Document:

exv10w24

 

Exhibit 10.24

FORM OF

CONVEYANCE AND ASSUMPTION AGREEMENT

     This Conveyance and Assumption Agreement (this “Agreement”) is entered into by and
among PEC Equipment Company, LLC, a Delaware limited liability company (“PEC”), Central
States Coal Reserves of Indiana, LLC, a Delaware limited liability company (“Central States
Indiana”), Central States Coal Reserves of Illinois, LLC, a Delaware limited liability company
(“Central States Illinois”) ”), and Cyprus Creek Land Company, a Delaware corporation
(“Cyprus Creek”), (collectively “Central States”), and Peabody Coal Company, LLC, a
Delaware limited liability company (“PCC”), and is
made effective as of ___ ___, 2007
(the “Effective Date”).

Recitals

General

     A. PCC is an indirect subsidiary of Patriot Coal Corporation (“Patriot”).

     B. On the Effective Date, Peabody Energy Corporation (“Peabody”) will consummate a
transaction by which Peabody will spin off Patriot to Peabody’s shareholders (the
“Spin-Off”).

Real Property and Reclamation Obligations

     C. Under the Surface Mining Control and Reclamation Act of 1977, as amended (“SMCRA”),
and under the existing operating permits for coal removal relating to the Real Property, as set
forth on Exhibit A, attached hereto and incorporated herein by this reference (the
“Permits”), PCC is currently obligated to perform certain acts of reclamation on the Real
Property (as defined hereinafter), including Phase I, Phase II, and Phase III reclamation
activities (the “Phase I Reclamation Obligations” and the “Phase II and Phase III
Reclamation Obligations” respectively; collectively the “Reclamation Obligations”).

     D. The Phase I Reclamation Obligations are nearly complete at all locations with the remaining
work primarily at Lynnville, Hawthorn and Center Prep. The Phase I Reclamation Obligations
generally include final grading, soil replacement and initial seeding for erosion control. The
Phase II and Phase III Reclamation Obligations include a 5 year minimum liability period,
revegetation, land use planning and land productivity testing.

     E. Central States Illinois, Central States Indiana, and Cyprus Creek, all indirect
subsidiaries of Peabody (both before and after the Spin-Off), own certain real property that is
located within the boundaries of the Permits, including without limitation the surface and reserves
rights relating to such real property (the “Real Property”). Active mining operations have
been closed or suspended on the Real Property.

     F. Each of the Permits contains a right-of-entry (“ROE”) which authorizes PCC’s access
to the Real Property in order to complete the Phase I Reclamation Obligations using

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PCC’s employees. PCC will continue to have access to the Real Property as granted under the
ROE’s until PCC completes the Phase I Reclamation Obligations.

Equipment

     G. PCC owns the equipment described on Exhibit B, attached hereto and incorporated
herein by this reference (the “Equipment”), which is used in reclamation projects at coal
mining sites (including, without limitation, the Phase I Reclamation Obligations at the Real
Property). The parties understand that, to the extent PCC may need additional time beyond the
Effective Date to complete the Phase I Reclamation Obligations, PCC will use certain items of the
Equipment beyond the Effective Date.

     H. PEC and Central States desire to use the Equipment to complete (i) other reclamation
obligations at locations other than the Real Property and (ii) the Phase II and Phase III
Reclamation Obligations at the Real Property.

Terms and Conditions

     In consideration of the mutual promises, covenants and agreements set forth in this Agreement,
the parties to the Agreement agree as follows:

Article 1

Conveyance of Equipment and Assumption of 

Phase II and III Reclamation Obligations

     1.1 (a) On the Effective Date, PCC shall convey to PEC title to all Equipment not needed by
PCC to complete the Phase I Reclamation Obligations.

          (b) Promptly after completion of the Phase I Reclamation Obligations, PCC shall convey to PEC
title to all remaining Equipment. PCC will use good faith efforts to complete the Phase I
Reclamation Obligations as soon as practicable.

          (c) The conveyances in (a) and (b) of this section shall be evidenced by a bill of sale, in
mutually agreed form, duly executed by PCC and delivered to PEC at the time of conveyance.

     1.2 As consideration for PCC’s conveyance and transfer of the Equipment to PEC, Central States
shall, and hereby do, fully assume the Phase II and Phase III Reclamation Obligations so that upon
such assumption PCC will have no more responsibilities for the Phase II and Phase III Reclamation
Obligations.

     1.3 The Equipment shall be conveyed to PEC under Section 1.1 free and clear of all security
interests, liens and other encumbrances on PCC’s title, but otherwise on an “as is” and “where is”
basis, subject to Section 1.4. PCC shall deliver the Equipment to PEC at the Real Property or such
other location as PCC and PEC may agree.

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     1.4 During the period that PCC uses the Equipment on and after the Effective Date for purposes
of the Phase I Reclamation Obligations, PCC, at its own cost and expense, shall keep the Equipment
in good working condition (consistent with the condition of the Equipment on the Effective Date),
reasonable wear and tear excluded. PEC shall be responsible for the material cost of normal repair
parts, wear items and major components to maintain the Equipment in such condition. PCC shall be
responsible for (i) the labor associated with the installation of parts, wear items and major
components, and (ii) all labor, fuel, oil, lubricants, antifreeze, and other ordinary consumable
materials required to operate and maintain the Equipment in such condition

     1.5 The parties will cooperate to the extent necessary to fulfill the purposes of this
Agreement. Within a reasonable time subsequent to the date when PCC completes the Phase I
Reclamation Obligations, Central States shall secure reclamation-only permits for all areas
currently covered by the Permits and bonded by PCC. Central States shall, and/or shall cause one
or more of its affiliates to, take any further action necessary to ensure that PCC is relieved from
the Phase II and Phase III Reclamation Obligations. Central States shall reimburse PCC for (i)
fees, if any, that PCC may incur on the Permits between the Effective Date and the time the
aforementioned reclamation-only permits are approved, and (ii) premium, if any, that PCC may incur
on any surety bond identified on Exhibit A between the Effective Date and the time such
surety bond is replaced. PCC shall take any further action necessary to ensure that PEC takes
title and possession of the Equipment as provided herein.

Article 2

General Provisions

     2.1 Notices. All notices, consents and other communications given under or with
respect to this Agreement shall be effective only if in writing and if given by (a) personal
delivery, (b) registered or certified United States mail, return receipt requested, (c) courier for
overnight delivery, or (d) facsimile transmission followed by delivery by courier for overnight
delivery, to the party to receive the notice, consent or other communication at the following
address for that party (or such other address as that party shall specify by notice):

PCC:

Peabody Coal Company, LLC

[                                        ]

[                                        ]

Facsimile No.: (314) [          ] – [               ]

Attention: [                    ]

PEC and/or Central States:

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PEC Equipment Company, LLC (as applicable)

Central States Coal Reserves of Indiana, LLC (as applicable)

Central States Coal Reserves of Illinois, LLC (as applicable)

Cyprus Creek Land Company (as applicable)

701 Market Street

St. Louis, Missouri 63101

Facsimile No.: (314) 342-7740

Attention: Walter Hawkins, Vice President and Treasurer

     2.2 Assignment. Neither party to this Agreement shall assign, convey, mortgage, or
otherwise transfer this Agreement or any interest hereunder, without the prior consent of the other
party to this Agreement, which shall not be unreasonably withheld or delayed.

     2.3 No Waiver. No delay or failure by either party to exercise any right or remedy
under this Agreement, and no partial exercise of any right or remedy, shall constitute a waiver of
that or any other right or remedy, except to the extent waived by the written consent of the party
entitled to exercise such right or remedy. A valid waiver by any party to this Agreement of the
breach of any one or more covenants or the non-fulfillment of one or more conditions contained
herein shall not bar any of such party’s rights or remedies for a subsequent breach of the same
covenant(s) or non-fulfillment of the same condition(s), unless otherwise expressed in the written
consent upon which such valid waiver is based.

     2.4 Binding Effect. The provisions of this Agreement shall be binding upon and inure
to the benefit of all parties and their respective successors and assigns.

     2.5 Counterparts; Reproductions. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which together shall constitute
one and the same instrument. Once signed, any reproduction of this Agreement made by reliable
means (e.g., photocopy, facsimile, PDF) will be considered an original.

     2.6 Governing Law; Choice of Forum. The laws of the State of Missouri, without regard
to conflict of laws or choice of law principles, govern all matters arising out of this Agreement.
The parties hereby submit to the exclusive jurisdiction of the United States District Court for the
Eastern District of Missouri for any suit, action or proceeding to resolve any and all disputes
arising out of this Agreement.

     2.7 Severability. If any provision of this Agreement is found by a court of competent
jurisdiction to be contrary to, prohibited by or invalid under any applicable law, such court may
modify such provision so, as modified, such provision will be enforceable and will to the maximum
extent possible comply with the apparent intent of the parties in drafting such provision. If no
such modification is possible, such provision will be deemed omitted, without invalidating the
remaining provisions hereof. No such modification or omission of a provision will in any way affect
or impair such provision in any other jurisdiction.

     2.8 Captions. The captions, headings or titles of the various articles and sections
of this Agreement are for convenience of reference only, and will not be deemed or construed to
limit or expand the substantive provisions of such articles or sections.

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     2.9 Amendment. Neither this Agreement, nor any part hereof, may be modified or
amended except by an instrument in writing duly executed and delivered by the party sought to be
charged therewith.

     2.10 Entire Agreement. This Agreement contains the Parties’ entire understanding and
agreement with respect to the subject matter hereof. Any and all additional, conflicting or
inconsistent discussions, agreements, promises, representations and statements, if any, between the
parties or their representatives that are not incorporated herein will be null and void and are
merged into this Agreement.

[Remainder of Page Intentionally Left Blank; Signature Page Follows.]

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     IN WITNESS WHEREOF, the parties, each by a duly authorized representative, have executed this
Agreement effective as of the Effective Date, intending to be bound by the terms and conditions
stated herein.

	 	 	 	 	 	 	 	 	 
	PEC EQUIPMENT COMPANY, LLC	 	PEABODY COAL COMPANY, LLC	 	 
	 
	 	 	 	 	 	 	 	 
	By:

	 	 	 	By:	 	 	 	 
	 

	 	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Name: 	 	 	Name: 	 	 	 
	 

	 	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Title:	 	Title:	 	 
	 

	 	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	CENTRAL STATES COAL RESERVES
OF INDIANA, LLC	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	By:
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Name: 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Title:	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	CENTRAL STATES COAL RESERVES
OF ILLINOIS, LLC	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	By:
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Name: 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Title:	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	CYPRUS CREEK LAND COMPANY	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	By:
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Name: 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Title:	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 

6exv10w25

 

Exhibit 10.25

FORM OF

THROUGHPUT AND STORAGE AGREEMENT

This Throughput and Storage Agreement (this “Agreement”) is made effective this ___day of
___, 2007 (the “Commencement Date”) by and among PEABODY TERMINALS, LLC, JAMES RIVER
COAL TERMINAL, LLC (James River Coal Terminal, LLC and Peabody Terminals, LLC being collectively
referred to herein as “Peabody”) and PATRIOT COAL SALES LLC (“Patriot”).

Background Information

	A.	 	Peabody is a partner in Dominion Terminal Associates (“DTA”). DTA operates a coal terminal
facility in Newport News, Virginia (the “Terminal”).
	 
	B.	 	DTA and its partners (including Peabody) (the “DTA Partners”) have entered into, among other
contracts, an Amended and Restated Operating Agreement dated as of January 1, 1988 (as the
same has heretofore been amended and may hereafter be amended, the “Operating Agreement”) and
an Amended and Restated Throughput and Handling Agreement dated as of July 1, 1987 (as the
same has heretofore been amended and may hereafter be amended, the “Throughput Agreement”, and
together with the Operating Agreement, the “Operative Agreements”).
	 
	C.	 	Peabody desires to assign to Patriot, and Patriot desires to acquire from Peabody, a portion
of Peabody’s rights under the Operative Agreements to throughput and ground storage capacity
at the Terminal on the terms and conditions set forth in this Agreement.

Agreement

For good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged,
Peabody and Patriot agree as follows:

	1.	 	Services: Peabody hereby assigns and allocates to Patriot, and Patriot hereby accepts an
assignment and allocation from Peabody of, a portion of the ground storage space and
throughput capacity allocated to Peabody and related services provided by DTA under the
Operative Agreements, which assignment and allocation shall be subject to the terms and
conditions hereinafter set forth.
	 
	2.	 	Term: The initial term shall commence on the Commencement Date and shall expire at 11:59 p.m.
(St. Louis, MO time) on December 31, 2012 (“Initial Term”).
	 
	3.	 	Right to Extend: The parties shall have the right to extend the term at the end of the
Initial Term on mutually agreeable terms provided that they reach agreement on the renewal
rates and other terms not later than sixty (60) days prior to the Patriot Nomination Date
(defined below) of the last calendar year of the Initial Term or the then-

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	 	 	current extension term, as applicable. The Initial Term plus any renewal or extension terms
will be referred to herein as the “Term”.
	 
	4.	 	Ground Storage and Throughput Tonnage:
	 
	(a)	 	The parties acknowledge and agree that: (i) availability of ground storage and throughput
capacity at the Terminal is subject to the Operative Agreements and to operating guidelines
established by DTA; (ii) Peabody will acquire ground storage and throughput capacity from DTA
(for both itself and for Patriot) in accordance with the Operative Agreements and DTA
guidelines on the basis of Patriot’s annual nominations; and (iii) the parties will work
together in good faith to obtain ground storage and throughput capacity that satisfies the
needs of both parties.
	 
	(b)	 	As used in this Agreement, the “Patriot Nomination Date” of a given calendar year means a
date that is thirty (30) days before the nomination date established by DTA for such calendar
year.
	 
	(c)	 	Beginning in 2008, on or before the Patriot Nomination Date, Patriot shall notify Peabody of
its estimated ground storage needs for the subsequent calendar year. The parties will work
together in good faith to (i) agree upon allocations of ground storage capacity between them
in making nominations of annual ground storage capacity to DTA and (ii) to manage the ground
storage capacity allocated by DTA to meet their respective needs. In no event, however, will
Patriot be entitled to ground storage beyond what is commensurate with its Annual Throughput
Nomination Tons. The following table represents the parties agreement as to the minimum
ground storage capacity necessary for Patriot’s Annual Throughput Nomination Tons and Peabody
hereby agrees to use this table in connection with Peabody’s annual ground storage capacity
nominations to DTA:

	 	 	 	 	 	 	 	 	 
	 	 	If Annual Throughput Nomination Tons are:	 	Then Minimum Ground Storage Tons are:
	 	 	 
	 
	 	 	≤ 2,000,000	 	 	 	175,000	 
	 
	 	 	2,000,001 to 2,500,000	 	 	 	225,000	 
	 
	 	 	2,500,001 to 3,000,000	 	 	 	275,000	 
	 
	 	 	3,000,001 to 4,000,000	 	 	 	300,000	 

	 	 	Any ground storage capacity requirements in excess of those set out in the foregoing table
shall be subject to availability. Peabody and Patriot agree to work together in good faith to
develop schedules of their respective ground storage capacity requirements (on an annual,
quarterly or monthly basis) as required by DTA or as are necessary to the efficient management
of the allocated ground storage capacity.
	 
	 	 	Patriot acknowledges and agrees that the ground storage locations shall be as determined
from time to time by the operating manager of the Terminal (“DTA Manager”) and are subject
to change from time to time by DTA Manager.

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	(d)	 	Beginning in 2008, on or before the Patriot Nomination Date, Patriot shall notify Peabody of
its estimated throughput needs for the subsequent calendar year (“Annual Throughput Nomination
Tons”) for the subsequent calendar year, in an amount not to exceed 4,000,000 net tons.
Patriot shall have the right to nominate tons in addition to the Annual Throughput Nomination
Tons, which Peabody shall have the right to accept or reject based upon availability.
Notwithstanding anything herein to the contrary, the Annual Throughput Nomination Tons shall
be deemed to be inclusive of (a) any tons sold (or to be sold) by Patriot to affiliates of
Peabody pursuant to contracts in existence on the Commencement Date for delivery via the
Terminal and (b) any tons sold (or to be sold) by Patriot to customers other than affiliates
of Peabody.
	 
	(e)	 	The parties shall work together in good faith during 2007 to make ground storage and
throughput nominations for calendar year 2008.
	 
	5.	 	Exclusive Provider of Services:
	 
	(a)	 	During the Term, Peabody shall be the exclusive provider of U.S. terminal services to Patriot
(or its current or future affiliates) for all Central Appalachian coal originating on the CSX
rail (including purchased coal) for transport to domestic or international destinations
through Newport News, VA, up to a maximum of four million tons per calendar year during the
Term. In the event Patriot acquires another coal company during the Term, the terms of any
contract in place at the time of such acquisition shall be excluded from the foregoing
exclusivity requirement but Patriot agrees that any contracts entered into after the date of
such acquisition shall be governed by such exclusivity requirement unless Peabody otherwise
agrees in writing.
	 
	(b)	 	If after the Patriot Nomination Date of a particular calendar year, Patriot desires
additional throughput capacity for the subsequent calendar year beyond the Annual Throughput
Nomination Tons, then, prior to obtaining such throughput services from a third party
(including DTA), Patriot will attempt to obtain said services from Peabody. To the extent
there is insufficient capacity at the Terminal to fulfill Patriot’s need for said additional
throughput services for such calendar year, then and only then shall Patriot contract with a
third party to obtain such additional throughput services. In the event additional throughput
capacity is available at the Terminal, Patriot shall pay the rate per ton then established by
DTA for third party throughput for any such additional tons.
	 
	6.	 	Weights: For purposes of calculations hereunder, all weights shall be based upon outbound
vessel weights as determined by vessel draft survey.
	 
	7.	 	Coal Quality: All coal delivered to DTA shall be free flowing and free of wood, iron, steel,
excess water and other extraneous materials. DTA shall have the right to refuse to accept
Patriot coal at the Terminal which does not meet the above criteria or which in DTA’s
reasonable discretion, cannot be reasonably unloaded or which could reasonably cause damage to
any machinery or equipment at the Terminal.

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	8.	 	Pricing:
	 
	(a)	 	Payment for the services to be provided hereunder shall be on a per net ton basis and shall
be based upon established weights calculated in accordance with Section 6.
	 
	(b)	 	The combined throughput and ground storage fees for the Initial Term shall be $1.50 per net
ton shall be applicable to the Annual Throughput Nomination Tons plus a +10% variance (the
combination of which shall in no event exceed 4,000,000 net tons).
	 
	(c)	 	Patriot acknowledges and agrees that Peabody will be relying on Patriot’s Annual Nomination
Tons in reaching agreement with DTA for Peabody’s annual tonnage commitments for throughput.
To the extent that Patriot’s actual utilization of throughput falls short of Patriot’s Annual
Throughput Nomination Tons (other than due to Force Majeure under Section 21) by more than
12.0% (each net ton in excess of such 12.0% threshold, an “Excessive Shortfall Ton”), then
Patriot shall pay Peabody $0.75 for each Excessive Shortfall Ton as liquidated damages.
	 
	(d)	 	In addition to the foregoing, Patriot shall reimburse Peabody for any additional costs
incurred by Peabody in the event any coal governed by this Agreement remains in ground storage
beyond the end of the Term, which shall be a daily per ton rate as established by DTA.
	 
	9.	 	Taxes: All taxes levied upon or calculated with reference to any Patriot coal delivered to
DTA shall be borne by Patriot and Patriot shall reimburse Peabody for any taxes imposed
against Peabody in connection herewith (other than income tax).
	 
	10.	 	Interest: Patriot shall pay to Peabody interest at the rate per annum equal to the prime
lending rate as may from time to time be published in The Wall Street Journal under “Money
Rates” for any amounts not paid within five (5) business days from the date due hereunder
until payment thereof is received by Peabody. This right to collect interest is in addition
to any other rights or remedies available at law or in equity.
	 
	11.	 	Rules and Regulations: Patriot’s use of the Terminal shall be governed at all times by the
operational documents of the Terminal including, but not limited to, the rail shipping
procedure (“Rail Shipping Procedure”), the current port information and regulations manual
(“Terminal Tariff”), and such other conditions of shipping and ground storage and blending
imposed by DTA (collectively, “Operating Procedures”). Scheduling of barge, vessel and
railcar deliveries shall be in accordance with the Operating Procedures.
	 
	12.	 	Limitation of Liability:
	 
	(a)	 	Peabody will not be responsible for any loss of, damage to, including loss of quality, or
destruction of coal while in the care, custody and control of DTA whether or not such loss,
damage or destruction of coal is caused by an act of God or natural occurrence, inadvertent
co-mingling or spontaneous combustion.

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	(b)	 	Neither Peabody nor Patriot shall be liable to the other for consequential, incidental,
punitive, exemplary or indirect damages, lost profits, or business interruption damages,
whether by statute, in tort or in contract, under any indemnity provision or otherwise, except
as otherwise provided in Section 8(c).

	13.	 	Payment Terms: Payment shall be made in United States funds and timely sent to Peabody via
ACH/wire transfer to the following account:

	 	 	 	 	 
	 

	 	Bank Name:
	 	PNC Bank, N.A.
	 

	 	ABA Number:
	 	043000096 
	 

	 	Bank Account Number:
	 	1008971375 
	 

	 	Bank Account Name:
	 	Peabody Investments Corp.

	 	 	Peabody shall invoice Patriot on a monthly basis and payment shall be due not less than
thirty (30) days from and after vessel loadings. Peabody shall attach a copy of the vessel
loading report to each invoice, and unless Patriot disputes such report within ten (10) days
after receipt, the facts contained therein shall be deemed agreed.
	 
	14.	 	Permits and Train Numbers: Permits and train numbers will be issued to Patriot on a monthly
basis. Patriot shall provide DTA with any permit requests on or before the 25th
day of the month preceding the month in which delivery of coal is to be made. Peabody shall
have no liability to Patriot resulting from CSX’s inability to provide adequate permits or
railcars to Patriot for the transportation of coal pursuant hereto.
	 
	15.	 	Title and Risk of Loss: Title to all coal delivered to DTA shall at all times remain in
Patriot. DTA shall function and serve as Patriot’s bailee with respect to any coal covered
hereby while such coal is in the care, custody and control of DTA. Patriot shall bear the
risk of loss with respect to Patriot coal at the Terminal. Notwithstanding the foregoing,
coal that accumulates in ditches and ponds and ordinary spillage from conveyors, the dumper
and the like, where it is impractical to determine its owner and return it to piles
(collectively, “Scrap Coal”) shall be the property of DTA and shall be sold or otherwise
disposed of as the DTA Manager sees fit.
	 
	16.	 	Default: In the event that (i) any party shall fail to pay on the due date thereof any
payment due hereunder and such failure shall continue for 10 days after receipt of written
notice thereof, or (ii) any party shall fail or neglect to commence to correct any default
hereunder, or dispute the existence thereof in good faith and in writing, or to perform any
covenant or obligation hereunder, or any representation or warranty hereunder proves to be
untrue or is breached, and such failure, neglect or breach continues for 15 days after
receipt of written notice thereof, then without further notice or demand or court order, a
non-defaulting party shall have the right to terminate. In such event, the non-defaulting
party(ies) shall have the right to recover all damages proximately related to or arising from
any breach by the defaulting party(ies), including legal expenses and reasonable attorneys’
fees.

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	17.	 	Dispute Resolution: Disputes arising pursuant hereto shall be resolved in accordance with
this provision. The procedure for dispute resolution may be invoked by either party by
written notice to the other party claiming the existence of a dispute and describing the
nature of that dispute (the “Dispute Notice”). The parties shall negotiate expeditiously in
good faith in an effort to resolve any disputes arising hereunder. Resolution of disputes by
negotiation shall be acknowledged in writing by both parties. In the event a dispute cannot
be resolved by negotiation within thirty (30) days after the date of the Dispute Notice, the
parties agree to consider the use of a mini-trial or other informal procedure such as umpire
settlement (“Informal Procedure”) to resolve the dispute. An Informal Procedure shall be
utilized only if the parties agree in writing on the procedures to be followed and whether the
resulting determination shall be binding. Any dispute which is not resolved nor committed to
final and binding resolution by means of an Informal Procedure within ninety (90) days of the
date of the Dispute Notice may, within one hundred (100) days of the date of the Dispute
Notice, be referred to a court of competent jurisdiction by either party.
	 
	18.	 	Laws and Regulations: In the performance hereunder, Peabody and Patriot shall comply with
all prevailing and valid laws and regulations of the United States and the state, county and
municipality having jurisdiction. Each party will, at its own expense, acquire any and all
permits, licenses or approvals required by any governmental agency, regulatory body, or its
agents to enable it to satisfy its obligations hereunder. Nothing herein shall prevent any
party from contesting the validity or alleged violation of any law or regulation, and while
such contest is pending, the contesting party shall not be in default hereunder.
	 
	19.	 	Liability and Indemnity: Patriot shall be solely liable for all acts or omissions undertaken
by Patriot in the exercise of the rights granted hereunder and shall indemnify and hold
Peabody harmless from any loss, liability, claim or expense of any nature, including
reasonable attorneys’ fees, incurred by Peabody as a result of, or arising in any way from any
such act or omission by Patriot, its agents, servants or employees hereunder.
	 
	20.	 	DTA Performance:
	 
	(a)	 	Subject to Section 20(c) below, Peabody makes no representations or warranties of any kind
regarding operation of the Terminal or the services to be provided by DTA in connection with
the exercise of Patriot’s rights hereunder. Patriot’s obligation to make the payments
specified herein shall not be excused or suspended as a result of the Terminal being
unavailable for Patriot’s use for any reason, excepting Force Majeure, unless such
unavailability is due to the fault of Peabody.
	 
	(b)	 	Peabody does not guarantee any vessel loading rates and shall incur no demurrage obligations
whatsoever hereunder.
	 
	(c)	 	Peabody will use commercially reasonable efforts to defend its rights against DTA and the
other DTA Partners under the Operative Agreements and to pursue all necessary legal

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	 	 	action to enforce Peabody’s rights against DTA and the DTA Partners under the Operative
Agreements, in each case to the extent such rights relate to throughput and ground storage
capacity assigned to Patriot under this Agreement; provided, however, that Peabody will have
the right, in its sole discretion, to determine whether or not Peabody will defend or pursue
a given legal action; and in the event Peabody determines not to defend or pursue a given
legal action, Peabody will notify Patriot of such determination. Peabody agrees that in the
course of defending or pursuing Peabody’s rights against DTA or the DTA Partners under the
Operative Agreements that Peabody will exercise commercially reasonable efforts to avoid
taking any actions that Peabody knows or would reasonably be expected to know would be
detrimental to Patriot without first advising Patriot of such actions. Notwithstanding the
foregoing, however, nothing in this Section 20(c) will be construed to limit any right
Patriot may have against Peabody under this Agreement as a result of such action by, or
inaction of, Peabody.
	 
	21.	 	Force Majeure:
	 
	(a)	 	In the event any party’s ability to perform hereunder (except the obligation to make
payments) is limited or prevented in whole or in part by events at the Terminal or relating to
the CSX rail transportation system servicing the Terminal (including acts of God, fire,
floods, storms and safety precautions taken by DTA prior to the arrival of storms, explosions,
accidents, breakdowns, epidemics, war, civil disorders, strikes or other labor difficulties,
shortages, actions by Coast Guard other governmental authorities to close the Terminal,
security requirements imposed by governmental authorities, or failure of raw materials, labor,
fuel, power, equipment, supplies or transportation), or by any law, rule, regulation, order or
other action adopted or taken by any Federal, state, or local governmental authority, or any
other like or unlike cause not reasonably within Patriot’s or Peabody’s control, the effected
party(ies) shall be considered to be subject to a condition of Force Majeure to the extent
such performance is so limited or prevented. The effected party(ies) must give prompt notice
of such an event which notice shall include a description of the event and an estimate of the
period of time such event will affect performance.
	 
	(b)	 	If, because of Force Majeure, any party is unable, wholly or partially, to carry out any of
its obligations hereunder (except the obligation to make payments) at the time the Force
Majeure occurred or in the future, the obligations of the party (ies) suffering such Force
Majeure shall be suspended to the extent made necessary by such Force Majeure and during the
continuance of such Force Majeure or its effects; provided, however, that no party shall,
however, be relieved of liability for failure of performance to the extent that such failure
is due to causes arising out of its own negligence or to causes which it could, but fails to
remove or remedy with reasonable dispatch.
	 
	(c)	 	The party(ies) affected by the Force Majeure event shall use their best efforts to eliminate
such event as soon as and to the extent reasonably practicable. Nothing herein contained shall
cause the party(ies) affected by the Force Majeure to submit to unreasonable conditions or
restrictions imposed by any governmental authority, or to submit to any labor agreement, and
it is agreed that any settlement of labor strikes or differences with

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	 	 	workmen shall be within the sole discretion of the party affected thereby. Performance
hereunder may, upon mutual agreement of Patriot and Peabody, be made up within or beyond the
Term hereof. During any period in which Peabody’s performance hereunder is partially
suspended or curtailed as a result of Force Majeure, Peabody shall allocate its available
stockpile space in a fair and reasonable manner.
	 
	22.	 	Assignment: Neither party shall have the right to assign its rights and obligations
hereunder without the prior written consent of the other party, which consent shall not be
unreasonably withheld, conditioned or delayed. Notwithstanding the foregoing: (a) Peabody
shall have the right to assign its rights and obligations hereunder to any affiliate of
Peabody or to DTA in the event the DTA organizational and/or controlling documents require
third party agreements of this type and nature to be assigned to DTA and upon such written
assignment, Peabody shall be released from any obligation arising from and after the date of
said assignment; and (b) Patriot shall have the right to assign its rights and obligations
hereunder to any 100% affiliate of Patriot (provided that such assignment shall be valid only
as long as the assignee remains a 100% affiliate of Patriot).
	 
	23.	 	Relationship: No fiduciary relationship shall be deemed to exist between Patriot and Peabody
as a result of this Agreement or the services to be provided by Peabody to Patriot hereunder.
Peabody shall be solely an independent contractor of Patriot. Peabody and Patriot shall not
be deemed to be partners or joint venturers under any circumstances or in any respect in
connection herewith.
	 
	24.	 	Governing Law: This Agreement will be construed in accordance with and governed in all
respects by the laws of the Commonwealth of Virginia, without regard to conflict of law rules.
	 
	25.	 	Entire Agreement; Amendments; Waivers: This Agreement sets forth the complete and final
agreement between the parties with respect to the subject matter hereof, and supersedes all
prior discussions, understandings and agreements concerning that subject matter, whether oral
or written. Any amendments to this Agreement shall be in writing, signed by both parties. A
party’s failure to insist in any one or more instances upon strict performance of a provision
of, or to take advantage of any of its rights under, this Agreement shall not be considered as
a waiver of such provision or right.
	 
	26.	 	Notices: Notice sent by facsimile, first class, certified or registered U.S. Mail, or a
reputable over night courier service, addressed to the party to whom such notice is given, at
the address of such party stated herein beneath such party’s signature block or to such other
address (or facsimile number) as such party may designate, shall be deemed delivered (i) if
mailed, upon mailing and (ii) if faxed, upon receipt of answerback acknowledgement, and
sufficient notice in any case requiring notice hereunder.
	 
	27.	 	Confidentiality: The terms and conditions hereof shall remain confidential and shall not be
disclosed to any other party without the mutual consent of the parties, except that it may be
disclosed (a) to parent or affiliated company, (b) where such disclosure may be required by
law, (c) in connection with the assertion of a claim or defense in judicial or

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	 	 	administrative proceedings involving one of the parties hereto, (d) to independent
accounting firms or law firms which execute an agreement to keep such terms and conditions
confidential, and (e) DTA, which has executed an agreement to keep such terms and conditions
confidential.
	 
	28.	 	Transfer of Interests in DTA: Peabody will not sell or transfer all or any part of its
interests in DTA unless the buyer or transferee agrees in writing to be bound by this
Agreement with respect to the interest sold or transferred.
	 
	29.	 	Counterparts; Reproductions: This Agreement may be signed in any number of counterparts,
each of which is an original for all purposes, but all of which taken together constitute one
and the same contract, notwithstanding that all parties are not signatories to the same
counterpart. Once signed, any reproduction of this Agreement made by reliable means (e.g.,
photocopy, facsimile, PDF) will be considered an original.

[Signatures on following page]

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The Parties have executed this Agreement as of the date first written above.

	 	 	 	 	 	 	 
	PEABODY TERMINALS, LLC	 	PATRIOT COAL SALES LLC
	 
	 	 	 	 	 	 
	By:

	 	 	 	By:	 	 
	 

	 	 
	 	 	 	 
	Name:

	 	 	 	Name:	 	 
	 

	 	 
	 	 	 	 
	Title:

	 	 	 	Title:	 	 
	 

	 	 
	 	 	 	 
	 
	 	 	 	 	 	 
	Address for Notices:	 	Address for Notices:
	 
	 	 	 	 	 	 
	701 Market Street, Suite 712	 	12312 Olive Boulevard, Suite 400
	St. Louis, MO 63101	 	St. Louis, MO 63141
	Fax:

	 	(314) 342-7740
	 	Fax:
	 	(314) 
	 

	 	 	 	 	 	 
	Attn:

	 	 	 	Attn:	 	 
	 

	 	 
	 	 	 	 
	 
	 	 	 	 	 	 
	JAMES RIVER COAL TERMINAL, LLC	 	 	 	 
	 
	 	 	 	 	 	 
	By:
	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	Name:
	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	Title:
	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	Address for Notices:	 	 	 	 
	 
	 	 	 	 	 	 
	701 Market Street, Suite 712	 	 	 	 
	St. Louis, MO 63101	 	 	 	 
	Fax:

	 	(314) 342-7740	 	 	 	 
	Attn:
	 	 	 	 	 	 
	 

	 	 	 	 	 	 

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