or any acts or omissions by, any beneficiary of any Letter of Credit,
or any other Person having a role in any transaction or obligation relating to a Letter of Credit,
or the existence, nature, quality, quantity, condition, value or other characteristic of any
property or services relating to a Letter of Credit;



               (viii) any failure by the LC Bank or any of the LC Bank’s Affiliates to issue any Letter of
Credit in the form requested by the Seller, unless the LC Bank has received written notice from the
Seller of such failure within three Business Days after the LC Bank shall have furnished the Seller
a copy of such Letter of Credit and such error is material and no drawing has been made thereon
prior to receipt of such notice;



               (ix) any Material Adverse Effect on the Seller, the Transferor, any Originator or any
Affiliates thereof;



               (x) any breach of this Agreement or any Transaction Document by any party thereto;



               (xi) the occurrence or continuance of an Insolvency Proceeding with respect to the Seller, the
Transferor, any Originator or any Affiliate thereof;



21









 





               (xii) the fact that a Termination Event or an Unmatured Termination Event shall have occurred
and be continuing;



               (xiii) the fact that this Agreement or the obligations of Seller or Servicer hereunder shall
have been terminated; and



               (xiv) any other circumstance or happening whatsoever, whether or not similar to any of the
foregoing.



          Section 1.19 Indemnity.



          In addition to other amounts payable hereunder, the Seller hereby agrees to protect,
indemnify, pay and save harmless the Administrator, the LC Bank, each LC Participant and any of the
LC Bank’s Affiliates that have issued a Letter of Credit from and against any and all claims,
demands, liabilities, damages, taxes, penalties, interest, judgments, losses, costs, charges and
expenses (including Attorney Costs) which the Administrator, the LC Bank, any LC Participant or any
of their respective Affiliates may incur or be subject to as a consequence, direct or indirect, of
the issuance of any Letter of Credit, except to the extent resulting from (a) the gross negligence
or willful misconduct of the party to be indemnified as determined by a final judgment of a court
of competent jurisdiction or (b) the wrongful dishonor by the LC Bank of a proper demand for
payment made under any Letter of Credit, except if such dishonor resulted from any act or omission,
whether rightful or wrongful, of any present or future de jure or de facto Governmental Authority
(all such acts or omissions herein called “Governmental Acts”).



          Section 1.20 Liability for Acts and Omissions.



          As between the Seller, on the one hand, and the Administrator, the LC Bank, the LC
Participants, the Purchaser Agents and the Purchasers, on the other, the Seller assumes all risks
of the acts and omissions of, or misuse of any Letter of Credit by, the respective beneficiaries of
such Letter of Credit. In furtherance and not in limitation of the respective foregoing, none of
the Administrator, the LC Bank, the LC Participants, the Purchaser Agents or the Purchasers shall
be responsible for: (i) the form, validity, sufficiency, accuracy, genuineness or legal effect of
any document submitted by any party in connection with the application for an issuance of any such
Letter of Credit, even if it should in fact prove to be in any or all respects invalid,
insufficient, inaccurate, fraudulent or forged (even if the LC Bank or any LC Participant shall
have been notified thereof); (ii) the validity or sufficiency of any instrument transferring or
assigning or purporting to transfer or assign any such Letter of Credit or the rights or benefits
thereunder or proceeds thereof, in whole or in part, which may prove to be invalid or ineffective
for any reason; (iii) the failure of the beneficiary of any such Letter of Credit, or any other
party to which such Letter of Credit may be transferred, to comply fully with any conditions
required in order to draw upon such Letter of Credit or any other claim of the Seller against any
beneficiary of such Letter of Credit, or any such transferee, or any dispute between or among the
Seller and any beneficiary of any Letter of Credit or any such transferee; (iv) errors, omissions,
interruptions or delays in transmission or delivery of any messages, by mail, cable, telegraph,
telex or otherwise, whether or not they be in cipher; (v) errors in interpretation of technical



22









 




terms; (vi) any loss or delay in the transmission or otherwise of any document required in
order to make a drawing under any such Letter of Credit or of the proceeds thereof; (vii) the
misapplication by the beneficiary of any such Letter of Credit of the proceeds of any drawing under
such Letter of Credit; or (viii) any consequences arising from causes beyond the control of the
Administrator, the LC Bank, the LC Participants, the Purchaser Agents and the Purchasers, including
any Governmental Acts, and none of the above shall affect or impair, or prevent the vesting of, any
of the LC Bank’s rights or powers hereunder. Nothing in the preceding sentence shall relieve the LC
Bank from liability for its gross negligence or willful misconduct, as determined by a final
non-appealable judgment of a court of competent jurisdiction, in connection with actions or
omissions described in such clauses (i) through (viii) of such sentence. In no event shall the
Administrator, the LC Bank, the LC Participants, the Purchaser Agents or the Purchasers or their
respective Affiliates, be liable to the Seller or any other Person for any indirect, consequential,
incidental, punitive, exemplary or special damages or expenses (including without limitation
attorneys’ fees), or for any damages resulting from any change in the value of any property
relating to a Letter of Credit.




          Without limiting the generality of the foregoing, the Administrator, the LC Bank, the LC
Participants, the Purchaser Agents and the Purchasers and each of its Affiliates (i) may rely on
any written communication believed in good faith by such Person to have been authorized or given by
or on behalf of the applicant for a Letter of Credit; (ii) may honor any presentation if the
documents presented appear on their face to comply with the terms and conditions of the relevant
Letter of Credit; (iii) may honor a previously dishonored presentation under a Letter of Credit,
whether such dishonor was pursuant to a court order, to settle or compromise any claim of wrongful
dishonor, or otherwise, and shall be entitled to reimbursement to the same extent as if such
presentation had initially been honored, together with any interest paid by the LC Bank or its
Affiliates; (iv) may honor any drawing that is payable upon presentation of a statement advising
negotiation or payment, upon receipt of such statement (even if such statement indicates that a
draft or other document is being delivered separately), and shall not be liable for any failure of
any such draft or other document to arrive, or to conform in any way with the relevant Letter of
Credit; (v) may pay any paying or negotiating bank claiming that it rightfully honored under the
laws or practices of the place where such bank is located; and (vi) may settle or adjust any claim
or demand made on the Administrator, the LC Bank, the LC Participants, the Purchaser Agents or the
Purchasers or their respective Affiliates, in any way related to any order issued at the
applicant’s request to an air carrier, a letter of guarantee or of indemnity issued to a carrier or
any similar document (each an “Order”) and may honor any drawing in connection with any
Letter of Credit that is the subject of such Order, notwithstanding that any drafts or other
documents presented in connection with such Letter of Credit fail to conform in any way with such
Letter of Credit.



          In furtherance and extension and not in limitation of the specific provisions set forth above,
any action taken or omitted by the LC Bank under or in connection with any Letter of Credit issued
by it or any documents and certificates delivered thereunder, if taken or omitted in good faith and
without gross negligence or willful misconduct, as determined by a final non-appealable judgment of
a court of competent jurisdiction, shall not put the LC Bank under any resulting liability to the
Seller, any LC Participant or any other Person.



23









 





ARTICLE II.

REPRESENTATIONS AND WARRANTIES; COVENANTS;

TERMINATION EVENTS




          Section 2.1 Representations and Warranties; Covenants.



          Each of the Seller and the Servicer hereby makes the representations and warranties, and
hereby agrees to perform and observe the covenants, applicable to it as set forth in Exhibits
III and IV, respectively.



          Section 2.2 Termination Events.



          If any of the Termination Events set forth in Exhibit V shall occur, the Administrator
may (with the consent of the Majority Purchaser Agents) and shall (at the direction of the Majority
Purchaser Agents), by notice to the Seller, declare the Facility Termination Date to have occurred
(in which case the Facility Termination Date shall be deemed to have occurred); provided,
that automatically upon the occurrence of any event (without any requirement for the passage of
time or the giving of notice) described in paragraph (f) of Exhibit V, the Facility
Termination Date shall occur. Upon any such declaration, occurrence or deemed occurrence of the
Facility Termination Date, the Purchasers, the Purchaser Agents and the Administrator shall have,
in addition to the rights and remedies that they may have under this Agreement, all other rights
and remedies provided after default under the UCC and under other applicable law, which rights and
remedies shall be cumulative.



ARTICLE III.

INDEMNIFICATION




          Section 3.1 Indemnities by the Seller.



          Without limiting any other rights that the Administrator, the Purchasers, the Purchaser
Agents, the Liquidity Providers, any Program Support Provider or any of their respective
Affiliates, employees, officers, directors, agents, counsel, successors, transferees or permitted
assigns (each, an “Indemnified Party”) may have hereunder or under applicable law, the
Seller hereby agrees to indemnify each Indemnified Party from and against any and all claims,
damages, expenses, costs, losses, liabilities, penalties and Taxes (including Attorney Costs) (all
of the foregoing being collectively referred to as “Indemnified Amounts”) at any time
imposed on or incurred by any Indemnified Party arising out of or otherwise relating to any
Transaction Document, the transactions contemplated thereby or the acquisition of any portion of
the Purchased Interest, or any action taken or omitted by any of the Indemnified Parties (including
any action taken by the Administrator as attorney-in-fact for the Seller, the Transferor or any
Originator hereunder or under any other Transaction Document) whether arising by reason of the acts
to be performed by the Seller hereunder or otherwise, excluding only Indemnified Amounts to the
extent: (a) a final judgment of a court of competent jurisdiction holds that such Indemnified
Amounts resulted from gross negligence or willful misconduct of the Indemnified Party seeking
indemnification, (b) due to the credit risk of the Obligor and for which reimbursement would
constitute recourse to the Transferor, any Originator, the Seller or



24









 




the Servicer for uncollectible Receivables or (c) such Indemnified Amounts include Taxes
imposed or based on, or measured by, the gross or net income or receipts of such Indemnified Party
by the jurisdiction under the laws of which such Indemnified Party is organized, operates or where
its principal executive office is located (or any political subdivision thereof); provided,
however, that nothing contained in this sentence shall limit the liability of the Seller or
the Servicer or limit the recourse of any Indemnified Party to the Seller or the Servicer for any
amounts otherwise specifically provided to be paid by the Seller or the Servicer hereunder.
Without limiting the foregoing indemnification, and subject to the exclusions in the preceding
sentence, the Seller shall indemnify each Indemnified Party for Indemnified Amounts (including
losses in respect of uncollectible Receivables regardless for purposes of these specific matters
whether reimbursement therefor would constitute recourse to the Seller or the Servicer, except as
set forth in subclause (viii) below) relating to or resulting from any of the following:




               (i) the failure of any Receivable included in the calculation of the Net Receivables Pool
Balance as an Eligible Receivable to be an Eligible Receivable, the failure of any information
contained in any Information Package to be true and correct, or the failure of any other
information provided to any Purchaser or the Administrator with respect to the Receivables or this
Agreement to be true and correct,



               (ii) the failure of any representation, warranty or statement made or deemed made by the
Seller (or any employee, officer or agent of the Seller) under or in connection with this
Agreement, any other Transaction Document, any Information Package or any other information or
report delivered by or on behalf of the Seller pursuant hereto to have been true and correct as of
the date made or deemed made when made,



               (iii) the failure by the Seller to comply with any applicable law, rule or regulation related
to any Receivable or the related Contract or the non-conformity of any Receivable or the related
Contract with any such applicable law, rule or regulation,



               (iv) the failure of the Seller to vest and maintain vested in the Administrator (on behalf of
the Purchasers) a first priority perfected ownership interest or security interest in the Purchased
Interest and the property conveyed hereunder, free and clear of any Adverse Claim,



               (v) any commingling of funds to which the Administrator, any Purchaser Agent or any Purchaser
is entitled hereunder with any other funds;



               (vi) the failure to have filed, in accordance with the requirements of this Agreement or any
other Transaction Document, financing statements (including as-extracted collateral filings) or
other similar instruments or documents under the UCC of each applicable jurisdiction or other
applicable laws with respect to any Receivables in, or purporting to be in, the Receivables Pool
and the other Pool Assets, whether at the time of any Purchase or at any subsequent time;



               (vii) any failure of a Lock-Box Bank to comply with the terms of the applicable Lock-Box
Agreement;



25









 





               (viii) any dispute, claim, offset or defense (other than discharge in bankruptcy of the
Obligor) of the Obligor to the payment of any Receivable (including without limitation a defense
based on such Receivable or the related Contract not being a legal, valid and binding obligation of
such Obligor enforceable against it in accordance with its terms), or any other claim resulting
from the sale or lease of goods or the rendering of services related to such Receivable or the
furnishing or failure to furnish any such goods or services or other similar claim or defense not
arising from the financial inability of any Obligor to pay undisputed indebtedness;



               (ix) any failure of the Seller to perform its duties or obligations in accordance with the
provisions of this Agreement or any other Transaction Document to which it is a party;



               (x) any action taken by the Administrator as attorney-in-fact for the Seller, the Transferor
or any Originator pursuant to this Agreement or any other Transaction Document;



               (xi) any environmental liability claim or products liability claim or other claim,
investigation, litigation or proceeding, arising out of or in connection with merchandise,
insurance or services that are the subject of any Contract;



               (xii) the use of proceeds of purchases or reinvestments or the issuance of any Letter of
Credit; or



               (xiii) any reduction in Capital as a result of the distribution of Collections pursuant to
Section 1.4(d), if all or a portion of such distributions shall thereafter be rescinded or
otherwise must be returned for any reason.



          Section 3.2 Indemnities by the Servicer.



          Without limiting any other rights that any Indemnified Party may have hereunder or under
applicable law, the Servicer hereby agrees to indemnify each Indemnified Party from and against any
and all Indemnified Amounts arising out of or resulting from (whether directly or indirectly):
(a) the failure of any information contained in an Information Package to be true and correct, or
the failure of any other information provided to any such Indemnified Party by, or on behalf of,
the Servicer to be true and correct, (b) the failure of any representation, warranty or statement
made or deemed made by the Servicer (or any of its officers) under or in connection with this
Agreement or any other Transaction Document to which it is a party to have been true and correct as
of the date made or deemed made when made, (c) the failure by the Servicer to comply with any
applicable law, rule or regulation with respect to any Pool Receivable or the related Contract,
(d) any dispute, claim, offset or defense of the Obligor (other than as a result of discharge in
bankruptcy with respect to such Obligor) to the payment of any Receivable in, or purporting to be
in, the Receivables Pool resulting from or related to the collection activities with respect to
such Receivable, or (e) any failure of the Servicer to perform its duties or obligations in
accordance with the provisions hereof or any other Transaction Document to which it is a party.



26









 





ARTICLE IV.

ADMINISTRATION AND COLLECTIONS





     Section 4.1 Appointment of the Servicer.



     (a) The servicing, administering and collection of the Pool Receivables shall be conducted by
the Person so designated from time to time as the Servicer in accordance with this Section. Until
the Administrator gives notice to Arch Sales (in accordance with this Section) of the designation
of a new Servicer, Arch Sales is hereby designated as, and hereby agrees to perform the duties and
obligations of, the Servicer pursuant to the terms hereof. Upon the occurrence of a Termination
Event, the Administrator may (with the consent of the Majority Purchaser Agents) and shall (at the
direction of the Majority Purchaser Agents) designate as Servicer any Person (including itself) to
succeed Arch Sales or any successor Servicer, on the condition in each case that any such Person so
designated shall agree to perform the duties and obligations of the Servicer pursuant to the terms
hereof.



     (b) Upon the designation of a successor Servicer as set forth in clause (a), Arch
Sales agrees that it will terminate its activities as Servicer hereunder in a manner that the
Administrator determines will facilitate the transition of the performance of such activities to
the new Servicer, and Arch Sales shall cooperate with and assist such new Servicer. Such
cooperation shall include access to and transfer of related records (including all Contracts) and
use by the new Servicer of all licenses, hardware or software necessary or desirable to collect the
Pool Receivables and the Related Security.



     (c) Arch Sales acknowledges that, in making their decision to execute and deliver this
Agreement, the Administrator, the Purchaser Agents and the Purchasers have relied on Arch Sales’
agreement to act as Servicer hereunder. Accordingly, Arch Sales agrees that it will not
voluntarily resign as Servicer without the prior written consent of the Administrator and the
Purchasers.



     (d) The Servicer may delegate its duties and obligations hereunder to any subservicer (each a
“Sub-Servicer”); provided, that, in each such delegation: (i) each such
Sub-Servicer shall agree in writing to perform the delegated duties and obligations of the Servicer
pursuant to the terms hereof, (ii) the Servicer shall remain liable for the performance of the
duties and obligations so delegated, (iii) the Seller, the Administrator, the Purchaser Agents and
the Purchasers shall have the right to look solely to the Servicer for performance, and (iv) the
terms of any agreement with any Sub-Servicer shall provide that the Administrator may terminate
such agreement upon the termination of the Servicer hereunder by giving notice of its desire to
terminate such agreement to the Servicer (and the Servicer shall provide appropriate notice to each
such Sub-Servicer); provided, however, that if any such delegation is to any Person
other than an Originator or the Transferor, the Administrator and the Majority Purchaser Agents
shall have consented in writing in advance to such delegation.




     Section 4.2 Duties of the Servicer.



27









 





     (a) The Servicer shall take or cause to be taken all such action as may be necessary or
advisable to administer and collect each Pool Receivable from time to time, all in accordance with
this Agreement and all applicable laws, rules and regulations, with reasonable care and diligence,
and in accordance with the Credit and Collection Policies. The Servicer shall set aside, for the
accounts of the Seller and the Purchasers, the amount of the Collections to which each is entitled
in accordance with Article I. The Servicer may, in accordance with the applicable Credit
and Collection Policy, take such action, including modifications, waivers or restructurings of Pool
Receivables and the related Contracts as the Servicer may determine to be appropriate to maximize
Collections thereof or reflect adjustments permitted under the Credit and Collection Policy or
required under applicable laws, rules or regulations or the applicable Contract; provided,
however, that for the purposes of this Agreement (i) such action shall not change the
number of days such Pool Receivable has remained unpaid from the date of the original due date
related to such Pool Receivable, (ii) such action shall not alter the status of such Pool
Receivable as a Delinquent Receivable or a Defaulted Receivable under this Agreement or limit the
rights of any of the Purchasers, Purchaser Agents or the Administrator under this Agreement or any
other Transaction Document and (iii) if a Termination Event has occurred and is continuing and Arch
Sales or an Affiliate thereof is serving as the Servicer, Arch Sales or such Affiliate may take
such action only upon the prior approval of the Administrator. The Seller shall deliver to the
Servicer and the Servicer shall hold for the benefit of the Seller and the Administrator
(individually and for the benefit of the Purchasers), in accordance with their respective
interests, all records and documents (including computer tapes or disks) with respect to each Pool
Receivable. Notwithstanding anything to the contrary contained herein, if a Termination Event has
occurred and is continuing, the Administrator may direct the Servicer (whether the Servicer is Arch
Sales or any other Person) to commence or settle any legal action to enforce collection of any Pool
Receivable or to foreclose upon or repossess any Related Security.



     (b) The Servicer shall, as soon as practicable following actual receipt of collected funds,
turn over to the Seller the collections of any indebtedness that is not a Pool Receivable, less, if
Arch Sales or an Affiliate thereof is not the Servicer, all reasonable and appropriate
out-of-pocket costs and expenses of such Servicer of servicing, collecting and administering such
collections. The Servicer, if other than Arch Sales or an Affiliate thereof, shall, as soon as
practicable upon demand, deliver to the Seller all records in its possession that evidence or
relate to any indebtedness that is not a Pool Receivable, and copies of records in its possession
that evidence or relate to any indebtedness that is a Pool Receivable.



     (c) The Servicer’s obligations hereunder shall terminate on the later of: (i) the Facility
Termination Date, (ii) the date on which no Capital of or Discount in respect of the Purchased
Interest shall be outstanding, (iii) the date the LC Participation Amount is cash collateralized in
full and (iv) the date on which all amounts required to be paid to the Purchasers, the Purchaser
Agents, the Administrator and any other Indemnified Party or Affected Person hereunder shall have
been paid in full. After such termination, if Arch Sales or an Affiliate thereof was not the
Servicer on the date of such termination, the Servicer shall promptly deliver to the Seller all
books, records and related materials that the Seller previously provided to the Servicer, or that
have been obtained by the Servicer, in connection with this Agreement.



28









 





          Section 4.3 Lock-Box Account Arrangements.



          Prior to the Closing Date, the Seller shall have entered into Lock-Box Agreements with all of
the Lock-Box Banks and delivered original counterparts thereof to the Administrator. Upon the
occurrence of a Termination Event, the Administrator may (and shall, at the direction of the
Majority Purchaser Agents) at any time thereafter give notice to each Lock-Box Bank that the
Administrator is exercising its rights under the Lock-Box Agreements to do any or all of the
following: (a) to have the exclusive ownership and control of the Lock-Box Accounts transferred to
the Administrator (for the benefit of the Purchasers) and to exercise exclusive dominion and
control over the funds deposited therein, (b) to have the proceeds that are sent to the respective
Lock-Box Accounts redirected pursuant to the Administrator’s instructions rather than deposited in
the applicable Lock-Box Account, and (c) to take any or all other actions permitted under the
applicable Lock-Box Agreement. The Seller hereby agrees that if the Administrator at any time
takes any action set forth in the preceding sentence, the Administrator shall have exclusive
control (for the benefit of the Purchasers) of the proceeds (including Collections) of all Pool
Receivables and the Seller hereby further agrees to take any other action that the Administrator
may reasonably request to transfer such control. Any proceeds of Pool Receivables received by the
Seller or the Servicer thereafter shall be sent immediately to, or as otherwise instructed by, the
Administrator. The parties hereto hereby acknowledge that if at any time the Administrator takes
control of any Lock-Box Account, the Administrator shall not have any rights to the funds therein
in excess of the unpaid amounts due to the Administrator, the Purchaser Agents, the Purchasers, any
Indemnified Party, any Affected Person or any other Person hereunder or under any other Transaction
Document, and the Administrator shall distribute or cause to be distributed such funds in
accordance with Section 4.2(b) and Article I (in each case as if such funds were
held by the Servicer thereunder).



          Section 4.4 Enforcement Rights.



     (a) At any time following the occurrence and during the continuation of a Termination Event:



               (i) the Administrator may direct the Obligors that payment of all amounts payable under any
Pool Receivable is to be made directly to the Administrator or its designee,



               (ii) the Administrator may instruct the Seller or the Servicer to give notice of the
Purchasers’ interest in Pool Receivables to each Obligor, which notice shall direct that payments
be made directly to the Administrator or its designee (on behalf of the Purchasers), and the Seller
or the Servicer, as the case may be, shall give such notice at the expense of the Seller or the
Servicer, as the case may be; provided, that if the Seller or the Servicer, as the case may
be, fails to so notify each Obligor, the Administrator (at the Seller’s or the Servicer’s, as the
case may be, expense) may so notify the Obligors, and



               (iii) the Administrator may request the Servicer to, and upon such request the Servicer shall:
(A) assemble all of the records necessary or desirable to collect the Pool Receivables and the
Related Security, and transfer or license to a successor Servicer the use



29









 




of all software necessary or desirable to collect the Pool Receivables and the Related
Security, and make the same available to the Administrator or its designee (for the benefit of the
Purchasers) at a place selected by the Administrator, and (B) segregate all cash, checks and other
instruments received by it from time to time constituting Collections in a manner acceptable to the
Administrator and, promptly upon receipt, remit all such cash, checks and instruments, duly
endorsed or with duly executed instruments of transfer, to the Administrator or its designee.




     (b) The Seller hereby authorizes the Administrator (on behalf of each Purchaser Group), and
irrevocably appoints the Administrator as its attorney-in-fact with full power of substitution and
with full authority in the place and stead of the Seller, which appointment is coupled with an
interest, to take any and all steps in the name of the Seller and on behalf of the Seller necessary
or desirable, in the determination of the Administrator, following the occurrence and during the
continuation of a Termination Event, to collect any and all amounts or portions thereof due under
any and all Pool Assets, including endorsing the name of the Seller on checks and other instruments
representing Collections and enforcing such Pool Assets. Notwithstanding anything to the contrary
contained in this subsection, none of the powers conferred upon such attorney-in-fact pursuant to
the preceding sentence shall subject such attorney-in-fact to any liability if any action taken by
it shall prove to be inadequate or invalid, nor shall they confer any obligations upon such
attorney-in-fact in any manner whatsoever.




     Section 4.5 Responsibilities of the Seller.



     (a) Anything herein to the contrary notwithstanding, the Seller shall: (i) perform all of its
obligations, if any, under the Contracts related to the Pool Receivables to the same extent as if
interests in such Pool Receivables had not been transferred hereunder, and the exercise by the
Administrator, any Purchaser Agent or any Purchaser of their respective rights hereunder shall not
relieve the Seller from such obligations, and (ii) pay when due any taxes, including any sales
taxes payable in connection with the Pool Receivables and their creation and satisfaction. None of
the Administrator, the Purchaser Agents and the Purchasers shall have any obligation or liability
with respect to any Pool Asset, nor shall any of them be obligated to perform any of the
obligations of the Seller, the Transferor, ACI or any Originator thereunder.



     (b) Arch Sales hereby irrevocably agrees that if at any time it shall cease to be the Servicer
hereunder, it shall act (if the then-current Servicer so requests) as the data-processing agent of
the Servicer and, in such capacity, Arch Sales shall conduct the data-processing functions of the
administration of the Receivables and the Collections thereon in substantially the same way that
Arch Sales conducted such data-processing functions while it acted as the Servicer.



     Section 4.6 Servicing Fee.



     (a) Subject to clause (b), the Servicer shall be paid a fee (the “Servicing
Fee”) equal to 1.00% per annum (the “Servicing Fee Rate”) of the daily average
aggregate Outstanding Balance of the Pool Receivables. The Purchasers’ Share of such fee shall be
paid through the distributions contemplated by Section 1.4(d), and the Seller’s Share of
such fee shall be paid by the Seller on each Settlement Date.



30









 





     (b) If the Servicer ceases to be Arch Sales or an Affiliate thereof, the servicing fee shall
be the greater of: (i) the amount calculated pursuant to clause (a), and (ii) an
alternative amount specified by the successor Servicer not to exceed 110% of the aggregate
reasonable costs and expenses incurred by such successor Servicer in connection with the
performance of its obligations as Servicer.




     Section 4.7 Authorization and Action of the Administrator and Purchaser Agents.



     (a) Each Purchaser and Purchaser Agent hereby accepts the appointment of and irrevocably
authorizes the Administrator to take such actions as agent on its behalf and to exercise such
powers as are delegated to the Administrator hereby and to exercise such other powers as are
reasonably incidental thereto. The Administrator shall hold, in its name, for the benefit of each
Purchaser, ratably, the Purchased Interest. The Administrator shall not have any duties other than
those expressly set forth herein or any fiduciary relationship with any Purchaser or Purchaser
Agent, and no implied obligations or liabilities shall be read into this Agreement, or otherwise
exist, against the Administrator. The Administrator does not assume, nor shall it be deemed to
have assumed, any obligation to, or relationship of trust or agency with, the Seller or Servicer.
Notwithstanding any provision of this Agreement or any other Transaction Document to the contrary,
in no event shall the Administrator ever be required to take any action which exposes the
Administrator to personal liability or which is contrary to the provisions of this Agreement, any
other Transaction Document or applicable law. The appointment and authority of the Administrator
hereunder shall terminate on the later of (i) the Facility Termination Date, (ii) the date on which
no Capital of or Discount in respect of the Purchased Interest shall be outstanding, (iii) the date
on which 100% of the LC Participation Amount has been deposited in the LC Collateral Account and
(iv) the date on which all amounts required to be paid by the Seller under this Agreement to any
Purchaser, the Administrator and any other Indemnified Party or Affected Person shall have been
paid in full.



     (b) Each Purchaser hereby accepts the appointment of the respective institution identified as
the Purchaser Agent for such Purchaser’s Purchaser Group on Schedule IV hereto or in the
Assumption Agreement or Transfer Supplement pursuant to which such Purchaser becomes a party
hereto, and irrevocably authorizes such Purchaser Agent to take such action on its behalf under the
provisions of this Agreement and to exercise such powers and perform such duties as are expressly
delegated to such Purchaser Agent by the terms of this Agreement, if any, together with such other
powers as are reasonably incidental thereto. Notwithstanding any provision to the contrary
elsewhere in this Agreement, no Purchaser Agent shall have any duties or responsibilities, except
those expressly set forth herein, or any fiduciary relationship with any Purchaser or other
Purchaser Agent or the Administrator, and no implied obligations or liabilities shall be read into
this Agreement, or otherwise exist, against any Purchaser Agent.



     (c) Except as otherwise specifically provided in this Agreement, the provisions of this
Section 4.7 are solely for the benefit of the Administrator, the Purchaser Agents and the
Purchasers, and none of the Seller or the Servicer shall have any rights as a third party
beneficiary or otherwise under any of the provisions of this Section 4.7, except that this
Section 4.7 shall not affect any obligations which the Administrator, any Purchaser Agent
or any



31









 




Purchaser may have to the Seller or the Servicer under the other provisions of this Agreement.
Furthermore, no Purchaser shall have any rights as a third-party beneficiary or otherwise under
any of the provisions hereof in respect of a Purchaser Agent that is not the Purchaser Agent for
such Purchaser.




     (d) In performing its functions and duties hereunder, the Administrator shall act solely as
the agent of the Purchasers and the Purchaser Agents and does not assume nor shall be deemed to
have assumed any obligation or relationship of trust or agency with or for the Seller or Servicer
or any of their successors and assigns. In performing its functions and duties hereunder, each
Purchaser Agent shall act solely as the agent of its respective Purchasers and does not assume nor
shall be deemed to have assumed any obligation or relationship of trust or agency with or for the
Seller, the Servicer, any Purchaser not in such Purchaser Agent’s Purchaser Group, any other
Purchaser Agent or the Administrator, or any of their respective successors and assigns.




     Section 4.8 Nature of Administrator’s Duties; Delegation of Administrator’s Duties;
Exculpatory Duties.



     (a) The Administrator shall have no duties or responsibilities except those expressly set
forth in this Agreement or in the other Transaction Documents. The duties of the Administrator
shall be mechanical and administrative in nature. The Administrator shall not have, by reason of
this Agreement, a fiduciary relationship in respect of any Purchaser. Nothing in this Agreement or
any of the Transaction Documents, express or implied, is intended to or shall be construed to
impose upon the Administrator any obligations in respect of this Agreement or any of the
Transaction Documents except as expressly set forth herein or therein. The Administrator shall not
have any duty or responsibility, either initially or on a continuing basis, to provide any
Purchaser or Purchaser Agent with any credit or other information with respect to the Seller, any
Originator, the Transferor, any Sub-Servicer or the Servicer, whether coming into its possession
before the date hereof or at any time or times thereafter. If the Administrator seeks the consent
or approval of the Purchasers or the Purchaser Agents to the taking or refraining from taking any
action hereunder, the Administrator shall send notice thereof to each Purchaser (or such
Purchaser’s Purchaser Agent, on its behalf) or each Purchaser Agent, as applicable. The
Administrator shall promptly notify each Purchaser Agent any time that the Purchasers and/or
Purchaser Agents, as the case may be, have instructed the Administrator to act or refrain from
acting pursuant hereto.



     (b) The Administrator may execute any of its duties through agents or attorneys-in-fact and
shall be entitled to advice of counsel concerning all matters pertaining to such duties. The
Administrator shall not be responsible for the negligence or misconduct of any agents or
attorneys-in-fact selected by it with reasonable care.



     (c) None of the Administrator and the Purchaser Agent, nor any of their respective directors,
officers, agents or employees shall be liable for any action taken or omitted (i) with the consent
or at the direction of the Majority Purchaser Agents (or, in the case of any Purchaser Agent, the
Purchasers within such Purchaser Agent’s Purchaser Group that have a majority of the aggregate
Commitments of such Purchaser Group) or (ii) in the absence of such Person’s



32









 




gross negligence or willful misconduct. The Administrator shall not be responsible to any
Purchaser, Purchaser Agent or other Person for (i) any recitals, representations, warranties or
other statements made by the Seller, any Sub-Servicer, the Servicer, the Transferor, any Originator
or any of their Affiliates, (ii) the value, validity, effectiveness, genuineness, enforceability or
sufficiency of any Transaction Document, (iii) any failure of the Seller, any Sub-Servicer, the
Servicer, the Transferor, any Originator or any of their Affiliates to perform any obligation
hereunder or under the other Transaction Documents to which it is a party (or under any Contract),
or (iv) the satisfaction of any condition specified in Exhibit II. The Administrator shall not
have any obligation to any Purchaser Agent or Purchaser to ascertain or inquire about the
observance or performance of any agreement contained in any Transaction Document or to inspect the
properties, books or records of the Seller, the Servicer, the Transferor, any Originator or any of
their respective Affiliates.




          Section 4.9 UCC Filings.



          Each of the Seller and the Purchasers expressly recognizes and agrees that the Administrator
may be listed as the assignee or secured party of record on the various UCC filings required to be
made hereunder in order to perfect the transfer of the Purchased Interest from the Seller to the
Purchasers, that such listing shall be for administrative convenience only in creating a record or
nominee owner to take certain actions hereunder on behalf of the Purchasers and that such listing
will not affect in any way the status of the Purchasers as the beneficial owners of the Purchased
Interest. In addition, such listing shall impose no duties on the Administrator other than those
expressly and specifically undertaken in accordance with this Section 4.9.



          Section 4.10 Agent’s Reliance, Etc.



          None of the Administrator and the Purchaser Agents, nor any of their respective directors,
officers, agents or employees shall be liable for any action taken or omitted to be taken by it as
Administrator or as Purchaser Agent, as the case may be, under or in connection with this Agreement
except for such Person’s own gross negligence or willful misconduct. Each of the Administrator and
each Purchaser Agent: (i) may consult with legal counsel (including counsel for the Seller),
independent public accountants and other experts selected by the Administrator and shall not be
liable for any action taken or omitted to be taken in good faith by it in accordance with the
advice of such counsel, accountants or experts; (ii) makes no warranty or representation to any
Purchaser or Purchaser Agent and shall not be responsible to any Purchaser or Purchaser Agent for
any statements, warranties or representations made in or in connection with this Agreement; (iii)
shall not have any duty to ascertain or to inquire as to the performance or observance of any of
the terms, covenants or conditions of this Agreement on the part of the Seller, the Servicer, any
Sub-Servicer, the Transferor or any Originator or to inspect the property (including the books and
records) of the Seller, the Servicer, any Sub-Servicer, the Transferor or any Originator; (iv)
shall not be responsible to any Purchaser or Purchaser Agent for the due execution, legality,
validity, enforceability, genuineness, sufficiency, or value of this Agreement, or any other
instrument or document furnished pursuant hereto; and (v) shall incur no liability under or in
respect of this Agreement or any other Transaction Document by acting upon any notice (including
notice by telephone), consent, certificate or other instrument or writing (which may be by telex)
believed by it to be genuine and signed or sent by the proper party or parties.



33









 




The Administrator may at any time request instructions from the Purchasers and/or Purchaser
Agents, and the Purchaser Agents may at any time request instructions from the Purchasers in their
Purchaser Groups, with respect to any actions or approvals which by the terms of this Agreement or
of any of the other Transaction Documents the Administrator or such Purchaser Agent is permitted or
required to take or to grant, and if such instructions are promptly requested, the Administrator
and/or such Purchaser Agent shall be absolutely entitled to refrain from taking any action or to
withhold any approval and shall not be under any liability whatsoever to any Person for refraining
from any action or withholding any approval under any of the Transaction Documents until it shall
have received such instructions from the Majority Purchaser Agents, in the case of the
Administrator or Purchasers holding the majority of the aggregate of the Commitments in such
Purchaser Agent’s Purchaser Group, in the case of any Purchaser Agent (or, in either case, where
expressly required hereunder, from the Majority LC Participants, the LC Bank, all of the Purchasers
and/or all of the LC Participants). Without limiting the foregoing, (x) none of the Purchasers
and the Purchaser Agents shall have any right of action whatsoever against the Administrator as a
result of the Administrator acting or refraining from acting under this Agreement or any of the
other Transaction Documents in accordance with the instructions of the Majority Purchaser Agent and
(y) none of the Purchasers in a Purchaser Agent’s Purchaser Group shall have any right of action
whatsoever against such Purchaser Agent as a result of such Purchaser Agent acting or refraining
from acting under this Agreement or any of the other Transaction Documents in accordance with the
instructions of the Purchasers within such Purchaser Agent’s Purchaser Group with a majority of the
Commitments of such Purchaser Group. The Administrator shall in all cases be fully protected in
acting, or in refraining from acting, under this Agreement in accordance with a request of the
required Purchasers or required Purchaser Agents, and such request and any action taken or failure
to act pursuant thereto shall be binding upon all Purchasers, all Purchaser Agents and the
Administrator. Each Purchaser Agent shall in all cases be fully protected in acting, or in
refraining from acting, under this Agreement in accordance with a request of the Purchasers in such
Purchaser Agent’s Purchaser Group with a majority of the Commitments of such Purchaser Group, and
any such request and any action taken or failure to act pursuant thereto shall be binding upon all
the Purchasers in such Purchaser Agent’s Purchaser Group and such Purchaser Agent.




          Section 4.11 Administrator and Affiliates.



          To the extent that the Administrator or any of its Affiliates is or shall become an LC
Participant hereunder, the Administrator or such Affiliate, in such capacity, shall have the same
rights and powers under this Agreement as would any other LC Participant hereunder and may exercise
the same as though it were not the Administrator. The Administrator and its Affiliates may
generally engage in any kind of business with the Seller, the Transferor, any Originator, ACI, any
Sub-Servicer or the Servicer, any of their respective Affiliates and any Person who may do business
with or own securities of the Seller, the Transferor, any Originator, ACI, any Sub-Servicer or the
Servicer or any of their respective Affiliates, all as if it were not the Administrator hereunder
and without any duty to account therefor to any Purchaser Agent, or Purchaser.



          Section 4.12 Notice of Termination Events.



34









 





          Neither the Administrator nor any Purchaser Agent shall be deemed to have knowledge or notice
of the occurrence of any Termination Event or Unmatured Termination Event unless it has received
notice from, in the case of the Administrator, any Purchaser Agent, any Purchaser, the Servicer or
the Seller and, in the case of any Purchaser Agent, the Administrator, any other Purchaser Agent,
any Purchaser, the Servicer or the Seller, in each case stating that a Termination Event or an
Unmatured Termination Event has occurred hereunder and describing such Termination Event or
Unmatured Termination Event. In the event that the Administrator receives such a notice, it shall
promptly give notice thereof to each Purchaser Agent. In the event that a Purchaser Agent receives
such a notice, it shall promptly give notice thereof to the Administrator (unless such Purchaser
Agent first received notice of such Termination Event or Unmatured Termination Event from the
Administrator) and to each of its related Purchasers. The Administrator shall take such action
concerning a Termination Event or an Unmatured Termination Event as may be directed by the Majority
Purchaser Agents (unless such action otherwise requires the consent of the required Purchasers, all
Purchaser Agents or the LC Bank), but until the Administrator receives such directions, the
Administrator may (but shall not be obligated to) take such action, or refrain from taking such
action, as the Administrator deems advisable and in the best interests of the Purchasers and
Purchaser Agents.




     Section 4.13 Non-Reliance on Administrator, Purchaser Agents and other Purchasers;
Administrators and Affiliates.



     (a) Each Purchaser and Purchaser Agent expressly acknowledges that none of the Administrator
and the Purchaser Agents, in the case of such Purchaser, and none of the Administrator or any other
Purchaser Agent, in the case of such Purchaser Agent, nor in either case any of their respective
officers, directors, employees, agents, attorneys-in-fact or Affiliates has made any
representations or warranties to it and that no act by the Administrator or any Purchaser Agent
hereafter taken, including any review of the affairs of the Seller, the Transferor, ACI, the
Servicer or any Originator, shall be deemed to constitute any representation or warranty by the
Administrator or such Purchaser Agent. Each Purchaser and Purchaser Agent represents and warrants
to the Administrator and such Purchaser’s Purchaser Agent, in the case of such Purchaser, and
Administrator, in the case of such Purchaser Agent, that it has, independently and without reliance
upon the Administrator, the LC Bank, any Purchaser Agent or any Purchaser and based on such
documents and information as it has deemed appropriate, made and will continue to make its own
appraisal of any investigation into the business, operations, property, prospects, financial and
other conditions and creditworthiness of the Seller, the Transferor, ACI, the Servicer or the
Originators, and made its own evaluation and decision to enter into this Agreement. Except for
terms specifically required to be delivered hereunder, the Administrator shall not have any duty or
responsibility to provide any Purchaser or Purchaser Agent, and no Purchaser Agent have any duty or
responsibility to provide any Purchaser, with any information concerning the Seller, the
Transferor, ACI, the Servicer or the Originators or any of their Affiliates that comes into the
possession of the Administrator or such Purchaser Agent, respectively, or any of their respective
officers, directors, employees, agents, attorneys-in-fact or Affiliates.



     (b) Each of the Purchasers, the Purchaser Agents and the Administrator and any of their
respective Affiliates may extend credit to, accept deposits from and generally engage in any



35









 




kind of banking, trust, debt, entity or other business with the Seller, the Transferor, ACI,
the Servicer or any Originator or any of their Affiliates. With respect to the acquisition of the
Eligible Receivables pursuant to this Agreement, each of the Purchaser Agents and the Administrator
shall have the same rights and powers under this Agreement as any Purchaser and may exercise the
same as though it were not such an agent, and the terms “Purchaser” and “Purchasers” shall include,
to the extent applicable, each of the Purchaser Agents and the Administrator in their individual
capacities.




          Section 4.14 Indemnification.



          Each LC Participant and Related Committed Purchaser agrees to indemnify and hold harmless the
Administrator and its officers, directors, employees, representatives and agents and the LC Bank
(to the extent not reimbursed by the Seller, the Transferor, the Servicer or any Originator and
without limiting the obligation of the Seller, the Transferor, the Servicer, or any Originator to
do so), ratably according to its Pro Rata Share, from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, settlements, costs, expenses and, or
disbursements of any kind or nature whatsoever (including, in connection with any investigative or
threatened proceeding, whether or not the Administrator, the LC Bank or such Person shall be
designated a party thereto) that may at any time be imposed on, incurred by, or asserted against
the Administrator, LC Bank or such Person as a result of, or related to, any of the transactions
contemplated by the Transaction Documents or the execution, delivery or performance of the
Transaction Documents or any other document furnished in connection therewith; provided,
however, that no LC Participant or Related Committed Purchaser shall be liable for any
portion of such liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses, or disbursements resulting from the Administrator’s or the LC Bank’s gross
negligence or willful misconduct, as determined by a final non-appealable judgment of a court of
competent jurisdiction. Without limiting the generality of the foregoing, each LC Participant
agrees to reimburse the Administrator and the LC Bank, ratably according to their Pro Rata Shares,
promptly upon demand, for any out-of-pocket expenses (including reasonable counsel fees) incurred
by the Administrator or the LC Bank in connection with the administration, modification, amendment
or enforcement (whether through negotiations, legal proceedings or otherwise) of, or legal advice
in respect of its rights or responsibilities under, this Agreement.



          Section 4.15 Successor Administrator.



          The Administrator may, upon at least thirty (30) days’ notice to the Seller, the Purchaser
Agents and the Servicer, resign as Administrator. Such resignation shall not become effective
until a successor Administrator is appointed by the Majority Purchaser Agents and the LC Bank and
has accepted such appointment. Upon such acceptance of its appointment as Administrator hereunder
by a successor Administrator, such successor Administrator shall succeed to and become vested with
all the rights and duties of the retiring Administrator, and the retiring Administrator shall be
discharged from its duties and obligations under the Transaction Documents. After any retiring
Administrator’s resignation hereunder, the provisions of Sections 3.1 and 3.2 and
this Article IV shall inure to its benefit as to any actions taken or omitted to be taken
by it while it was the Administrator.



36









 





ARTICLE V.

MISCELLANEOUS




          Section 5.1 Amendments, Etc.



          No amendment or waiver of any provision of this Agreement or any other Transaction Document,
or consent to any departure by the Seller or the Servicer therefrom, shall be effective unless in a
writing signed by the Administrator, the Majority Purchaser Agents and the LC Bank and, in the case
of an amendment, by the other parties thereto; provided, however, that no such
amendment shall, (a) without the consent of each affected Purchaser, (i) extend the date of any
payment or deposit of Collections by the Seller or the Servicer or decrease the outstanding amount
of or rate of Discount or extend the repayment of or any scheduled payment date for the payment of
any Discount in respect of any Portion of Capital or any fees owed to a Purchaser; (ii) reduce any
fees payable pursuant to the applicable Fee Letter, (iii) forgive or waive or otherwise excuse any
repayment of Capital or change either the amount of Capital of any Purchaser or any Purchaser’s pro
rata share of the Purchased Interest; (iii) increase the Commitment of any Purchaser; (iv) amend or
modify the Pro Rata Share of any LC Participant; (v) amend or modify the provisions of this
Section 5.1 or the definition of “Eligible Receivables”, “Majority LC Participants”,
“Majority Purchaser Agents”, “Scheduled Commitment Termination Date” or “Termination Date” or (vi)
amend or modify any defined term (or any term used directly or indirectly in such defined term)
used in clauses (i) through (v) above in a manner that would circumvent the intention of the
restrictions set forth in such clauses and (b) without the consent of the Majority Purchaser Agents
and/or Majority LC Participants, as applicable, amend, waive or modify any provision expressly
requiring the consent of such Majority Purchaser Agents and/or Majority LC Participant. Each such
amendment, waiver or consent shall be effective only in the specific instance and for the specific
purpose for which it was given. The Administrator hereby agrees to provide executed copies of any
material amendment or waiver of any provision of this Agreement or any other Transaction Document
to the Rating Agencies. No failure on the part of any Purchaser Agent, any Purchaser or the
Administrator to exercise, and no delay in exercising any right hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any right hereunder preclude any other or
further exercise thereof or the exercise of any other right.



          Section 5.2 Notices, Etc.



          All notices and other communications provided for hereunder shall, unless otherwise stated
herein, be in writing (including facsimile communication) and shall be personally delivered or sent
by facsimile, or by overnight mail, to the intended party at the mailing address or facsimile
number of such party set forth under its name on the signature pages hereof (or in any other
document or agreement pursuant to which it is or became a party hereto), or at such other address
or facsimile number as shall be designated by such party in a written notice to the other parties
hereto. All such notices and communications shall be effective (i) if delivered by overnight mail,
when received, and (ii) if transmitted by facsimile, when sent, receipt confirmed by telephone or
electronic means.



          Section 5.3 Successors and Assigns; Assignability; Participations.



37









 





     (a) Successors and Assigns. Whenever in this Agreement any of the parties hereto is
referred to, such reference shall be deemed to include the successors and assigns of such party;
all covenants, promises and agreements by or on behalf of any parties hereto that are contained in
this Agreement shall bind and inure to the benefit of the parties hereto and their respective
successors and assigns. Except as otherwise provided in Section 4.1(d), neither the Seller
nor the Servicer may assign or transfer any of its rights or delegate any of its duties hereunder
or under any Transaction Document without the prior written consent of the Administrator, each
Purchaser Agent and the LC Bank.



     (b) Participations. (i) Except as otherwise specifically provided herein, any
Purchaser may sell to one or more Persons (each a “Participant”) participating interests in
the interests of such Purchaser hereunder; provided, that no Purchaser shall grant any
participation under which the Participant shall have rights to approve any amendment to or waiver
of this Agreement or any other Transaction Document. Such Purchaser shall remain solely
responsible for performing its obligations hereunder, and the Seller, the Servicer, each Purchaser
Agent and the Administrator shall continue to deal solely and directly with such Purchaser in
connection with such Purchaser’s rights and obligations hereunder. A Purchaser shall not agree
with a Participant to restrict such Purchaser’s right to agree to any amendment, waiver or
modification hereto, except amendments, waivers or modifications that require the consent of all
Purchasers. (ii) Notwithstanding anything contained in paragraph (a) or clause (i) of paragraph
(b) of this Section 5.3, each of the LC Bank and each LC Participant may sell
participations in all or any part of any Funded Purchase made by such LC Participant to another
bank or other entity so long as (i) no such grant of a participation shall, without the consent of
the Seller, require the Seller to file a registration statement with the SEC and (ii) no holder of
any such participation shall be entitled to require such LC Participant to take or omit to take any
action hereunder except that such LC Participant may agree with such participant that, without such
Participant’s consent, such LC Participant will not consent to an amendment, modification or waiver
that requires the consent of all LC Participants. Any such Participant shall not have any rights
hereunder or under the Transaction Documents.



     (c) Assignments by Related Committed Purchasers. Any Related Committed Purchaser may
assign to one or more Persons (each a “Purchasing Related Committed Purchaser”), reasonably
acceptable to each of the Administrator, the LC Bank and the related Purchaser Agent in each such
Person’s sole discretion, its rights and obligations herein (including its Commitment (which shall
be inclusive of its Commitment as an LC Participant)) in whole or in part, pursuant to a supplement
hereto, substantially in the form of Annex G with any changes as have been approved by the
parties thereto (each, a “Transfer Supplement”), executed by each such Purchasing Related
Committed Purchaser, such selling Related Committed Purchaser, such related Purchaser Agent and the
Administrator and with the consent of the Seller (provided, that the consent of the Seller
shall not be unreasonably withheld, conditioned or delayed and that no such consent shall be
required if (i) a Termination Event or Unmatured Termination Event has occurred and is continuing
or (ii) such assignment is made by any Related Committed Purchaser to (A) the Administrator, (B)
any other Related Committed Purchaser, (C) any Affiliate of the Administrator or any Related
Committed Purchaser, (D) any commercial paper conduit or similar financing vehicle sponsored or
administered by such Purchaser and for whom such Purchaser acts as a program support provider or
through which (directly or



38









 




indirectly) such Purchaser does or may fund Purchases hereunder (each, a “Conduit”),
(E) any Liquidity Provider, (F) any Program Support Provider or (G) any Person that (1) is in the
business of issuing commercial paper notes and (2) is associated with or administered by the
Administrator or such Related Committed Purchaser or any Affiliate of the Administrator or such
Related Committed Purchaser). Upon (i) the execution of the Transfer Supplement, (ii) delivery of
an executed copy thereof to the Seller, the Servicer, such related Purchaser Agent and the
Administrator and (iii) payment by the Purchasing Related Committed Purchaser to the selling
Related Committed Purchaser of the agreed purchase price, if any, such selling Related Committed
Purchaser shall be released from its obligations hereunder to the extent of such assignment and
such Purchasing Related Committed Purchaser shall for all purposes be a Related Committed Purchaser
party hereto and shall have all the rights and obligations of a Related Committed Purchaser
hereunder to the same extent as if it were an original party hereto. The amount of the Commitment
of the selling Related Committed Purchaser allocable to such Purchasing Related Committed Purchaser
shall be equal to the amount of the Commitment of the selling Related Committed Purchaser
transferred regardless of the purchase price, if any, paid therefor. The Transfer Supplement shall
be an amendment hereof only to the extent necessary to reflect the addition of such Purchasing
Related Committed Purchaser as a “Related Committed Purchaser” and a related “LC Participant” and
any resulting adjustment of the selling Related Committed Purchaser’s Commitment and, if
applicable, selling related LC Participant’s Pro Rata Share of the LC Participation Amount.




     (d) Assignments to Liquidity Providers and other Program Support Providers. Any
Conduit Purchaser may at any time grant to one or more of its Liquidity Providers or other Program
Support Providers participating interests in its portion of the Purchased Interest. In the event
of any such grant by such Conduit Purchaser of a participating interest to a Liquidity Provider or
other Program Support Provider, such Conduit Purchaser shall remain responsible for the performance
of its obligations hereunder. The Seller agrees that each Liquidity Provider and Program Support
Provider shall be entitled to the benefits of Sections 1.7 and 1.8.



     (e) Other Assignment by Conduit Purchasers. Each party hereto agrees and consents (i)
to any Conduit Purchaser’s assignment, participation, grant of security interests in or other
transfers of any portion of, or any of its beneficial interest in, the Purchased Interest (or
portion thereof), including without limitation to any collateral agent in connection with its
commercial paper program and (ii) to the complete assignment by any Conduit Purchaser of all of its
rights and obligations hereunder to any other Person, and upon such assignment such Conduit
Purchaser shall be released from all obligations and duties, if any, hereunder; provided,
that such Conduit Purchaser may not, without the prior consent of its Related Committed Purchasers,
make any such transfer of its rights hereunder unless the assignee (x) is a Conduit or (y) (i) is
principally engaged in the purchase of assets similar to the assets being purchased hereunder, (ii)
has as its Purchaser Agent the Purchaser Agent of the assigning Conduit Purchaser and (iii) issues
commercial paper or other Notes with credit ratings substantially comparable to the ratings of the
assigning Conduit Purchaser. Any assigning Conduit Purchaser shall deliver to any assignee a
Transfer Supplement with any changes as have been approved by the parties thereto, duly executed by
such Conduit Purchaser, assigning any portion of its interest in the Purchased Interest to its
assignee. Such Conduit Purchaser shall promptly (i) notify each of the other parties hereto of
such assignment and (ii) take all further action that the assignee



39









 




reasonably requests in order to evidence the assignee’s right, title and interest in such
interest in the Purchased Interest and to enable the assignee to exercise or enforce any rights of
such Conduit Purchaser hereunder. Upon the assignment of any portion of its interest in the
Purchased Interest, the assignee shall have all of the rights hereunder with respect to such
interest (except that the Discount therefor shall thereafter accrue at the rate, determined with
respect to the assigning Conduit Purchaser unless the Seller, the related Purchaser Agent and the
assignee shall have agreed upon a different Discount).




     (f) Certain Pledges. Without limiting the right of any Purchaser to sell or grant
interests, security interests or participations to any Person as otherwise described in this
Article V, above, any Purchaser may at any time pledge or assign a security interest in all
or any portion of its rights under this Agreement to secure its obligations as a Purchaser
hereunder, including any pledge or assignment to secure obligations to a Federal Reserve Bank;
provided that no such pledge or assignment shall release such Purchaser from any of its
obligations hereunder or substitute any such pledge or assignee for such Purchaser as a party
hereto.



     (g) Assignment by Administrator. This Agreement and the rights and obligations of the
Administrator hereunder shall be assignable, in whole or in part, by the Administrator and its
successors and assigns; provided, that unless: (i) such assignment is to an Affiliate of
PNC, (ii) it becomes unlawful for PNC to serve as the Administrator or (iii) a Termination Event
exists, the Seller has consented to such assignment, which consent shall not be unreasonably
withheld, conditioned or delayed.



     (h) Agents. Without limiting any other rights that may be available under applicable
law, the rights of the Purchasers and each Liquidity Provider may be enforced through it or by its
agents.



     (i) Disclosure; Notice. Each assignor may, in connection with an assignment permitted
hereunder, disclose to the applicable assignee (that shall have agreed to be bound by
Section 5.6) any information relating to the Servicer, the Seller or the Pool Receivables
furnished to such assignor by or on behalf of the Servicer, the Seller, any Purchaser, any
Purchaser Agent or the Administrator. Such assignor shall give prior written notice to Seller of
any assignment of such assignor’s rights and obligations (including ownership of the Purchased
Interest) to any Person other than a Program Support Provider.



     (j) Opinions of Counsel. If required by the Administrator or the applicable Purchaser
Agent or to maintain the ratings of the Notes of any Conduit Purchaser, each Transfer Supplement or
other assignment and acceptance agreement must be accompanied by an opinion of counsel of the
assignee as to matters as the Administrator or such Purchaser Agent may reasonably request.




     Section 5.4 Costs, Expenses and Taxes.



     (a) By way of clarification, and not of limitation, of Sections 1.7, 1.19
or 3.1, the Seller shall pay to the Administrator, any Purchaser Agent and/or any Purchaser
on demand all costs and expenses in connection with (i) the preparation, execution, delivery and
administration



40









 




(including amendments or waivers of any provision) of this Agreement and the other Transaction
Documents, (ii) the sale of the Purchased Interest (or any portion thereof), (iii) the perfection
(and continuation) of the Administrator’s rights (on behalf of the Purchasers) in the Receivables,
Collections and other Pool Assets, (iv) the enforcement by the Administrator, the Purchaser Agents
or the Purchasers of the obligations of the Seller, the Transferor, the Servicer or the Originators
under the Transaction Documents or of any Obligor under a Receivable and (v) the maintenance by the
Administrator of the Lock-Box Accounts (and any related lock-box or post office box), including
reasonable fees, costs and expenses of legal counsel for the Administrator, the Purchaser Agents,
the Purchasers, any Liquidity Provider or Program Support Provider relating to any of the foregoing
or to advising the Administrator, any Purchaser Agent, any Purchaser, any Liquidity Provider or any
other Program Support Provider about its rights and remedies under any Transaction Document and all
costs and expenses (including reasonable counsel fees and expenses) of the Administrator, the
Purchaser Agents, the Purchasers, any Liquidity Provider or Program Support Provider in connection
with the enforcement of the Transaction Documents and in connection with the administration of the
Transaction Documents; provided, that unless a Termination Event has occurred and is
continuing, the Seller shall be liable only for fees, costs and expenses of legal counsel for the
Administrator (which legal counsel may represent any or all of the Administrator, the Purchaser
Agents, the Purchasers, any Liquidity Provider and any Program Support Provider). Subject to
Section 1(e) of Exhibit IV of this Agreement, the Seller shall reimburse the
Administrator, each Purchaser Agent and each Purchaser for the cost of such Person’s auditors
(which may be employees of such Person) auditing the books, records and procedures of the Seller or
the Servicer. The Seller shall reimburse each Conduit Purchaser for any amounts such Conduit
Purchaser must pay to any Liquidity Provider or other Program Support Provider on account of any
Tax. The Seller shall reimburse each Conduit Purchaser on demand for all reasonable costs and
expenses incurred by such Conduit Purchaser or any holder of membership interests of such Conduit
Purchaser in connection with the Transaction Documents or the transactions contemplated thereby,
including costs related to the auditing of the Conduit Purchaser’s books by certified public
accountants, Rating Agency fees and fees and out of pocket expenses of counsel of the
Administrator, any Purchaser Agent and any Purchaser, or any membership interest holder, or
administrator, of such for advice relating to such Conduit Purchaser’s operation.




     (b) All payments made by the Seller to the Administrator, any Purchaser Agent, any Purchaser,
Liquidity Provider or other Program Support Provider hereunder shall be made without withholding
for or on account of any present or future taxes (other than those imposed or based on the gross or
net income or receipts of the recipient by the jurisdiction under the laws of which such Person is
organized, operates or where its principal executive office is located or any political subdivision
thereof). If any such withholding is so required, the Seller shall make the withholding, pay the
amount withheld to the appropriate authority before penalties attach thereto or interest accrues
thereon and pay such additional amount as may be necessary to ensure that the net amount actually
received by such Person free and clear of such taxes (including such taxes on such additional
amount) is equal to the amount that such Person would have received had such withholding not been
made. If any such Person pays any such taxes, penalties or interest the Seller shall reimburse
such Person for that payment on demand. If the Seller pays any such taxes, penalties or interest,
it shall deliver official tax receipts evidencing that payment or



41









 




certified copies thereof to such Person on whose account such withholding was made on or
before the thirtieth day after payment.




     (c) In addition, the Seller shall pay on demand any and all stamp and other taxes and fees
payable in connection with the execution, delivery, filing and recording of this Agreement, the
other Transaction Documents or the other documents or agreements to be delivered hereunder or
thereunder, and agrees to save each Indemnified Party and Affected Person harmless from and against
any liabilities with respect to or resulting from any delay in paying or omission to pay such taxes
and fees.




     Section 5.5 No Proceedings; Limitation on Payments.



     (a) Each of the Seller, ACI, the Servicer, the Administrator, the LC Bank, the Purchaser
Agents and the Purchasers and each assignee of the Purchased Interest or any interest therein, and
each Person that enters into a commitment to purchase the Purchased Interest or interests therein,
hereby covenants and agrees that it will not institute against, or join any other Person in
instituting against, any Conduit Purchaser any bankruptcy, reorganization, arrangement, insolvency
or liquidation proceeding, or other proceeding under any federal or state bankruptcy or similar
law, for one year and one day after the latest maturing Note issued by such Conduit Purchaser is
paid in full. The provisions of this paragraph shall survive any termination of this Agreement.



     (b) Each of the Seller, ACI, the Servicer, the Administrator, the LC Bank, the Purchaser
Agents and the Purchasers and each assignee of the Purchased Interest or any interest therein, and
each Person that enters into a commitment to purchase the Purchased Interest or interests therein,
hereby covenants and agrees that it will not institute against, or join any other Person in
instituting against, the Seller any bankruptcy, reorganization, arrangement, insolvency or
liquidation proceeding, or other proceeding under any federal or state bankruptcy or similar law,
for one year and one day after all indebtedness and other obligations of the Seller hereunder and
under each other Transaction Document shall have been paid in full; provided, that the
Administrator may take any such action with the prior written consent of the Majority Purchaser
Agents and the LC Bank. The provisions of this paragraph shall survive any termination of this
Agreement.



     (c) Notwithstanding any provisions contained in this Agreement to the contrary, no Conduit
Purchaser shall, or shall be obligated to, pay any amount, if any, payable by it pursuant to this
Agreement or any other Transaction Document unless (i) such Conduit Purchaser has received funds
which may be used to make such payment and which funds are not required to repay such Conduit
Purchaser’s Notes when due and (ii) after giving effect to such payment, either (x) such Conduit
Purchaser could issue Notes to refinance all of its outstanding Notes (assuming such outstanding
Notes matured at such time) in accordance with the program documents governing such Conduit
Purchaser’s securitization program or (y) all such Conduit Purchaser’s Notes are paid in full. Any
amount which a Conduit Purchaser does not pay pursuant to the operation of the preceding sentence
shall not constitute a claim (as defined in §101 of the Bankruptcy Code) against or company
obligation of such Conduit Purchaser for any



42









 




such insufficiency unless and until such Conduit Purchaser satisfies the provisions of
clauses (i) and (ii) above. The provisions of this paragraph shall survive any
termination of this Agreement.




          Section 5.6 Confidentiality.



          Unless otherwise required by applicable law, each of the Seller and the Servicer agrees to
maintain the confidentiality of this Agreement and the other Transaction Documents (and all drafts
thereof) in communications with third parties and otherwise; provided, that this Agreement
may be disclosed: (a) to third parties to the extent such disclosure is made pursuant to a written
agreement of confidentiality in form and substance reasonably satisfactory to the Administrator and
each Purchaser Agent, (b) to the Seller’s legal counsel and auditors if they agree to hold it
confidential, subject to applicable law, (c) in connection with any legal proceeding arising out of
or in connection with this Agreement or any other Transaction Document or the preservation or
maintenance of that party’s rights hereunder or thereunder, (d) if required to do so by a court of
competent jurisdiction whether in pursuance of any procedure for discovering documents or
otherwise, (e) pursuant to any law in accordance with which that party is required or accustomed to
act (including applicable SEC requirements), (f) to any Governmental Authority, and (g) to any
Person in connection with any credit agreement or other financing transaction. The restrictions in
the preceding sentence shall not apply to disclosures to any party to this Agreement by any other
party hereto, information already known to a recipient otherwise than in breach of this Section,
information also received from another source on terms not requiring it to be kept confidential, or
information that is or becomes publicly available otherwise than in breach of this Section. Unless
otherwise required by applicable law, each of the Administrator, the Purchaser Agents and the
Purchasers agrees to maintain the confidentiality of non-public financial information regarding
ACI, the Seller, the Transferor, the Servicer and the Originators; provided, that such
information may be disclosed to: (i) third parties to the extent such disclosure is made pursuant
to a written agreement of confidentiality in form and substance reasonably satisfactory to ACI,
(ii) legal counsel and auditors of the Purchasers, the Purchaser Agents or the Administrator if
they agree to hold it confidential, (iii) if applicable, the Rating Agencies rating the Notes of
any Conduit Purchaser, (iv) any Program Support Provider or potential Program Support Provider (if
they agree to hold it confidential), and (v) any placement agency placing the Notes and (vi) any
regulatory authorities or Governmental Authority having jurisdiction over the Administrator, any
Purchaser Agent, any Purchaser, any Program Support Provider or any Liquidity Provider.



          Section 5.7 GOVERNING LAW AND JURISDICTION.



     (a) THIS AGREEMENT SHALL BE DEEMED TO BE A CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL
LAWS OF THE STATE OF NEW YORK (INCLUDING FOR SUCH PURPOSE SECTIONS 5-1401 AND 5-1402 OF THE GENERAL
OBLIGATIONS LAW OF THE STATE OF NEW YORK) EXCEPT TO THE EXTENT THAT THE VALIDITY OR PERFECTION OF A
SECURITY INTEREST OR REMEDIES HEREUNDER, IN RESPECT OF ANY PARTICULAR COLLATERAL ARE GOVERNED BY
THE LAWS OF A JURISDICTION OTHER THAN THE STATE OF NEW YORK.



43









 





     (b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT MAY BE BROUGHT IN THE COURTS
OF THE STATE OF NEW YORK OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK; AND, BY
EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH OF THE PARTIES HERETO CONSENTS, FOR ITSELF AND IN
RESPECT OF ITS PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF THOSE COURTS. EACH OF THE PARTIES
HERETO IRREVOCABLY WAIVES, TO THE MAXIMUM EXTENT PERMITTED BY LAW, ANY OBJECTION, INCLUDING ANY
OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, THAT IT MAY NOW
OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN SUCH JURISDICTION IN RESPECT OF
THIS AGREEMENT OR ANY DOCUMENT RELATED HERETO. EACH OF THE PARTIES HERETO WAIVES PERSONAL SERVICE
OF ANY SUMMONS, COMPLAINT OR OTHER PROCESS, WHICH SERVICE MAY BE MADE BY ANY OTHER MEANS PERMITTED
BY NEW YORK LAW.



          Section 5.8 Execution in Counterparts.



          This Agreement may be executed in any number of counterparts, each of which, when so executed,
shall be deemed to be an original, and all of which, when taken together, shall constitute one and
the same agreement.



          Section 5.9 Survival of Termination; Non-Waiver.



          The provisions of Sections 1.7, 1.8, 1.18, 1.19, 3.1,
3.2, 5.4, 5.5, 5.6, 5.7, 5.10 and 5.14
shall survive any termination of this Agreement.



          Section 5.10 WAIVER OF JURY TRIAL.



          EACH OF THE PARTIES HERETO WAIVES ITS RESPECTIVE RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR
CAUSE OF ACTION BASED UPON OR ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY IN ANY ACTION, PROCEEDING OR OTHER LITIGATION OF ANY TYPE BROUGHT BY ANY OF THE
PARTIES AGAINST ANY OTHER PARTY OR PARTIES, WHETHER WITH RESPECT TO CONTRACT CLAIMS, TORT CLAIMS OR
OTHERWISE. EACH OF THE PARTIES HERETO AGREES THAT ANY SUCH CLAIM OR CAUSE OF ACTION SHALL BE TRIED
BY A COURT TRIAL WITHOUT A JURY. WITHOUT LIMITING THE FOREGOING, EACH OF THE PARTIES HERETO
FURTHER AGREES THAT ITS RESPECTIVE RIGHT TO A TRIAL BY JURY IS WAIVED BY OPERATION OF THIS SECTION
AS TO ANY ACTION, COUNTERCLAIM OR OTHER PROCEEDING THAT SEEKS, IN WHOLE OR IN PART, TO CHALLENGE
THE VALIDITY OR ENFORCEABILITY OF THIS AGREEMENT OR ANY PROVISION HEREOF. THIS WAIVER SHALL APPLY
TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT.



          Section 5.11 Entire Agreement.



44









 





          This Agreement and the other Transaction Documents embody the entire agreement and
understanding between the parties hereto, and supersede all prior or contemporaneous agreements and
understandings of such Persons, verbal or written, relating to the subject matter hereof and
thereof.



          Section 5.12 Headings.



          The captions and headings of this Agreement and any Exhibit, Schedule or Annex hereto are for
convenience of reference only and shall not affect the interpretation hereof or thereof.



          Section 5.13 Right of Setoff.



          Each Purchaser is hereby authorized (in addition to any other rights it may have) to setoff,
appropriate and apply (without presentment, demand, protest or other notice which are hereby
expressly waived) any deposits and any other indebtedness held or owing by such Purchaser
(including by any branches or agencies of such Purchaser) to, or for the account of, the Seller
against amounts owing by the Seller hereunder (even if contingent or unmatured); provided
that such Purchaser shall notify Seller concurrently with such setoff.



          Section 5.14 Purchaser Groups’ Liabilities.



          The obligations of each Purchaser Agent and each Purchaser under the Transaction Documents are
solely the corporate obligations of such Person. No recourse shall be had for any obligation or
claim arising out of or based upon any Transaction Document against any member, employee, officer,
director or incorporator of any such Person; provided, however, that this Section
shall not relieve any such Person of any liability it might otherwise have for its own gross
negligence or willful misconduct.



          Section 5.15 Sharing of Recoveries.



          Each Purchaser agrees that if it receives any recovery, through set-off, judicial action or
otherwise, on any amount payable or recoverable hereunder in a greater proportion than should have
been received hereunder or otherwise inconsistent with the provisions hereof, then the recipient of
such recovery shall purchase for cash an interest in amounts owing to the other Purchasers (as
return of Capital or otherwise), without representation or warranty except for the representation
and warranty that such interest is being sold by each such other Purchaser free and clear of any
Adverse Claim created or granted by such other Purchaser, in the amount necessary to create
proportional participation by the Purchaser in such recovery. If all or any portion of such amount
is thereafter recovered from the recipient, such purchase shall be rescinded and the purchase price
restored to the extent of such recovery, but without interest.



          Section 5.16 Ratification.



          After giving effect to this Agreement and the transactions contemplated by this Agreement, all
of the provisions of the Performance Guaranty shall remain in full force and effect and the
Performance Guarantor hereby ratifies and affirms the Performance Guaranty and



45









 




acknowledges that the Performance Guaranty has continued and shall continue in full force and
effect in accordance with its terms.




[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]




46









 





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



	 	 	 	 	 	 

	 	 	ARCH RECEIVABLE COMPANY, LLC,

as Seller
	 
	 	 	 	 
	 

	 	By:	 	/s/ James E. Florczak
	 

	 	 	 	 
	 

	 	Name:	 	James E. Florczak
	 

	 	 	 	 
	 

	 	Title:	 	Treasurer  &  Vice President
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	Address:
	 	One CityPlace Drive, Suite 300
	 

	 	 	 	St. Louis, MO 63141
	 
	 	 	 	 
	 

	 	Attention:
	 	James E. Florczak,
	 

	 	 	 	     Vice President and Treasurer
	 

	 	Telephone:
	 	314-994-2785
	 

	 	Facsimile:
	 	314-994-2739
	 
	 	 	 	 
	 	 	ARCH COAL SALES COMPANY, INC., 

as initial Servicer
	 
	 	 	 	 
	 

	 	By:	 	/s/ James E. Florczak
	 

	 	 	 	 
	 

	 	Name:	 	James E. Florczak
	 

	 	 	 	 
	 

	 	Title:	 	Vice President & Treasurer
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	Address:
	 	One CityPlace Drive, Suite 300
	 

	 	 	 	St. Louis, MO 63141
	 
	 	 	 	 
	 

	 	Attention:
	 	James E. Florczak,
	 

	 	 	 	     Vice President and Treasurer
	 

	 	Telephone:
	 	314-994-2785
	 

	 	Facsimile:
	 	314-994-2739






S-1









 





	 	 	 	 	 	 

	 	 	PNC BANK, NATIONAL ASSOCIATION,

as Administrator
	 
	 	 	 	 
	 

	 	By:	 	/s/ William Falcon
	 

	 	 	 	 
	 

	 	Name:	 	 
	 

	 	Title:	 	 
	 
	 	 	 	 
	 

	 	Address:
	 	PNC Bank, National Association
	 

	 	 	 	One PNC Plaza, 26th Floor
	 

	 	 	 	249 Fifth Avenue
	 

	 	Attention:
	 	Pittsburgh, PA 15222-2707

William Falcon
	 

	 	Telephone:
	 	412-762-5442
	 

	 	Facsimile:
	 	412-762-9184






S-2









 





	 	 	 	 	 	 

	 	 	MARKET STREET FUNDING LLC,

as a Conduit Purchaser
	 
	 	 	 	 
	 

	 	By:	 	/s/ Doug Johnson
	 

	 	 	 	 
	 

	 	Name:	 	 
	 

	 	 	 	 
	 

	 	Title:	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	Address:
	 	Market Street Funding LLC
	 

	 	 	 	c/o AMACAR Group, LLC
	 

	 	 	 	6525 Morrison Boulevard, Suite 318
	 

	 	 	 	Charlotte, NC 28211
	 
	 	 	 	 
	 

	 	Attention:
	 	Doug Johnson
	 

	 	Telephone:
	 	704-365-0569
	 

	 	Facsimile:
	 	704-365-1362
	 
	 	 	 	 
	 	 	With a copy to:
	 
	 	 	 	 
	 	 	PNC Bank, National Association
	 	 	One PNC Plaza, 26th Floor
	 	 	249 Fifth Avenue
	 	 	Pittsburgh, PA 15222-2707
	 

	 	Attention:
	 	William Falcon
	 

	 	Telephone:
	 	412-762-5442
	 

	 	Facsimile:
	 	412-762-9184






S-3









 





	 	 	 	 	 	 

	 	 	MARKET STREET FUNDING LLC,

as a Related Committed Purchaser
	 
	 	 	 	 
	 

	 	By:	 	/s/ Doug Johnson
	 

	 	 	 	 
	 

	 	Name:	 	 
	 

	 	 	 	 
	 

	 	Title:	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	Address:
	 	Market Street Funding LLC
	 

	 	 	 	c/o AMACAR Group, LLC
	 

	 	 	 	6525 Morrison Boulevard, Suite 318
	 

	 	 	 	Charlotte, NC 28211
	 
	 	 	 	 
	 

	 	Attention:
	 	Doug Johnson
	 

	 	Telephone:
	 	704-365-0569
	 

	 	Facsimile:
	 	704-365-1362
	 
	 	 	 	 
	 	 	With a copy to:
	 
	 	 	 	 
	 	 	PNC Bank, National Association
	 	 	One PNC Plaza, 26th Floor
	 	 	249 Fifth Avenue
	 	 	Pittsburgh, PA 15222-2707
	 

	 	Attention:
	 	William Falcon
	 

	 	Telephone:
	 	412-762-5442
	 

	 	Facsimile:
	 	412-762-9184
	 
	 	 	 	 
	 

	 	Commitment:
	 	$125,000,000 






S-4









 





	 	 	 	 	 	 

	 	 	PNC BANK, NATIONAL ASSOCIATION,

as the LC Bank and as an LC Participant
	 
	 	 	 	 
	 

	 	By:	 	/s/ Richard Munsick
	 

	 	 	 	 
	 

	 	Name:
	 	Richard Munsick
	 

	 	Title:
	 	Senior Vice President
	 
	 	 	 	 
	 

	 	Address:
	 	PNC Bank, National Association
	 

	 	 	 	500 First Avenue
	 

	 	 	 	Third Floor
	 

	 	 	 	Pittsburgh, PA 15219
	 

	 	Attention:
	 	Richard Munsick
	 

	 	Telephone:
	 	412-762-4299
	 

	 	Facsimile:
	 	412-762-9184
	 
	 	 	 	 
	 

	 	Commitment:
	 	$125,000,000 
	 

	 	Pro-Rata Share:
	 	71.43% 






S-5









 





	 	 	 	 	 	 

	 	 	PNC BANK, NATIONAL ASSOCIATION,

as a Purchaser Agent
	 
	 	 	 	 
	 

	 	By:	 	/s/ William Falcon
	 

	 	 	 	 
	 

	 	Name:
	 	William Falcon
	 

	 	Title:
	 	Vice President
	 
	 	 	 	 
	 

	 	Address:
	 	PNC Bank, National Association
	 

	 	 	 	One PNC Plaza, 26th Floor
	 

	 	 	 	249 Fifth Avenue
	 

	 	 	 	Pittsburgh, PA 15222-2707
	 

	 	Attention:
	 	William Falcon
	 

	 	Telephone:
	 	412-762-5442
	 

	 	Facsimile:
	 	412-762-9184






S-6









 





	 	 	 	 	 	 

	 	 	ATLANTIC ASSET SECURITIZATION LLC,

as a Conduit Purchaser
	 
	 	 	 	 
	 

	 	By:	 	/s/ Sam Pilcer
	 

	 	 	 	 
	 

	 	Name:	 	 
	 

	 	Title:	 	 
	 
	 	 	 	 
	 

	 	By:	 	/s/ Kostantina Kourmpetis
	 

	 	 	 	 
	 

	 	Name:	 	 
	 

	 	Title:	 	 
	 
	 	 	 	 
	 

	 	Address:
	 	Atlantic Asset Securitization
	 

	 	 	 	c/o Credit Agricole Corporate and 
	 

	 	Investment
Bank New York Branch
	 

	 	 	 	1301 Avenue of the Americas
	 

	 	 	 	New York, NY 10019
	 

	 	Attention:
	 	Debt Capital Markets-Securitization
	 

	 	Telephone:
	 	212-261-3996
	 

	 	Facsimile:
	 	917-849-5584
	 
	 	 	 	 
	 	 	With a copy to its Purchaser Agent






S-7









 





	 	 	 	 	 	 	 

	 	 	CREDIT AGRICOLE CORPORATE AND 
INVESTMENT BANK NEW
YORK BRANCH,

as a Related Committed Purchaser
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ Sam Pilcer	 	 
	 

	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	Title:	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ Kostantina Kourmpetis	 	 
	 

	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	Title:	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Address:
	 	Credit Agricole Corporate and 
	 

	 	Investment
Bank New York Branch

	 

	 	 	 	1301 Avenue of the Americas

	 

	 	 	 	New York, NY 10019

	 

	 	Attention:
	 	Debt Capital Markets-Securitization

	 

	 	Telephone:
	 	212-261-3996
	 

	 	Facsimile:
	 	917-849-5584
	 
	 	 	With a copy to its Purchaser Agent
	 
	 	 	 	 	 	 
	 

	 	Commitment:
	 	$50,000,000






S-8









 





	 	 	 	 	 	 

	 	 	CREDIT AGRICOLE CORPORATE AND 
INVESTMENT BANK NEW
YORK BRANCH,

as an LC Participant
	 
	 	 	 	 
	 

	 	By:	 	/s/ Sam Pilcer
	 

	 	 	 	 
	 

	 	Name:	 	 
	 

	 	Title:	 	 
	 
	 	 	 	 
	 

	 	By:	 	/s/ Konstantina Kourmpetis
	 

	 	 	 	 
	 

	 	Name:	 	 
	 

	 	Title:	 	 
	 
	 	 	 	 
	 

	 	Address:
	 	Credit Agricole Corporate and 
	 

	 	Investment
Bank New York Branch
	 

	 	 	 	1301 Avenue of the Americas
	 

	 	 	 	New York, NY 10019
	 

	 	Attention:
	 	Debt Capital Markets-Securitization
	 

	 	Telephone:
	 	212-261-3996
	 

	 	Facsimile:
	 	917-849-5584
	 
	 	 	With a copy to its Purchaser Agent
	 
	 	 	 	 
	 

	 	Commitment:
	 	$50,000,000 
	 

	 	Pro-Rata Share:
	 	28.57% 






S-9









 





	 	 	 	 	 	 

	 	 	CREDIT AGRICOLE CORPORATE AND 
INVESTMENT BANK NEW
YORK BRANCH,

as a Purchaser Agent
	 
	 	 	 	 
	 

	 	By:	 	/s/ Sam Pilcer
	 

	 	 	 	 
	 

	 	Name:	 	 
	 

	 	Title:	 	 
	 
	 	 	 	 
	 

	 	By:	 	/s/ Kostantina Kourmpetis
	 

	 	 	 	 
	 

	 	Name:	 	 
	 

	 	Title:	 	 
	 
	 	 	 	 
	 

	 	Address:
	 	Credit Agricole Corporate and 
	 

	 	Investment
Bank New York Branch
	 

	 	 	 	1301 Avenue of the Americas
	 

	 	 	 	New York, NY 10019
	 

	 	Attention:
	 	Debt Capital Markets-Securitization
	 

	 	Telephone:
	 	212-261-3996
	 

	 	Facsimile:
	 	917-849-5584






S-10









 





	 	 	 	 	 	 

	 	 	Agreed to, solely for purposes of Section
5.16:
	 
	 	 	 	 
	 	 	ARCH COAL, INC.
	 
	 	 	 	 
	 

	 	By:	 	/s/  James E. Florczak
	 

	 	 	 	 
	 

	 	Name:	 	 James E. Florczak
	 

	 	 	 	 
	 

	 	Title:	 	Vice President & Treasurer
	 

	 	 	 	 






S-11











 





EXHIBIT I

DEFINITIONS




     As used in the Agreement (including its Exhibits, Schedules and Annexes), the following terms
shall have the following meanings (such meanings to be equally applicable to both the singular and
plural forms of the terms defined). Unless otherwise indicated, all Section, Annex, Exhibit and
Schedule references in this Exhibit are to Sections of and Annexes, Exhibits and Schedules to the
Agreement.



     “ACI” means Arch Coal, Inc., a Delaware corporation.



     “Adjusted LC Participation Amount” means, at any time, the LC Participation Amount
less the amount of cash collateral held in the LC Collateral Account at such time.



     “Administration Account” means the account number 1002422076 of the Administrator
maintained at the office of PNC at One PNC Plaza, 249 Fifth Avenue, Pittsburgh, Pennsylvania
15222-2707, or such other account as may be so designated in writing by the Administrator to the
Servicer.



     “Administrator” has the meaning set forth in the preamble to the Agreement.



     “Adverse Claim” means a lien, security interest or other charge or encumbrance, or any
other type of preferential arrangement; it being understood that any thereof in favor of, or
assigned to, the Administrator (for the benefit of the Purchasers) shall not constitute an Adverse
Claim.



     “Affected Person” has the meaning set forth in Section 1.7 of the Agreement.



     “Affiliate” means, as to any Person: (a) any Person that, directly or indirectly, is
in control of, is controlled by or is under common control with such Person, or (b) who is a
director or officer: (i) of such Person or (ii) of any Person described in clause (a),
except that, in the case of each Conduit Purchaser, Affiliate shall mean the holder(s) of its
capital stock or membership interests, as the case may be. For purposes of this definition,
control of a Person shall mean the power, direct or indirect: (x) to vote 25% or more of the
securities having ordinary voting power for the election of directors or managers of such Person,
or (y) to direct or cause the direction of the management and policies of such Person, in either
case whether by ownership of securities, contract, proxy or otherwise.



     “Aggregate Capital” means at any time the aggregate outstanding Capital of all
Purchasers at such time.



     “Aggregate Discount” means, at any time, the sum of the aggregate for each Purchaser
of the accrued and unpaid Discount with respect to each such Purchaser’s Capital at such time.



     “Agreement” has the meaning set forth in the preamble to the Agreement.



     “Alternate Rate” for any Settlement Period for any Capital (or portion thereof) funded
by any Purchaser other than through the issuance of Notes means an interest rate per annum equal



I-1









 




to: (a) 3.25% per annum above the Euro-Rate for such Settlement Period, or, in the sole
discretion of the applicable Purchaser Agent (b) the Base Rate for such Settlement Period;
provided, however, that the “Alternate Rate” for any day while a Termination Event or an Unmatured
Termination Event exists shall be an interest rate equal to the greater of (i) 3.0% per annum
above the Base Rate as in effect on such day and (ii) the “Alternate Rate” as calculated in
clause (a) above.




     “Arch Coal” has the meaning set forth in the preamble to the Agreement.



     “Arch Sales” has the meaning set forth in the preamble to the Agreement.



     “Arch Western Group” means Arch Western Resources, LLC, a Delaware limited liability
company, and any of its Subsidiaries.



     “Assumption Agreement” means an agreement substantially in the form set forth in
Annex F to this Agreement.



     “Atlantic” has the meaning set forth in Section 1.2(i)(ii) of the Agreement.



     “Attorney Costs” means and includes all reasonable fees, costs, expenses and
disbursements of any law firm or other external counsel and all reasonable disbursements of
internal counsel.



     “Bankruptcy Code” means the United States Bankruptcy Reform Act of 1978 (11 U.S.C. §
101, et seq.), as amended from time to time.



     “Base Rate” means, with respect to any Purchaser, for any day, a fluctuating interest
rate per annum as shall be in effect from time to time, which rate shall be at all times equal to
the higher of:




     (a) the rate of interest in effect for such day as publicly announced from time to time
by the applicable Purchaser Agent (or applicable Related Committed Purchaser or, in the case
of determining the Base Rate for purposes of calculating the Yield Reserve, the
Administrator) as its “reference rate”. Such “reference rate” is set by the applicable
Purchaser Agent (or the applicable Related Committed Purchaser or the Administrator) based
upon various factors, including such Person’s costs and desired return, general economic
conditions and other factors, and is used as a reference point for pricing some loans, which
may be priced at, above or below such announced rate), and




     (b) 0.50% per annum above the latest Federal Funds Rate.



     “Benefit Plan” means any employee benefit pension plan as defined in Section 3(2) of
ERISA in respect of which the Seller, the Transferor, any Originator, ACI or any ERISA Affiliate
is, or at any time during the immediately preceding six years was, an “employer” as defined in
Section 3(5) of ERISA.



     “Business Day” means any day (other than a Saturday or Sunday) on which: (a) banks
are not authorized or required to close in New York City, New York, or Pittsburgh,



I-2









 




Pennsylvania; and (b) if this definition of “Business Day” is utilized in connection with the
Euro-Rate, dealings are carried out in the London interbank market.




     “Capital” means, with respect to any Purchaser, the aggregate amounts paid to the
Seller in connection with Funded Purchases in respect of the Purchased Interest by such Purchaser
pursuant to Section 1.2 of the Agreement (including such Purchaser’s Pro Rata Share of the
aggregate amount of all unreimbursed draws deemed to be Funded Purchases pursuant to Section
1.2(e)), as reduced from time to time by Collections distributed and applied on account of such
Capital pursuant to Section 1.4(d) of the Agreement; provided, that if such Capital
shall have been reduced by any distribution and thereafter all or a portion of such distribution is
rescinded or must otherwise be returned for any reason, such Capital shall be increased by the
amount of such rescinded or returned distribution as though it had not been made.



     “Change in Control” means (a) ACI ceases to own, directly or indirectly, 100% of the
issued and outstanding capital stock of Arch Sales free and clear of all Adverse Claims (other than
the lien in favor of PNC, as administrative agent or collateral agent, under any revolving credit
agreement of ACI) or ceases to own, directly or indirectly, 100% of the membership interests of the
Seller free and clear of all Adverse Claims (other than the lien in favor of PNC, as administrative
agent or collateral agent, under any revolving credit agreement of ACI); or (b) any person or group
of persons (within the meaning of Sections 13(d) or 14(a) of the Securities Exchange Act of 1934,
as amended) shall have acquired beneficial ownership of (within the meaning of Rule 13d-3
promulgated by the SEC under said Act) 35% or more of the voting capital stock of ACI; or
(c) within a period of twelve (12) consecutive calendar months, individuals who (1) were directors
of ACI on the first day of such period, (2) were nominated for election by the ACI, or (3) were
appointed by the board shall cease to constitute a majority of the board of directors of ACI.



     “Closing Date” means February 24, 2010.



     “Collections” means, with respect to any Pool Receivable: (a) all funds that are
received by any Originator, the Transferor, ACI, the Seller or the Servicer in payment of any
amounts owed in respect of such Receivable (including purchase price, finance charges, interest and
all other charges), or applied to amounts owed in respect of such Receivable (including insurance
payments and net proceeds of the sale or other disposition of repossessed goods or other collateral
or property of the related Obligor or any other Person directly or indirectly liable for the
payment of such Pool Receivable and available to be applied thereon), (b) all amounts deemed to
have been received pursuant to Section 1.4(e) of the Agreement and (c) all other proceeds
of such Pool Receivable.



     “Commitment” means, with respect to any Related Committed Purchaser, LC Participant or
LC Bank, as applicable, the maximum aggregate amount which such Purchaser is obligated to pay
hereunder on account of all Funded Purchases and all drawings under all Letters of Credit, on a
combined basis, as set forth on Schedule IV or in the Assumption Agreement or other
agreement pursuant to which it became a Purchaser, as such amount may be modified in connection
with any subsequent assignment pursuant to Section 5.3 or in connection with a change in
the Purchase Limit pursuant to Section 1.1(b) of the Agreement). For the avoidance of



I-3









 




doubt, in no event shall the sum of the aggregate Commitments of all Purchasers in a Purchaser
Group exceed such Purchaser Group’s Group Commitment.




     “Commitment Percentage” means, for each Related Committed Purchaser or related LC
Participant in a Purchaser Group, the Commitment of such Related Committed Purchaser or related LC
Participant, as the case may be, divided by the total of all Commitments of all Related Committed
Purchasers or related LC Participants, as the case may be, in such Purchaser Group.



     “Commodity Hedge” means a price protection agreement: (i) related to crude oil,
diesel fuel, heating oil, coal, SO2 allowances or other commodities used in the ordinary course of
business of ACI and its Affiliates and (ii) entered into by ACI and its Affiliates for hedging
purposes in the ordinary course of the operations of their business.



     “Company Note” has the meaning set forth in Section 3.1 of the Purchase and
Sale Agreement.



     “Concentration Percentage” means: (a) for any Group A Obligor, 16%, (b) for any
Group B Obligor, 16%, (c) for any Group C Obligor, 8% and (d) for any Group D Obligor, 4%;
provided, that the Concentration Percentage for TVA, so long as TVA maintains a long term
debt rating of “AAA” by Standard & Poor’s and “Aaa” by Moody’s, shall be 25%.



     “Concentration Reserve” means at any time, the product of (a) the Aggregate Capital
plus the LC Participation Amount, and (b)(i) the Concentration Reserve Percentage divided by (ii) 1
minus the Concentration Reserve Percentage.



     “Concentration Reserve Percentage” means, at any time, the (a) largest of the
following: (i) the sum of the five (5) largest Group D Obligor Receivables balances (up to the
Concentration Percentage for each such Obligor), (ii) the sum of the three (3) largest Group C
Obligor Receivables balances (up to the Concentration Percentage for each such Obligor), (iii) the
sum of the two (2) largest Group B Obligor Receivables balance (up to the Concentration Percentage
for each such Obligor), and (iv) the largest Group A Obligor Receivables balance (up to the
Concentration Percentage for such Obligor), divided by (b) the sum of the outstanding balances of
all Eligible Receivables.



     “Conduit” has the meaning set forth in Section 5.3(c) of the Agreement.



     “Conduit Purchaser” means each commercial paper conduit that is a party to this
Agreement, as a purchaser, or that becomes a party to this Agreement as a purchaser pursuant to an
Assumption Agreement or otherwise.



     “Contract” means, with respect to any Receivable, any and all contracts, instruments,
agreements, leases, invoices, notes or other writings pursuant to which such Receivable arises or
that evidence such Receivable or under which an Obligor becomes or is obligated to make payment in
respect of such Receivable.



     “CP Rate” means, for any Conduit Purchaser and for any Settlement Period for any
Portion of Capital (a) the per annum rate equivalent to the weighted average cost
(as determined by the applicable Purchaser Agent and which shall include commissions of placement
agents and



I-4









 




dealers, incremental carrying costs incurred with respect to Notes of such Person maturing on
dates other than those on which corresponding funds are received by such Conduit Purchaser, other
borrowings by such Conduit Purchaser (other than under any Program Support Agreement) and any other
costs associated with the issuance of Notes) of or related to the issuance of Notes that are
allocated, in whole or in part, by the applicable Conduit Purchaser to fund or maintain such
Portion of Capital (and which may be also allocated in part to the funding of other assets of such
Conduit Purchaser); provided, however, that if any component of such rate is a
discount rate, in calculating the “CP Rate” for such Portion of Capital for such Settlement
Period, the applicable Purchaser Agent shall for such component use the rate resulting from
converting such discount rate to an interest bearing equivalent rate per annum;
provided, further, that notwithstanding anything in this Agreement or the other
Transaction Documents to the contrary, the Seller agrees that any amounts payable to Conduit
Purchasers in respect of Discount for any Settlement Period with respect to any Portion of Capital
funded by such Conduit Purchasers at the CP Rate shall include an amount equal to the portion of
the face amount of the outstanding Notes issued to fund or maintain such Portion of Capital that
corresponds to the portion of the proceeds of such Notes that was used to pay the interest
component of maturing Notes issued to fund or maintain such Portion of Capital, to the extent that
such Conduit Purchaser had not received payments of interest in respect of such interest component
prior to the maturity date of such maturing Notes (for purposes of the foregoing, the “interest
component” of Notes equals the excess of the face amount thereof over the net proceeds received by
such Conduit Purchaser from the issuance of Notes, except that if such Notes are issued on an
interest-bearing basis its “interest component” will equal the amount of interest accruing on such
Notes through maturity) or (b) any other rate designated as the “CP Rate” for such Conduit
Purchaser in an Assumption Agreement or Transfer Supplement or other document pursuant to which
such Person becomes a party as a Conduit Purchaser to this Agreement, or any other writing or
agreement provided by such Conduit Purchaser to the Seller, the Servicer and the applicable
Purchaser Agent from time to time. The “CP Rate” for any day while a Termination Event or an
Unmatured Termination Event exists shall be an interest rate equal to the greater of (a) 3.0% per
annum above the Base Rate as in effect on such day and (b) the Alternate Rate as calculated in the
definition thereof.




     “Credit Agreement” means that certain Credit Agreement dated as of December 22, 2004,
by and among ACI, the banks party thereto, PNC, as administrative agent, Citicorp USA, Inc. and
JPMorgan Chase Bank, N.A. and Wachovia Bank, National Association, as co-syndication agents. Bank
of America, N.A., as documentation agent and PNC Capital Markets, Inc., Citigroup Global Markets
Inc. and J.P. Morgan Securities Inc., as joint lead arrangers, as in effect on the date hereof.



     “Credit Agricole” has the meaning set forth in Section 1.2(i)(i) of the
Agreement.



     “Credit and Collection Policy” means, as the context may require, those receivables
credit and collection policies and practices of the Originators and the Transferor in effect on the
Closing Date and described in Schedule I to the Agreement, as modified in compliance with
the Agreement.



     “Cut-off Date” has the meaning set forth in the Sale Agreements.



I-5









 





     “Days’ Sales Outstanding” means, for any calendar month, an amount computed as of the
last day of such calendar month equal to: (a) the average of the Outstanding Balance of all Pool
Receivables as of the last day of each of the three most recent calendar months ended on the last
day of such calendar month divided by (b) (i) the aggregate credit sales made by the Originators
and the Transferor during the three calendar months ended on the last day of such calendar month
divided by (ii) 90.



     “Debt” means, as to any Person at any time, any and all indebtedness, obligations or
liabilities (whether matured or unmatured, liquidated or unliquidated, direct or indirect, absolute
or contingent, or joint or several) of such Person for or in respect of: (i) borrowed money,
(ii) amounts raised under or liabilities in respect of any note purchase or acceptance credit
facility, (iii) reimbursement obligations (contingent or otherwise) under any letter of credit,
(iv) any other transaction (including production payments (excluding royalties), installment
purchase agreements, forward sale or purchase agreements, capitalized leases and conditional sales
agreements) having the commercial effect of a borrowing of money entered into by such Person to
finance its operations or capital requirements (but not including trade payable and accrued
expenses incurred in the ordinary course of business which are not represented by a promissory note
or other evidence of indebtedness and which are not more than thirty (30) days past due), or
(v) any Guaranty of any such Indebtedness. It is understood that obligations in respect of any
Hedging Transaction shall not be deemed to be Debt.



     “Declining Conduit Purchaser” has the meaning set forth in Section 1.4(b)(ii)
of this Agreement.



     “Declining Notice” has the meaning set forth in Section 1.4(b)(ii) of this
Agreement.



     “Default Ratio” means the ratio (expressed as a percentage and rounded to the nearest
1/100 of 1%, with 5/1000th of 1% rounded upward) computed as of the last day of each calendar month
by dividing: (a) the aggregate Outstanding Balance of all Pool Receivables that became Defaulted
Receivables during such month (other than Receivables that became Defaulted Receivables as a result
of an Insolvency Proceeding with respect to the Obligor thereof during such month), by (b) the
aggregate credit sales made by the Originators and the Transferor during the month that is seven
calendar months before such month.



     “Defaulted Receivable” means a Receivable:




     (a) as to which any payment, or part thereof, remains unpaid for more than 150
days from the original due date for such payment, or




     (b) without duplication (i) as to which an Insolvency Proceeding shall have
occurred with respect to the Obligor thereof or any other Person obligated thereon
or owning any Related Security with respect thereto, or (ii) that has been written
off the applicable Originator’s or the Transferor’s books as uncollectible.



     “Delinquency Ratio” means the ratio (expressed as a percentage and rounded to the
nearest 1/100 of 1%, with 5/1000th of 1% rounded upward) computed as of the last day of each
calendar month by dividing: (a) the aggregate Outstanding Balance of all Pool Receivables that



I-6









 




were Delinquent Receivables on such day by (b) the aggregate Outstanding Balance of all Pool
Receivables on such day.




     “Delinquent Receivable” means a Receivable as to which any payment, or part thereof,
remains unpaid for more than 60 days from the original due date for such payment.



     “Dilution Horizon” means, for any calendar month, the ratio (expressed as a percentage
and rounded to the nearest 1/100th of 1%, with 5/1000th of 1% rounded upward) computed as of the
last day of such calendar month of: (a) the aggregate credit sales made by the Originators and the
Transferor during the two most recent calendar months to (b) the Net Receivables Pool Balance at
the last day of the most recent calendar month.



     “Dilution Ratio” means the ratio (expressed as a percentage and rounded to the nearest
1/100th of 1%, with 5/1000th of 1% rounded upward), computed as of the last day of each calendar
month by dividing: (a) the aggregate amount of payments made or owed by the Seller pursuant to
Section 1.4(e)(i) of the Agreement during such calendar month by (b) the aggregate credit
sales made by the Originators and the Transferor during the calendar month that is one month prior
to such calendar month.



     “Dilution Reserve” means, on any day, an amount equal to: (a) the sum of the Capital
plus the LC Participation Amount at the close of business of the Servicer on such day multiplied by
(b) (i) the Dilution Reserve Percentage on such day, divided by (ii) 100% minus the
Dilution Reserve Percentage on such day.



     “Dilution Reserve Percentage” means, on any day, the product of (a) the Dilution
Horizon multiplied by (b) the sum of (i) 2.25 times the average of the Dilution Ratios for the
twelve most recent calendar months and (ii) the Spike Factor.



     “Discount” means, with respect to any Purchaser:




     (a) for any Portion of Capital for any Settlement Period with respect to any Purchaser
to the extent such Portion of Capital will be funded by such Purchaser during such
Settlement Period through the issuance of Notes:



CPR x C x ED/360





     (b) for any Portion of Capital for any Settlement Period with respect to any Purchaser
to the extent such Portion of Capital will not be funded by such Purchaser during such
Settlement Period through the issuance of Notes or, if the LC Bank and/or any LC Participant
has made, or has deemed to have made, a Funded Purchase in connection with any drawing under
a Letter of Credit which accrues Discount pursuant to Section 1.2(e) of the
Agreement:



AR x C x ED/Year + TF






I-7









 








     where:



	 	 	 	 	 	 	 

	 

	 	AR
	 	=
	 	the Alternate Rate for such Portion of Capital for such
Settlement Period with respect to such Purchaser,
	 
	 

	 	C
	 	=
	 	the Portion of Capital during such Settlement Period with
respect to such Purchaser,
	 
	 

	 	CPR
	 	=
	 	the CP Rate for the Portion of Capital for such Settlement
Period with respect to such Purchaser,
	 
	 

	 	ED
	 	=
	 	the actual number of days during such Settlement Period,
	 
	 

	 	Year
	 	=
	 	if such Portion of Capital is funded based upon: (i) the
Euro-Rate, 360 days, and (ii) the Base Rate, 365 or 366 days, as applicable,
and
	 
	 

	 	TF
	 	=
	 	the Termination Fee, if any, for the Portion of Capital for
such Settlement Period with respect to such Purchaser;





provided, that no provision of the Agreement shall require the payment or permit the
collection of Discount in excess of the maximum permitted by applicable law; and provided
further, that Discount for the Portion of Capital shall not be considered paid by any
distribution to the extent that at any time all or a portion of such distribution is rescinded or
must otherwise be returned for any reason.




     “Drawing Date” has the meaning set forth in Section 1.14 of the Agreement.



     “Eligible Assignee” means any bank or financial institution acceptable to the LC Bank
and the Administrator.



     “Eligible Foreign Obligor” means an Obligor which is a resident of any country (other
than the United States of America) that has a short-term foreign currency rating (or, if such
country does not have such a short-term foreign currency rating, a long-term foreign currency
rating) of at least “A2” (or “A”) by Standard & Poor’s and “P-1” (or “A2”) by Moody’s.



     “Eligible Receivable” means, at any time, a Pool Receivable:




     (a) the Obligor of which is: (i) (A) United States resident or (B) an Eligible Foreign
Obligor; (ii) not (A) a United States Federal Government Authority or (B) a governmental
entity within the State of Ohio; provided that TVA shall not be subject to the
restriction set forth in clause (ii)(A) above; (iii) not subject to any action of
the type described in paragraph (f) of Exhibit V to the Agreement; and (iv)
not an Affiliate of ACI, the Transferor, the Servicer or any other Originator,




     (b) that is denominated and payable only in U.S. dollars in the United States, and the
Obligor with respect to which has been instructed to remit Collections in respect thereof to
a Lock-Box Account in the United States of America,



I-8









 






     (c) that does not have a stated maturity which is more than 35 days after the original
invoice date of such Receivable; provided, that up to 10% of “Eligible Receivables”
may have stated maturities of greater than 35 days and no more than 60 days after the
original invoice date of such Receivables,




     (d) that arises under a duly authorized Contract for the sale and delivery of goods or
services in the ordinary course of the applicable Originator’s or the Transferor’s business,




     (e) that arises under a duly authorized Contract that is in full force and effect and
that is a legal, valid and binding obligation of the related Obligor, enforceable against
such Obligor in accordance with its terms,




     (f) that conforms in all material respects with all applicable laws, rulings and
regulations in effect,




     (g) that is not the subject of any asserted dispute, offset, hold back, defense,
Adverse Claim or other claim, provided that, with respect to any Pool Receivable which is
subject to any such claim, the amount of such Pool Receivable which shall be treated as an
Eligible Receivable shall equal the excess of the amount of such Pool Receivable over the
amount of such claim asserted by or available to the related Obligor,




     (h) that satisfies all applicable requirements of the applicable Credit and Collection
Policy,




     (i) that has not been modified, waived or restructured since its creation, except as
permitted pursuant to Section 4.2 of the Agreement,




     (j) in which the Seller owns good and marketable title, free and clear of any Adverse
Claims, and that is freely assignable by the Seller (including without any consent of the
related Obligor),




     (k) for which the Administrator (on behalf of the Purchasers) shall have a valid and
enforceable undivided percentage ownership or security interest, to the extent of the
Purchased Interest, and a valid and enforceable first priority perfected security interest
therein and in the Related Security and Collections with respect thereto, in each case free
and clear of any Adverse Claim,




     (l) that constitutes an account as defined in the UCC, and that is not evidenced by
instruments or chattel paper,




     (m) that is neither a Defaulted Receivable nor a Delinquent Receivable,




     (n) for which neither the Originator thereof, the Transferor, the Seller nor the
Servicer has established any offset arrangements with the related Obligor,




     (o) for which the sum of the Outstanding Balances of all Receivables of the related
Obligor with respect to which any payment, or part thereof, remains unpaid for



I-9









 






more than 90 days from the original due date for such payment do not exceed 35.00% of
the Outstanding Balance of all such Obligor’s Receivables,




     (p) that represents amounts earned and payable by the Obligor that are not subject to
the performance of additional services by the Originator thereof or the Transferor,




     (q) that if such Receivable has not yet been billed, the related coal has been shipped
within the last 60 days; and




     (r) that if such Receivable is a Rio Tinto Receivable, a Rio Tinto Trigger Event has
not occurred with respect to any Rio Tinto Receivable (it being understood that upon the
occurrence of a Rio Tinto Trigger Event with respect to any Receivable, then on and after
such time, no Rio Tinto Receivables, whether or not then in the Receivables Pool prior to
such Rio Tinto Trigger Event, shall be an Eligible Receivable).



     “ERISA” means the Employee Retirement Income Security Act of 1974, as amended from
time to time, and any successor statute of similar import, together with the rulings and
regulations thereunder, in each case as in effect from time to time. References to sections of
ERISA also refer to any successor sections.



     “ERISA Affiliate” means: (a) any corporation that is a member of the same controlled
group of corporations (within the meaning of Section 414(b) of the Internal Revenue Code) as the
Seller, the Transferor, any Originator or ACI, (b) a trade or business (whether or not
incorporated) under common control (within the meaning of Section 414(c) of the Internal Revenue
Code) with the Seller, the Transferor, any Originator or ACI, or (c) a member of the same
affiliated service group (within the meaning of Section 414(m) of the Internal Revenue Code) as the
Seller, the Transferor, any Originator, any corporation described in clause (a) or any
trade or business described in clause (b).



     “Euro-Rate” means with respect to any Settlement Period the interest rate per annum
determined by the applicable Purchaser Agent by dividing (the resulting quotient rounded upwards,
if necessary, to the nearest 1/100th of 1% per annum) (i) the rate of interest determined by such
Purchaser Agent in accordance with its usual procedures (which determination shall be conclusive
absent manifest error) to be the rate per annum for deposits in U.S. dollars as reported by
Bloomberg Finance L.P. and shown on US0001M Screen as the composite offered rate for London
interbank deposits for such period (or on any successor or substitute page of such service, or any
successor or substitute for such service, providing rate quotations comparable to those currently
provided on such page of such service, as determined by such Purchase Agent from time to time for
purposes of providing quotations of interest rates applicable to dollar deposits in the London
interbank market at or about 11:00 a.m. (London time) on the Business Day which is two (2) Business
Days prior to the first day of such Settlement Period for an amount comparable to the Portion of
Capital to be funded at the Alternate Rate and based upon the Euro-Rate during such Settlement
Period by (ii) a number equal to 1.00 minus the Euro-Rate Reserve Percentage. The Euro-Rate may
also be expressed by the following formula:



     Euro-Rate = Composite of London interbank offered rates



I-10









 




shown on Bloomberg Finance L.P. Screen

US0001M or appropriate successor


1.00 - Euro-Rate Reserve Percentage



where “Euro-Rate Reserve Percentage” means, the maximum effective percentage in effect on
such day as prescribed by the Board of Governors of the Federal Reserve System (or any successor)
for determining the reserve requirements (including without limitation, supplemental, marginal, and
emergency reserve requirements) with respect to eurocurrency funding (currently referred to as
“Eurocurrency Liabilities”). The Euro-Rate shall be adjusted with respect to any Portion
of Capital funded at the Alternate Rate and based upon the Euro-Rate that is outstanding on the
effective date of any change in the Euro-Rate Reserve Percentage as of such effective date. The
applicable Purchaser Agent shall give prompt notice to the Seller of the Euro-Rate as determined or
adjusted in accordance herewith (which determination shall be conclusive absent manifest error).




     “Excess Concentration” means the sum of the following amounts: (i) the amount by which
the Outstanding Balance of Eligible Receivables of each Obligor then in the Receivables Pool
exceeds an amount equal to the Concentration Percentage for such Obligor multiplied by the
Outstanding Balance of all Eligible Receivables then in the Receivables Pool, plus (ii) the amount
by which the aggregate Outstanding Balance of all Eligible Receivables then in the Receivables Pool
the Obligor of which is a Canadian resident exceeds 15% of the aggregate Outstanding Balance of all
Eligible Receivables then in the Receivables Pool, plus (iii) the amount by which the aggregate
Outstanding Balance of all Eligible Receivables then in the Receivable Pool the Obligor of which is
an Eligible Foreign Obligor (other than a resident of Canada) exceeds 5% of the aggregate
Outstanding Balance of all Eligible Receivables then in the Receivables Pool, plus (iv) the amount
by which the aggregate Outstanding Balance of all Eligible Receivables then in the Receivables Pool
the coal with respect to which has been shipped but not yet billed for more than 30 days but not
more than 60 days from shipment exceeds 10% of the aggregate Outstanding Balance of all Eligible
Receivables then in the Receivables Pool.



     “Excluded Subsidiary” means Arch Western Acquisition Corporation, a Delaware
corporation, Arch Western Resources, LLC, a Delaware limited liability company, and any
Subsidiaries of Arch Western Resources, LLC.



     “Exiting Notice” has the meaning set forth in Section 1.4(b)(ii) of this
Agreement.



     “Exiting Purchaser” has the meaning set forth in Section 1.4(b)(ii) of this
Agreement.



     “Facility Termination Date” means the earliest to occur of: (a) May 22, 2013, (b) the
date determined pursuant to Section 2.2 of the Agreement, (c) the date the Purchase Limit
reduces to zero pursuant to Section 1.1(b) of the Agreement, (d) with respect to each
Purchaser Group, the earliest to occur of (i) the date that the commitments of the related
Liquidity Providers terminate under the Liquidity Agreement and (ii) the date that the Commitments
of all Related Committed Purchasers in such Purchaser Group terminate hereunder, (e) the date which
is 30 days after the date on which the Administrator has received written notice from the Seller of
its election to terminate the Purchase Facility and (f) with respect to the LC Bank, any LC



I-11









 




Participant or any Related Committed Purchaser, the LC Bank’s, such LC Participant’s or such
Related Committed Purchaser’s Scheduled Commitment Termination Date.




     “FAS 166/167” has the meaning set forth in Section 1.7(c) of the Agreement.



     “FASB” has the meaning set forth in Section 1.7(a) of the Agreement.



     “Federal Funds Rate” means, for any day, the per annum rate set forth in the weekly
statistical release designated as H.15(519), or any successor publication, published by the Federal
Reserve Board (including any such successor, “H.15(519)”) for such day opposite the caption
“Federal Funds (Effective).” If on any relevant day such rate is not yet published in H. 15(519),
the rate for such day will be the rate set forth in the daily statistical release designated as the
Composite 3:30 p.m. Quotations for U.S. Government Securities, or any successor publication,
published by the Federal Reserve Bank of New York (including any such successor, the “Composite
3:30 p.m. Quotations”) for such day under the caption “Federal Funds Effective Rate.” If on any
relevant day the appropriate rate is not yet published in either H.15(519) or the Composite 3:30
p.m. Quotations, the rate for such day will be the arithmetic mean as determined by the
Administrator of the rates for the last transaction in overnight Federal funds arranged before 9:00
a.m. (New York time) on that day by each of three leading brokers of Federal funds transactions in
New York City selected by the Administrator.



     “Federal Reserve Board” means the Board of Governors of the Federal Reserve System, or
any entity succeeding to any of its principal functions.



     “Fee Letters” has the meaning set forth in Section 1.5 of the Agreement.



     “Fees” means the fees payable by the Seller pursuant to the applicable Fee Letter.



     “Funded Purchase” shall mean a purchase or deemed purchase of undivided percentage
ownership interests in the Purchased Interest under the Agreement which (i) is paid for in cash,
including pursuant to Section 1.1(b) (other than through reinvestment of Collections
pursuant to Section 1.4(b) of the Agreement) or (ii) is treated as a Funded Purchase
pursuant to Section 1.2(e) of the Agreement and/or any of the provisions set forth in
Sections 1.11 through 1.20 of the Agreement.



     “Governmental Acts” has the meaning set forth in Section 1.19 of the Agreement.



     “Governmental Authority” means any nation or government, any state or other political
subdivision thereof, any central bank (or similar monetary or regulatory authority) thereof, any
body or entity exercising executive, legislative, judicial, regulatory or administrative functions
of or pertaining to government, including any court, and any Person owned or controlled, through
stock or capital ownership or otherwise, by any of the foregoing.



     “Group A Obligor” means any Obligor with a short-term rating of at least: (a) “A1” by
Standard & Poor’s, or if such Obligor does not have a short-term rating from Standard & Poor’s, a
rating of “A+” or better by Standard & Poor’s on its long-term senior unsecured and
uncredit-enhanced debt securities, and (b) “P-1” by Moody’s, or if such Obligor does not
have a short-



I-12









 




term rating from Moody’s, “Al” or better by Moody’s on its long-term senior unsecured and
uncredit-enhanced debt securities.




     “Group B Obligor” means an Obligor, not a Group A Obligor, with a short-term rating of
at least: (a) “A-2” by Standard & Poor’s, or if such Obligor does not have a short-term rating
from Standard & Poor’s, a rating of “BBB+” to “A” by Standard & Poor’s on its long-term senior
unsecured and uncredit-enhanced debt securities, and (b) “P-2” by Moody’s, or if such
Obligor does not have a short-term rating from Moody’s, “Baal” to “A2” by Moody’s on its long-term
senior unsecured and uncredit-enhanced debt securities.



     “Group Capital” means, with respect to any Purchaser Group, an amount equal to the
aggregate outstanding Capital of all Purchasers within such Purchaser Group.



     “Group C Obligor” means an Obligor, not a Group A Obligor or a Group B Obligor, with a
short-term rating of at least: (a) “A-3” by Standard & Poor’s, or if such Obligor does not have a
short-term rating from Standard & Poor’s, a rating of “BBB-” to “BBB” by Standard & Poor’s on its
long-term senior unsecured and uncredit-enhanced debt securities, and (b) “P-3” by Moody’s,
or if such Obligor does not have a short-term rating from Moody’s, “Baa3” to “Baa2” by Moody’s on
its long-term senior unsecured and uncredit-enhanced debt securities.



     “Group Commitment” means, with respect to any Purchaser Group, the aggregate of the
Commitments of each Related Committed Purchaser within such Purchaser Group, which amount is set
forth on Schedule IV hereto.



     “Group D Obligor” means any Obligor that is not a Group A Obligor, Group B Obligor or
Group C Obligor.



     “Guaranty” of any Person means any obligation of such Person guarantying or in effect
guarantying any liability or obligation of any other Person in any manner, whether directly or
indirectly, including any such liability arising by virtue of partnership agreements, including any
agreement to indemnify or hold harmless any other Person, any performance bond or other suretyship
arrangement and any other form of assurance against loss, except endorsement of negotiable or other
instruments for deposit or collection in the ordinary course of business.



     “Hedging Transaction” means any of the following transactions by ACI or any of its
Subsidiaries: any rate swap transaction, basis swap, forward rate transaction, commodity swap,
commodity option, equity or equity index swap, equity or equity index option, bond option, interest
rate option, foreign exchange transaction, cap transaction, floor transaction, collar transaction,
currency swap transaction, cross-currency rate swap transaction, currency option or any other
similar transaction or any combination of the foregoing transactions, including, without
limitation, any Interest Rate Hedge or any Commodity Hedge.



     “Indemnified Amounts” has the meaning set forth in Section 3.1 of the
Agreement.



     “Indemnified Party” has the meaning set forth in Section 3.1 of the Agreement.



     “Independent Director” has the meaning set forth in paragraph 3(c) of
Exhibit IV to the Agreement.



I-13









 





     “Information Package” means a report, in substantially the form of Annex A to
the Agreement, furnished to the Administrator pursuant to the Agreement.



     “Insolvency Proceeding” means (a) any case, action or proceeding before any court or
other Governmental Authority relating to bankruptcy, reorganization, insolvency, liquidation,
receivership, dissolution, winding-up or relief of debtors, or (b) any general assignment for the
benefit of creditors of a Person, composition, marshaling of assets for creditors of a Person, or
other, similar arrangement in respect of its creditors generally or any substantial portion of its
creditors, in each of cases (a) and (b) undertaken under U.S. Federal, state or foreign law,
including the Bankruptcy Code.



     “Interest Rate Hedge” means an interest rate exchange, collar, cap, swap, adjustable
strike cap, adjustable strike corridor or similar agreements entered into by ACI or any of its
Affiliates in the ordinary course operations of their business.



     “Internal Revenue Code” means the Internal Revenue Code of 1986, as amended from time
to time, and any successor statute of similar import, together with the regulations thereunder, in
each case as in effect from time to time. References to sections of the Internal Revenue Code also
refer to any successor sections.



     “LC Bank” has the meaning set forth in the preamble to the Agreement.



     “LC Collateral Account” means the account designated as the LC Collateral Account
established and maintained by the Administrator (for the benefit of the LC Bank and the LC
Participants), or such other account as may be so designated as such by the Administrator.



     “LC Participant” means each Person listed as such (and its respective Commitment) for
each Purchaser Group as set forth on the signature pages of this Agreement or in any Assumption
Agreement or Transfer Supplement.



     “LC Participation Amount” shall mean, at any time, the then sum of the undrawn amounts
of all outstanding Letters of Credit.



     “Letter of Credit” shall mean any stand-by letter of credit issued by the LC Bank for
the account of the Seller pursuant to the Agreement.



     “Letter of Credit Application” has the meaning set forth in Section 1.12 of
the Agreement.



     “Liquidity Agent” means any bank or other financial institution acting as agent for
the various Liquidity Providers under each Liquidity Agreement.



     “Liquidity Agreement” means any agreement entered into in connection with this
Agreement pursuant to which a Liquidity Provider agrees to make purchases or advances to, or
purchase assets from, any Conduit Purchaser in order to provide liquidity for such Conduit
Purchaser’s Purchases.



I-14









 





     “Liquidity Provider” means each bank or other financial institution that provides
liquidity support to any Conduit Purchaser pursuant to the terms of a Liquidity Agreement.



     “LLC Agreement” means the limited liability company agreement of Seller.



     “Lock-Box Account” means each account listed on Schedule II to this Agreement
(in each case, in the name of the Seller) and maintained at a bank or other financial institution
acting as a Lock-Box Bank pursuant to a Lock-Box Agreement for the purpose of receiving
Collections.



     “Lock-Box Agreement” means each agreement, in form and substance satisfactory to the
Administrator, among the Seller, the Servicer, the Administrator and a Lock-Box Bank, governing the
terms of the related Lock-Box Accounts.



     “Lock-Box Bank” means any of the banks or other financial institutions holding one or
more Lock-Box Accounts.



     “Loss Reserve” means, on any date, an amount equal to: (a) the sum of the Aggregate
Capital plus the LC Participation Amount at the close of business of the Servicer on such date
multiplied by (b) (i) the Loss Reserve Percentage on such date divided by (ii) 100% minus the Loss
Reserve Percentage on such date.



     “Loss Reserve Percentage” means, on any date,(i) the product of (A) 2.25 times (B) the
highest average of the Default Ratios for any three consecutive calendar months during the twelve
most recent calendar months times (C) the aggregate credit sales made by the Originators and the
Transferor during the 5 most recent calendar months divided by (ii) the Net Receivables Pool
Balance as of such date.



     “Majority LC Participants” means, at any time, the LC Participants whose Commitments
aggregate more than 50% of the Commitments of all LC Participants at such time; provided,
that so long as the aggregate of Commitments of all LC Participants in any Purchaser Group is
greater than 50% of the aggregate of the Commitments of all LC Participants in all Purchaser
Groups, then “Majority LC Participants” shall mean the LC Participants, in a minimum of two
Purchaser Groups, whose Commitments aggregate more than 50% of the aggregate of the Commitments of
all LC Participants in all Purchaser Groups.



     “Majority Purchaser Agents” means, at any time, the Purchaser Agents for the Purchaser
Groups with Related Committed Purchasers whose Commitments aggregate more than 50% of the aggregate
of the Commitments of all Related Committed Purchasers in all Purchaser Groups; provided,
that so long as the aggregate of the Commitments of all Related Committed Purchasers in any
Purchaser Group is greater than 50% of the aggregate of the Commitments of all Related Committed
Purchasers in all Purchaser Groups, then “Majority Purchaser Agents” shall mean a minimum of two
Purchaser Agents for Purchaser Groups with Related Committed Purchasers whose Commitments aggregate
more than 50% of the aggregate of the Commitments of all Related Committed Purchasers in all
Purchaser Groups.



     “Market Street” has the meaning set forth in the Preliminary Statements of the
Agreement.



I-15









 





     “Material Adverse Effect” means relative to any Person with respect to any event or
circumstance, a material adverse effect on:




     (a) the assets, operations, business or financial condition of such Person,




     (b) the ability of any such Person to perform its obligations under the Agreement or
any other Transaction Document to which it is a party,




     (c) the validity or enforceability of the Agreement or any other Transaction Document,
or the validity, enforceability or collectibility of any of the Pool Receivables, or




     (d) the status, perfection, enforceability or priority of the Administrator’s, any
Purchaser’s or the Seller’s interest in the Pool Assets.



     “Minimum Dilution Reserve” means, on any day, an amount equal to (a) the Minimum
Dilution Reserve Percentage divided by (b) 100% minus the Minimum Dilution Reserve Percentage on
such day.



     “Minimum Dilution Reserve Percentage” means, on any day, the product of (a) the
average of the Dilution Ratios for the twelve most recent calendar months multiplied by (b) the
Dilution Horizon.



     “Monthly Settlement Date” means the 21st day of each calendar month (or if such day is
not a Business Day, the next occurring Business Day); provided, however, that on and after the
occurrence and continuation of any Termination Event, the Monthly Settlement Date shall be the date
selected as such by the Administrator (with the consent or at the direction of the Majority
Purchaser Agents) from time to time (it being understood that the Administrator (with the
consent or at the direction of the Majority Purchaser Agents) may select such Monthly Settlement
Date to occur as frequently as daily) or, in the absence of any such selection, the date which
would be the Monthly Settlement Date pursuant to this definition).



     “Moody’s” means Moody’s Investors Service, Inc.



     “Mortgage” is defined in the Credit Agreement.



     “Net Receivables Pool Balance” means, at any time: (a) the Outstanding Balance of
Eligible Receivables then in the Receivables Pool minus (b) the Excess Concentration.



     “Notes” means short-term promissory notes issued, or to be issued, by any Conduit
Purchaser to fund its investments in accounts receivable or other financial assets.



     “Obligor” means, with respect to any Receivable, the Person obligated to make payments
pursuant to the Contract relating to such Receivable.



     “Order” has the meaning set forth in Section 1.20 of the Agreement.



I-16









 





     “Original Agreement” has the meaning set forth in Preliminary Statements of this
Agreement.



     “Original Agreement Outstanding Amounts” has the meaning set forth in the Preliminary
Statements of this Agreement.



     “Original Closing Date” means February 3, 2006.



     “Originator” and “Originators” have the meaning set forth in the Purchase and
Sale Agreement, as the same may be modified from time to time by adding new Originators or removing
Originators, in each case with the prior written consent of the Administrator.



     “Outstanding Balance” of any Receivable at any time means the then outstanding
principal balance thereof.



     “Participant” has the meaning set forth in Section 5.3(b) of this Agreement.



     “Paydown Notice” has the meaning set forth in Section 1.4(f)(i) of the
Agreement.



     “Performance Guarantor” means ACI.



     “Performance Guaranty” means the Performance Guaranty, dated as of February 3, 2006,
by the Performance Guarantor in favor of the Administrator for the benefit of the Purchasers and LC
Participants, as the same may be amended, restated, supplemented or otherwise modified from time to
time.



     “Permitted Merger” means (i) any merger of any existing Originator into any other
existing Originator or (ii) any merger of any existing Originator into ACI.



     “Person” means an individual, partnership, corporation (including a business trust),
joint stock company, trust, unincorporated association, joint venture, limited liability company or
other entity, or a government or any political subdivision or agency thereof.



     “PNC” has the meaning set forth in the preamble to the Agreement.



     “Pool Assets” has the meaning set forth in Section 1.2(d) of the Agreement.



     “Pool Receivable” means a Receivable in the Receivables Pool.



     “Portion of Capital” means, with respect to any Purchaser and its related Capital, the
portion of such Capital being funded or maintained by such Purchaser by reference to a particular
interest rate basis.



     “Program Support Agreement” means and includes any Liquidity Agreement and any other
agreement entered into by any Program Support Provider providing for: (a) the issuance of one or
more letters of credit for the account of any Conduit Purchaser, (b) the issuance of one or more
surety bonds for which any Conduit Purchaser is obligated to reimburse the applicable Program
Support Provider for any drawings thereunder, (c) the sale by any Conduit Purchaser to



I-17









 




any Program Support Provider of the Purchased Interest (or portions thereof) maintained by
such Conduit Purchaser and/or (d) the making of loans and/or other extensions of credit to any
Conduit Purchaser in connection with such Conduit Purchaser’s receivables-securitization program
contemplated in the Agreement, together with any letter of credit, surety bond or other instrument
issued thereunder.




     “Program Support Provider” means and includes, with respect to any Conduit Purchaser,
any Liquidity Provider and any other Person (other than any customer of such Conduit Purchaser) now
or hereafter extending credit or having a commitment to extend credit to or for the account of, or
to make purchases from, such Conduit Purchaser pursuant to any Program Support Agreement.



     “Pro Rata Share” shall mean, as to any LC Participant, a fraction, the numerator of
which equals the Commitment of such LC Participant at such time and the denominator of which equals
the aggregate of the Commitments of all LC Participants at such time.



     “Purchase” has the meaning set forth in Section 1.1(a) of this Agreement.



     “Purchase and Sale Agreement” means the Purchase and Sale Agreement, dated as of
February 3, 2006, between the Originators and the Transferor, as such agreement may be amended,
supplemented or otherwise modified from time to time.



     “Purchase and Sale Indemnified Amounts” has the meaning set forth in Section
9.1 of the Purchase and Sale Agreement.



     “Purchase and Sale Indemnified Party” has the meaning set forth in Section 9.1
of the Purchase and Sale Agreement.



     “Purchase and Sale Termination Date” has the meaning set forth in Section 1.4
of the Purchase and Sale Agreement.



     “Purchase and Sale Termination Event” has the meaning set forth in Section 8.1
of the Purchase and Sale Agreement.



     “Purchase Date” means the date on which a Funded Purchase or a reinvestment is made
pursuant to this Agreement.



     “Purchase Facility” has the meaning set forth in Section 1.1 of the Purchase
and Sale Agreement.



     “Purchase Limit” means $175,000,000, as such amount may be reduced pursuant to
Section 1.1 (b) of the Agreement or otherwise in connection with any Exiting Purchaser, or
increased pursuant to Section 1.1(f) of this Agreement. References to the unused portion
of the Purchase Limit shall mean, at any time, the Purchase Limit minus the sum of the then
Aggregate Capital plus the LC Participation Amount.



     “Purchase Notice” has the meaning set forth in Section 1.2(a) of the
Agreement.



I-18









 





     “Purchase Price” has the meaning set forth in Section 2.1 of the Purchase and
Sale Agreement.



     “Purchase Report” has the meaning set forth in Section 2.1 of the Purchase and
Sale Agreement.



     “Purchased Interest” means, at any time, the undivided percentage ownership interest
in: (a) each and every Pool Receivable now existing or hereafter arising, (b) all Related Security
with respect to such Pool Receivables and (c) all Collections with respect to, and other proceeds
of, such Pool Receivables and Related Security. Such undivided percentage interest shall be
computed as:



Aggregate Capital + Adjusted LC

Participation Amount + Total Reserves

Net Receivables Pool Balance



The Purchased Interest shall be determined from time to time pursuant to Section 1.3 of the
Agreement.




     “Purchaser” means each Conduit Purchaser, Related Committed Purchaser, LC Participant
and the LC Bank.



     “Purchaser Agent” means each Person acting as agent on behalf of a Purchaser Group and
designated as a Purchaser Agent for such Purchaser Group on the signature pages to this Agreement
or any other Person who becomes a party to this Agreement as a Purchaser Agent pursuant to an
Assumption Agreement or a Transfer Supplement.



     “Purchaser Group” means, for any Conduit Purchaser, such Conduit Purchaser, together
with such Conduit Purchaser’s Related Committed Purchasers, related Purchaser Agent and related LC
Participants and, in the case of Market Street as a Conduit Purchaser, the LC Bank.



     “Purchasers’ Share” of any amount, at any time, means such amount multiplied by the
Purchased Interest at such time.



     “Purchasing Related Committed Purchaser” has the meaning set forth in Section
5.3(c) of this Agreement.



     “Ratable Share’ means, for each Purchaser Group, such Purchaser Group’s Group
Commitment divided by the aggregate Group Commitments of all Purchaser Groups.



     “Rating Agency” mean each of Standard & Poor’s and Moody’s (and/or each other rating
agency then rating the Notes of any Conduit Purchaser).



     “Receivable” means any indebtedness and other obligations owed to any Originator, the
Transferor or the Seller, or any right of the Seller, the Transferor or any Originator to payment
from or on behalf of, an Obligor, whether constituting an account, as-extracted collateral, chattel
paper, payment intangible, instrument or general intangible, in each instance arising in connection
with the sale of goods or the rendering of services, and includes, without limitation,



I-19









 




the obligation to pay any finance charges, fees and other charges with respect thereto.
Indebtedness and other obligations arising from any one transaction, including, without limitation,
indebtedness and other obligations represented by an individual invoice or agreement, shall
constitute a Receivable separate from a Receivable consisting of the indebtedness and other
obligations arising from any other transaction.




     “Receivables Pool” means, at any time, all of the then outstanding Receivables
purchased by the Seller pursuant to the Sale and Contribution Agreement prior to the Facility
Termination Date.



     “Reimbursement Obligation” has the meaning set forth in Section 1.14 of the
Agreement.



     “Related Committed Purchaser” means each Person listed as such for each Conduit
Purchaser as set forth on the signature pages of this Agreement or in any Assumption Agreement or
Transfer Supplement.



     “Related Rights” has the meaning set forth in Section 1.1 of the Purchase and
Sale Agreement.



     “Related Security” means, with respect to any Receivable:




     (a) all of the Seller’s, the Transferor’s and each Originator’s interest in any goods
(including returned goods), and documentation of title evidencing the shipment or storage of
any goods (including returned goods), the sale of which gave rise to such Receivable,




     (b) all instruments and chattel paper that may evidence such Receivable,




     (c) all other security interests or liens and property subject thereto from time to
time purporting to secure payment of such Receivable, whether pursuant to the Contract
related to such Receivable or otherwise, together with all UCC financing statements or
similar filings relating thereto,




     (d) all of the Seller’s, the Transferor’s and each Originator’s rights, interests and
claims under the Contracts and all guaranties, indemnities, insurance and other agreements
(including the related Contract) or arrangements of whatever character from time to time
supporting or securing payment of such Receivable or otherwise relating to such Receivable,
whether pursuant to the Contract related to such Receivable or otherwise, and




     (e) all of the Seller’s rights, interests and claims under the Sale Agreements and the
other Transaction Documents.



     “Restricted Payments” has the meaning set forth in Section 1(n) of Exhibit
IV of the Agreement.



     “Release Agreement” means, as the context may require, either of or both of (a) the
letter agreement dated as of February 3, 2006, and (b) the letter agreement dated as of February
24,



I-20









 




2010, in each case between ACI and PNC, as administrative agent and collateral agent, as may
be amended, modified, restated or replaced from time to time with the consent of the Administrator.




     “Rio Tinto” means Rio Tinto Energy America Inc.



     “Rio Tinto Receivable” means a Receivable (a) arising under the “SRP Contract” (as
such term is defined in the Coal Sales Agreement, dated October 1, 2009, by and among Arch Coal and
Kennecott Coal Sales Company (the “SRP Agreement”) and acquired by Arch Coal pursuant to
the terms and conditions of such SRP Agreement or (b) arising under a “Coal Sales Agreement” (as
such term is defined in the Arch Coal Supply Agreement, dated October 1, 2009, between Arch Coal
and Rio Tinto (the “Rio Tinto Agreement”) and acquired by Arch Coal pursuant to the terms
and conditions of such Rio Tinto Agreement.



     “Rio Tinto Trigger Event” means, with respect to all Rio Tinto Receivables, the first
to occur of (a) Rio Tinto shall fail to maintain a long term debt rating of at least “BBB-” by
Standard & Poor’s and “Baa3” by Moody’s and (b) the aggregate amount of any asserted
dispute, offset, hold back, defense, or Adverse Claim outstanding against all Rio Tinto Receivables
shall be greater than $50,000.



     “Sale Agreements” means, collectively the Purchase and Sale Agreement and the Sale and
Contribution Agreement.



     “Sale and Contribution Agreement” means the Sale and Contribution Agreement, dated as
of February 3, 2006, between the Transferor and the Seller, as such agreement may be amended,
supplemented or otherwise modified from time to time.



     “Sale and Contribution Indemnified Amounts” has the meaning set forth in Section
9.1 of the Sale and Contribution Agreement.



     “Sale and Contribution Indemnified Party” has the meaning set forth in Section
9.1 of the Sale and Contribution Agreement.



     “Sale and Contribution Termination Date” has the meaning set forth in Section
1.4 of the Sale and Contribution Agreement.



     “Sale and Contribution Termination Event” has the meaning set forth in Section
8.1 of the Sale and Contribution Agreement.



     “Scheduled Commitment Termination Date” means with respect to the LC Bank, any LC
Participant or any Related Committed Purchaser, February 23, 2011, as such date may be extended
from time to time in the sole discretion of the LC Bank, such LC Participant or such Related
Committed Purchaser, as the case may be.



     “SEC” shall mean the Securities and Exchange Commission or any governmental agencies
substituted therefor.



     “Seller” has the meaning set forth in the preamble to the Agreement.



I-21









 





     “Seller’s Share” of any amount means the greater of: (a) $0 and (b) such amount minus
the Purchasers’ Share.



     “Servicer” has the meaning set forth in the preamble to the Agreement.



     “Servicing Fee” shall mean the fee referred to in Section 4.6 of the
Agreement.



     “Servicing Fee Rate” shall mean the rate referred to in Section 4.6 of the
Agreement.



     “Settlement Date” means with respect to any Portion of Capital for any Settlement
Period, (i) prior to the Facility Termination Date, the Monthly Settlement Date and (ii) on and
after the Facility Termination Date, each day selected from time to time by the Administrator (with
the consent or at the direction of the Majority Purchaser Agents) (it being understood that the
Administrator (with the consent or at the direction of the Majority Purchaser Agents) may select
such Settlement Date to occur as frequently as daily), or, in the absence of such selection, the
Monthly Settlement Date.



     “Settlement Period” means: (a) before the Facility Termination Date: (i) initially
the period commencing on the date of the initial purchase pursuant to Section 1.2 of the
Agreement (or in the case of any fees payable hereunder, commencing on the Closing Date) and ending
on (but not including) the next Monthly Settlement Date, and (ii) thereafter, each period
commencing on such Monthly Settlement Date and ending on (but not including) the next Monthly
Settlement Date, and (b) on and after the Facility Termination Date, such period (including a
period of one day) as shall be selected from time to time by the Administrator (with the consent or
at the direction of the Majority Purchaser Agents) or, in the absence of any such selection, each
period of 30 days from the last day of the preceding Settlement Period.



     “Solvent” means, with respect to any Person at any time, a condition under which:




     (i) the fair value and present fair saleable value of such Person’s total assets is, on
the date of determination, greater than such Person’s total liabilities (including
contingent and unliquidated liabilities) at such time;




     (ii) the fair value and present fair saleable value of such Person’s assets is greater
than the amount that will be required to pay such Person’s probable liability on its
existing debts as they become absolute and matured (“debts,” for this purpose, includes all
legal liabilities, whether matured or unmatured, liquidated or unliquidated, absolute,
fixed, or contingent);




     (iii) such Person is and shall continue to be able to pay all of its liabilities as
such liabilities mature; and




     (iv) such Person does not have unreasonably small capital with which to engage in its
current and in its anticipated business.



I-22









 





     For purposes of this definition:




     (A) the amount of a Person’s contingent or unliquidated liabilities at any time shall
be that amount which, in light of all the facts and circumstances then existing, represents
the amount which can reasonably be expected to become an actual or matured liability;




     (B) the “fair value” of an asset shall be the amount which may be realized within a
reasonable time either through collection or sale of such asset at its regular market value;




     (C) the “regular market value” of an asset shall be the amount which a capable and
diligent business person could obtain for such asset from an interested buyer who is willing
to purchase such asset under ordinary selling conditions; and




     (D) the “present fair saleable value” of an asset means the amount which can be
obtained if such asset is sold with reasonable promptness in an arm’s-length transaction in
an existing and not theoretical market.



     “Spike Factor” means, for any calendar month, (a) the positive difference, if any,
between: (i) the highest Dilution Ratio for any one calendar month during the twelve most recent
calendar months and (ii) the arithmetic average of the Dilution Ratios for such twelve months
times (b) (i) the highest Dilution Ratio for any one calendar month during the twelve most
recent calendar months divided by (ii) the arithmetic average of the Dilution Ratios for
such twelve months.



     “Standard & Poor’s” means Standard & Poor’s, a division of The McGraw-Hill Companies,
Inc.



     “Sub-Servicer” has the meaning set forth in Section 4.1(d) of this Agreement.



     “Subsidiary” means, as to any Person, a corporation, partnership, limited liability
company or other entity of which shares of stock of each class or other interests having ordinary
voting power (other than stock or other interests having such power only by reason of the happening
of a contingency) to elect a majority of the Board of Directors or other managers of such entity
are at the time owned, or management of which is otherwise controlled: (a) by such Person, (b) by
one or more Subsidiaries of such Person or (c) by such Person and one or more Subsidiaries of such
Person.



     “Tangible Net Worth” means, with respect to any Person, the tangible net worth of such
Person as determined in accordance with generally accepted accounting principles, consistently
applied.



     “Taxes” has the meaning set forth in Section 1.10 of this Agreement.



     “Termination Day” means: (a) each day on which the conditions set forth in
Section 2 of Exhibit II to the Agreement are not satisfied or (b) each day that
occurs on or after the Facility Termination Date.



I-23









 





     “Termination Event” has the meaning specified in Exhibit V to the Agreement.



     “Termination Fee” means, for any Settlement Period during which a Termination Day
occurs, the amount, if any, by which: (a) the additional Discount (calculated without taking into
account any Termination Fee or any shortened duration of such Settlement Period pursuant to the
definition thereof) that would have accrued during such Settlement Period on the reductions of
Capital relating to such Settlement Period had such reductions not been made, exceeds (b) the
income, if any, received by the applicable Purchaser from investing the proceeds of such reductions
of Capital, as determined by the applicable Purchaser Agent, which determination shall be binding
and conclusive for all purposes, absent manifest error.



     “Total Reserves” means, at any time, the sum of: (a) the Yield Reserve, plus (b) the
greater of (i) the Concentration Reserve plus the Minimum Dilution Reserve and (ii) the Loss
Reserve plus the Dilution Reserve.



     “Transaction Documents” means the Agreement, the Lock-Box Agreements, each Fee Letter,
the Purchase and Sale Agreement, the Sale and Contribution Agreement, the Performance Guaranty, and
all other certificates, instruments, UCC financing statements, reports, notices, agreements and
documents executed or delivered under or in connection with the Agreement, in each case as the same
may be amended, supplemented or otherwise modified from time to time in accordance with the
Agreement.



     “Transfer Supplement” has the meaning set forth in Section 6.3(c) of this
Agreement.



     “Transferor” has the meaning set forth in the Sale and Contribution Agreement.



     “TVA” means Tennessee Valley Authority, an Obligor of the Originators and the
Transferor.



     “UCC” means the Uniform Commercial Code as from time to time in effect in the
applicable jurisdiction.



     “Unmatured Purchase and Sale Termination Event” means any event which, with the giving
of notice or lapse of time, or both, would become a Purchase and Sale Termination Event.



     “Unmatured Sale and Contribution Termination Event” means any event which, with the
giving of notice or lapse of time, or both, would become a Sale and Contribution Termination Event.



     “Unmatured Termination Event” means an event that, with the giving of notice or lapse
of time, or both, would constitute a Termination Event.



     “Yield Reserve” means, on any date, an amount equal to: (a) the sum of the Aggregate
Capital plus the LC Participation Amount at the close of business of the Servicer on such date
multiplied by (b) (i) the Yield Reserve Percentage on such date divided by (ii) 100% minus the
Yield Reserve Percentage on such date.



I-24









 





“Yield Reserve Percentage” means at any time:




	 	 	 	 	 

	 

	 	(BR+SFR)  x l.5 x DSO
 

     360
	 	 






where:




	 	 	 	 	 	 	 

	 

	 	BR
	 	=
	 	the Base Rate computed for the most recent Settlement Period,
	 
	 	 	 	 	 	 
	 

	 	DSO
	 	=
	 	Days’ Sales Outstanding, and
	 
	 	 	 	 	 	 
	 

	 	SFR
	 	=
	 	the Servicing Fee Rate






     Other Terms. All accounting terms not specifically defined herein shall be construed
in accordance with generally accepted accounting principles. All terms used in Article 9 of the
UCC in the State of New York, and not specifically defined herein, are used herein as defined in
such Article 9. Unless the context otherwise requires, “or” means “and/or,” and “including” (and
with correlative meaning “include” and “includes”) means including without limiting the generality
of any description preceding such term.








I-25









 








EXHIBIT II

CONDITIONS OF PURCHASES




     1. Conditions Precedent to Effectiveness. The effectiveness of this Agreement is subject to
the condition precedent that the Administrator shall have received, on or before the Closing Date,
each of the following, each in form and substance (including the date thereof) satisfactory to the
Administrator and each Purchaser Agent:



     (a) Counterparts of (i) this Agreement, duly executed by the parties hereto, (ii) the
amendments, each dated as of the date hereof, to the Sale Agreements, duly executed by the parties
thereto and (iii) the other Transaction Documents, duly executed by the parties thereto.



     (b) Certified copies of: (i) the resolutions of the board of directors of each of the Seller,
the Originators, the Transferor, and ACI authorizing the execution, delivery and performance by the
Seller, the Originators, the Transferor and ACI, as the case may be, of this Agreement and the
other Transaction Documents to which it is a party; (ii) all documents evidencing other necessary
corporate or organizational action and governmental approvals, if any, with respect to this
Agreement and the other Transaction Documents and (iii) the certificate of incorporation and
by-laws or limited liability company agreement, as applicable, of the Seller, the Originators, the
Transferor and ACI.



     (c) A certificate of the Secretary or Assistant Secretary of the Seller, each of the
Originators, the Transferor and ACI certifying the names and true signatures of its officers who
are authorized to sign this Agreement and the other Transaction Documents to which it is a party.
Until the Administrator receives a subsequent incumbency certificate from the Seller, the
Originators, the Transferor or ACI, as the case may be, the Administrator shall be entitled to rely
on the last such certificate delivered to it by the Seller, the Originators, the Transferor or ACI,
as the case may be.



     (d) Proper financing statements (Form UCC-1), duly authorized and suitable for filing under
the UCC of all jurisdictions that the Administrator may deem necessary or desirable in order to
perfect the interests of the Seller and the Administrator (for the benefit of the Purchasers)
contemplated by this Agreement and each of the Sale Agreements.



     (e) Proper financing statements (Form UCC-3), duly authorized and suitable for filing under
the UCC of all jurisdictions that the Administrator may deem necessary or desirable to release all
security interests and other rights of any Person in the Receivables, Contracts or Related Security
previously granted by any Originator, the Transferor or the Seller.



     (f) Completed UCC search reports, dated on or shortly before the Closing Date, listing the
financing statements filed in all applicable jurisdictions that name any Originator, the Transferor
or the Seller as debtor, together with copies of such other financing statements, and similar
search reports with respect to judgment liens, federal tax liens and liens of the Pension Benefit
Guaranty Corporation in such jurisdictions, as the Administrator may request, showing no Adverse
Claims on any Pool Assets other than any security interests that are released as of the Closing
Date.



II-1









 





     (g) (x) Favorable opinions, addressed to each Rating Agency, the Administrator, each Purchaser
Agent and each Purchaser, in form and substance reasonably satisfactory to the Administrator, of
Bryan Cave LLP, counsel for the Seller, the Originators, the Servicer, the Transferor and ACI,
covering such matters as the Administrator may reasonably request, including, without limitation,
certain organizational and New York enforceability matters, certain bankruptcy matters, certain UCC
perfection and priority matters and (y) favorable opinions, which may be in the form of a reliance
letter, addressed to each member of the Atlantic Purchaser Group, in form and substance reasonably
satisfactory to the Purchaser Agent for the Atlantic Purchaser Group, covering each opinion
delivered by Bryan Cave LLP or in-house counsel in connection with the Original Agreement.



     (h) Satisfactory results of a review and audit (performed by representatives of the
Administrator) of the Servicer’s collection, operating and reporting systems, the Credit and
Collection Policy of each Originator and the Transferor, historical receivables data and accounts,
including satisfactory results of a review of the Servicer’s operating location(s) and satisfactory
review and approval of the Eligible Receivables in existence on the date of the initial purchase
under the Agreement.



     (i) A pro forma Information Package representing the performance of the Receivables Pool for
the calendar month before closing.



     (j) Evidence of payment by the Seller of all accrued and unpaid fees (including those
contemplated by the Fee Letters), costs and expenses to the extent then due and payable on the date
thereof, including any such costs, fees and expenses arising under or referenced in Section
5.4 of the Agreement and the Fee Letters.



     (k) Each Fee Letter duly executed by the Seller and ACI.



     (l) Good standing certificates with respect to each of the Seller, the Originators, the
Transferor and ACI issued by the Secretary of State (or similar official) of the state of each such
Person’s organization or formation and principal place of business.



     (m) The Liquidity Agreement and all other Transaction Documents duly executed by the parties
thereto.



     (n) All information with respect to the Receivables as the Administrator or the Purchasers may
reasonably request.



     (o) A Release Agreement, dated on or before the Closing Date, duly executed by the
administrative agent under the Credit Agreement, releasing all security interests and other rights
of any Person in the Receivables, Contracts or Related Security previously granted by any Person
thereunder.



     (p) Such other approvals, opinions or documents as the Administrator or the Purchasers may
reasonably request.



     2. Conditions Precedent to All Funded Purchases, Issuances of Letters of Credit and
Reinvestments. Each Funded Purchase (including the initial Funded Purchase) and the issuance



II-2









 




of any Letters of Credit and each reinvestment shall be subject to the further conditions
precedent that:




     (a) in the case of each Funded Purchase and the issuance of any Letters of Credit, the
Servicer shall have delivered to the Administrator and each Purchaser Agent on or before such
purchase or issuance, as the case may be, in form and substance satisfactory to the Administrator
and each Purchaser Agent, a completed pro forma Information Package to reflect the level of the
Aggregate Capital, the LC Participation Amount and related reserves and the calculation of the
Purchased Interest after such subsequent purchase or issuance, as the case may be, and a completed
Purchase Notice in the form of Annex B; and



     (b) on the date of such Funded Purchase, issuance or reinvestment, as the case may be, the
following statements shall be true (and acceptance of the proceeds of such Funded Purchase,
issuance or reinvestment shall be deemed a representation and warranty by the Seller that such
statements are then true):




     (i) the representations and warranties contained in Exhibit III to the
Agreement are true and correct on and as of the date of such Funded Purchase,
issuance or reinvestment as though made on and as of such date except for
representations and warranties which apply as to an earlier date (in which case such
representations and warranties shall be true and correct as of such earlier date);




     (ii) no event has occurred and is continuing, or would result from such Funded
Purchase, issuance or reinvestment, that constitutes a Termination Event or an
Unmatured Termination Event;




     (iii) the sum of the Aggregate Capital plus the LC Participation Amount, after
giving effect to any such Funded Purchase, issuance or reinvestment, as the case may
be, shall not exceed the Purchase Limit, and the Purchased Interest shall not exceed
100%; and




     (iv) the Facility Termination Date has not occurred.





II-3









 








EXHIBIT III

REPRESENTATIONS AND WARRANTIES




     1. Representations and Warranties of the Seller. The Seller represents and warrants to the
Administrator, each Purchaser Agent and each Purchaser as of the Closing Date that:



     (a) Existence and Power. The Seller is a limited liability company duly organized,
validly existing and in good standing under the laws of Delaware, and has all organizational power
and all governmental licenses, authorizations, consents and approvals required to carry on its
business in each jurisdiction in which its business is conducted except if failure to have such
licenses, authorizations, consents or approvals could not reasonably be expected to have a Material
Adverse Effect.



     (b) Company and Governmental Authorization, Contravention. The execution, delivery
and performance by the Seller of this Agreement and each other Transaction Document to which it is
a party are within the Seller’s organizational powers, have been duly authorized by all necessary
organizational action, require no action by or in respect of, or filing with (other than the filing
of UCC financing statements and continuation statements), any governmental body, agency or
official, and, do not contravene, or constitute a default under, any provision of applicable law or
regulation or of the operating agreement of the Seller or of any agreement, judgment, injunction,
order, decree or other instrument binding upon the Seller or result in the creation or imposition
of any lien (other than liens in favor of the Administrator) on assets of the Seller.



     (c) Binding Effect of Agreement. This Agreement and each other Transaction Document
to which it is a party constitutes the legal, valid and binding obligation of the Seller
enforceable against the Seller in accordance with its respective terms, except as such
enforceability may be limited by bankruptcy, insolvency, reorganization or other similar laws
affecting the enforcement of creditors’ rights generally and by general principles of equity,
regardless of whether enforceability is considered in a proceeding in equity or at law.



     (d) Accuracy of Information. All information heretofore furnished by the Seller to
the Administrator, any Purchaser Agent or any Purchaser pursuant to or in connection with this
Agreement or any other Transaction Document is, and all such information hereafter furnished by the
Seller to the Administrator, any Purchaser Agent or any Purchaser in writing pursuant to this
Agreement or any Transaction Document will be, true and accurate on the date such information is
stated or certified.



     (e) Actions, Suits. Except as set forth in Schedule III, there are no
actions, suits or proceedings pending or, to the best of the Seller’s knowledge, threatened against
or affecting the Seller or its properties, in or before any court, arbitrator or other body, which
could reasonably be expected to have a Material Adverse Effect upon the ability of the Seller to
perform its obligations under this Agreement or any other Transaction Document to which it is a
party.



     (f) Accuracy of Exhibits; Lock-Box Arrangements. The names and addresses of all the
Lock-Box Banks together with the account numbers of the Lock-Box Accounts at such Lock-



III-1









 




Box Banks, are specified in Schedule II to this Agreement (or at such other Lock-Box
Banks and/or with such other Lock-Box Accounts as have been notified to the Administrator), and all
Lock-Box Accounts are subject to Lock-Box Agreements. All information on each Exhibit, Schedule or
Annex to this Agreement or the other Transaction Documents (as updated by the Seller from time to
time) is true and complete. The Seller has delivered a copy of all Lock-Box Agreements to the
Administrator. The Seller has not granted any interest in any Lock-Box Account (or any related
lock-box or post office box) to any Person other than the Administrator and, upon delivery to a
Lock-Box Bank of the related Lock-Box Agreement, the Administrator will have exclusive ownership
and control of the Lock-Box Account at such Lock-Box Bank.




     (g) No Material Adverse Effect. Since the date of formation of Seller as set forth in
its certificate of formation, there has been no Material Adverse Effect with respect to the Seller.



     (h) Names and Location. The Seller has not used any company names, trade names or
assumed names other than its name set forth on the signature pages of this Agreement. The Seller is
“located” (as such term is defined in the applicable UCC) in Delaware. The office where the Seller
keeps its records concerning the Receivables is at the address set forth below its signature to
this Agreement.



     (i) Margin Stock. The Seller is not engaged in the business of extending credit for
the purpose of purchasing or carrying margin stock (within the meaning of Regulations T, U and X,
as issued by the Board of Governors of the Federal Reserve System), and no proceeds of any purchase
or reinvestment hereunder will be used to purchase or carry any margin stock or to extend credit to
others for the purpose of purchasing or carrying any margin stock.



     (j) Eligible Receivables. Each Pool Receivable included as an Eligible Receivable in
the calculation of the Net Receivables Pool Balance is an Eligible Receivable.



     (k) Credit and Collection Policy. The Seller has complied in all material respects
with the Credit and Collection Policy of each Originator and the Transferor with regard to each
Receivable originated by such Originator or the Transferor, as applicable.



     (l) Investment Company Act. The Seller is not an “investment company,” or a company
“controlled” by an “investment company,” within the meaning of the Investment Company Act of 1940,
as amended.



     (m) Mortgages Covering As-Extracted Collateral. Except for any security interest,
lien or other rights in the Receivables, Contracts and Related Security that have been released
pursuant to the Release Agreement, there are no mortgages that are effective as financing
statements covering as-extracted collateral and that name any Originator (or, if such Originator is
not the “record owner” of the underlying property, any “record owner” with respect to such
as-extracted collateral, as such term is used in the UCC) as grantor, debtor or words of similar
effect filed or recorded in any jurisdiction.



     2. Representations and Warranties of the Servicer. The Servicer represents and warrants to
the Administrator, each Purchaser Agent and each Purchaser as of the Closing Date that:



III-2









 





     (a) Existence and Power. The Servicer is a corporation duly formed, validly existing
and in good standing under the laws of the State of Delaware, and has all company power and all
governmental licenses, authorizations, consents and approvals required to carry on its business in
each jurisdiction in which its business is conducted, except if failure to have such licenses,
authorizations, consents or approvals would not reasonably be expected to have a Material Adverse
Effect.



     (b) Company and Governmental Authorization, Contravention. The execution, delivery
and performance by the Servicer of this Agreement and each other Transaction Document to which it
is a party are within the Servicer’s organizational powers, have been duly authorized by all
necessary organizational action, require no action by or in respect of, or filing with, any
governmental body, agency or official, and do not contravene, or constitute a default under, any
provision of applicable law or regulation or of the certificate of incorporation or bylaws of the
Servicer or of any judgment, injunction, order or decree or agreement or other instrument binding
upon the Servicer or result in the creation or imposition of any lien on assets of the Servicer
(other than in favor of the Administrator under the Transaction Documents) or any of its
Subsidiaries.



     (c) Binding Effect of Agreement. This Agreement and each other Transaction Document
to which it is a party constitutes the legal, valid and binding obligation of the Servicer
enforceable against the Servicer in accordance with its terms, except as such enforceability may be
limited by bankruptcy, insolvency, reorganization or other similar laws affecting the enforcement
of creditors’ rights generally and by general principles of equity, regardless of whether
enforceability is considered in a proceeding in equity or at law.



     (d) Accuracy of Information. All information heretofore furnished by the Servicer to
the Administrator, any Purchaser Agent or any Purchaser pursuant to or in connection with this
Agreement or any other Transaction Document is, and all such information hereafter furnished by the
Servicer to the Administrator, any Purchaser Agent or any Purchaser in writing pursuant to this
Agreement or any other Transaction Document will be, true and accurate on the date such information
is stated or certified.



     (e) Actions, Suits. Except as set forth in Schedule III, there are no
actions, suits or proceedings pending or, to the best of the Servicer’s knowledge, threatened
against or affecting the Servicer or any of its Affiliates or their respective properties, in or
before any court, arbitrator or other body, which could reasonably be expected to have a Material
Adverse Effect upon the ability of the Servicer (or such Affiliate) to perform its obligations
under this Agreement or any other Transaction Document to which it is a party.



     (f) No Material Adverse Effect. Since December 31, 2004, there has been no Material
Adverse Effect on the Servicer.



     (g) Credit and Collection Policy. The Servicer has complied in all material respects
with the Credit and Collection Policy of each Originator and the Transferor with regard to each
Receivable originated by such Originator or the Transferor, as applicable.



III-3









 





     (h) Investment Company Act. The Servicer is not an “investment company,” or a company
“controlled” by an “investment company,” within the meaning of the Investment Company Act of 1940,
as amended.



     (i) Lock-Box Accounts. On or prior to the Closing Date, the Servicer has transferred
and assigned all of its right, title and interest in and to, and remedies, powers and privileges
under, the Lock-Box Accounts to the Seller.



     3. Representations, Warranties and Agreements Relating to the Security Interest. The Seller
hereby makes the following representations, warranties and agreements with respect to the
Receivables and Related Security:



     (a) The Receivables.




     (i) Creation. This Agreement creates a valid and continuing security
interest (as defined in the applicable UCC) in the Receivables included in the
Receivables Pool in favor of the Administrator (for the benefit of the Purchasers),
which security interest is prior to all other Adverse Claims, and is enforceable as
such as against creditors of and purchasers from the Seller.




     (ii) Nature of Receivables. The Receivables included in the
Receivables Pool constitute either “accounts” (including, without limitation,
“accounts” constituting “as-extracted collateral”), “general intangibles” or
“tangible chattel paper” within the meaning of the applicable UCC.




     (iii) Ownership of Receivables. The Seller owns and has good and
marketable title to the Receivables included in the Receivables Pool and Related
Security free and clear of any Adverse Claim.




     (iv) Perfection and Related Security. The Seller will cause (and will
cause each Originator and the Transferor to cause), within ten days after the
Closing Date, the filing of all appropriate financing statements in the proper
filing office in the appropriate jurisdictions under applicable law in order to
perfect the sale of the Receivables and Related Security from such Originator to the
Transferor pursuant to the Purchase and Sale Agreement and in order to perfect the
sale from the Transferor to the Seller pursuant to the Sale and Contribution
Agreement, and the sale and security interest therein from the Seller to the
Administrator under this Agreement, to the extent that such collateral constitutes
“accounts” (including, without limitation, “accounts” constituting “as-extracted
collateral”), “general intangibles,” or “tangible chattel paper.”




     (v) Tangible Chattel Paper. With respect to any Receivables included
in the Receivables Pool that constitute “tangible chattel paper”, if any, the Seller
(or the Servicer on its behalf) has in its possession the original copies of such
tangible chattel paper that constitute or evidence such Receivables, and the Seller
has caused (and will cause the applicable Originator and the Transferor to cause),
within ten days after the Closing Date, the filing of financing statements described



III-4









 







in clause (iv), above, each of which will contain a statement that: “A
purchase of, or security interest in, any collateral described in this financing
statement will violate the rights of the Administrator” or words to similar effect.
The Receivables to the extent they are evidenced by “tangible chattel paper” do not
have any marks or notations indicating that they have been pledged, assigned or
otherwise conveyed to any Person other than the Seller or the Administrator.



     (b) The Lock-Box Accounts.




     (i) Nature of Accounts. Each Lock-Box Account constitutes a “deposit
account” within the meaning of the applicable UCC.




     (ii) Ownership. The Seller owns and has good and marketable title to
the Lock-Box Accounts free and clear of any Adverse Claim.




     (iii) Perfection. The Seller has delivered to the Administrator a
fully executed Lock-Box Agreement relating to each Lock-Box Account, pursuant to
which each applicable Lock-Box Bank, respectively, has agreed, following the
occurrence and continuation of a Termination Event, to comply with all instructions
originated by the Administrator (on behalf of the Purchasers) directing the
disposition of funds in such Lock-Box Account without further consent by the Seller
or the Servicer.



     (c) Priority.




     (i) Other than the transfer of the Receivables to the Transferor, the Seller
and the Administrator under the Purchase and Sale Agreement, the Sale and
Contribution Agreement and this Agreement, respectively, and/or the security
interest granted to the Transferor, the Seller and the Administrator pursuant to the
Purchase and Sale Agreement, the Sale and Contribution Agreement and this Agreement,
respectively, neither the Transferor, the Seller nor any Originator has pledged,
assigned, sold, granted a security interest in, or otherwise conveyed any of the
Receivables transferred or purported to be transferred under the Transaction
Documents, the Lock-Box Accounts or any subaccount thereof, except for any such
pledge, grant or other conveyance which has been or will be released or terminated.
Neither the Seller, the Transferor nor any Originator has authorized the filing of,
or is aware of any financing statements against any of the Seller, the Transferor or
such Originator that include a description of Receivables transferred or purported
to be transferred under the Transaction Documents, the Lock-Box Accounts or any
subaccount thereof, other than any financing statement (i) relating to the sale
thereof by such Originator to the Transferor under the Purchase and Sale Agreement
or relating to the sale thereof by the Transferor to the Seller under the Sale and
Contribution Agreement, (ii) relating to the security interest granted to the
Administrator under this Agreement, or (iii) that has been or will be released or
terminated pursuant to the Release Agreement.



III-5









 






     (ii) The Seller is not aware of any judgment, ERISA or tax lien filings against
either the Seller, the Servicer, the Transferor or any Originator, other than such
judgment, ERISA or tax lien filing that (A) has not been outstanding for greater
than 30 days from the earlier of such Person’s knowledge or notice thereof, (B) is
less than $250,000 and (C) does not otherwise give rise to a Termination Event under
clause (l) of Exhibit V hereto.




     (iii) The Lock-Box Accounts are not in the name of any person other than the
Seller or the Administrator. Neither the Seller nor the Servicer has consented to
any bank maintaining such account to comply with instructions of any person other
than the Administrator.



     (d) Survival of Supplemental Representations. Notwithstanding any other provision of
this Agreement or any other Transaction Document, the representations contained in this Section
shall be continuing, and remain in full force and effect until such time as the Purchased Interest
and all other obligations under this Agreement have been finally and fully paid and performed.



     (e) No Waiver. To the extent required pursuant to the securitization program of any
Conduit Purchaser, the parties to this Agreement: (i) shall not, without obtaining a confirmation
of the then-current rating of the Notes, waive any of the representations set forth in this
Section; (ii) shall provide the Ratings Agencies with prompt written notice of any breach of any
representations set forth in this Section, and shall not, without obtaining a confirmation of the
then-current rating of the Notes (as determined after any adjustment or withdrawal of the ratings
following notice of such breach) waive a breach of any of the representations set forth in this
Section.



     (f) Servicer to Maintain Perfection and Priority. In order to evidence the interests
of the Administrator under this Agreement, the Servicer shall, from time to time take such action,
or execute and deliver such instruments as may be necessary (including, without limitation, such
actions as are reasonably requested by the Administrator) to maintain and perfect, as a
first-priority interest, the Administrator’s security interest in the Receivables, Related Security
and Collections. The Servicer shall, from time to time and within the time limits established by
law, prepare and present to the Administrator for the Administrator’s authorization and approval,
all financing statements, amendments, continuations or initial financing statements in lieu of a
continuation statement, or other filings necessary to continue, maintain and perfect the
Administrator’s security interest as a first-priority interest. The Administrator’s approval of
such filings shall authorize the Servicer to file such financing statements under the UCC without
the signature of the Seller, any Originator, the Transferor or the Administrator where allowed by
applicable law. Notwithstanding anything else in the Transaction Documents to the contrary, the
Servicer shall not have any authority to file a termination, partial termination, release, partial
release, or any amendment that deletes the name of a debtor or excludes collateral of any such
financing statements filed in connection with the Transaction Documents, without the prior written
consent of the Administrator.



III-6









 





     (g) Mining Operations and Mineheads. The Servicer shall (and shall cause each
applicable Originator to) promptly, and in any event within 30 days of any change, deletion or
addition to the location of any Originator’s mining operations or mineheads set forth on
Schedule V to the Purchase and Sale Agreement, (i) notify the Administrator and each
Purchaser Agent of such change, deletion or addition, (ii) cause the filing or recording of such
financing statements and amendments and/or releases to financing statements, mortgages or other
instruments, if any, necessary to preserve and maintain the perfection and priority of the security
interest of the Transferor, Seller and Administrator (on behalf of the Purchasers) in the Pool
Assets pursuant to this Agreement, in each case in form and substance satisfactory to the
Administrator and (iii) deliver to the Administrator and each Purchaser Agent an updated
Schedule V to the Purchase and Sale Agreement reflecting such change, deletion or addition;
it being understood that no Receivable the related location of mining operations and/or mineheads
of which is not as set forth on Schedule V to the Purchase and Sale Agreement as of the
Closing Date shall be an Eligible Receivable until such time as each condition under this
clause (g) shall have been satisfied (and upon such satisfaction, the Purchase and Sale
Agreement shall be deemed amended to reflect such updated Schedule V to the Purchase and
Sale Agreement).



     (h) Additional Mortgages Under Credit Agreement. The Servicer shall (and shall cause
each applicable Originator to) (x) provide written notice promptly, and in any event within 30
days, to the Seller, the Administrator and each Purchaser Agent of each new Mortgage or amendment
or modification of an existing Mortgage under the Credit Agreement covering as-extracted
collateral, (y) cause to be delivered to the Administrator a letter, in the form of the Release
Agreement (or such other form as may be approved by the Administrator), addressed to the
Administrator and duly executed by the related grantee or beneficiary releasing such party’s
security interest, lien or other rights under such new Mortgage or amended or modified Mortgage in
the Receivables, Contracts and Related Security subject thereto and (z) file or record all
amendments and/or releases to such new, amended or modified Mortgages necessary to release and
remove of record any such security interest, lien or other interest of the related grantee or
beneficiary in the Receivables, Contracts and Related Security, in each case in form and substance
satisfactory to the Administrator.



     4. Ordinary Course of Business. Seller represents and warrants that each remittance of
Collections by or on behalf of the Seller to the Purchasers under this Agreement will have been (i)
in payment of a debt incurred by the Seller in the ordinary course of business or financial affairs
of the Seller and (ii) made in the ordinary course of business or financial affairs of the Seller.



     5. Reaffirmation of Representations and Warranties. On the date of each purchase and/or
reinvestment and issuance of a Letter of Credit hereunder, and on the date each Information Package
or other report is delivered to the Administrator, any Purchaser Agent or any Purchaser hereunder,
the Seller and the Servicer, by accepting the proceeds of such purchase reinvestment or Letter of
Credit, as applicable and/or the provision of such information or report, shall each be deemed to
have certified that (i) all representations and warranties of the Seller and the Servicer, as
applicable, described in this Exhibit III, as from time to time amended in accordance with
the terms hereof, are correct on and as of such day as though made on and as of such day, except
for representations and warranties which apply as to an earlier date (in which



III-7









 




case such representations and warranties shall be true and correct as of such date), and (ii)
no event has occurred or is continuing, or would result from any such purchase, reinvestment or
issuance, which constitutes a Termination Event or an Unmatured Termination Event.









III-8









 








EXHIBIT IV

COVENANTS




     1. Covenants of the Seller. At all times from the date hereof until the latest of the
Facility Termination Date, the date on which no Capital of or Discount in respect of the Purchased
Interest shall be outstanding, the date the LC Participation Amount is cash collateralized in full
or the date all other amounts owed by the Seller under this Agreement to any Purchaser Agent, any
Purchaser, the Administrator and any other Indemnified Party or Affected Person shall be paid in
full:



     (a) Financial Reporting. The Seller will maintain a system of accounting established
and administered in accordance with generally accepted accounting principles as in effect in the
appropriate jurisdiction, and the Seller (or the Servicer on its behalf) shall furnish to the
Administrator and each Purchaser Agent:




     (i) Annual Reporting. Promptly upon completion and in no event later
than 90 days after the close of each fiscal year of the Seller, annual unaudited
financial statements of the Seller certified by a designated financial or other
officer of the Seller.




     (ii) Information Packages. As soon as available and in any event not
later than two Business Days prior to the Monthly Settlement Date, an Information
Package as of the most recently completed calendar month.




     (iii) Other Information. Such other information (including
non-financial information) as the Administrator or any Purchaser Agent may from time
to time reasonably request.



     (b) Notices. The Seller will notify the Administrator and each Purchaser Agent in
writing of any of the following events promptly upon (but in no event later than three Business
Days after) a financial or other officer learning of the occurrence thereof, with such notice
describing the same, and if applicable, the steps being taken by the Person(s) affected with
respect thereto:




     (i) Notice of Termination Events or Unmatured Termination Events. A
statement of the chief financial officer or chief accounting officer of the Seller
setting forth details of any Termination Event or Unmatured Termination Event and
the action which the Seller proposes to take with respect thereto.




     (ii) Representations and Warranties. The failure of any representation
or warranty to be true (when made or at any time thereafter) with respect to the
Receivables included in the Receivables Pool.




     (iii) Litigation. The institution of any litigation, arbitration
proceeding or governmental proceeding which may have a Material Adverse Effect on
the Seller.



IV-1









 






     (iv) Adverse Claim. (A) Any Person shall obtain an Adverse Claim upon
the Pool Receivables or Collections with respect thereto, (B) any Person other than
the Seller, the Servicer or the Administrator shall obtain any rights or direct any
action with respect to any Lock-Box Account (or related lock-box or post office box)
or (C) any Obligor shall receive any change in payment instructions with respect to
Pool Receivable(s) from a Person other than the Servicer or the Administrator.




     (v) ERISA and Other Claims. Promptly after the filing or receiving
thereof, copies of all reports and notices that the Seller or any ERISA Affiliate
files under ERISA with the Internal Revenue Service, the Pension Benefit Guaranty
Corporation or the U.S. Department of Labor or that the Seller or any Affiliate
receives from any of the foregoing or from any multiemployer plan (within the
meaning of Section 4001(a)(3) of ERISA) to which the Seller or any of its Affiliates
is or was, within the preceding five years, a contributing employer, in each case in
respect of the assessment of withdrawal liability or an event or condition that
could, in the aggregate, result in the imposition of liability on the Seller and/or
any such Affiliate.




     (vi) Name Changes. At least thirty days before any change in the
Seller’s name or any other change requiring the amendment of UCC financing
statements, a notice setting forth such changes and the effective date thereof.




     (vii) Material Adverse Change. Promptly after the occurrence thereof,
notice of a material adverse change in the business, operations, property or
financial or other condition of the Seller, the Servicer, the Transferor or any
Originator.



     (c) Conduct of Business. The Seller will carry on and conduct its business in
substantially the same manner and in substantially the same fields of enterprise as it is presently
conducted and will do all things necessary to remain duly organized, validly existing and in good
standing as a domestic organization in its jurisdiction of organization and maintain all requisite
authority to conduct its business in each jurisdiction in which its business is conducted.



     (d) Compliance with Laws. The Seller will comply with all laws, rules, regulations,
orders, writs, judgments, injunctions, decrees or awards to which it may be subject.



     (e) Furnishing of Information and Inspection of Receivables. The Seller will furnish
to the Administrator and each Purchaser Agent from time to time such information with respect to
the Pool Receivables as the Administrator or any Purchaser Agent may reasonably request. The
Seller will, at the Seller’s expense, during regular business hours with prior written notice (i)
permit the Administrator and/or any Purchaser Agent, or their respective agents or representatives,
(A) to examine and make copies of and abstracts from all books and records relating to the Pool
Receivables or other Pool Assets and (B) to visit the offices and properties of the Seller for the
purpose of examining such books and records, and to discuss matters relating to the Pool
Receivables, other Pool Assets or the Seller’s performance hereunder or under the other



IV-2









 




Transaction Documents to which it is a party with any of the officers, directors, employees or
independent public accountants of the Seller (provided that representatives of the Seller are
present during such discussions) having knowledge of such matters and (ii) without limiting the
provisions of clause (i) above, during regular business hours, at the Seller’s expense,
upon prior written notice from the Administrator and/or such Purchaser Agent, permit certified
public accountants or other auditors acceptable to the Administrator to conduct a review of its
books and records with respect to such Receivables, provided, that the Seller shall be
required to reimburse the Administrator and Purchaser Agents for only one (1) such audit per year,
unless a Termination Event has occurred and is continuing.




     (f) Payments on Receivables, Accounts. The Seller will, and will cause each
Originator and the Transferor to, at all times instruct all Obligors to deliver payments on the
Pool Receivables to a Lock-Box Account. If any such payments or other Collections are received by
the Seller, an Originator or the Transferor, it shall hold such payments in trust for the benefit
of the Administrator and the Purchasers and promptly (but in any event within two Business Days
after receipt) remit such funds into a Lock-Box Account. The Seller will cause each Lock-Box Bank
to comply with the terms of each applicable Lock-Box Agreement. The Seller will not permit the
funds other than Collections on Pool Receivables and other Pool Assets to be deposited into any
Lock-Box Account. If such funds are nevertheless deposited into any Lock-Box Account, the Seller
will promptly identify such funds for segregation. The Seller will not, and will not permit the
Servicer, any Originator or the Transferor or other Person to, commingle Collections or other funds
to which the Administrator, any Purchaser Agent or any Purchaser is entitled with any other funds.
The Seller shall only add, and shall only permit an Originator or the Transferor to add, a Lock-Box
Bank (or the related lock-box or post office box), or Lock-Box Account to those listed on
Schedule II to this Agreement, if the Administrator has received notice of such addition, a
copy of any new Lock-Box Agreement and an executed and acknowledged copy of a Lock-Box Agreement in
form and substance acceptable to the Administrator from any such new Lock-Box Bank. The Seller
shall only terminate a Lock-Box Bank or close a Lock-Box Account (or the related lock-box or post
office box), with the prior written consent of the Administrator.



     (g) Sales, Liens, etc. Except as otherwise provided herein, the Seller will not sell,
assign (by operation of law or otherwise) or otherwise dispose of, or create or suffer to exist any
Adverse Claim upon (including, without limitation, the filing of any financing statement) or with
respect to, any Pool Receivable or other Pool Asset, or assign any right to receive income in
respect thereof.



     (h) Extension or Amendment of Pool Receivables. Except as otherwise permitted in
Section 4.2 of this Agreement, the Seller will not, and will not permit the Servicer to,
alter the delinquency status or adjust the Outstanding Balance or otherwise modify the terms of any
Pool Receivable in any material respect, or amend, modify or waive, in any material respect, any
term or condition of any related Contract (which term or condition relates to payments under, or
the enforcement of, such Contract). The Seller shall at its expense, timely and fully perform and
comply with all provisions, covenants and other promises required to be observed by it under the
Contracts related to the Pool Receivables, and timely and fully comply with the Credit and



IV-3









 




Collection Policy with regard to each Receivable and the related Contract (which term or
condition relates to payments under, or the enforcement of, such Contract).




     (i) Change in Business. The Seller will not (i) make any change in the character of
its business or (ii) make any change in any Credit and Collection Policy that could reasonably be
expected to have a Material Adverse Effect, in the case of either clause (i) or
(ii) above, without the prior written consent of the Administrator and the Majority
Purchaser Agents. The Seller shall not make any other written change in any Credit and Collection
Policy without giving prior written notice thereof to the Administrator and each Purchaser Agent.



     (j) Fundamental Changes. The Seller shall not, without the prior written consent of
the Administrator and the Majority Purchaser Agents, permit itself (i) to merge or consolidate with
or into, or convey, transfer, lease or otherwise dispose of (whether in one transaction or in a
series of transactions) all or substantially all of its assets (whether now owned or hereafter
acquired) to, any Person or (ii) to be owned by any Person other than Arch Sales and thereby cause
Arch Sales’ percentage of ownership or control of the Seller to be reduced. The Seller shall
provide the Administrator and each Purchaser with at least 30 days’ prior written notice before
making any change in the Seller’s name, location or making any other change in the Seller’s
identity or corporate structure that could impair or otherwise render any UCC financing statement
filed in connection with this Agreement “seriously misleading” as such term (or similar term) is
used in the applicable UCC; each notice to the Administrator and the Purchaser Agents pursuant to
this sentence shall set forth the applicable change and the proposed effective date thereof. The
Seller will also maintain and implement (or cause the Servicer to maintain and implement)
administrative and operating procedures (including an ability to recreate records evidencing Pool
Receivables and related Contracts in the event of the destruction of the originals thereof), and
keep and maintain (or cause the Servicer to keep and maintain) all documents, books, records,
computer tapes and disks and other information reasonably necessary or advisable for the collection
of all Pool Receivables (including records adequate to permit the daily identification of each Pool
Receivable and all Collections of and adjustments to each existing Pool Receivable).



     (k) Change in Payment Instructions to Obligors. The Seller shall not (and shall cause
the Servicer and each Sub-Servicer not to) add to, replace or terminate any of the Lock-Box
Accounts (or any related lock-box or post office box) listed in Schedule II hereto or make
any change in its (or their) instructions to the Obligors regarding payments to be made to the
Lock-Box Accounts (or any related lock-box or post office box), unless the Administrator shall have
received (x) prior written notice of such addition, termination or change and (y) signed and
acknowledged Lock-Box Agreements with respect to such new Lock-Box Accounts (or any related
lock-box or post office box).



     (l) Ownership Interest, Etc. The Seller shall (and shall cause the Servicer to), at
its expense, take all action necessary or reasonably desirable to establish and maintain a valid
and enforceable undivided percentage ownership or security interest, to the extent of the Purchased
Interest, in the Pool Receivables, the Related Security and Collections with respect thereto, and a
first priority perfected security interest in the Pool Assets, in each case free and clear of any
Adverse Claim, in favor of the Administrator (on behalf of the Purchasers), including taking such



IV-4









 




action to perfect, protect or more fully evidence the interest of the Administrator (on behalf
of the Purchasers) as the Administrator or any Purchaser may reasonably request.




     (m) Certain Agreements. Without the prior written consent of the Administrator and the
Majority Purchaser Agents, the Seller will not (and will not permit the Originators or the
Transferor to) amend, modify, waive, revoke or terminate any Transaction Document to which it is a
party or any provision of the Seller’s organizational documents which requires the consent of the
“Independent Director” (as defined in the Seller’s LLC Agreement).



     (n) Restricted Payments. (i) Except pursuant to clause (ii) below, the Seller
will not: (A) purchase or redeem any shares of its capital stock, (B) declare or pay any dividend
or set aside any funds for any such purpose, (C) prepay, purchase or redeem any Debt, (D) lend or
advance any funds or (E) repay any loans or advances to, for or from any of its Affiliates (the
amounts described in clauses (A) through (E) being referred to as “Restricted
Payments”).




     (ii) Subject to the limitations set forth in clause (iii) below, the
Seller may make Restricted Payments so long as such Restricted Payments are made
only in one or more of the following ways: (A) the Seller may make cash payments
(including prepayments) on the Company Notes in accordance with their respective
terms, and (B) if no amounts are then outstanding under any Company Note, the Seller
may declare and pay dividends.




     (iii) The Seller may make Restricted Payments only out of the funds, if any, it
receives pursuant to Sections 1.4(b)(ii) and (iv) and 1.4(d)
of this Agreement. Furthermore, the Seller shall not pay, make or declare: (A) any
dividend if, after giving effect thereto, the Tangible Net Worth of the Seller would
be less than $5,000,000, or (B) any Restricted Payment (including any dividend) if,
after giving effect thereto, any Termination Event or Unmatured Termination Event
shall have occurred and be continuing.



     (o) Other Business. The Seller will not: (i) engage in any business other than the
transactions contemplated by the Transaction Documents, (ii) create, incur or permit to exist any
Debt of any kind (or cause or permit to be issued for its account any letters of credit or bankers’
acceptances) other than pursuant to this Agreement or the Company Notes, or (iii) form any
Subsidiary or make any investments in any other Person.



     (p) Use of Seller’s Share of Collections. The Seller shall apply the Seller’s Share of
Collections to make payments in the following order of priority: (i) the payment of its expenses
(including all obligations payable to the Purchasers, Purchaser Agents and the Administrator under
this Agreement and under the Fee Letters), (ii) the payment of accrued and unpaid interest on the
Company Notes and (iii) other legal and valid organizational purposes.



     (q) Further Assurances; Change in Name or Jurisdiction of Origination, etc. (i) The
Seller hereby authorizes and hereby agrees from time to time, at its own expense, promptly to
execute (if necessary) and deliver all further instruments and documents, and to take all further
actions, that may be necessary or desirable, or that the Administrator may reasonably request, to



IV-5









 




perfect, protect or more fully evidence the purchases or issuances made under this Agreement
and/or security interest granted pursuant to this Agreement or any other Transaction Document, or
to enable the Administrator (on behalf of the Purchasers) to exercise and enforce the Purchasers’
rights and remedies under this Agreement and any other Transaction Document. Without limiting the
foregoing, the Seller hereby authorizes, and will, upon the request of the Administrator, at the
Seller’s own expense, execute (if necessary) and file such financing or continuation statements
(including fixture filings and as extracted collateral filings), or amendments thereto, and such
other instruments and documents, that may be necessary or desirable, or that the Administrator may
reasonably request, to perfect, protect or evidence any of the foregoing.





     (i) The Seller authorizes the Administrator to file financing or continuation
statements, and amendments thereto and assignments thereof, relating to the
Receivables and the Related Security, the related Contracts and the Collections with
respect thereto and the other collateral subject to a lien under any Transaction
Document without the signature of the Seller. A photocopy or other reproduction of
this Agreement shall be sufficient as a financing statement where permitted by law.




     (ii) The Seller shall at all times be organized under the laws of the State of
Delaware and shall not take any action to change its jurisdiction of organization.




     (iii) The Seller will not change its name, location, identity or corporate
structure unless (x) the Administrator and each Purchaser Agent shall have received
at least thirty (30) days’ advance written notice of such change, (y) the Seller, at
its own expense, shall have taken all action necessary or appropriate to perfect or
maintain the perfection of the lien under this Agreement (including, without
limitation, the filing of all financing statements and the taking of such other
action as the Administrator may request in connection with such change or
relocation), and (z) if requested by the Administrator or any Purchaser, the Seller
shall cause to be delivered to the Administrator or any Purchaser Agent, an opinion,
in form and substance satisfactory to the Administrator and such Purchaser Agent as
to such UCC perfection and priority matters as such Person may request at such time.



     (r) Tangible Net Worth. The Seller will not permit its Tangible Net Worth, at any
time, to be less than $5,000,000.



     2. Covenants of the Servicer. At all times from the date hereof until the latest of the
Facility Termination Date, the date on which no Capital of or Discount in respect of the Purchased
Interest shall be outstanding, the date the LC Participation Amount is cash collateralized in full
or the date all other amounts owed by the Seller or the Servicer under this Agreement to any
Purchaser, any Purchaser Agent, the Administrator and any other Indemnified Party or Affected
Person shall be paid in full:



IV-6









 





     (a) Financial Reporting. The Servicer will maintain a system of accounting
established and administered in accordance with generally accepted accounting principles as in
effect in the appropriate jurisdiction, and the Servicer shall furnish to the Administrator and
each Purchaser Agent:




     (i) Compliance Certificates. (a) A compliance certificate promptly
upon completion of the annual report of the Performance Guarantor and in no event
later than 90 days after the close of the Performance Guarantor’s fiscal year, in
form and substance substantially similar to Annex D signed by its chief accounting
officer or treasurer solely in their capacities as officers of the Servicer stating
that no Termination Event or Unmatured Termination Event exists, or if any
Termination Event or Unmatured Termination Event exists, stating the nature and
status thereof, and (b) within 45 days after the close of each fiscal quarter of the
Servicer, a compliance certificate in form and substance substantially similar to
Annex D.




     (ii) Information Packages. As soon as available and in any event not
later than two Business Days prior to the Monthly Settlement Date, an Information
Package as of the most recently completed calendar month.




     (iii) Other Information. Such other information (including
non-financial information) as the Administrator or any Purchaser Agent may from time
to time reasonably request.



     (b) Notices. The Servicer will notify the Administrator and each Purchaser Agent in
writing of any of the following events promptly upon (but in no event later than three Business
Days after) a financial or other officer learning of the occurrence thereof, with such notice
describing the same, and if applicable, the steps being taken by the Person(s) affected with
respect thereto:




     (i) Notice of Termination Events or Unmatured Termination Events. A
statement of the chief financial officer or chief accounting officer of the Servicer
setting forth details of any Termination Event or Unmatured Termination Event and
the action which the Servicer proposes to take with respect thereto.




     (ii) Representations and Warranties. The failure of any representation
or warranty to be true (when made or at any time thereafter) with respect to the
Pool Receivables.




     (iii) Litigation. The institution of any litigation, arbitration
proceeding or governmental proceeding which could reasonably be expected to have a
Material Adverse Effect on the Servicer.




     (iv) Adverse Claim. (A) Any Person shall obtain an Adverse Claim upon
the Pool Receivables or Collections with respect thereto, (B) any Person other than
the Seller, the Servicer or the Administrator shall obtain any rights or direct any
action with respect to any Lock-Box Account (or related lock-box or



IV-7









 







post office box) or (C) any Obligor shall receive any change in payment
instructions with respect to Pool Receivable(s) from a Person other than the
Servicer or the Administrator.




     (v) ERISA. Promptly after the filing or receiving thereof notice of
and, upon the request of the Administrator, copies of all reports and notices that
ACI or any Affiliate of ACI files under ERISA with the Internal Revenue Service, the
Pension Benefit Guaranty Corporation or the U.S. Department of Labor or that such
Person or any of its Affiliates receives from any of the foregoing or from any
multiemployer plan (within the meaning of Section 4001(a)(3) of ERISA) to which such
Person or any Affiliate of ACI is or was, within the preceding five years, a
contributing employer, in each case in respect of the assessment of withdrawal
liability or an event or condition that could, in the aggregate, result in the
imposition of liability on ACI and/or any such Affiliate.




     (vi) Name Changes. At least thirty days before any change in ACI, any
Originator’s or the Transferor’s name or any other change requiring the amendment of
UCC financing statements, a notice setting forth such changes and the effective date
thereof.




     (vii) Material Adverse Change. A material adverse change in the
business, operations, property or financial or other condition of ACI or any
Originator or the Transferor or any of their respective Subsidiaries.




     (viii) Other Debt Default. A default or any event of default under any
other financing arrangement evidencing $40,000,000 or more of indebtedness pursuant
to which ACI, Arch Sales, any Originator, the Transferor or any of their Affiliates
is a debtor or an obligor.




     (ix) Permitted Merger. No later than 10 Business Days after the
effective date of any Permitted Merger, a notice setting forth, in reasonable
detail, the terms, conditions and Persons involved therein.



     (c) Conduct of Business. The Servicer will carry on and conduct its business in
substantially the same manner and in substantially the same fields of enterprise as it is presently
conducted and will do all things necessary to remain duly incorporated, validly existing and in
good standing as a domestic corporation in its jurisdiction of incorporation and maintain all
requisite authority to conduct its business in each jurisdiction in which its business is conducted
if the failure to have such authority could reasonably be expected to have a Material Adverse
Effect.



     (d) Compliance with Laws. The Servicer will comply with all laws, rules, regulations,
orders, writs, judgments, injunctions, decrees or awards to which it may be subject if the failure
to comply could reasonably be expected to have a Material Adverse Effect.



     (e) Furnishing of Information and Inspection of Receivables. The Servicer will
furnish to the Administrator and each Purchaser Agent from time to time such information with



IV-8









 




respect to the Pool Receivables as the Administrator or any Purchaser Agent may reasonably
request. The Servicer will, at the Servicer’s expense, during regular business hours with prior
written notice, (i) permit the Administrator and/or any Purchaser Agent, or their respective agents
or representatives, (A) to examine and make copies of and abstracts from all books and records
relating to the Pool Receivables or other Pool Assets and (B) to visit the offices and properties
of the Servicer for the purpose of examining such books and records, and to discuss matters
relating to the Pool Receivables, other Pool Assets or the Servicer’s performance hereunder or
under the other Transaction Documents to which it is a party with any of the officers, directors,
employees or independent public accountants of the Servicer (provided that representatives of the
Servicer are present during such discussions) having knowledge of such matters and (ii) without
limiting the provisions of clause (i) above, during regular business hours, at the
Servicer’s expense, upon prior written notice from the Administrator or such Purchaser Agent,
permit certified public accountants or other auditors acceptable to the Administrator to conduct, a
review of its books and records with respect to such Receivables; provided, that the
Servicer shall be required to reimburse the Administrator and the Purchaser Agents for only one (1)
such audit per year unless a Termination Event has occurred and is continuing.




     (f) Payments on Receivables, Accounts. The Servicer will at all times instruct all
Obligors to deliver payments on the Pool Receivables to a Lock-Box Account. If any such payments
or other Collections are received by the Servicer, it shall hold such payments in trust for the
benefit of the Administrator and the Purchasers and promptly (but in any event within two Business
Days after receipt) remit such funds into a Lock-Box Account. The Servicer will cause each
Lock-Box Bank to comply with the terms of each applicable Lock-Box Agreement. The Servicer will
not permit the funds other than Collections on Pool Receivables and other Pool Assets to be
deposited into any Lock-Box Account. If such funds are nevertheless deposited into any Lock-Box
Account, the Servicer will promptly identify such funds for segregation. The Servicer will not
commingle Collections or other funds to which the Administrator, any Purchaser Agent or any
Purchaser is entitled with any other funds. The Servicer shall only add, a Lock-Box Bank (or the
related lock-box or post office box), or Lock-Box Account to those listed on Schedule II to
this Agreement, if the Administrator has received notice of such addition, a copy of any new
Lock-Box Agreement and an executed and acknowledged copy of a Lock-Box Agreement in form and
substance acceptable to the Administrator from any such new Lock-Box Bank. The Servicer shall only
terminate a Lock-Box Bank or close a Lock-Box Account (or the related lock-box or post office box)
with the prior written consent of the Administrator.



     (g) Extension or Amendment of Pool Receivables. Except as otherwise permitted in
Section 4.2 of this Agreement, the Servicer will not alter the delinquency status or adjust
the Outstanding Balance or otherwise modify the terms of any Pool Receivable in any material
respect, or amend, modify or waive, in any material respect any term or condition of any related
Contract (which term or condition relates to payments under, or the enforcement of, such Contract).
The Servicer shall at its expense, timely and fully perform and comply with all provisions,
covenants and other promises required to be observed by it under the Contracts related to the Pool
Receivables, and timely and fully comply with the Credit and Collection Policy with regard to each
Pool Receivable and the related Contract (which term or condition relates to payments under, or the
enforcement of, such Contract).



IV-9









 





     (h) Change in Business. The Servicer will not (i) make any material change in the
character of its business or (ii) make any change in any Credit and Collection Policy that could
reasonably be expected to have a Material Adverse Effect, in the case of either (i) or (ii) above,
without the prior written consent of the Administrator and the Majority Purchaser Agents. The
Servicer shall not make any written change in any Credit and Collection Policy without giving prior
written notice thereof to the Administrator and each Purchaser Agent.



     (i) Records. The Servicer will maintain and implement administrative and operating
procedures (including an ability to recreate records evidencing Pool Receivables and related
Contracts in the event of the destruction of the originals thereof), and keep and maintain all
documents, books, records, computer tapes and disks and other information reasonably necessary or
advisable for the collection of all Pool Receivables (including records adequate to permit the
daily identification of each Pool Receivable and all Collections of and adjustments to each
existing Pool Receivable).



     (j) Change in Payment Instructions to Obligors. The Servicer shall not add to,
replace or terminate any of the Lock-Box Accounts (or any related lock-box or post office box)
listed in Schedule II hereto or make any change in its instructions to the Obligors
regarding payments to be made to the Lock-Box Accounts (or any related lock-box or post office
box), unless the Administrator shall have received (x) prior written notice of such addition,
termination or change and (y) signed and acknowledged Lock-Box Agreements with respect to such new
Lock-Box Accounts (or any related lock-box or post office box).



     (k) Ownership Interest, Etc. The Servicer shall, at its expense, take all action
necessary or reasonably desirable to establish and maintain a valid and enforceable undivided
percentage ownership or security interest, to the extent of the Purchased Interest, in the Pool
Receivables, the Related Security and Collections with respect thereto, and a first priority
perfected security interest in the Pool Assets, in each case free and clear of any Adverse Claim,
in favor of the Administrator (on behalf of the Purchasers), including taking such action to
perfect, protect or more fully evidence the interest of the Administrator (on behalf of the
Purchasers) as the Administrator may reasonably request.



     (l) Further Assurances; Change in Name or Jurisdiction of Origination, etc. The
Servicer hereby authorizes and hereby agrees from time to time, at its own expense, promptly to
execute (if necessary) and deliver all further instruments and documents, and to take all further
actions, that may be necessary or desirable, or that the Administrator may reasonably request, to
perfect, protect or more fully evidence the purchases or issuances made under this Agreement and/or
security interest granted pursuant to this Agreement or any other Transaction Document, or to
enable the Administrator (on behalf of the Purchasers) to exercise and enforce their respective
rights and remedies under this Agreement or any other Transaction Document. Without limiting the
foregoing, the Servicer hereby authorizes, and will, upon the request of the Administrator, at the
Servicer’s own expense, execute (if necessary) and file such financing or continuation statements
(including fixture filings and as extracted collateral filings), or amendments thereto, and such
other instruments and documents, that may be necessary or desirable, or that the Administrator may
reasonably request, to perfect, protect or evidence any of the foregoing.



IV-10









 






     (i) The Servicer authorizes the Administrator to file financing or continuation
statements, and amendments thereto and assignments thereof, relating to the
Receivables and the Related Security, the related Contracts and the Collections with
respect thereto and the other collateral subject to a lien under any Transaction
Document without the signature of the Servicer. A photocopy or other reproduction
of this Agreement shall be sufficient as a financing statement where permitted by
law.




     (ii) The Servicer shall at all times be organized under the laws of the State
of Delaware and shall not take any action to change its jurisdiction of
organization.




     (iii) The Servicer will not change its name, location, identity or corporate
structure unless (x) the Administrator and each Purchaser Agent shall have received
at least thirty (30) days’ advance written notice of such change, (y) the Servicer,
at its own expense, shall have taken all action necessary or appropriate to perfect
or maintain the perfection of the lien under this Agreement (including, without
limitation, the filing of all financing statements and the taking of such other
action as the Administrator may request in connection with such change or
relocation), and (z) if requested by the Administrator or any Purchaser Agent, the
Servicer shall cause to be delivered to the Administrator and each Purchaser Agent,
an opinion, in form and substance satisfactory to the Administrator and each such
Purchaser Agent as to such UCC perfection and priority matters as such Person may
request at such time.



     3. Separate Existence. Each of the Seller and the Servicer hereby acknowledges that the
Purchasers, the Purchaser Agents and the Administrator are entering into the transactions
contemplated by this Agreement and the other Transaction Documents in reliance upon the Seller’s
identity as a legal entity separate from ACI and its Affiliates. Therefore, from and after the
date hereof, each of the Seller and ACI shall take all steps specifically required by this
Agreement or reasonably required by the Administrator, any Purchaser Agent or any Purchaser to
continue the Seller’s identity as a separate legal entity and to make it apparent to third Persons
that the Seller is an entity with assets and liabilities distinct from those of ACI and any other
Person, and is not a division of ACI, its Affiliates or any other Person. Without limiting the
generality of the foregoing and in addition to and consistent with the other covenants set forth
herein, each of the Seller and ACI shall take such actions as shall be required in order that:



     (a) The Seller will be a limited liability company whose primary activities are restricted in
its LLC Agreement to: (i) purchasing or otherwise acquiring from the Transferor, owning, holding,
granting security interests or selling interests in Pool Assets, (ii) entering into agreements for
the selling and servicing of the Receivables Pool, and (iii) conducting such other activities as it
deems necessary or appropriate to carry out its primary activities;



     (b) The Seller shall not engage in any business or activity except as set forth in this
Agreement nor, incur any indebtedness or liability other than as expressly permitted by the
Transaction Documents;



IV-11









 





     (c) (i) Not less than one member of the Seller’s board of directors (the “Independent
Director”) shall be a natural person (A) who is not, and has not been at any time during the
five (5) years preceding such person’s initial appointment: (1) a direct, indirect or beneficial
stockholder, equityholder, officer, director (other than the Independent Director), employee,
member, manager, attorney, partner, affiliate, or supplier of Seller, ACI, Arch Sales, any
Originator, the Transferor or any of their respective Affiliates (the “Arch Group”);
provided, that indirect stock ownership of any member of the Arch Group by any person
through a mutual fund or similar diversified investment pool shall not disqualify such person from
being an Independent Director unless such person maintains direct or indirect control of the
investment decisions of such mutual fund or similar diversified investment pool, (2) a customer of,
supplier to or other person who derives more than 1% of its purchases or revenues from its
activities with any member of the Arch Group; (3) a trustee, conservator or receiver for any member
of the Arch Group; (4) a person or other entity controlling, controlled by or under common control
with any such equity holder, partner, member, manager, customer, supplier or other person; or (5) a
member of the immediate family of any such equityholder, director, officer, employee, member,
manager, partner, customer, supplier or other person and (B) (1) who has (x) prior experience as an
independent director for a corporation or an independent manager of a limited liability company
whose charter documents required the unanimous consent of all independent director or independent
managers thereof before such corporation could consent to the institution of bankruptcy or
insolvency proceedings against it or could file a petition seeking relief under any applicable
federal or state law relating to bankruptcy and (y) at least three years of employment experience
with one or more entities that provide, in the ordinary course of their respective businesses,
advisory, management or placement services to issuers of securitization or structured finance
instruments, agreements or securities and (2) is reasonably acceptable to the Administrator and
each Purchaser Agent (such acceptability of any Independent Director appointed after the date
hereof must be evidenced in writing signed by the Administrator and each Purchaser Agent). Under
this clause (c), the term “control” means the possession, directly or indirectly, of the
power to direct or cause the direction of management, policies or activities of a Person, whether
through ownership of voting securities, by contract or otherwise. (ii) The operating agreement of
the Seller shall provide that: (A) the Seller’s board of managers or other governing body shall not
approve, or take any other action to cause the filing of, a voluntary bankruptcy petition with
respect to the Seller unless the Independent Director shall approve the taking of such action in
writing before the taking of such action, and (B) such provision and each other provision requiring
an Independent Director cannot be amended without the prior written consent of the Independent
Director.



     (d) The Independent Director shall not at any time serve as a trustee in bankruptcy for the
Seller, ACI, any Originator, the Transferor or any of their respective Affiliates;



     (e) The Seller shall maintain its organizational documents in conformity with this Agreement,
such that it does not amend, restate, supplement or otherwise modify its ability to comply with the
terms and provisions of any of the Transaction Documents, including, without limitation, clause
(i) of Exhibit V;



     (f) The Seller shall conduct its affairs strictly in accordance with its organizational
documents and observe all necessary, appropriate and customary company formalities, including,



IV-12









 




but not limited to, holding all regular and special members’ and board of directors’ meetings
appropriate to authorize all limited liability company action, keeping separate and accurate
minutes of its meetings, passing all resolutions or consents necessary to authorize actions taken
or to be taken, and maintaining accurate and separate books, records and accounts, including, but
not limited to, payroll and intercompany transaction accounts;




     (g) Any employee, consultant or agent of the Seller will be compensated from the Seller’s
funds for services provided to the Seller, and to the extent that Seller shares the same officers
or other employees as ACI (or any other Affiliate thereof), the salaries and expenses relating to
providing benefits to such officers and other employees shall be fairly allocated among such
entities, and each such entity shall bear its fair share of the salary and benefit costs associated
with such common officers and employees. The Seller will not engage any agents other than its
attorneys, auditors and other professionals, and a servicer and any other agent contemplated by the
Transaction Documents for the Receivables Pool, which servicer will be fully compensated for its
services by payment of the Servicing Fee, and a manager, which manager will be fully compensated
from the Seller’s funds;



     (h) The Seller will contract with the Servicer to perform for the Seller all operations
required on a daily basis to service the Receivables Pool. The Seller will pay the Servicer the
Servicing Fee pursuant hereto. The Seller will not incur any indirect or overhead expenses for
items shared with ACI (or any other Affiliate thereof) that are not reflected in the Servicing Fee.
To the extent, if any, that the Seller (or any Affiliate thereof) shares items of expenses not
reflected in the Servicing Fee or the manager’s fee, such as legal, auditing and other professional
services, such expenses will be allocated to the extent practical on the basis of actual use or the
value of services rendered, and otherwise on a basis reasonably related to the actual use or the
value of services rendered; it being understood that ACI shall pay all expenses relating to the
preparation, negotiation, execution and delivery of the Transaction Documents, including legal,
agency and other fees;



     (i) The Seller’s operating expenses will not be paid by ACI, the Transferor or any Originator
or any Affiliate thereof;



     (j) The Seller will have its own separate stationery;



     (k) The Seller’s books and records will be maintained separately from those of ACI and any
other Affiliate thereof and in a manner such that it will not be difficult or costly to segregate,
ascertain or otherwise identify the assets and liabilities of Seller;



     (l) All financial statements of ACI or any Affiliate thereof that are consolidated to include
the Seller will disclose that (i) the Seller’s sole business consists of the purchase or acceptance
through capital contributions of the Receivables and Related Rights from the Transferor and the
subsequent retransfer of or granting of a security interest in such Receivables and Related Rights
to certain purchasers party to this Agreement, (ii) the Seller is a separate legal entity with its
own separate creditors who will be entitled, upon its liquidation, to be satisfied out of the
Seller’s assets prior to any assets or value in the Seller becoming available to the Seller’s



IV-13









 




equity holders and (iii) the assets of the Seller are not available to pay creditors of ACI or
any other Affiliates of ACI or the Originators or the Transferor;




     (m) The Seller’s assets will be maintained in a manner that facilitates their identification
and segregation from those of ACI or any Affiliates thereof;



     (n) The Seller will strictly observe corporate formalities in its dealings with ACI or any
Affiliates thereof, and funds or other assets of the Seller will not be commingled with those of
ACI or any Affiliates thereof except as permitted by this Agreement in connection with servicing
the Pool Receivables. The Seller shall not maintain joint bank accounts or other depository
accounts to which ACI or any Affiliate thereof (other than ACI in its capacity as the Servicer) has
independent access. The Seller is not named, and has not entered into any agreement to be named,
directly or indirectly, as a direct or contingent beneficiary or loss payee on any insurance policy
with respect to any loss relating to the property of ACI or any Subsidiaries or other Affiliates
thereof. The Seller will pay to the appropriate Affiliate the marginal increase or, in the absence
of such increase, the market amount of its portion of the premium payable with respect to any
insurance policy that covers the Seller and such Affiliate;



     (o) The Seller will maintain arm’s-length relationships with ACI (and any Affiliates thereof).
Any Person that renders or otherwise furnishes services to the Seller will be compensated by the
Seller at market rates for such services it renders or otherwise furnishes to the Seller. Neither
the Seller on the one hand, nor ACI, on the other hand, will be or will hold itself out to be
responsible for the debts of the other or the decisions or actions respecting the daily business
and affairs of the other. The Seller and ACI will immediately correct any known misrepresentation
with respect to the foregoing, and they will not operate or purport to operate as an integrated
single economic unit with respect to each other or in their dealing with any other entity;



     (p) The Seller shall have a separate area from ACI for its business (which may be located at
the same address as such entities) and to the extent that any other such entity have offices in the
same location, there shall be a fair and appropriate allocation of overhead costs between them, and
each shall bear its fair share of such expenses; and



     (q) To the extent not already covered in paragraphs (a) through (o) above, Seller shall comply
and/or act in accordance with the provisions of Section 6.4 of the Sale and Contribution Agreement.



     4. Post-Closing Covenant. Each of the Seller and the Servicer hereby covenants and agrees
that it shall cause to be duly recorded in each applicable jurisdiction, within forty-five (45)
days of the Closing Date, amendments and/or releases to mortgages that are effective as financing
statements covering as-extracted collateral as contemplated by the Release Agreement, in each case
in form and substance satisfactory to the Administrator.








IV-14









 








EXHIBIT V

TERMINATION EVENTS




     Each of the following shall be a “Termination Event”:



     (a) (i) the Seller, ACI, any Originator, the Transferor or the Servicer shall fail to perform
or observe any term, covenant or agreement under the Agreement or any other Transaction Document,
and, except as otherwise provided herein, such failure, solely to the extent capable of cure, shall
continue for 30 days, (ii) the Seller or the Servicer shall fail to make when due any payment or
deposit to be made by it under the Agreement or any other Transaction Document and such failure
shall continue unremedied for one Business Day, or (iii) Arch Sales shall resign as Servicer, and
no successor Servicer reasonably satisfactory to the Administrator shall have been appointed;



     (b) Arch Sales (or any Affiliate thereof) shall fail to transfer to any successor Servicer
when required any rights pursuant to the Agreement that Arch Sales (or such Affiliate) then has as
Servicer;



     (c) any representation or warranty made or deemed made by the Seller, ACI, any Originator, the
Transferor or the Servicer (or any of their respective officers) under or in connection with the
Agreement or any other Transaction Document, or any information or report delivered by the Seller,
ACI, any Originator, the Transferor or the Servicer pursuant to the Agreement or any other
Transaction Document, shall prove to have been incorrect or untrue when made or deemed made or
delivered, and shall remain incorrect or untrue for 10 Business Days;



     (d) the Seller or the Servicer shall fail to deliver the Information Package pursuant to the
Agreement, and such failure shall remain unremedied for two Business Days;



     (e) the Agreement or any purchase or reinvestment pursuant to the Agreement shall for any
reason: (i) cease to create, or the Purchased Interest shall for any reason cease to be, a valid
and enforceable perfected undivided percentage ownership or security interest to the extent of the
Purchased Interest in each Pool Receivable, the Related Security and Collections with respect
thereto, free and clear of any Adverse Claim, or (ii) cease to create with respect to the Pool
Assets, or the interest of the Administrator with respect to such Pool Assets shall cease to be, a
valid and enforceable first priority perfected security interest, free and clear of any Adverse
Claim;



     (f) the Seller, ACI, the Transferor or any Originator shall generally not pay its debts as
such debts become due, or shall admit in writing its inability to pay its debts generally, or shall
make a general assignment for the benefit of creditors; or any proceeding shall be instituted by or
against the Seller, ACI, the Transferor or any Originator seeking to adjudicate it as bankrupt or
insolvent, or seeking liquidation, winding up, reorganization, arrangement, adjustment, protection,
relief or composition of it or its debts under any law relating to bankruptcy, insolvency or
reorganization or relief of debtors, or seeking the entry of an order for relief or the appointment
of a receiver, trustee, custodian or other similar official for it or for any substantial part of
its property and, in the case of any such proceeding instituted against it (but not instituted



V-1









 




by it), either such proceeding shall remain undismissed or unstayed for a period of 60 days,
or any of the actions sought in such proceeding (including the entry of an order for relief
against, or the appointment of a receiver, trustee, custodian or other similar official for, it or
for any substantial part of its property) shall occur; or the Seller, ACI, the Transferor or any
Originator shall take any corporate or organizational action to authorize any of the actions set
forth above in this paragraph;




     (g) (i) the (A) Default Ratio shall exceed 3% or (B) the Delinquency Ratio shall exceed 6%, or
(ii) the average for three consecutive calendar months of: (A) the Default Ratio shall exceed 2%,
(B) the Delinquency Ratio shall exceed 4% or (C) the Dilution Ratio shall exceed 3%, or (iii) Days’
Sales Outstanding shall exceed 48 days;



     (h) a Change in Control shall occur;



     (i) at any time (i) the sum of (A) the Aggregate Capital, plus the Adjusted LC Participation
Amount, plus (B) the Total Reserves exceeds (ii) the sum of (A) the Net Receivables Pool Balance at
such time, plus (B) the Purchasers’ Share of the amount of Collections then on deposit in the
Lock-Box Accounts (other than amounts set aside therein representing Discount and fees), and such
circumstance shall not have been cured within two Business Days;



     (j) ACI or any of its Subsidiaries (other than any Excluded Subsidiary) shall fail to pay any
principal of or premium or interest on any of its Debt that is outstanding in a principal amount of
at least $40,000,000 in the aggregate when the same becomes due and payable (whether by scheduled
maturity, required prepayment, acceleration, demand or otherwise), and such failure shall continue
after the applicable grace period, if any, specified in the agreement, mortgage, indenture or
instrument relating to such Debt (whether or not such failure shall have been waived under the
related agreement), (ii) any other event shall occur or condition shall exist under any agreement,
mortgage, indenture or instrument relating to any such Debt and shall continue after the applicable
grace period, if any, specified in such agreement, mortgage, indenture or instrument (whether or
not such failure shall have been waived under the related agreement), if the effect of such event
or condition is to give the applicable debtholders the right (whether acted upon or not) to
accelerate the maturity of such Debt, or (iii) any such Debt shall be declared to be due and
payable, or required to be prepaid (other than by a regularly scheduled required prepayment),
redeemed, purchased or defeased, or an offer to repay, redeem, purchase or defease such Debt shall
be required to be made, in each case before the stated maturity thereof;



     (k) ACI shall fail to perform any of its obligations under the Performance Guaranty;



     (l) (i) a contribution failure shall occur with respect to any Benefit Plan sufficient to give
rise to a lien on any of the assets of Seller, any Originator, the Transferor, ACI or any ERISA
Affiliate under Section 302(f) of ERISA and such failure is not cured and any related lien released
within 10 days or (ii) either the Internal Revenue Service or the Pension Benefit Guaranty
Corporation shall have filed one or more notices of lien asserting a claim or claims pursuant to
the Internal Revenue Code, or ERISA, as applicable, against the assets of (a) the



V-2









 




Seller or (b) the Servicer, the Transferor, any Originator, ACI or any ERISA Affiliate (other
than the Seller) in an amount in excess of $250,000 and such lien is not released within 10 days;




     (m) the Seller or ACI shall fail to (x) provide the Administrator and each Purchaser Agent
with at least ten days’ prior written notice of any replacement or appointment of any director that
is to serve as an Independent Director on the Seller’s board of directors or (y) obtain the prior
written consent of the Administrator and each Purchaser Agent for any replacement or appointment of
any director that is to serve as an Independent Director on the Seller’s board of directors and, in
either case, such failure shall continue for ten days; or



     (n) Any Letter of Credit is drawn upon and, unless as a result of the LC Bank’s failure to
provide the notice required by Section 1.14(b), not fully reimbursed pursuant to
Section 1.14 (including, if applicable, with the proceeds of any funding by any Purchaser)
within two Business Days from the date of such draw.




V-3