Document:

Exhibit 10.4

 

EXECUTION VERSION

 

SECOND AMENDED AND RESTATED SALE AND CONTRIBUTION AGREEMENT

 

Dated as of October 5, 2016

 

between

 

ARCH COAL, INC.,

 

as the Transferor

 

and

 

ARCH RECEIVABLE COMPANY, LLC

 

 

CONTENTS

 

	
Clause
    	
 
    	
Subject Matter
    	
 
    	
Page
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
ARTICLE I
    
	
AGREEMENT TO PURCHASE   AND SELL
    
	
2
    
	
 
    
	
SECTION 1.1
    	
 
    	
Agreement To Purchase and Sell
    	
 
    	
2
    
	
SECTION 1.2
    	
 
    	
Timing of Purchases
    	
 
    	
3
    
	
SECTION 1.3
    	
 
    	
Consideration for Purchases
    	
 
    	
3
    
	
SECTION 1.4
    	
 
    	
Sale and Contribution Termination Date
    	
 
    	
3
    
	
SECTION 1.5
    	
 
    	
Intention of the Parties
    	
 
    	
3
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
ARTICLE II
    
	
PURCHASE REPORT;   CALCULATION OF PURCHASE PRICE
    
	
4
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
SECTION 2.1
    	
 
    	
Purchase Report
    	
 
    	
4
    
	
SECTION 2.2
    	
 
    	
Calculation of Purchase Price
    	
 
    	
5
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
ARTICLE III
    
	
PAYMENT OF PURCHASE   PRICE
    
	
5
    
	
 
    
	
SECTION 3.1
    	
 
    	
Contribution of Receivables and Initial Purchase   Price Payment
    	
 
    	
5
    
	
SECTION 3.2
    	
 
    	
Purchase Price Payments; Letters of Credit
    	
 
    	
6
    
	
SECTION 3.3
    	
 
    	
Settlement as to Specific Receivables and Dilution
    	
 
    	
7
    
	
SECTION 3.4
    	
 
    	
Reconveyance of Receivables
    	
 
    	
8
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
ARTICLE IV
    
	
CONDITIONS OF PURCHASES
    
	
8
    
	
 
    
	
SECTION 4.1
    	
 
    	
Conditions Precedent to Initial Purchase
    	
 
    	
8
    
	
SECTION 4.2
    	
 
    	
Certification as to Representations and Warranties
    	
 
    	
10
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
ARTICLE V
    
	
REPRESENTATIONS AND   WARRANTIES OF THE TRANSFEROR
    
	
10
    
	
 
    
	
SECTION 5.1
    	
 
    	
Existence and Power
    	
 
    	
10
    
	
SECTION 5.2
    	
 
    	
Company and Governmental Authorization,   Contravention
    	
 
    	
10
    
	
SECTION 5.3
    	
 
    	
Binding Effect of Agreement
    	
 
    	
11
    
	
SECTION 5.4
    	
 
    	
Accuracy of Information
    	
 
    	
11
    
	
SECTION 5.5
    	
 
    	
Actions, Suits
    	
 
    	
11
    
	
SECTION 5.6
    	
 
    	
Taxes
    	
 
    	
11
    
	
SECTION 5.7
    	
 
    	
Compliance with Applicable Laws
    	
 
    	
11
    

 

	
 
    	
Second A&R Sale and 
    
	
 
    	
Contribution Agreement
    
	
 
    	
(Arch Coal)
    

 

i

 

CONTENTS

 

	
Clause
    	
 
    	
Subject Matter
    	
 
    	
Page
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
SECTION 5.8
    	
 
    	
Reliance on Separate Legal Identity
    	
 
    	
11
    
	
SECTION 5.9
    	
 
    	
Investment Company
    	
 
    	
11
    
	
SECTION 5.10
    	
 
    	
Perfection
    	
 
    	
12
    
	
SECTION 5.11
    	
 
    	
Creation of Receivables
    	
 
    	
12
    
	
SECTION 5.12
    	
 
    	
Credit and Collection Policy
    	
 
    	
12
    
	
SECTION 5.13
    	
 
    	
Enforceability of Contracts
    	
 
    	
12
    
	
SECTION 5.14
    	
 
    	
Location and Offices
    	
 
    	
12
    
	
SECTION 5.15
    	
 
    	
Good Title
    	
 
    	
12
    
	
SECTION 5.16
    	
 
    	
Names
    	
 
    	
13
    
	
SECTION 5.17
    	
 
    	
Nature of Receivables
    	
 
    	
13
    
	
SECTION 5.18
    	
 
    	
Bulk Sales, Margin Regulations, No Fraudulent Conveyance
    	
 
    	
13
    
	
SECTION 5.19
    	
 
    	
Effectiveness of Orders
    	
 
    	
13
    
	
SECTION 5.20
    	
 
    	
Solvency
    	
 
    	
13
    
	
SECTION 5.21
    	
 
    	
[Reserved.]
    	
 
    	
13
    
	
SECTION 5.22
    	
 
    	
Licenses, Contingent Liabilities, and Labor   Controversies
    	
 
    	
13
    
	
SECTION 5.23
    	
 
    	
Purchase Price
    	
 
    	
13
    
	
SECTION 5.24
    	
 
    	
No Material Adverse Effect
    	
 
    	
14
    
	
SECTION 5.25
    	
 
    	
Anti-Money Laundering/International Trade Law   Compliance
    	
 
    	
14
    
	
SECTION 5.26
    	
 
    	
Mortgages Covering As-Extracted Collateral
    	
 
    	
14
    
	
SECTION 5.27
    	
 
    	
Reaffirmation of Representations and Warranties by   the Transferor
    	
 
    	
14
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
ARTICLE VI
    
	
COVENANTS OF THE   TRANSFEROR
    
	
14
    
	
 
    
	
SECTION 6.1
    	
 
    	
Affirmative Covenants
    	
 
    	
14
    
	
SECTION 6.2
    	
 
    	
Reporting Requirements
    	
 
    	
16
    
	
SECTION 6.3
    	
 
    	
Negative Covenants
    	
 
    	
17
    
	
SECTION 6.4
    	
 
    	
Substantive Consolidation
    	
 
    	
19
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
ARTICLE VII
    
	
ADDITIONAL RIGHTS AND OBLIGATIONS   IN RESPECT OF RECEIVABLES
    
	
21
    
	
 
    
	
SECTION 7.1
    	
 
    	
Rights of the Company
    	
 
    	
21
    
	
SECTION 7.2
    	
 
    	
Responsibilities of the Transferor
    	
 
    	
21
    
	
SECTION 7.3
    	
 
    	
Further Action Evidencing Purchases
    	
 
    	
22
    
	
SECTION 7.4
    	
 
    	
Application of Collections
    	
 
    	
22
    
	
SECTION 7.5
    	
 
    	
Performance of Obligations
    	
 
    	
23
    

 

ii

 

CONTENTS

 

	
Clause
    	
 
    	
Subject Matter
    	
 
    	
Page
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
ARTICLE VIII
    
	
SALE AND CONTRIBUTION   TERMINATION EVENTS
    
	
23
    
	
 
    
	
SECTION 8.1
    	
 
    	
Sale and Contribution Termination Events
    	
 
    	
23
    
	
SECTION 8.2
    	
 
    	
Remedies
    	
 
    	
23
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
ARTICLE IX
    
	
INDEMNIFICATION
    
	
24
    
	
 
    
	
SECTION 9.1
    	
 
    	
Indemnities by the Transferor
    	
 
    	
24
    
	
ARTICLE X
    
	
MISCELLANEOUS
    
	
26
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
SECTION 10.1
    	
 
    	
Amendments, etc.
    	
 
    	
26
    
	
SECTION 10.2
    	
 
    	
Notices, etc.
    	
 
    	
26
    
	
SECTION 10.3
    	
 
    	
No Waiver; Cumulative Remedies
    	
 
    	
27
    
	
SECTION 10.4
    	
 
    	
Binding Effect; Assignability
    	
 
    	
27
    
	
SECTION 10.5
    	
 
    	
Governing Law
    	
 
    	
27
    
	
SECTION 10.6
    	
 
    	
Costs, Expenses and Taxes
    	
 
    	
28
    
	
SECTION 10.7
    	
 
    	
SUBMISSION TO JURISDICTION
    	
 
    	
28
    
	
SECTION 10.8
    	
 
    	
WAIVER OF JURY TRIAL
    	
 
    	
28
    
	
SECTION 10.9
    	
 
    	
Captions and Cross References; Incorporation by   Reference
    	
 
    	
29
    
	
SECTION 10.10
    	
 
    	
Execution in Counterparts
    	
 
    	
29
    
	
SECTION 10.11
    	
 
    	
Acknowledgment and Agreement
    	
 
    	
29
    
	
SECTION 10.12
    	
 
    	
No Proceeding
    	
 
    	
29
    
	
SECTION 10.13
    	
 
    	
Limited Recourse
    	
 
    	
29
    
	
SECTION 10.14
    	
 
    	
Severability
    	
 
    	
30
    
	
SECTION 10.15
    	
 
    	
Amendment and Restatement
    	
 
    	
30
    

 

iii

 

SCHEDULES

 

	
Schedule I
    	
Location of The Transferor
    
	
Schedule II
    	
Location of Books and Records of the Transferor
    

 

EXHIBITS

 

	
Exhibit A
    	
Form of   Purchase Report
    
	
Exhibit B
    	
Form of   Company Note
    

 

iv

 

THIS SECOND AMENDED AND RESTATED SALE AND CONTRIBUTION AGREEMENT (as amended, restated, supplemented or otherwise modified from time to time, this “Agreement”), dated as of October 5, 2016 is entered into between ARCH COAL, INC. (individually, “ACI”), as the transferor (the “Transferor”), and ARCH RECEIVABLE COMPANY, LLC, a Delaware limited liability company (the “Company”).

 

DEFINITIONS

 

Unless otherwise indicated herein, capitalized terms used and not otherwise defined in this Agreement are defined in Exhibit I to the Third Amended and Restated Receivables Purchase Agreement, dated as of the date hereof (as the same may be amended, restated, supplemented or otherwise modified from time to time, the “Receivables Purchase Agreement”), among the Company, as Seller, Arch Coal Sales Company, Inc. (individually, “Arch Sales”), as initial Servicer (in such capacity, the “Servicer”), the various Purchasers and LC Participants from time to time party thereto, and PNC Bank, National Association, as Administrator and as LC Bank.  All references herein to months are to calendar months unless otherwise expressly indicated.

 

BACKGROUND:

 

1.              The Company is a special purpose limited liability company, all of the issued and outstanding membership interests of which are owned by ACI;

 

2.              The Transferor generates Receivables in the ordinary course of its business, and purchases Receivables and the Related Security pursuant to that certain Amended and Restated Purchase and Sale Agreement, dated as of the date hereof (as the same may be amended, restated, supplemented or otherwise modified from time to time, the “Purchase and Sale Agreement”) by and among the Originators and the Transferor;

 

3.              The Transferor, in order to finance its business, wishes to sell or contribute Receivables to the Company, and the Company is willing to purchase or acquire Receivables from the Transferor, on the terms and subject to the conditions set forth herein;

 

4.              The Transferor and the Company intend this transaction to be a true sale or contribution of Receivables by the Transferor to the Company, providing the Company with the full benefits of ownership of the Receivables, and the Transferor and the Company do not intend the transactions hereunder to be characterized as a loan from the Company to the Transferor; and

 

5.              The Transferor acknowledges that the Company may from time to time transfer, assign and grant a security interest in undivided beneficial interests in the Receivables, Related Security and other rights to the Administrator for the benefit of the Secured Parties under the Receivables Purchase Agreement.

 

NOW, THEREFORE, in consideration of the premises and the mutual agreements herein contained, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound, agree as follows:

 

 

ARTICLE I
 AGREEMENT TO PURCHASE AND SELL

 

SECTION 1.1  Agreement To Purchase and Sell.  On the terms and subject to the conditions set forth in this Agreement, the Transferor agrees to sell to the Company, and the Company agrees to purchase from the Transferor, from time to time on or after the Closing Date, but before the Sale and Contribution Termination Date (as defined in Section 1.4), all of the Transferor’s right, title and interest in and to:

 

(a)                                 each Receivable of the Transferor (including, without limitation, each such Receivable sold or purported sold to the Transferor pursuant to the Purchase and Sale Agreement) that existed and was owing to the Transferor at the closing of the Transferor’s business on January 1, 2006 (the “Cut-off Date”) other than Receivables contributed pursuant to Section 3.1 (the “Contributed Receivables”);

 

(b)                                 each Receivable sold or purported to be sold by an Originator to the Transferor pursuant to the Purchase and Sale Agreement and each Receivable generated or otherwise acquired by the Transferor from and including the Cut-off Date to but excluding the Sale and Contribution Termination Date;

 

(c)                                  all rights to, but not the obligations of, the Transferor under all Related Security with respect to any of the foregoing Receivables;

 

(d)                                 all monies due or to become due to the Transferor with respect to any of the foregoing;

 

(e)                                  all books and records of the Transferor to the extent related to any of the foregoing;

 

(f)                                   all Collections and other proceeds and products of any of the foregoing (as defined in the UCC) that are or were received by the Transferor on or after the Cut-off Date, including, without limitation, all funds which either are received by the Transferor, the Company or the Servicer from or on behalf of the Obligors in payment of any amounts owed (including, without limitation, invoice price, finance charges, interest and all other charges) in respect of any of the above Receivables or are applied to such amounts owed by the Obligors (including, without limitation, any insurance payments that the Transferor, the Company or the Servicer applies in the ordinary course of its business to amounts owed in respect of any of the above Receivables, and net proceeds of sale or other disposition of repossessed goods or other collateral or property of the Obligors in respect of any of the above Receivables or any other parties directly or indirectly liable for payment of such Receivables);

 

(g)                                  all rights, remedies, powers, privileges, title and interest (but not obligations) under the Purchase and Sale Agreement with respect to the Receivables sold and contributed hereunder; and

 

2

 

(h)                                 all rights, remedies, powers, privileges, title and interest (but not obligations) in and to the Lock-Box Accounts into which any Collections or other proceeds with respect to such Receivables may be deposited.

 

All purchases and contributions hereunder are absolute and irrevocable and shall be made without recourse, but shall be made pursuant to, and in reliance upon, the representations, warranties and covenants of the Transferor set forth in this Agreement and each other Transaction Document.  No obligation or liability to any Obligor on any Receivable is intended to be assumed by the Company hereunder, and any such assumption is expressly disclaimed.  The Company’s foregoing agreement to purchase Receivables and the property, proceeds and rights described in clauses (c) through (h) (collectively, the “Related Rights”) is herein called the “Purchase Facility.”  The Transferor hereby authorizes and consents to the filing of each of the financing statements that have been filed prior to the date hereof by or on behalf of the Company or the Administrator in connection with the Original SCA notwithstanding that the collateral described therein may be broader in scope than the collateral described in this Agreement.

 

SECTION 1.2  Timing of Purchases.

 

(a)                                 Closing Date Purchases.  The Transferor’s entire right, title and interest in (i) each Receivable that existed and was owing to the Transferor on the Closing Date (other than Contributed Receivables) and (ii) all Related Rights with respect thereto automatically shall be deemed to have been sold by the Transferor to the Company on the Closing Date.

 

(b)                                 Subsequent Purchases.  After the Closing Date, until the Sale and Contribution Termination Date, each Receivable and the Related Rights sold or purported to be sold by an Originator to the Transferor pursuant to the Purchase and Sale Agreement and each Receivable and the Related Rights generated or otherwise acquired by the Transferor shall be deemed to have been sold by the Transferor to the Company immediately (and without further action) upon the sale or purported sale or the creation of such Receivable, as applicable.

 

SECTION 1.3  Consideration for Purchases.  On the terms and subject to the conditions set forth in this Agreement, the Company agrees to make Purchase Price payments to the Transferor in accordance with Article III and to reflect all contributions in accordance with Section 3.1.

 

SECTION 1.4  Sale and Contribution Termination Date.  The “Sale and Contribution Termination Date” shall be the earliest to occur of (a) the date the Purchase Facility is terminated pursuant to Section 8.2 and (b) the Payment Date (as defined in Section 2.2) immediately following the day on which the Transferor shall have given written notice to the Company and the Administrator at or prior to 10:00 a.m. (New York City time) that the Transferor desires to terminate this Agreement.

 

SECTION 1.5  Intention of the Parties.  It is the express intent of the Transferor and the Company that each conveyance by the Transferor to the Company pursuant to this Agreement of the Receivables, including without limitation, all Receivables, if any, constituting general intangibles as defined in the UCC, and all Related Rights be construed as a valid and perfected

 

3

 

sale and absolute assignment (without recourse except as provided herein) of such Receivables and Related Rights by the Transferor to the Company (rather than the grant of a security interest to secure a debt or other obligation of the Transferor) and that the right, title and interest in and to such Receivables and Related Rights conveyed to the Company be prior to the rights of and enforceable against all other Persons at any time, including, without limitation, lien creditors, secured lenders, purchasers and any Person claiming through the Transferor.  However, if, contrary to the mutual intent of the parties, any conveyance of Receivables and Related Rights, including without limitation any Receivables constituting general intangibles, is not construed to be both a valid and perfected sale and absolute assignment of such Receivables and Related Rights, and a conveyance of such Receivables and Related Rights that is prior to the rights of and enforceable against all other Persons at any time, including without limitation lien creditors, secured lenders, purchasers and any Person claiming through the Transferor, then, it is the intent of the Transferor and the Company that (i) this Agreement also shall be deemed to be, and hereby is, a security agreement within the meaning of the UCC; and (ii) the Transferor shall be deemed to have granted to the Company as of the Closing Date, and the Transferor hereby grants to the Company, a security interest in, to and under all of the Transferor’s right, title and interest in and to: (A) the Receivables and the Related Rights now existing and hereafter created, generated or otherwise acquired by the Transferor (including, without limitation, each such Receivable sold or purported to be sold by an Originator to the Transferor pursuant to the Purchase and Sale Agreement), (B) all monies due or to become due and all amounts received with respect thereto, (C)  all books and records of the Transferor to the extent related to any of the foregoing, (D) all rights, remedies, powers, privileges, title and interest (but not obligations) of the Transferor in and to the Lock-Box Accounts into which any Collections or other proceeds with respect to such Receivables may be deposited, and any related investment property acquired with any such Collections or other proceeds (as such term is defined in the applicable UCC) and (E) all proceeds and products of any of the foregoing to secure all of the Transferor’s obligations hereunder.

 

ARTICLE II
 PURCHASE REPORT; CALCULATION OF PURCHASE PRICE

 

SECTION 2.1  Purchase Report.  On the 21st day of each calendar month after the Closing Date (or if such day is not a Business Day, the next occurring Business Day) (each such date, a “Monthly Purchase Report Date”), the Servicer shall deliver to the Company and the Transferor a report in substantially the form of Exhibit A (each such report being herein called a “Purchase Report”) setting forth, among other things:

 

(a)                                 [Reserved];

 

(b)                                 Receivables purchased (or, in the case of Contributed Receivables, received) by the Company from the Transferor during the period commencing on the Monthly Purchase Report Date immediately preceding such Monthly Purchase Report Date to (but not including) such Monthly Purchase Report Date (in the case of each subsequent Purchase Report); and

 

4

 

(c)                                  the calculations of reductions of the Purchase Price for any Receivables as provided in Section 3.3(a) and (b).

 

SECTION 2.2  Calculation of Purchase Price.  The “Purchase Price” to be paid to the Transferor for the Receivables that are purchased hereunder from the Transferor shall be determined in accordance with the following formula:

 

	
PP
    	
=
    	
OB x FMVD
    
	
 
    	
 
    	
 
    
	
where:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
PP
    	
=
    	
Purchase Price for each Receivable as calculated on   the relevant Payment Date.
    
	
 
    	
 
    	
 
    
	
OB
    	
=
    	
The Outstanding Balance of such Receivable on the   relevant Payment Date.
    
	
 
    	
 
    	
 
    
	
FMVD
    	
=
    	
Fair Market Value Discount, as measured on such   Payment Date, which is equal to the quotient (expressed as percentage) of   (a) one divided by (b) the sum of (i) one, plus (ii) the product of (A) the Prime Rate on   such Payment Date, and   (B) a fraction, the numerator of which is the Days’ Sales Outstanding   (calculated as of the last Business Day of the calendar month next preceding   such Payment Date) and the denominator of which is 365.
    

 

“Payment Date” means (i) the Closing Date and (ii) each Business Day thereafter that the Transferor is open for business.

 

“Prime Rate” means a per annum rate equal to the “Prime  Rate” as published in the “Money Rates” section of The Wall Street Journal or if such information ceases to be published in The Wall Street Journal, such other publication as determined by the Administrator in its sole discretion.

 

ARTICLE III
 PAYMENT OF PURCHASE PRICE

 

SECTION 3.1  Contribution of Receivables and Initial Purchase Price Payment.

 

(a)                                 Contribution of Receivables.  On February 3, 2006, ACI contributed to the capital of the Company either or a combination of (i) Receivables and Related Rights consisting of each Receivable of ACI that existed and was owing to ACI on February 3, 2006, beginning with the oldest of such Receivables and continuing chronologically thereafter and/or (ii) cash or other assets, in either case, such that the aggregate outstanding balance of all equity held by the Transferor in the Company, after giving effect to such contribution, was equal to $5,500,000.

 

5

 

(b)                                 Company Note.  On the terms and subject to the conditions set forth in this Agreement, the Company agrees to pay to the Transferor the Purchase Price for the purchases to be made from the Transferor from time to time (i) partially in cash (to the extent that the Company has available cash) and (ii) partially by issuing a promissory note in the form of Exhibit B to the Transferor (such promissory note, as it may be amended, supplemented, endorsed or otherwise modified from time to time, together with all promissory notes issued from time to time in substitution therefor or renewal thereof in accordance with the Transaction Documents, collectively referred to herein as the “Company Note”).

 

SECTION 3.2  Purchase Price Payments; Letters of Credit.  (a) On each Payment Date from and after the Closing Date, on the terms and subject to the conditions set forth in this Agreement, the Company shall pay to the Transferor the Purchase Price for the Receivables sold or purported to be sold by an Originator to the Transferor pursuant to the Purchase and Sale Agreement and for the Receivables generated by the Transferor on such Payment Date:

 

(i)                                     First, in cash to the extent the Company has cash available therefor and such payment is not prohibited under the Receivables Purchase Agreement and/or, if requested by Transferor and permitted under the Receivables Purchase Agreement, by causing the LC Bank to issue one or more Letters of Credit in accordance with this Section 3.2 and on the terms and subject to the conditions of this Article III and the Receivables Purchase Agreement; and

 

(ii)                                  Second, to the extent any portion of the Purchase Price remains unpaid, the principal amount outstanding under the Company Note shall be automatically increased by an amount equal to such remaining Purchase Price.

 

The Servicer shall make all appropriate record keeping entries with respect to the Company Note to reflect the foregoing payments and reductions made pursuant to Section 3.3, and the Servicer’s books and records shall constitute rebuttable presumptive evidence of the principal amount of, and accrued interest on, the Company Note at any time.  The Transferor hereby irrevocably authorizes the Servicer to mark the Company Note “CANCELED” and to return the Company Note to the Company upon the final payment thereof after the occurrence of the Sale and Contribution Termination Date.

 

(b)                                 The Transferor may request that the Purchase Price for Receivables sold on a Payment Date be paid by the Company by procuring the issuance of a Letter of Credit by the LC Bank.  Upon the request of the Transferor, and on the terms and conditions for issuing Letters of Credit under the Receivables Purchase Agreement (including any limitations therein on the amount of any such issuance and/or whether such issuance is permitted), the Company agrees to cause the LC Bank to issue, on the Payment Dates specified by the Transferor, Letters of Credit in favor of one or more beneficiaries selected by the Transferor, with the consent of the Company.  The aggregate stated amount of the Letters of Credit being issued on any Payment Date on behalf of the Transferor shall constitute a credit against the aggregate Purchase Price otherwise payable by the Company to the Transferor on such Payment Date.  In the event that the Transferor requests that any purchases be paid for in whole and/or in part by the issuance of a Letter of Credit, the Transferor shall on a timely basis provide the Company with such

 

6

 

information as is necessary for the Company to obtain such Letter of Credit from the LC Bank.  The Transferor shall have no reimbursement obligations in respect of any Letter of Credit.  To the extent that the aggregate stated amount of the Letters of Credit being issued on any Payment Date exceeds the aggregate Purchase Price payable by the Company to the Transferor on such Payment Date, such excess shall be deemed to be (i) a reduction in the outstanding principal balance of (and, to the extent necessary, the accrued but unpaid interest on) the Company Note payable to the Transferor, to the extent the outstanding principal balance (and accrued interest) is greater than such excess and/or (ii) a reduction in the Purchase Price payable on the Payment Dates immediately following the date any such Letter of Credit is issued.  In the event that any Letter of Credit issued in partial payment of any Purchase Price hereunder (i) expires or is cancelled or otherwise terminated with all or any portion of its stated amount undrawn, (ii) has its stated amount decreased (for a reason other than a drawing having been made thereunder) or (iii) the Company’s Reimbursement Obligation in respect thereof is reduced for any reason other than by virtue of a payment made in respect of a drawing thereunder, then an amount equal to such undrawn amount or such reduction, as the case may be, shall either be paid in cash to the Transferor on the next Payment Date or, if the Company does not then have cash available therefor, shall be deemed to be added to the outstanding principal balance of the Company Note issued to the Transferor.

 

(c)                                  The Transferor agrees to be bound by the terms of each Letter of Credit Application referenced in the Receivables Purchase Agreement and that 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, in each case subject to the terms and conditions set forth in the Receivables Purchase Agreement.

 

SECTION 3.3  Settlement as to Specific Receivables and Dilution.

 

(a)                                 If (i) on the day of purchase or contribution of any Receivable from the Transferor hereunder, any of the representations or warranties set forth in Sections 5.10, 5.15 and 5.17 are not true with respect to such Receivable or (ii) as a result of any action or inaction (other than solely as a result of the failure to collect such Receivable due to a discharge in bankruptcy or similar insolvency proceeding or other credit related reasons with respect to the relevant Obligor) of the Transferor or any Originator, on any subsequent day, any of such representations or warranties set forth in Sections 5.10, 5.15 and 5.17 is no longer true with respect to such Receivable on such subsequent date (without giving effect to any reference to the date of sale, creation, purchaser or contribution of such Receivable in such representation or warranty), then the Purchase Price (or in the case of a Contributed Receivable the Outstanding Balance of such Receivable (the “Contributed Value”)), with respect to such Receivable shall be reduced by an amount equal to the Outstanding Balance of such Receivable and shall be accounted to the Transferor as provided in clause (c) below; provided, that if the Company thereafter receives payment on account of Collections due with respect to such Receivable, the Company promptly shall deliver such funds to the Transferor.

 

7

 

(b)                                 If, on any day, the Outstanding Balance of any Receivable (including any Contributed Receivable) purchased or contributed hereunder is reduced or adjusted as a result of any revision, cancellation, allowance, rebate, defective, rejected, returned, repossessed or foreclosed goods or services, or any discount or other adjustment made by the Transferor, any Originator, the Company or the Servicer or any setoff, netting of obligations or dispute between the Transferor, any Originator or the Servicer and an Obligor, as indicated on the books of the Company (or, for periods prior to the Closing Date, the books of the Transferor), then the Purchase Price or Contributed Value, as the case may be, with respect to such Receivable shall be reduced by the amount of such net reduction and shall be accounted to the Transferor as provided in clause (c) below.

 

(c)                                  Any reduction in the Purchase Price or Contributed Value of any Receivable pursuant to clause (a) or (b) above shall be applied as a credit for the account of the Company against the Purchase Price of Receivables subsequently purchased by the Company from the Transferor hereunder; provided, however if there have been no purchases of Receivables from the Transferor (or insufficiently large purchases of Receivables) to create a Purchase Price sufficient to so apply such credit against, the amount of such credit:

 

(i)                                     to the extent of any outstanding principal balance under the Company Note payable to the Transferor, shall be deemed to be a payment under, and shall be deducted from the principal amount outstanding under, the Company Note payable to the Transferor; and

 

(ii)                                  after making any deduction pursuant to clause (i) above, shall be paid in cash to the Company by the Transferor in the manner and for application as described in the following proviso;

 

provided, further, that at any time (y) when a Termination Event or an Unmatured Termination Event exists under the Receivables Purchase Agreement or (z) on or after the Sale and Contribution Termination Date, the amount of any such credit shall be paid by the Transferor to the Company by deposit in immediately available funds into a Lock-Box Account for application by the Servicer to the same extent as if Collections of the applicable Receivable in such amount had actually been received on such date.

 

SECTION 3.4  Reconveyance of Receivables.  In the event that the Transferor has paid to the Company the full Outstanding Balance of any Receivable pursuant to Section 3.3, the Company shall reconvey such Receivable to the Transferor, without representation or warranty, but free and clear of all liens, security interests, charges, and encumbrances created by the Company.

 

ARTICLE IV
 CONDITIONS OF PURCHASES

 

SECTION 4.1  Conditions Precedent to Initial Purchase.  The initial purchase hereunder is subject to the condition precedent that the Company and the Administrator (as the total assignee of the Company) shall have received, on or before the Closing Date, the following, each

 

8

 

(unless otherwise indicated) dated the Closing Date, and each in form and substance satisfactory to the Company and the Administrator (as the total assignee of the Company):

 

(a)                                 A copy of the resolutions of the board of directors or managers of the Transferor approving the Transaction Documents to be executed and delivered by it and the transactions contemplated hereby and thereby, certified by the Secretary or Assistant Secretary of the Transferor;

 

(b)                                 Good standing certificates for the Transferor issued as of a recent date acceptable to the Company and the Administrator (as the total assignee of the Company) by the Secretary of State of the jurisdiction of the Transferor’s organization;

 

(c)                                  A certificate of the Secretary or Assistant Secretary of the Transferor certifying the names and true signatures of the officers authorized on such Person’s behalf to sign the Transaction Documents to be executed and delivered by it (on which certificate the Servicer, the Company and the Administrator (as the total assignee of the Company) may conclusively rely until such time as the Servicer, the Company and the Administrator (as the total assignee of the Company) shall receive from such Person a revised certificate meeting the requirements of this clause (c));

 

(d)                                 The certificate or articles of incorporation or other organizational document of the Transferor (including all amendments and modifications thereto) duly certified by the Secretary of State of the jurisdiction of the Transferor’s organization as of a recent date, together with a copy of the by-laws of the Transferor, each duly certified by the Secretary or an Assistant Secretary of the Transferor;

 

(e)                                  Completed UCC search reports, dated the Closing Date or no earlier than 30 days prior thereto, listing the financing statements filed in all applicable jurisdictions that name any Originator, Transferor or the Company, 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 reasonably request, showing no Adverse Claims on any Pool Assets other than any security interests that are released as of the Closing Date pursuant to the Confirmation Order or the Plan of Reorganization;

 

(f)                                   Favorable opinions, addressed to the Administrator, each Purchaser Agent and each Purchaser, in form and substance reasonably satisfactory to the Administrator, of external counsel for the Transferor, covering such matters as the Administrator may reasonably request, including, without limitation, (i) certain Delaware corporate and no conflict matters, (ii) certain organizational and New York enforceability matters, certain bankruptcy matters and (iii) certain UCC creation and Delaware perfection matters;

 

(g)                                  Evidence (i) of the execution and delivery by each of the parties thereto of each of the other Transaction Documents to be executed and delivered in connection herewith and (ii) that each of the conditions precedent to the execution, delivery and effectiveness of such

 

9

 

other Transaction Documents has been satisfied to the Company’s and the Administrator’s (as the total assignee of the Company) satisfaction; and

 

(h)                                 A copy of the Confirmation Order that has not been modified or amended (except for modifications or amendments approved by the Administrator and the Majority Purchaser Agents).

 

SECTION 4.2  Certification as to Representations and Warranties.  The Transferor, by accepting the Purchase Price related to each purchase of Receivables generated or otherwise acquired by the Transferor, shall be deemed to have certified that the representations and warranties contained in Article V, as from time to time amended in accordance with the terms hereof, are true and correct in all material respects on and as of such day, with the same effect as though made on and as of such day (except for representations and warranties which apply to an earlier date, in which case such representations and warranties shall be true and correct in all material respects as of such earlier date).

 

ARTICLE V
 REPRESENTATIONS AND WARRANTIES OF THE TRANSFEROR

 

In order to induce the Company to enter into this Agreement and to make purchases hereunder, the Transferor hereby represents and warrants that each representation and warranty concerning it or the Receivables sold or contributed by it hereunder, that is contained in the Receivables Purchase Agreement is true and correct, and hereby makes as of the Closing Date the representations and warranties set forth in this Article V.

 

SECTION 5.1  Existence and Power.  The Transferor is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization, and upon the entry by the Bankruptcy Court of the Confirmation Order, has all power and authority 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.

 

SECTION 5.2  Company and Governmental Authorization, Contravention.  The execution, delivery and performance by the Transferor of this Agreement (i) are within the Transferor’s company powers, have been duly authorized by all necessary company action, require no action by or in respect of, or filing with (other than the filing of the UCC financing statements and continuation statements contemplated hereunder), any governmental body, agency or official, (ii) other than as would not reasonably be expected to result in a Material Adverse Effect, do not contravene, or constitute a default under, any provision of Applicable Law or of the organizational documents of the Transferor or of any agreement, judgment, injunction, order, decree or other instrument binding upon the Transferor and (iii) do not result in the creation or imposition of any Adverse Claim on assets of the Transferor or any of its Subsidiaries.

 

10

 

SECTION 5.3  Binding Effect of Agreement.  This Agreement and each of the other Transaction Documents to which it is a party constitutes the legal, valid and binding obligation of the Transferor enforceable against the Transferor 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.

 

SECTION 5.4  Accuracy of Information.  All information heretofore furnished in writing by the Transferor to the Company or the Administrator pursuant to or in connection with this Agreement or any other Transaction Document or any transaction contemplated hereby or thereby is, and all such information hereafter furnished by the Transferor to the Company or the Administrator in writing pursuant to this Agreement or any Transaction Document will be, taken as a whole, true and accurate in all material respects on the date such information is stated or certified.

 

SECTION 5.5  Actions, Suits.  There are no actions, suits or proceedings pending or, to the best of the Transferor’s knowledge, threatened against or affecting the Transferor 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.

 

SECTION 5.6  Taxes.  The Transferor has filed or caused to be filed all U.S. federal income tax returns and all other material returns, statements, forms and reports for taxes, domestic or foreign, required to be filed by it and has paid all taxes payable by it which have become due or any assessments made against it or any of its property and all other material taxes, fees or other charges imposed on it or any of its property by any Governmental Authority, except to the extent that such taxes are being contested in good faith by appropriate proceedings and for which such reserves or other appropriate provisions, if any, as are required by generally accepted accounting principles shall have been made.

 

SECTION 5.7  Compliance with Applicable Laws.  The Transferor is in compliance with the requirements of all Applicable Laws and orders of all Governmental Authorities except to the extent that the failure to comply would not reasonably be expected to have a Material Adverse Effect.  In addition, no Receivable sold, contributed or otherwise conveyed hereunder contravenes any Applicable Laws, rules or regulations applicable thereto or to the Transferor in any material respect.

 

SECTION 5.8  Reliance on Separate Legal Identity.  The Transferor acknowledges that each of the Administrator and the other Secured Parties are entering into the Transaction Documents to which they are parties in reliance upon the Company’s identity as a legal entity separate from the Transferor.

 

SECTION 5.9  Investment Company.  The Transferor is not required to register as an “investment company,” or a company “controlled” by an “investment company,” within the meaning of the Investment Company Act of 1940, as amended.

 

11

 

SECTION 5.10  Perfection.  Immediately preceding its sale of each Receivable hereunder, the Transferor was the owner of such Receivable sold or purported to be sold, free and clear of any Adverse Claims, and each such sale hereunder constitutes a valid sale, transfer and assignment of all of the Transferor’s right, title and interest in, to and under the Receivables sold by it, free and clear of any Adverse Claims. On or before the date hereof and before the sale or purported sale by an Originator to the Transferor under the Purchase and Sale Agreement and before the generation by the Transferor of any new Receivable to be sold or otherwise conveyed hereunder, all financing statements and other documents, if any, required to be recorded or filed in order to perfect and protect the Company’s ownership interest in such Receivable against all creditors of and purchasers from the Originators or the Transferor will have been duly filed in each filing office necessary for such purpose, and all filing fees and taxes, if any, payable in connection with such filings shall have been paid in full.  Each such financing statement, filed with respect to such Receivable as an as-extracted collateral filing, includes a complete and correct description of the real property in all material respects related to such Receivable as extracted collateral, as contemplated by the UCC, and names a record owner of the real property.

 

SECTION 5.11  Creation of Receivables.  The Transferor has exercised (and has caused each Originator to exercise) at least the same degree of care and diligence in the creation and acquisition of the Receivables sold, contributed or otherwise conveyed to the Transferor under the Purchase and Sale Agreement, in the case of the Originators and sold, contributed or otherwise conveyed to the Company hereunder in the case of the Transferor as it has exercised  in connection with the creation of receivables originated by such Person and not so transferred.

 

SECTION 5.12  Credit and Collection Policy.  The Transferor has complied (and has caused each Originator to comply) in all material respects with its Credit and Collection Policy in regard to each Receivable sold or contributed to the Transferor under the Purchase and Sale Agreement, in the case of the Originators and sold, contributed or otherwise conveyed to the Company by it hereunder and the related Contract.

 

SECTION 5.13  Enforceability of Contracts.  Each Contract related to any Receivable sold or contributed by the Transferor hereunder is effective to create, and has created, a legal, valid and binding obligation of the related Obligor to pay the outstanding balance of such Receivable, enforceable against the Obligor in accordance with its terms, without being subject to any defense, deduction, offset or counterclaim and the Transferor has fully performed (and has caused each Originator to fully perform) the obligations under such Contract.

 

SECTION 5.14  Location and Offices.  As of the Closing Date, the Transferor’s location (as such term is defined in the applicable UCC) is in the state set forth on Schedule I hereto, and such location has not been changed for at least four months before the date hereof.  The office where the Transferor keeps all records concerning the Receivables is located at the address set forth on Schedule II hereto or such other locations of which the Company and the Administrator (as the total assignee of the Company) have been given written notice in accordance with the terms hereof.

 

SECTION 5.15  Good Title.  Upon the sale or purported sale by an Originator to the Transferor under the Purchase and Sale Agreement and upon the creation or acquisition of each

 

12

 

new Receivable sold, contributed or otherwise conveyed or purported to be conveyed hereunder and on the Closing Date for then existing Receivables, the Company shall have a valid and perfected first priority ownership interest in each Receivable sold or contributed to it hereunder, free and clear of any Adverse Claim.

 

SECTION 5.16  Names.  The Transferor has not used any corporate or company names, tradenames or assumed names other than its name set forth on the signature pages of this Agreement.

 

SECTION 5.17  Nature of Receivables.  Each Pool Receivable purchased or contributed hereunder and included in the calculation of Net Receivables Pool Balance is, on the date of such purchase or contribution, an Eligible Receivable.

 

SECTION 5.18  Bulk Sales, Margin Regulations, No Fraudulent Conveyance.  No transaction contemplated hereby requires compliance with or will become subject to avoidance under any bulk sales act or similar law.  No use of funds obtained by an Originator under the Purchase and Sale Agreement or by the Transferor hereunder will conflict with or contravene Regulation T, U or X of the Federal Reserve Board.  No purchase under the Purchase and Sale Agreement or hereunder constitutes a fraudulent transfer or conveyance or avoidable post-petition transfer under any United States federal or applicable state bankruptcy or insolvency laws or is otherwise void or voidable under such or similar laws or principles or for any other reason.

 

SECTION 5.19  Effectiveness of Orders.  The Confirmation Order is in full force and effect and has not been vacated or reversed, is not subject to a stay, and has not been modified or amended (other than any amendment or modification approved in writing by the Administrator and the Majority Purchaser Agents).

 

SECTION 5.20  Solvency.  On the date hereof, and on the date of each purchase or contribution under the Purchase and Sale Agreement and hereunder (both before and after giving effect to such purchase or contribution), each Originator and the Transferor shall be Solvent.

 

SECTION 5.21  [Reserved.]

 

SECTION 5.22  Licenses, Contingent Liabilities, and Labor Controversies.

 

(a)                                 The Transferor has not failed to obtain (and has caused each Originator to obtain) any licenses, permits, franchises or other governmental authorizations necessary to the ownership of its properties or to the conduct of its business, except such failures to have such licenses, permits, franchises or other governmental authorizations that could not reasonably be expected to have a Material Adverse Effect.

 

(b)                                 There are no labor controversies pending against any Originator or the Transferor that have had (or could reasonably be expected to have) a Material Adverse Effect.

 

SECTION 5.23  Purchase Price.  Each sale and contribution by the Transferor to Company of an interest in Receivables has been made for “reasonably equivalent value” (as such

 

13

 

term is used in Section 548 of the Bankruptcy Code) and not for or on account of “antecedent debt” (as such term is used in Section 547 of the Bankruptcy Code) owed by the Transferor to Company, and is otherwise not subject to avoidance under any provision of the Bankruptcy Code or Applicable Law.

 

SECTION 5.24  No Material Adverse Effect.  Since the Closing Date, there has been no Material Adverse Effect on the Transferor.

 

SECTION 5.25  Anti-Money Laundering/International Trade Law Compliance.  No Covered Entity is a Sanctioned Person.  No Covered Entity, either in its own right or through any third party, (a) has any of its assets in a Sanctioned Country or in the possession, custody or control of a Sanctioned Person in violation of any Anti-Terrorism Law; (b) does business in or with, or derives any of its income from investments in or transactions with, any Sanctioned Country or Sanctioned Person in violation of any Anti-Terrorism Law; or (c) engages in any dealings or transactions prohibited by any Anti-Terrorism Law.

 

SECTION 5.26  Mortgages Covering As-Extracted Collateral.  There are no mortgages that are effective as financing statements covering as-extracted collateral that constitutes Pool Assets and that name the Transferor as grantor, debtor or words of similar effect filed or recorded in any jurisdiction.

 

SECTION 5.27  Reaffirmation of Representations and Warranties by the Transferor.  On each day that a Receivable is sold or purported to be sold by an Originator to the Transferor pursuant to the Purchase and Sale Agreement or is created by the Transferor, and when sold or contributed to the Company hereunder, the Transferor shall be deemed to have certified that all representations and warranties set forth in this Article V are true and correct on and as of such day (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)).

 

ARTICLE VI
 COVENANTS OF THE TRANSFEROR

 

SECTION 6.1  Affirmative Covenants.  At all times from the date hereof until the Final Payout Date, the Transferor shall:

 

(a)                                 General Information.  Furnish to the Company and the Administrator such information as the Company or the Administrator may from time to time reasonably request.

 

(b)                                 Furnishing of Information and Inspection of Records. Furnish to the Company and the Administrator from time to time such information with respect to the Receivables as such Person may reasonably request.  The Transferor will, at the Transferor’s expense, during regular business hours with prior written notice (i) permit the Company or the Administrator, or their respective agents or representatives, (A) to examine and make copies of and abstracts from all books and records relating to the Receivables or other Pool Assets and (B) to visit the offices and properties of the Transferor for the purpose of examining such books and records, and to discuss matters relating to the Receivables, other Related Rights or the Transferor’s performance hereunder or under the other Transaction Documents to which it is a

 

14

 

party with any of the officers, directors, employees or independent public accountants of the Transferor (provided that representatives of the Transferor 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 Transferor’s expense, upon reasonable prior written notice from the Company or the Administrator, permit certified public accountants or other auditors acceptable to the Administrator to conduct, a review of its books and records with respect to the Receivables; provided, that the Transferor shall only be responsible for the expenses incurred in connection with one (1) review for any calendar year pursuant to this clause (ii), so long as no Termination Event has occurred.

 

(c)                                  Keeping of Records and Books.  Have and maintain (i) administrative and operating procedures (including an ability to recreate records if originals are destroyed), (ii) adequate facilities, personnel and equipment and (iii) all records and other information reasonably necessary for collection of the Receivables originated by the Transferor (including records adequate to permit the daily identification of each new such Receivable and all Collections of, and adjustments to, each existing such Receivable).  The Transferor will give the Company and the Administrator prior notice of any change in such administrative and operating procedures that causes them to be materially different from the procedures described to the Company and the Administrator on or before the date hereof as the Transferor’s then existing or planned administrative and operating procedures for collecting Receivables.

 

(d)                                 Performance and Compliance with Receivables and Contracts.  Timely and fully perform and comply (and cause each Originator to timely and fully comply), at its own expense, in all material respects with all provisions, covenants and other promises required to be observed under all Contracts or other documents or agreements related to the Receivables.

 

(e)                                  Credit and Collection Policy.  Comply (and cause each Originator to comply) in all material respects with its Credit and Collection Policy in regard to each Receivable originated or acquired by it and any related Contract or other related document or agreement.

 

(f)                                   Receivable Purchase Agreement.  Perform and comply (and cause each Originator to perform and comply) in all material respects with each covenant and other undertaking in the Purchase and Sale Agreement and the Receivables Purchase Agreement that the Company undertakes to cause the Originators or the Transferor to perform, subject to any applicable grace periods, if any, for such performance provided for in such agreements.

 

(g)                                  Preservation of Existence.  Preserve and maintain (and cause each Originator to preserve and maintain) its existence as a corporation or limited liability company, as applicable, and all rights, franchises and privileges in the jurisdiction of its organization, and qualify and remain qualified in good standing as a foreign corporation or limited liability company, as applicable, in each jurisdiction where the failure to preserve and maintain such existence, rights, franchises, privileges and qualification could reasonably be expected to have a Material Adverse Effect.

 

15

 

(h)                                 Location of Records.  Keep (and cause each Originator to keep) its location (as such term is defined in the applicable UCC), and the office where it keeps its records concerning or related to Receivables, at the address(es) referred to in the Purchase and Sale Agreement, in the case of the Originators and in  Schedule I or Schedule II, respectively, in the case of the Transferor or at such other locations in jurisdictions where all action required by Section 7.3 shall have been taken and completed; provided that the Transferor shall promptly (and in any event prior to the date that is 30 days after any such change in location) give (or shall cause the relevant Originator to give) to the Company and the Administrator (as the assignee of the Company) written notice of any such change in location.

 

(i)                                     Data Records.  Place and maintain on its summary master control data processing records the following legend (or the substantive equivalent thereof):  “THE RECEIVABLES DESCRIBED HEREIN HAVE BEEN SOLD TO ARCH RECEIVABLE COMPANY, LLC PURSUANT TO A SECOND AMENDED AND RESTATED SALE AND CONTRIBUTION AGREEMENT, DATED AS OF OCTOBER 5, 2016, BETWEEN ARCH RECEIVABLE COMPANY, LLC AND ARCH COAL, INC.; AND AN INTEREST IN THE RECEIVABLES DESCRIBED HEREIN HAS BEEN GRANTED TO PNC BANK, NATIONAL ASSOCIATION, FOR THE BENEFIT OF THE SECURED PARTIES UNDER THE THIRD AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT, DATED AS OF OCTOBER 5, 2016, AMONG ARCH RECEIVABLE COMPANY, LLC, 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 THERETO AND PNC BANK, NATIONAL ASSOCIATION, AS ADMINISTRATOR AND AS LC BANK.”

 

(j)                                    Preservation of Security Interest.  Take (or cause to be taken) any and all action as Company or the Administrator may require to preserve and maintain the perfection and priority of the security interest of the Administrator in the Receivables and Related Rights.

 

(k)                                 Payments on Receivables, Accounts.  At all times instruct all Obligors to deliver payments on the Pool Receivables to a Lock-Box Account.  The Transferor will, at all times, maintain such books and records necessary to identify Collections received from time to time on Pool Receivables and to segregate such Collections from other property of the Transferor.  If any such payments or other Collections are received by the Transferor, it shall hold such payments in trust for the benefit of the Administrator and the other Secured Parties and promptly (but in any event within two Business Days after receipt) remit such funds into a Lock-Box Account.  The Transferor will cause each Lock-Box Bank to comply with the terms of each applicable Lock-Box Agreement.  The Transferor 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 Transferor will within two Business Days identify such funds for segregation.  The Transferor will not commingle Collections or other funds to which the Administrator or any other Secured Party is entitled with any other funds.

 

SECTION 6.2  Reporting Requirements.  From the date hereof until the first day following the Sale and Contribution Termination Date, the Transferor will, unless the Company

 

16

 

and the Administrator shall otherwise consent in writing, furnish to the Company and the Administrator:

 

(a)                                 Sale and Contribution Termination Events.  As soon as possible, and in any event within three (3) Business Days after the Transferor becomes aware of the occurrence of each Purchase and Sale Termination Event, Unmatured Purchase and Sale Termination Event, Sale and Contribution Termination Event or each event which with notice or the passage of time or both would become a Sale and Contribution Termination Event (an “Unmatured Sale and Contribution Termination Event”), a written statement of the chief financial officer, treasurer or other officer of the Transferor describing such Purchase and Sale Termination Event, Unmatured Purchase and Sale Termination Event, Sale and Contribution Termination Event or Unmatured Sale and Contribution Termination Event and the action that the applicable Originator or the Transferor proposes to take with respect thereto, in each case in reasonable detail;

 

(b)                                 Proceedings.  As soon as possible and in any event within three (3) Business Days after the Transferor becomes aware thereof, written notice of (i) litigation, investigation or proceeding of the type described in Section 5.5 not previously disclosed to the Company and the Administrator which could reasonably be expected to have a Material Adverse Effect, and (ii) all material adverse developments that have occurred with respect to any previously disclosed litigation, proceedings and investigations; and

 

(c)                                  Other.  Promptly, from time to time, such other information, documents, records or reports respecting the Receivables or the conditions or operations, financial or otherwise, of an Originator, the Transferor as the Company or the Administrator may from time to time reasonably request in order to protect the interests of the Company, the Secured Parties  or the Administrator under or as contemplated by the Transaction Documents.

 

SECTION 6.3  Negative Covenants.  At all times from the date hereof until the Final Payout Date, the Transferor agrees that, unless the Company and the Administrator shall otherwise consent in writing, it shall not:

 

(a)                                 Sales, Liens, Etc.  Except as otherwise provided herein or in any other Transaction Document, sell, assign (by operation of law or otherwise) or otherwise dispose of, or create or suffer to exist any Adverse Claim upon or with respect to, any Receivable sold, contributed or otherwise conveyed or purported to be sold, contributed or otherwise conveyed hereunder or related Contract or Related Security, or any interest therein, or any Collections thereon, or assign any right to receive income in respect thereof, and shall not permit any Originator to do or cause to be done, any of the foregoing, with respect to Receivables sold, contributed or otherwise conveyed or purported to be sold or otherwise conveyed under the Purchase and Sale Agreement.

 

(b)                                 Extension or Amendment of Receivables.  Except as otherwise permitted in Section 4.2(a) of the Receivables Purchase Agreement and the applicable Credit and Collection Policy, extend, amend or otherwise modify the terms of any Receivable in any material respect generated or acquired by it that is sold, contributed or otherwise conveyed hereunder, or amend, modify or waive, in any material respect, any term or condition of any

 

17

 

Contract related thereto (which term or condition relates to payments under, or the enforcement of, such Contract), and shall not permit any Originator to do or cause to be done, any of the foregoing, with respect to Receivables sold, contributed or otherwise conveyed or purported to be sold or otherwise conveyed under the Purchase and Sale Agreement.

 

(c)                                  Change in Business or Credit and Collection Policy.  (i) Make any change in the character of its business or (ii) make any change in its 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, and shall not permit any Originator to do or cause to be done, any of the foregoing, with respect to Receivables sold, contributed or otherwise conveyed or purported to be sold or otherwise conveyed under the Purchase and Sale Agreement without the prior written consent of the Administrator.  The Transferor shall not make (and shall not permit any Originator to make) any other written change in any Credit and Collection Policy without giving prior written notice thereof to the Administrator.

 

(d)                                 Receivables Not to be Evidenced by Promissory Notes or Chattel Paper.  Except as otherwise provided in the Receivables Purchase Agreement in regard to servicing, take any action to cause or permit any Receivable generated or acquired by it that is sold or contributed by it hereunder to become evidenced by any “instrument” or “chattel paper” (as defined in the applicable UCC), and shall not permit any Originator to do or cause to be done, any of the foregoing, with respect to Receivables sold, contributed or otherwise conveyed or purported to be sold or otherwise conveyed under the Purchase and Sale Agreement.

 

(e)                                  Mergers, Acquisitions, Sales, etc.  (i) Be a party to (or permit any Originator to be a party to) any merger, consolidation or other restructuring, except (A) a Permitted Merger or (B) any other merger, consolidation or other restructuring where the Company and the Administrator have each (1) received 10 Business Days’ prior notice thereof, (2) consented in writing thereto, (3) received executed copies of all documents, certificates and opinions (including, without limitation, opinions relating to bankruptcy and UCC matters) as the Company or the Administrator shall request and (4) been satisfied that all other action to perfect and protect the interests of the Company and the Administrator, on behalf of the Secured Parties, in and to the Receivables to be sold by it hereunder and other Related Rights, as requested by the Company or the Administrator shall have been taken by, and at the expense of the Transferor (including the filing of any UCC financing statements, the receipt of certificates and other requested documents from public officials and all such other actions required pursuant to Section 7.3) or (ii) directly or indirectly sell, transfer, assign, convey or lease whether in one or a series of transactions, all or substantially all of its assets (other than in accordance with the Transaction Documents).

 

(f)                                   No Change in Name, Identity or Corporate Structure.  Change its name, identity, corporate structure or jurisdiction of organization, in any case, unless the Company and the Administrator have each (1) received prior notice thereof, (2) received executed copies of all documents, certificates and opinions (including, without limitation, opinions relating to bankruptcy and UCC matters) as the Company or the Administrator shall request and (3) been satisfied that all other action to perfect and protect the interests of the Company and the Administrator, on behalf of the Secured Parties, in and to the Receivables to be sold by it

 

18

 

hereunder and other Related Rights, as requested by the Company or the Administrator shall have been taken by, and at the expense of the Transferor (including the filing of any UCC financing statements, the receipt of certificates and other requested documents from public officials and all such other actions required pursuant to Section 7.3).

 

(g)                                  Lock-Box Banks.  Make (or permit any Originator to make) any changes in instructions to Obligors regarding Collections on Receivables sold or purported to be sold by an Originator to the Transferor pursuant to the Purchase and Sale Agreement or regarding Collections or Receivables sold, contributed or otherwise conveyed by it hereunder or add or terminate any bank as a Lock-Box Bank unless the requirements of Sections 1(f) and (k) of Exhibit IV to the Receivables Purchase Agreement have been met.

 

(h)                                 Accounting for Purchases.  Account for or treat (whether in financial statements or otherwise) the transactions contemplated by the Purchase and Sale Agreement and hereby in any manner other than as sales of the Receivables and Related Rights by the applicable Originator to the Transferor and the Transferor to the Company, as the case may be.

 

(i)                                     Transaction Documents.  Enter into, execute, deliver or otherwise become bound after the Closing Date by any agreement, instrument, document or other arrangement that restricts the right of the Transferor to amend, supplement, amend and restate or otherwise modify, or to extend or renew, or to waive any right under, this Agreement or any other Transaction Document, or permit any Originator to do or cause to be done, any of the foregoing.

 

(j)                                    Company’s Tax Status.  Take or cause any action to be taken that could result in the Company (i) being treated other than as a “disregarded entity” within the meaning of U.S. Treasury Regulation § 301.7701-3 for U.S. federal income tax purposes or (ii) becoming an association taxable as a corporation or a publicly traded partnership taxable as a corporation for U.S. federal income tax purposes.

 

SECTION 6.4  Substantive Consolidation.  The Transferor hereby acknowledges that this Agreement and the other Transaction Documents are being entered into in reliance upon the Company’s identity as a legal entity separate from the Transferor and its Affiliates.  Therefore, from and after the date hereof, the Transferor shall take all reasonable steps necessary to make it apparent to third Persons that the Company is an entity with assets and liabilities distinct from those of the Transferor and any other Person, and is not a division of the Transferor, 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, the Transferor shall take such actions as shall be required in order that:

 

(a)                                 the Transferor shall not be involved in the day to day management of the Company;

 

(b)                                 the Transferor shall maintain separate corporate records and books of account from the Company and otherwise will observe corporate formalities and have a separate area from the Company for its business (which may be located at the same address as the Company, and, to the extent that it and the Company have offices in the

 

19

 

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);

 

(c)                                  the financial statements and books and records of the Transferor shall be prepared after the date of creation of the Company to reflect and shall reflect the separate existence of the Company; provided, that the Company’s assets and liabilities may be included in a consolidated financial statement issued by an affiliate of the Company; provided, however, that any such consolidated financial statement or the notes thereto shall make clear that the Company’s assets are not available to satisfy the obligations of such affiliate;

 

(d)                                 except as permitted by the Receivables Purchase Agreement, (i) the Transferor shall maintain its assets (including, without limitation, deposit accounts) separately from the assets (including, without limitation, deposit accounts) of the Company and (ii) the Company’s assets, and records relating thereto, have not been, are not, and shall not be, commingled with those of the Transferor;

 

(e)                                  all of the Company’s business correspondence and other communications shall be conducted in the Company’s own name and on its own stationery;

 

(f)                                   the Transferor shall not act as an agent for the Company (other than servicing activities pursuant to the Transaction Documents);

 

(g)                                  the Transferor shall not conduct any of the business of the Company in its own name;

 

(h)                                 the Transferor shall not pay any liabilities of the Company out of its own funds or assets;

 

(i)                                     the Transferor shall maintain an arm’s-length relationship with the Company;

 

(j)                                    the Transferor shall not assume or guarantee or become obligated for the debts of the Company or hold out its credit as being available to satisfy the obligations of the Company;

 

(k)                                 the Transferor shall not acquire obligations of the Company;

 

(l)                                     the Transferor shall allocate fairly and reasonably overhead or other expenses that are properly shared with the Company, including, without limitation, shared office space;

 

(m)                             the Transferor shall identify and hold itself out as a separate and distinct entity from the Company;

 

20

 

(n)           the Transferor shall correct any known misunderstanding respecting its separate identity from the Company;

 

(o)           the Transferor shall not enter into, or be a party to, any transaction with the Company, except in the ordinary course of its business and on terms which are intrinsically fair and not less favorable to it than would be obtained in a comparable arm’s-length transaction with an unrelated third party;

 

(p)           the Transferor shall not pay the salaries of the Company’s employees, if any; and

 

(q)           to the extent not already covered in paragraphs (a) through (p) above, the Transferor shall comply and/or act in accordance with all of the other separateness covenants set forth in Section 3 of Exhibit IV to the Receivables Purchase Agreement.

 

ARTICLE VII
 ADDITIONAL RIGHTS AND OBLIGATIONS
 IN RESPECT OF RECEIVABLES

 

SECTION 7.1  Rights of the Company.   The Transferor hereby authorizes the Company, the Servicer or their respective designees or assignees under the Receivables Purchase Agreement (including, without limitation, the Administrator) to take any and all steps in the Transferor’s name necessary or desirable, in their respective determination, to collect all amounts due under any and all Receivables sold, contributed or otherwise conveyed or purported to be conveyed by it hereunder, including, without limitation, endorsing the name of the Transferor on checks and other instruments representing Collections and enforcing such Receivables and the provisions of the related Contracts that concern payment and/or enforcement of rights to payment.

 

SECTION 7.2  Responsibilities of the Transferor.  Anything herein to the contrary notwithstanding:

 

(a)           Collection Procedures.  The Transferor agrees to direct its respective Obligors to make payments of Receivables sold, contributed or otherwise conveyed or purported to be conveyed by it hereunder directly to the relevant Lock-Box Account at a Lock-Box Bank.  The Transferor further agrees to transfer any Collections of Receivables sold or purported to be sold by an Originator to the Transferor pursuant to the Purchase and Sale Agreement or sold or conveyed by it hereunder that it receives directly to a Lock-Box Account within two (2) Business Days of receipt thereof, and agrees that all such Collections shall be deemed to be received in trust for the Company and the Administrator (for the benefit of the Secured Parties).

 

(b)           The Transferor shall perform its obligations hereunder, and the exercise by the Company or its designee of its rights hereunder shall not relieve the Transferor from such obligations.

 

21

 

(c)           None of the Company, the Servicer, the Secured Parties or the Administrator shall have any obligation or liability to any Obligor or any other third Person with respect to any Receivables, Contracts related thereto or any other related agreements, nor shall the Company, the Servicer, the Secured Parties or the Administrator be obligated to perform any of the obligations of an Originator or the Transferor thereunder.

 

(d)           The Transferor hereby grants to the Administrator an irrevocable power of attorney, with full power of substitution, coupled with an interest, during the occurrence and continuation of a Sale and Contribution Termination Event or a Termination Event to take in the name of the Transferor all steps necessary or advisable to endorse, negotiate or otherwise realize on any writing or other right of any kind held or transmitted by the Transferor or transmitted or received by the Company (whether or not from the Transferor) in connection with any Receivable sold, contributed or otherwise conveyed or purported to be conveyed by it hereunder or Related Rights.

 

SECTION 7.3  Further Action Evidencing Purchases.  The Transferor agrees that from time to time, at its expense, it will promptly execute and deliver all further instruments and documents, and take all further action that the Company, the Servicer or the Administrator may reasonably request in order to perfect, protect or more fully evidence the Receivables and Related Rights purchased by or contributed to the Company hereunder, or to enable the Company to exercise or enforce any of its rights hereunder or under any other Transaction Document.  Without limiting the generality of the foregoing, upon the request of the Company or the Administrator, the Transferor will (and will cause each Originator to):

 

(a)           execute (if applicable), authorize and file such financing or continuation statements, or amendments thereto or assignments thereof, and such other instruments or notices, as may be necessary or appropriate; and

 

(b)           on the Closing Date and from time to time, if requested thereafter, mark the master data processing records that evidence or list such Receivables and related Contracts with the legend set forth in Section 6.1(i).

 

The Transferor hereby authorizes the Company or its designee (including, without limitation, the Administrator) to file one or more financing or continuation statements, and amendments thereto and assignments thereof, without the signature of the Transferor, relative to all or any of the Receivables sold, contributed or otherwise conveyed or purported to be conveyed by it hereunder and Related Rights now existing or hereafter sold or purported to be sold by an Originator to the Transferor pursuant to the Purchase and Sale Agreement or generated by the Transferor.  If the Transferor fails to perform any of its agreements or obligations under this Agreement, the Company or its designee (including, without limitation, the Administrator) may (but shall not be required to) itself perform, or cause the performance of, such agreement or obligation, and the expenses of the Company or its designee (including, without limitation, the Administrator) incurred in connection therewith shall be payable by the Transferor.

 

SECTION 7.4  Application of Collections.  Any payment by an Obligor in respect of any indebtedness owed by it to any Originator or the Transferor shall, except as otherwise specified

 

22

 

by such Obligor or required by Applicable Law and unless otherwise instructed by the Servicer (with the prior written consent of the Administrator) or the Administrator, be applied as a Collection of any Receivable or Receivables of such Obligor to the extent of any amounts then due and payable thereunder before being applied to any other indebtedness of such Obligor.

 

SECTION 7.5  Performance of Obligations.  The Transferor shall (i) perform all of its obligations under the Contracts related to the Receivables generated or acquired by the Transferor to the same extent as if interests in such Receivables had not been transferred hereunder, and the exercise by the Company or the Administrator of its rights hereunder shall not relieve Transferor from any such obligations and (ii) pay when due any taxes, including, without limitation, any sales taxes payable in connection with the Receivables generated or acquired by the Transferor and their creation and satisfaction.

 

ARTICLE VIII
 SALE AND CONTRIBUTION TERMINATION EVENTS

 

SECTION 8.1  Sale and Contribution Termination Events.  Each of the following events or occurrences described in this Section 8.1 shall constitute a “Sale and Contribution Termination Event”:

 

(a)           The Facility Termination Date (as defined in the Receivables Purchase Agreement) shall have occurred; or

 

(b)           The Transferor shall fail to make when due any payment or deposit to be made by it under this Agreement or any other Transaction Document to which it is a party and such failure shall remain unremedied for two (2) Business Days; or

 

(c)           Any representation or warranty made or deemed to be made by the Transferor (or any of its officers) under or in connection with this Agreement, any other Transaction Documents to which it is a party, or any other information or report delivered pursuant hereto or thereto shall prove to have been incorrect or untrue in any material respect when made or deemed made or delivered, and shall remain incorrect or untrue for ten (10) Business Days; or

 

(d)           The Transferor shall fail to perform or observe any other term, covenant or agreement contained in this Agreement or any other Transaction Document to which it is a party on its part to be performed or observed and such failure shall continue for thirty (30) days after the earlier of the Transferor’s knowledge or notice thereof.

 

SECTION 8.2  Remedies.

 

(a)           Optional Termination.  Upon the occurrence of a Sale and Contribution Termination Event, the Company shall have the option, by notice to the Transferor (with a copy to the Administrator), to declare the Purchase Facility as terminated.

 

23

 

(b)           Remedies Cumulative.  Upon any termination of the Purchase Facility pursuant to Section 8.2(a), the Company shall have, in addition to all other rights and remedies under this Agreement, all other rights and remedies provided under the UCC of each applicable jurisdiction and other Applicable Laws, which rights shall be cumulative.

 

ARTICLE IX
 INDEMNIFICATION

 

SECTION 9.1  Indemnities by the Transferor.  Without limiting any other rights which the Company may have hereunder or under Applicable Law, the Transferor hereby agrees to indemnify the Company and each of its officers, directors, employees and agents (each of the foregoing Persons being individually called a “Sale and Contribution Indemnified Party”), forthwith on demand, from and against any and all damages, losses, claims, judgments, liabilities and related costs and expenses, including reasonable attorneys’ fees and disbursements (all of the foregoing being collectively called “Sale and Contribution Indemnified Amounts”) awarded against or incurred by any of them arising out of or as a result of the failure of the Transferor to perform its obligations under this Agreement or any other Transaction Document, or arising out of the claims asserted against a Sale and Contribution Indemnified Party relating to the transactions contemplated herein or therein or the use of proceeds thereof or therefrom; excluding, however, (i) Sale and Contribution Indemnified Amounts to the extent resulting from gross negligence or willful misconduct on the part of such Sale and Contribution Indemnified Party and (ii) any indemnification which has the effect of recourse for non-payment of the Receivables due to a discharge in bankruptcy or similar insolvency proceeding or other credit related reasons with respect to the relevant Obligor.  Without limiting the foregoing, and subject to the exclusions set forth in the preceding sentence, the Transferor shall indemnify each Sale and Contribution Indemnified Party for Sale and Contribution Indemnified Amounts relating to or resulting from:

 

(a)           the transfer by the Transferor of an interest in any Receivable to any Person other than the Company;

 

(b)           the breach of any representation or warranty made by the Transferor (or any of its officers) under or in connection with this Agreement or any other Transaction Document, or any information or report delivered by the Transferor pursuant hereto or thereto, which shall have been false or incorrect when made or deemed made;

 

(c)           the failure by the Transferor to comply with any Applicable Law with respect to any Receivable generated by the Transferor sold, contributed or otherwise transferred or purported to be transferred hereunder or the related Contract, or the nonconformity of any Receivable generated or acquired by the Transferor sold, contributed or otherwise transferred or purported to be transferred hereunder or the related Contract with any such Applicable Law;

 

(d)           the failure by the Transferor to vest and maintain vested in the Company an ownership interest in the Receivables generated or acquired by the

 

24

 

Transferor sold, contributed or otherwise transferred or purported to be transferred hereunder free and clear of any Adverse Claim;

 

(e)           the failure to file, or any delay in filing, by the Transferor financing statements or other similar instruments or documents under the UCC of any applicable jurisdiction or other Applicable Laws with respect to any Receivables or purported Receivables generated or acquired by the Transferor sold, contributed or otherwise transferred or purported to be transferred hereunder, whether at the time of any purchase or contribution or at any subsequent time to the extent required hereunder;

 

(f)            any dispute, claim, offset or defense (other than discharge in bankruptcy or similar insolvency proceeding of an Obligor or other credit related reasons) of the Obligor to the payment of any Receivable or purported Receivable generated or acquired by the Transferor sold, contributed or otherwise transferred or purported to be transferred hereunder (including, without limitation, a defense based on such Receivable’s or the related Contract’s 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 services related to any such Receivable or the furnishing of or failure to furnish such services;

 

(g)           any product liability claim arising out of or in connection with the products or services that are the subject of any Receivable generated or acquired by the Transferor;

 

(h)           any tax or governmental fee or charge, all interest and penalties thereon or with respect thereto, and all out-of-pocket costs and expenses, including the reasonable fees and expenses of counsel in defending against the same, which are required to be paid by reason of the purchase or ownership of the Receivables generated by the Transferor or any Related Security connected with any such Receivables, including any amounts paid or payable by the Company under Sections 1.10 and 3.1 of the Receivables Purchase Agreement and any taxes imposed on the Company’s income, capital, or revenue, and any liability of the Company attributable to taxes of any Person as a transferee or successor, by contract, operation of Applicable Law or otherwise;

 

(i)            any failure of Transferor to perform any of its duties or obligations in accordance with the provisions hereof and of each other Transaction Document related to Receivables or to timely and fully comply with the Credit and Collection Policy in regard to each Receivable;

 

(j)            the commingling (other than as a result of actions taken by the Administrator, any Purchaser Agent or any Purchaser) of Collections of Receivables at any time with other funds;

 

(k)           any setoff with respect to any Receivable;

 

(l)            the failure or delay to provide any Obligor with an invoice or other evidence of indebtedness;

 

25

 

(m)          any investigation, litigation or proceeding (actual or threatened) related to this Agreement or any other Transaction Document or in respect of any Receivable or any Related Rights;

 

(n)           any claim brought by any Person other than a Sale and Contribution Indemnified Party arising from any activity by Transferor or any Affiliate of Transferor in servicing, administering or collecting any Receivable;

 

(o)           any failure by Transferor to comply with its covenants, obligations and agreements contained in this Agreement or any other Transaction Document; and

 

(p)           any action taken by the Administrator as attorney-in-fact for Transferor pursuant to this Agreement or any other Transaction Document.

 

If for any reason the indemnification provided above in this Section 9.1 is unavailable to a Sale and Contribution Indemnified Party or is insufficient to hold such Sale and Contribution Indemnified Party harmless, then the Transferor shall contribute to the amount paid or payable by such Sale and Contribution Indemnified Party to the maximum extent permitted under Applicable Law.

 

ARTICLE X
 MISCELLANEOUS

 

SECTION 10.1  Amendments, etc.

 

(a)           The provisions of this Agreement may from time to time be amended, modified or waived, if such amendment, modification or waiver is in writing and executed by the Company and the Transferor, with the prior written consent of the Administrator.

 

(b)           No failure or delay on the part of the Company, the Servicer, the Transferor, the Administrator or any third party beneficiary in exercising any power or right hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such power or right preclude any other or further exercise thereof or the exercise of any other power or right.  No notice to or demand on the Company, the Servicer or the Transferor in any case shall entitle it to any notice or demand in similar or other circumstances.  No waiver or approval by the Company, the Administrator or the Servicer under this Agreement shall, except as may otherwise be stated in such waiver or approval, be applicable to subsequent transactions.  No waiver or approval under this Agreement shall require any similar or dissimilar waiver or approval thereafter to be granted hereunder.

 

(c)           The Transaction Documents contain a final and complete integration of all prior expressions by the parties hereto with respect to the subject matter thereof and shall constitute the entire agreement among the parties hereto with respect to the subject matter thereof, superseding all prior oral or written understandings.

 

SECTION 10.2  Notices, etc.  All notices and other communications provided for hereunder shall, unless otherwise stated herein, be in writing (including facsimile or electronic

 

26

 

mail communication) and shall be delivered or sent by facsimile, electronic mail, or by overnight mail, to the intended party at the mailing address or electronic mail address or facsimile number of such party set forth under its name on the signature pages hereof or at such other address or facsimile number as shall be designated by such party in a written notice to the other parties hereto or in the case of the Administrator, at its address for notice pursuant to the Receivables Purchase Agreement.  All such notices and communications shall be effective (i) if delivered by overnight mail, when received, and (ii) if transmitted by facsimile or electronic mail, when sent, receipt confirmed by telephone or electronic means.

 

SECTION 10.3  No Waiver; Cumulative Remedies.  The remedies herein provided are cumulative and not exclusive of any remedies provided by law.  Without limiting the foregoing, the Transferor hereby authorizes the Company, the Administrator and each Purchaser (each, a “Set-off Party”), at any time and from time to time, to the fullest extent permitted by law, to set off, against any obligations of the Transferor to such Set-off Party arising in connection with the Transaction Documents (including, without limitation, amounts payable pursuant to Section 9.1) that are then due and payable or that are not then due and payable but have accrued, any and all deposits (general or special, time or demand, provisional or final) at any time held by, and any and all indebtedness at any time owing by, any Set-off Party to or for the credit or the account of the Transferor; provided that such Set-off Party shall notify the Transferor promptly following such set-off; provided further, that no Set-off Party shall exercise any setoff against the Transferor pursuant to this Agreement with respect to any deposits of the Transferor held by such Set-off Party, if such exercise is in contravention of any deposit account control agreement or other similar agreement with the Transferor that is then in effect and to which such Set-off Party is a party in the capacity of the bank maintaining the Transferor’s relevant account.

 

SECTION 10.4  Binding Effect; Assignability.  This Agreement shall be binding upon and inure to the benefit of the Company and the Transferor and its successors and permitted assigns including any trustee or other representative of the bankruptcy estate of the Transferor.  The Transferor may not assign any of its rights hereunder or any interest herein without the prior written consent of the Company and the Administrator.  This Agreement shall create and constitute the continuing obligations of the parties hereto in accordance with its terms, and shall remain in full force and effect until such time as the parties hereto shall agree.  The rights and remedies with respect to any breach of any representation and warranty made by the Transferor pursuant to Article V and the indemnification and payment provisions of Article IX and Section 10.6 shall be continuing and shall survive any termination of this Agreement.

 

SECTION 10.5  Governing Law.  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.

 

27

 

SECTION 10.6  Costs, Expenses and Taxes.  In addition to the obligations of the Transferor under Article IX, the Transferor agrees to pay on demand:

 

(a)           to the Company (and any successor and permitted assigns thereof) all reasonable costs and expenses incurred by such Person in connection with the enforcement of this Agreement and the other Transaction Documents; and

 

(b)           all stamp and other taxes and fees payable in connection with the execution, delivery, filing and recording of this Agreement or the other Transaction Documents to be delivered hereunder, and agrees to indemnify each Sale and Contribution Indemnified Party against any liabilities with respect to or resulting from any delay in paying or omitting to pay such taxes and fees.

 

SECTION 10.7  SUBMISSION TO JURISDICTION.  EACH PARTY HERETO HEREBY IRREVOCABLY (a) SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY COURT OF THE STATE OF NEW YORK OR THE FEDERAL COURT OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK OVER ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO ANY TRANSACTION DOCUMENT; (b) AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH STATE OR UNITED STATES FEDERAL COURT; (c) WAIVES, TO THE FULLEST EXTENT IT MAY EFFECTIVELY DO SO, THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING; (d) IRREVOCABLY CONSENTS TO THE SERVICE OF ANY AND ALL PROCESS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES OF SUCH PROCESS TO SUCH PERSON AT ITS ADDRESS SPECIFIED IN SECTION 10.2; AND (e) AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW.  NOTHING IN THIS SECTION 10.7 SHALL AFFECT THE COMPANY’S RIGHT TO SERVE LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO BRING ANY ACTION OR PROCEEDING AGAINST THE TRANSFEROR OR ITS PROPERTY IN THE COURTS OF ANY OTHER JURISDICTIONS.

 

SECTION 10.8  WAIVER OF JURY TRIAL.  EACH PARTY HERETO WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS UNDER OR RELATING TO THIS AGREEMENT, ANY OTHER TRANSACTION DOCUMENT, OR ANY AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR WHICH MAY IN THE FUTURE BE DELIVERED IN CONNECTION HEREWITH OR ARISING FROM ANY RELATIONSHIP EXISTING IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER TRANSACTION DOCUMENT, AND AGREES THAT (a) ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY AND (b) ANY PARTY HERETO (OR ANY ASSIGNEE OR THIRD PARTY BENEFICIARY OF THIS AGREEMENT) MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS AGREEMENT WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF

 

28

 

ANY OTHER PARTY OR PARTIES HERETO TO WAIVER OF ITS OR THEIR RIGHT TO TRIAL BY JURY.

 

SECTION 10.9  Captions and Cross References; Incorporation by Reference.  The various captions (including, without limitation, the table of contents) in this Agreement are included for convenience only and shall not affect the meaning or interpretation of any provision of this Agreement.  References in this Agreement to any underscored Section or Exhibit are to such Section or Exhibit of this Agreement, as the case may be.  The Exhibits hereto are hereby incorporated by reference into and made a part of this Agreement.

 

SECTION 10.10  Execution in Counterparts.  This Agreement may be executed in any number of counterparts and by different parties hereto in separate 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 10.11  Acknowledgment and Agreement.  By execution below, the Transferor expressly acknowledges and agrees that all of the Company’s rights, title, and interests in, to, and under this Agreement (but not its obligations), shall be assigned by the Company to the Administrator (for the benefit of the Secured Parties) pursuant to the Receivables Purchase Agreement, and the Transferor irrevocably consents to such assignment.  Each of the parties hereto acknowledges and agrees that the Administrator and each of the other Secured Parties are third party beneficiaries of the rights of the Company arising hereunder and under the other Transaction Documents to which the Transferor is a party, and notwithstanding anything to the contrary contained herein or in any other Transaction Document, during the occurrence and continuation of a Termination Event under the Receivables Purchase Agreement, the Administrator, and not the Company, shall have the sole right to exercise all such rights and related remedies.

 

SECTION 10.12  No Proceeding.  The Transferor hereby agrees that it will not institute, or join any other Person in instituting, against the Company any Insolvency Proceeding for at least one year and one day following the Final Payout Date.  The Transferor further agrees that notwithstanding any provisions contained in this Agreement to the contrary, the Company shall not, and shall not be obligated to, pay any amount in respect of the Company Note or otherwise to the Transferor pursuant to this Agreement unless the Company has received funds which may, subject to Section 1.4 of the Receivables Purchase Agreement, be used to make such payment.  Any amount which the Company 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 corporate obligation of the Company by the Transferor for any such insufficiency unless and until the provisions of the foregoing sentence are satisfied.  The agreements in this Section 10.12 shall survive any termination of this Agreement.

 

SECTION 10.13  Limited Recourse.  Except as explicitly set forth herein, the obligations of the Company under this Agreement or any other Transaction Documents to which it is a party are solely the obligations of the Company.  No recourse under any Transaction Document shall be had against, and no liability shall attach to, any officer, employee, director, or beneficiary,

 

29

 

whether directly or indirectly, of the Company.  The agreements in this Section 10.13 shall survive any termination of this Agreement.

 

SECTION 10.14  Severability.  Any provisions of this Agreement which are prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

 

SECTION 10.15  Amendment and Restatement.  This Agreement amends and restates in its entirety, as of the date hereof, the Amended and Restated Sale and Contribution Agreement, dated as of January 13, 2016, among the parties hereto (as amended, the “Original SCA”).  Upon the effectiveness of this Agreement in accordance with its terms, the terms and provisions of the Original SCA shall, subject to this paragraph, be superseded hereby in their entirety.  Notwithstanding the foregoing and for the avoidance of doubt, (a) all indemnification obligations of the Transferor under the Original SCA shall survive this Agreement, (b) all sales and contributions of Receivables and Related Rights under the Original SCA by the Transferor to the Company are hereby ratified and confirmed and shall survive this Agreement and (c) the security interests granted by the Transferor pursuant to the Original SCA shall remain in full force and effect and shall survive this Agreement as security for all obligations of the Transferor under the Original SCA until such obligations have been finally and fully paid and performed. Upon the effectiveness of this Agreement, each reference to the Original SCA 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 SCA.

 

[Signature Pages Follow]

 

30

 

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   COAL, INC.
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Robert G. Jones
    
	
 
    	
Name:
    	
Robert   G. Jones
    
	
 
    	
Title:
    	
Senior Vice President —   Law, General Counsel and Secretary
    
	
 
    	
 
    
	
 
    	
Address:
    	
One   CityPlace Drive, Suite 300
    
	
 
    	
 
    	
St. Louis, Missouri 63141
    
	
 
    	
 
    	
 
    
	
 
    	
Attention:
    	
Robert G. Jones
    
	
 
    	
Telephone:
    	
314-994-2716
    
	
 
    	
Facsimile:
    	
314-994-2736
    
	
 
    	
Email:
    	
bjones@archcoal.com
    
	
 
    	
 
    
	
 
    	
ARCH   RECEIVABLE COMPANY, LLC
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Robert G. Jones
    
	
 
    	
Name:
    	
Robert   G. Jones
    
	
 
    	
Title:
    	
Senior Vice President —   Law, General Counsel and Secretary
    
	
 
    	
 
    
	
 
    	
Address:
    	
One   CityPlace Drive, Suite 300
    
	
 
    	
 
    	
St. Louis, Missouri 63141
    
	
 
    	
 
    	
 
    
	
 
    	
Attention:
    	
Robert G. Jones
    
	
 
    	
Telephone:
    	
314-994-2716
    
	
 
    	
Facsimile:
    	
314-994-2736
    
	
 
    	
Email:
    	
bjones@archcoal.com
    
				

 

S-1

 

Schedule I

LOCATION OF THE TRANSFEROR

 

Delaware

 

I-1

 

Schedule II

 

LOCATION OF BOOKS AND RECORDS OF THE TRANSFEROR

 

Arch Coal, Inc.

One CityPlace Drive, Suite 300

St. Louis, Missouri 63141

 

II-1

 

Exhibit A

 

FORM OF PURCHASE REPORT

 

	
Transferor:
    	
Arch Coal, Inc.
    
	
 
    	
 
    
	
Purchaser:
    	
Arch Receivable Company, LLC
    
	
 
    	
 
    
	
Payment Date:
    
	
 
    	
 
    
	
1.
    	
Outstanding Balance of Receivables Purchased:
    
	
 
    	
 
    
	
2.
    	
Fair Market Value Discount:
    
	
 
    	
 
    
	
 
    	
1/ (1 + [Prime Rate x Days’   Sales Outstanding]) 
    
	
 
    	
365
    
	
 
    	
 
    
	
 
    	
Where:
    
	
 
    	
 
    
	
 
    	
Prime Rate =
    
	
 
    	
 
    
	
 
    	
Days’ Sales Outstanding =
    
	
 
    	
 
    
	
3.
    	
Purchase Price (1 x 2) = $
    
			

 

A-1

 

Exhibit B

 

COMPANY NOTE

 

New York, New York
 [           ], 2016

 

FOR VALUE RECEIVED, the undersigned, ARCH RECEIVABLE COMPANY, LLC, a Delaware limited liability company (the “Company”), promises to pay to ARCH COAL, INC., a Delaware corporation (the “Transferor”), on the terms and subject to the conditions set forth herein and in the Sale and Contribution Agreement referred to below, the aggregate unpaid Purchase Price of all Receivables purchased by the Company from the Transferor pursuant to such Sale and Contribution Agreement, as such unpaid Purchase Price is shown in the records of Servicer.

 

1.             Sale and Contribution Agreement.  This Company Note is the Company Note described in, and is subject to the terms and conditions set forth in, that certain Second Amended and Restated Sale and Contribution Agreement dated as of October 5, 2016 (as the same may be amended, supplemented, amended and restated or otherwise modified in accordance with its terms, the “Sale and Contribution Agreement”), between the Company and the Transferor.  Reference is hereby made to the Sale and Contribution Agreement for a statement of certain other rights and obligations of the Company and the Transferor.

 

2.             Definitions.  Capitalized terms used (but not defined) herein have the meanings assigned thereto in the Sale and Contribution Agreement and in Exhibit I to the Receivables Purchase Agreement (as defined in the Sale and Contribution Agreement).  In addition, as used herein, the following terms have the following meanings:

 

“Bankruptcy Proceedings” has the meaning set forth in clause (b) of paragraph 9 hereof.

 

“Final Maturity Date” means the Payment Date immediately following the date that falls one year and one day after the Facility Termination Date.

 

“Interest Period” means the period from and including a Payment Date (or, in the case of the first Interest Period, the date hereof) to but excluding the next Payment Date.

 

“Senior Interests” means, collectively, (i) all accrued Discount on the Purchased Interest, (ii) the fees referred to in Section 1.5 of the Receivables Purchase Agreement, (iii) all amounts payable pursuant to Sections 1.7, 1.8, 1.19 or 5.4 of the Receivables Purchase Agreement, (iv) the Capital and (v) all other obligations of the Company and the Servicer that are due and payable, to (a) the Secured Parties, the Administrator and their respective successors, permitted transferees and assigns arising in connection with the Transaction Documents and

 

B-1

 

(b) any Indemnified Party or Affected Person arising in connection with the Receivables Purchase Agreement, in each case, howsoever created, arising or evidenced, whether direct or indirect, absolute or contingent, now or hereafter existing, or due or to become due, together with any and all interest and Discount accruing on any such amount after the commencement of any Bankruptcy Proceedings, notwithstanding any provision or rule of law that might restrict the rights of any Senior Interest Holder, as against the Company or anyone else, to collect such interest.

 

“Senior Interest Holders” means, collectively, the Secured Parties, the Administrator and the Indemnified Parties and Affected Persons.

 

“Subordination Provisions” means, collectively, clauses (a) through (l) of paragraph 9 hereof.

 

“Telerate Screen Rate” means, for any Interest Period, the rate for thirty day commercial paper denominated in Dollars which appears on Page 1250 of the Dow Jones Telerate Service (or such other page as may replace that page on that service for the purpose of displaying Dollar commercial paper rates) at approximately 9:00 a.m., New York City time, on the first day of such Interest Period.

 

3.             Interest.  Subject to the Subordination Provisions set forth below, the Company promises to pay interest on this Company Note as follows:

 

(a)           Prior to the Final Maturity Date, the aggregate unpaid Purchase Price from time to time outstanding during any Interest Period shall bear interest at a rate per annum equal to the Telerate Screen Rate for such Interest Period, as determined by the Servicer; and

 

(b)           From (and including) the Final Maturity Date to (but excluding) the date on which the entire aggregate unpaid Purchase Price is fully paid, the aggregate unpaid Purchase Price from time to time outstanding shall bear interest at a rate per annum equal to the rate of interest publicly announced from time to time by PNC Bank, National Association, as its “base rate”, “reference rate” or other comparable rate, as determined by the Servicer.

 

4.             Interest Payment Dates.  Subject to the Subordination Provisions set forth below, the Company shall pay accrued interest on this Company Note on each Payment Date, and shall pay accrued interest on the amount of each principal payment made in cash on a date other than a Payment Date at the time of such principal payment.

 

5.             Basis of Computation.  Interest accrued hereunder that is computed by reference to the Telerate Screen Rate shall be computed for the actual number of days elapsed on the basis of a 360-day year, and interest accrued hereunder that is computed by reference to the rate described in paragraph 3(b) of this Company Note shall be computed for the actual number of days elapsed on the basis of a 365- or 366-day year.

 

B-2

 

6.             Principal Payment Dates.  Subject to the Subordination Provisions set forth below, payments of the principal amount of this Company Note shall be made as follows:

 

(a)           The principal amount of this Company Note shall be reduced by an amount equal to each payment deemed made pursuant to Section 3.3 of the Sale and Contribution Agreement; and

 

(b)           The entire remaining unpaid Purchase Price of all Receivables purchased by the Company from the Transferor pursuant to the Sale and Contribution Agreement shall be paid on the Final Maturity Date.

 

Subject to the Subordination Provisions set forth below, the principal amount of and accrued interest on this Company Note may be prepaid by, and in the sole discretion of the Company, on any Business Day without premium or penalty.

 

7.             Payment Mechanics.  All payments of principal and interest hereunder are to be made in lawful money of the United States of America in the manner specified in Article III of the Sale and Contribution Agreement.

 

8.             Enforcement Expenses.  In addition to and not in limitation of the foregoing, but subject to the Subordination Provisions set forth below and to any limitation imposed by Applicable Law, the Company agrees to pay all expenses, including reasonable attorneys’ fees and legal expenses, incurred by the Transferor in seeking to collect any amounts payable hereunder which are not paid when due.

 

9.             Subordination Provisions. The Company covenants and agrees, and the Transferor and any other holder of this Company Note (collectively, the Transferor and any such other holder are called the “Holder”), by its acceptance of this Company Note, likewise covenants and agrees on behalf of itself and any holder of this Company Note, that the payment of the principal amount of and interest on this Company Note is hereby expressly subordinated in right of payment to the payment and performance of the Senior Interests to the extent and in the manner set forth in the following clauses of this paragraph 9:

 

(a)           No payment or other distribution of the Company’s assets of any kind or character, whether in cash, securities, or other rights or property, shall be made on account of this Company Note except to the extent such payment or other distribution is (i) permitted under Section 1(n) of Exhibit IV to the Receivables Purchase Agreement or (ii) made pursuant to clause (a) or (b) of paragraph 6 of this Company Note;

 

(b)           In the event of any dissolution, winding up, liquidation, readjustment, reorganization or other similar event relating to the Company, whether voluntary or involuntary, partial or complete, and whether in bankruptcy, insolvency or receivership proceedings, or upon an assignment for the benefit of creditors, or any other marshalling of the assets and liabilities of the Company or any sale of all or substantially all of the assets of the Company other than as permitted by the Sale and Contribution Agreement (such proceedings being herein collectively called “Bankruptcy Proceedings”), the Senior Interests shall first be paid and performed in full and in cash before the Transferor shall

 

B-3

 

be entitled to receive and to retain any payment or distribution in respect of this Company Note.  In order to implement the foregoing:  (i) all payments and distributions of any kind or character in respect of this Company Note to which Holder would be entitled except for this clause (b) shall be made directly to the Administrator (for the benefit of the Senior Interest Holders); (ii) Holder shall promptly file a claim or claims, in the form required in any Bankruptcy Proceedings, for the full outstanding amount of this Company Note, and shall use commercially reasonable efforts to cause said claim or claims to be approved and all payments and other distributions in respect thereof to be made directly to the Administrator (for the benefit of the Senior Interest Holders) until the Senior Interests shall have been paid and performed in full and in cash; and (iii) Holder hereby irrevocably agrees that Administrator (acting on behalf of the Secured Parties), in the name of Holder or otherwise, demand, sue for, collect, receive and receipt for any and all such payments or distributions, and file, prove and vote or consent in any such Bankruptcy Proceedings with respect to any and all claims of Holder relating to this Company Note, in each case until the Senior Interests shall have been paid and performed in full and in cash;

 

(c)           In the event that Holder receives any payment or other distribution of any kind or character from the Company or from any other source whatsoever, in respect of this Company Note, other than as expressly permitted by the terms of this Company Note, such payment or other distribution shall be received in trust for the Senior Interest Holders and shall be turned over by Holder to the Administrator (for the benefit of the Senior Interest Holders) forthwith.  Holder will mark its books and records so as clearly to indicate that this Company Note is subordinated in accordance with the terms hereof.  All payments and distributions received by the Administrator in respect of this Company Note, to the extent received in or converted into cash, may be applied by the Administrator (for the benefit of the Senior Interest Holders) first to the payment of any and all expenses (including reasonable attorneys’ fees and legal expenses) paid or incurred by the Senior Interest Holders in enforcing these Subordination Provisions, or in endeavoring to collect or realize upon this Company Note, and any balance thereof shall, solely as between the Transferor and the Senior Interest Holders, be applied by the Administrator (in the order of application set forth in Section 1.4(d) of the Receivables Purchase Agreement) toward the payment of the Senior Interests; but as between the Company and its creditors, no such payments or distributions of any kind or character shall be deemed to be payments or distributions in respect of the Senior Interests;

 

(d)           Notwithstanding any payments or distributions received by the Senior Interest Holders in respect of this Company Note, while any Bankruptcy Proceedings are pending Holder shall not be subrogated to the then existing rights of the Senior Interest Holders in respect of the Senior Interests until the Senior Interests have been paid and performed in full and in cash.  If no Bankruptcy Proceedings are pending, Holder shall only be entitled to exercise any subrogation rights that it may acquire (by reason of a payment or distribution to the Senior Interest Holders in respect of this Company Note) to the extent that any payment arising out of the exercise of such rights would be permitted under Section 1(n) of Exhibit IV to the Receivables Purchase Agreement;

 

B-4

 

(e)           These Subordination Provisions are intended solely for the purpose of defining the relative rights of Holder, on the one hand, and the Senior Interest Holders on the other hand.  Nothing contained in these Subordination Provisions or elsewhere in this Company Note is intended to or shall impair, as between the Company, its creditors (other than the Senior Interest Holders) and Holder, the Company’s obligation, which is unconditional and absolute, to pay Holder the principal of and interest on this Company Note as and when the same shall become due and payable in accordance with the terms hereof or to affect the relative rights of Holder and creditors of the Company (other than the Senior Interest Holders);

 

(f)            Holder shall not, until the Senior Interests have been paid and performed in full and in cash, (i) cancel, waive, forgive, or commence legal proceedings to enforce or collect, or subordinate to any obligation of the Company, howsoever created, arising or evidenced, whether direct or indirect, absolute or contingent, or now or hereafter existing, or due or to become due, other than the Senior Interests, this Company Note or any rights in respect hereof or (ii) convert this Company Note into an equity interest in the Company, unless Holder shall, in either case, have received the prior written consent of the Administrator;

 

(g)           Holder shall not, without the advance written consent of the Administrator and Secured Parties, commence, or join with any other Person in commencing, any Bankruptcy Proceedings with respect to the Company until at least one year and one day shall have passed since the Senior Interests shall have been paid and performed in full and in cash;

 

(h)           If, at any time, any payment (in whole or in part) of any Senior Interest is rescinded or must be restored or returned by a Senior Interest Holder (whether in connection with Bankruptcy Proceedings or otherwise), these Subordination Provisions shall continue to be effective or shall be reinstated, as the case may be, as though such payment had not been made;

 

(i)            Each of the Senior Interest Holders may, from time to time, at its sole discretion, without notice to Holder, and without waiving any of its rights under these Subordination Provisions, take any or all of the following actions:  (i) retain or obtain an interest in any property to secure any of the Senior Interests; (ii) retain or obtain the primary or secondary obligations of any other obligor or obligors with respect to any of the Senior Interests; (iii) extend or renew for one or more periods (whether or not longer than the original period), alter or exchange any of the Senior Interests, or release or compromise any obligation of any nature with respect to any of the Senior Interests; (iv) amend, supplement, amend and restate, or otherwise modify any Transaction Document; and (v) release its security interest in, or surrender, release or permit any substitution or exchange for all or any part of any rights or property securing any of the Senior Interests, or extend or renew for one or more periods (whether or not longer than the original period), or release, compromise, alter or exchange any obligations of any nature of any obligor with respect to any such rights or property;

 

B-5

 

(j)            Holder hereby waives:  (i) notice of acceptance of these Subordination Provisions by any of the Senior Interest Holders; (ii) notice of the existence, creation, non-payment or non-performance of all or any of the Senior Interests; and (iii) all diligence in enforcement, collection or protection of, or realization upon, the Senior Interests, or any thereof, or any security therefor;

 

(k)           Each of the Senior Interest Holders may, from time to time, on the terms and subject to the conditions set forth in the Transaction Documents to which such Persons are party, but without notice to Holder, assign or transfer any or all of the Senior Interests, or any interest therein; and, notwithstanding any such assignment or transfer or any subsequent assignment or transfer thereof, such Senior Interests shall be and remain Senior Interests for the purposes of these Subordination Provisions, and every immediate and successive assignee or transferee of any of the Senior Interests or of any interest of such assignee or transferee in the Senior Interests shall be entitled to the benefits of these Subordination Provisions to the same extent as if such assignee or transferee were the assignor or transferor; and

 

(l)            These Subordination Provisions constitute a continuing offer from the holder of this Company Note to all Persons who become the holders of, or who continue to hold, Senior Interests; and these Subordination Provisions are made for the benefit of the Senior Interest Holders, and the Administrator may proceed to enforce such provisions on behalf of each of such Persons.

 

10.          General.  No failure or delay on the part of the Transferor in exercising any power or right hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such power or right preclude any other or further exercise thereof or the exercise of any other power or right.  No amendment, modification or waiver of, or consent with respect to, any provision of this Company Note shall in any event be effective unless (i) the same shall be in writing and signed and delivered by the Company and Holder and (ii) all consents required for such actions under the Transaction Documents shall have been received by the appropriate Persons.

 

11.          Maximum Interest.  Notwithstanding anything in this Company Note to the contrary, the Company shall never be required to pay unearned interest on any amount outstanding hereunder and shall never be required to pay interest on the principal amount outstanding hereunder at a rate in excess of the maximum nonusurious interest rate that may be contracted for, charged or received under applicable federal or state law (such maximum rate being herein called the “Highest Lawful Rate”).  If the effective rate of interest which would otherwise be payable under this Company Note would exceed the Highest Lawful Rate, or if the holder of this Company Note shall receive any unearned interest or shall receive monies that are deemed to constitute interest which would increase the effective rate of interest payable by the Company under this Company Note to a rate in excess of the Highest Lawful Rate, then (i) the amount of interest which would otherwise be payable by the Company under this Company Note shall be reduced to the amount allowed by Applicable Law, and (ii) any unearned interest paid by the Company or any interest paid by the Company in excess of the Highest Lawful Rate shall be refunded to the Company.  Without limitation of the foregoing, all calculations of the rate of

 

B-6

 

interest contracted for, charged or received by the Transferor under this Company Note that are made for the purpose of determining whether such rate exceeds the Highest Lawful Rate applicable to the Transferor (such Highest Lawful Rate being herein called the “Transferor’s Maximum Permissible Rate”) shall be made, to the extent permitted by usury laws applicable to the Transferor (now or hereafter enacted), by amortizing, prorating and spreading in equal parts during the actual period during which any amount has been outstanding hereunder all interest at any time contracted for, charged or received by the Transferor in connection herewith.  If at any time and from time to time (i) the amount of interest payable to the Transferor on any date shall be computed at the Transferor’s Maximum Permissible Rate pursuant to the provisions of the foregoing sentence and (ii) in respect of any subsequent interest computation period the amount of interest otherwise payable to the Transferor would be less than the amount of interest payable to the Transferor computed at the Transferor’s Maximum Permissible Rate, then the amount of interest payable to the Transferor in respect of such subsequent interest computation period shall continue to be computed at the Transferor’s Maximum Permissible Rate until the total amount of interest payable to the Transferor shall equal the total amount of interest which would have been payable to the Transferor if the total amount of interest had been computed without giving effect to the provisions of the foregoing sentence.

 

12.          Governing Law.  THIS COMPANY NOTE 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).

 

13.          Captions.  Paragraph captions used in this Company Note are for convenience only and shall not affect the meaning or interpretation of any provision of this Company Note.

 

B-7

 

IN WITNESS WHEREOF, the Company has caused this Company Note to be executed as of the date first written above.

 

	
 
    	
ARCH   RECEIVABLE COMPANY, LLC
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    

 

B-8Exhibit 10.5

 

 

WARRANT AGREEMENT

 

Dated as of

 

October 5, 2016

 

between

 

ARCH COAL, INC.

 

and

 

AMERICAN STOCK TRANSFER & TRUST COMPANY, LLC,

 

as Warrant Agent

 

 

For 1,914,856 Series A Warrants

 

 

 

 

Table of Contents

 

	
 
    	
 
    	
 
    	
 
    	
Page
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
ARTICLE I
    
	
 
    
	
DEFINITIONS
    
	
 
    
	
Section 1.01.
    	
 
    	
Definitions
    	
 
    	
1
    
	
Section 1.02.
    	
 
    	
Other Definitions
    	
 
    	
3
    
	
Section 1.03.
    	
 
    	
Rules of Construction
    	
 
    	
3
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
ARTICLE II
    
	
 
    
	
WARRANTS
    
	
 
    
	
Section 2.01.
    	
 
    	
Form
    	
 
    	
4
    
	
Section 2.02.
    	
 
    	
Execution and Countersignature
    	
 
    	
5
    
	
Section 2.03.
    	
 
    	
Registry
    	
 
    	
6
    
	
Section 2.04.
    	
 
    	
Transfer and Exchange
    	
 
    	
6
    
	
Section 2.05.
    	
 
    	
Definitive Warrants
    	
 
    	
8
    
	
Section 2.06.
    	
 
    	
Replacement Certificates
    	
 
    	
9
    
	
Section 2.07.
    	
 
    	
Outstanding Warrants
    	
 
    	
9
    
	
Section 2.08.
    	
 
    	
Cancellation
    	
 
    	
10
    
	
Section 2.09.
    	
 
    	
CUSIP Numbers
    	
 
    	
10
    
	
Section 2.10.
    	
 
    	
Withholding and Reporting Requirements
    	
 
    	
10
    
	
Section 2.11.
    	
 
    	
Proxies
    	
 
    	
11
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
ARTICLE III
    
	
 
    
	
EXERCISE TERMS
    
	
 
    
	
Section 3.01.
    	
 
    	
Exercise
    	
 
    	
11
    
	
Section 3.02.
    	
 
    	
Manner of Exercise and Issuance of Shares
    	
 
    	
11
    
	
Section 3.03.
    	
 
    	
Covenants Relating to Common Stock Issuable Upon   Warrant Exercise
    	
 
    	
11
    
	
Section 3.04.
    	
 
    	
Exercise Calculations
    	
 
    	
11
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
ARTICLE IV
    
	
 
    
	
ANTIDILUTION PROVISIONS
    
	
 
    
	
Section 4.01.
    	
 
    	
Antidilution Adjustments; Notice of Adjustment
    	
 
    	
12
    
	
Section 4.02.
    	
 
    	
Adjustment to Warrant Certificate
    	
 
    	
12
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
ARTICLE V
    
	
 
    
	
WARRANT AGENT
    
	
 
    
	
Section 5.01.
    	
 
    	
Appointment of Warrant Agent
    	
 
    	
12
    

 

i

 

	
Section 5.02.
    	
 
    	
Rights and Duties of Warrant Agent
    	
 
    	
13
    
	
Section 5.03.
    	
 
    	
Individual Rights of Warrant Agent
    	
 
    	
14
    
	
Section 5.04.
    	
 
    	
Warrant Agent’s Disclaimer
    	
 
    	
14
    
	
Section 5.05.
    	
 
    	
Compensation and Indemnity
    	
 
    	
15
    
	
Section 5.06.
    	
 
    	
Successor Warrant Agent
    	
 
    	
15
    
	
Section 5.07.
    	
 
    	
Representations of the Company
    	
 
    	
17
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
ARTICLE VI
    
	
 
    
	
MISCELLANEOUS
    
	
 
    
	
Section 6.01.
    	
 
    	
Persons Benefitting
    	
 
    	
17
    
	
Section 6.02.
    	
 
    	
Amendment
    	
 
    	
18
    
	
Section 6.03.
    	
 
    	
Notices
    	
 
    	
19
    
	
Section 6.04.
    	
 
    	
Governing Law
    	
 
    	
20
    
	
Section 6.05.
    	
 
    	
Successors
    	
 
    	
20
    
	
Section 6.06.
    	
 
    	
Multiple Originals; Counterparts
    	
 
    	
20
    
	
Section 6.07.
    	
 
    	
Inspection of Agreement
    	
 
    	
20
    
	
Section 6.08.
    	
 
    	
Table of Contents
    	
 
    	
20
    
	
Section 6.09.
    	
 
    	
Severability
    	
 
    	
20
    
	
Section 6.10.
    	
 
    	
Customer Identification Program
    	
 
    	
21
    
	
Section 6.11.
    	
 
    	
Confidentiality
    	
 
    	
21
    
	
Section 6.12.
    	
 
    	
Force Majeure
    	
 
    	
21
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
EXHIBIT A
    	
 
    	
Form of Series A   Warrant
    	
 
    	
 
    

 

ii

 

This WARRANT AGREEMENT is dated as of October 5, 2016 (this “Agreement”), among Arch Coal, Inc., a Delaware corporation (the “Company”), and American Stock Transfer & Trust Company, LLC, a New York limited liability trust company, as Warrant Agent (the “Warrant Agent”).  All terms used but not defined in this Agreement shall have the respective meanings assigned to them in the form of Warrant Certificate attached to this Agreement as Exhibit A.

 

Pursuant to the Debtors’ Fourth Amended Joint Plan of Reorganization under Chapter 11 of the Bankruptcy Code, as confirmed by the United States Bankruptcy Court for the Eastern District of Missouri on September 13, 2016, the Company hereby issues warrants (the “Warrants”) to purchase initially 1,914,856 shares of Class A Common Stock, $0.01 par value per share, of the Company (the “Common Stock”), subject to Section 13(G) of each Warrant Certificate.

 

The Warrants will be substantially in the form attached hereto as Exhibit A.

 

Each Warrant entitles the registered holder thereof (the “Holder”) to receive, upon exercise thereof, a number of shares of Common Stock determined by the provisions of the relevant Warrant Certificate.  Each Warrant Certificate (including any Global Warrant) shall evidence such number of Warrants as is set forth therein, subject to adjustment pursuant to the provisions of the Warrant Certificate.

 

The Warrants and the shares of Common Stock issuable upon exercise of the Warrants will be freely transferable by Holders that are not Affiliates of the Company, subject to any applicable restrictions in the relevant Warrant Certificate.  The Company desires the Warrant Agent to act on behalf of the Company in connection with the registration, transfer, exchange, exercise and cancellation of the Warrants as provided in this Agreement and the Warrant Certificates, and the Warrant Agent is willing to so act.

 

Each party agrees as follows for the benefit of the other party and for the equal and ratable benefit of the Holders of Warrants:

 

ARTICLE I

 

DEFINITIONS

 

Section 1.01.                          Definitions.

 

“Affiliate” means, with respect to any Person, any Person directly or indirectly controlling, controlled by or under common control with, such other Person.  For purposes of this definition, “control” (including, with correlative meanings, the terms “controlled by” and “under common control with”) when used with respect to any Person, means the possession, directly or indirectly, of the power to cause the direction of management and/or policies of such Person, whether through the ownership of voting securities by contract or otherwise.

 

1

 

“Agent Members” means the securities brokers and dealers, banks and trust companies, clearing organizations and other similar organizations that are participants in the Depositary’s system.

 

“Business Day” means any day except Saturday, Sunday and any day on which banking institutions in the State of New York are authorized or required by law or other governmental actions to close.

 

“Custodian” means American Stock Transfer & Trust Company, LLC, as custodian for the Depositary, or any successor thereto.

 

“Definitive Warrant” means a Warrant Certificate in definitive form that is not deposited with the Depositary or with the Custodian.

 

“Depositary” means The Depository Trust Company, its nominees and their respective successors.

 

“Exchange Act” means the U.S. Securities Exchange Act of 1934, as amended, or any successor statute, and the rules and regulations promulgated thereunder.

 

“Exercise Period” has the meaning set forth in the form of Warrant Certificate attached as Exhibit A hereto.

 

“Exercise Price” has the meaning set forth in the form of Warrant Certificate attached as Exhibit A hereto.

 

“Officer” means the Chairman of the Board, President, Chief Executive Officer, Chief Operating Officer, Chief Financial Officer, General Counsel, Treasurer and Secretary of the Company, any Assistant Treasurer or any Assistant Secretary of the Company, and any Executive or Senior Vice President or any Vice President (whether or not designated by a number or numbers or word or words added before or after the title “Vice President”) of the Company.

 

“Officer’s Certificate” means a certificate signed by any Officer.

 

“Opinion of Counsel” means a written opinion from legal counsel who is acceptable to the Warrant Agent, in its sole discretion.  Such counsel may be an employee of or counsel to the Company or the Warrant Agent.

 

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

 

“Shares” has the meaning set forth in the form of Warrant Certificate attached as Exhibit A hereto.

 

2

 

“Warrant Certificate” means any registered certificate (including a Global Warrant) issued by the Company and authenticated by the Warrant Agent under this Agreement evidencing Warrants, in the form attached as Exhibit A hereto.

 

“Warrant Share Number” has the meaning set forth in the form of Warrant Certificate attached as Exhibit A hereto.

 

Section 1.02.                          Other Definitions.

 

	
Term
    	
 
    	
Defined in
   Section
    
	
 
    	
 
    	
 
    
	
“Agreement”
    	
 
    	
Recitals
    
	
“Company”
    	
 
    	
Recitals
    
	
“Common Stock”
    	
 
    	
Recitals
    
	
“Customer Identification Program”
    	
 
    	
6.10
    
	
“Global Warrant”
    	
 
    	
2.01(a)
    
	
“Holder” or “Holders”
    	
 
    	
Recitals
    
	
“Loss” or “Losses”
    	
 
    	
5.05(b)
    
	
“Registry”
    	
 
    	
2.03
    
	
“Warrant”
    	
 
    	
Recitals
    
	
“Warrant Agent”
    	
 
    	
Recitals
    

 

Section 1.03.                          Rules of Construction.

 

Unless the text otherwise requires:

 

(a)         a defined term has the meaning assigned to it;

 

(b)         an accounting term not otherwise defined has the meaning assigned to it in accordance with United States generally accepted accounting principles as in effect on the date hereof;

 

(c)          “or” is not exclusive;

 

(d)         “including” means including, without limitation; and

 

(e)          words in the singular include the plural and words in the plural include the singular.

 

3

 

ARTICLE II

 

WARRANTS

 

Section 2.01.                          Form.

 

(a)         Global Warrants.  Except as provided in Section 2.04 or 2.05, Warrants, including Warrants issued upon any transfer or exchange thereof, shall be issued in the form of one or more permanent global Warrants in fully registered form with the global securities legend set forth in the form of Warrant Certificate attached as Exhibit A hereto (each, a “Global Warrant”), which shall be deposited on behalf of the Company with the Depositary (or, at the direction of the Depositary, with the Custodian or such other custodian as the Depositary may direct), and registered in the name of the Depositary or a nominee of the Depositary, duly executed by the Company and countersigned by the Warrant Agent as hereinafter provided.

 

(b)         Book-Entry Provisions. This Section 2.01(b) shall apply only to a Global Warrant deposited with, at the direction of or on behalf of the Depositary.

 

(i)                                     The Company shall execute and the Warrant Agent shall, in accordance with Section 2.02, countersign, either by manual or facsimile signature, and deliver one or more Global Warrants that (A) shall be registered in the name of the Depositary or the nominee of the Depositary and (B) shall be delivered by the Warrant Agent to the Depositary or pursuant to the Depositary’s instructions or held by the Custodian.  Each Global Warrant shall be dated the date of its countersignature by the Warrant Agent.

 

(ii)                                  Agent Members shall have no rights under this Agreement with respect to any Global Warrant held on their behalf by the Depositary or by the Warrant Agent as the custodian of the Depositary or under such Global Warrant except to the extent set forth herein or in a Warrant Certificate, and the Depositary may be treated by the Company, the Warrant Agent and any agent of the Company or the Warrant Agent as the absolute owner of such Global Warrant for all purposes whatsoever.  Notwithstanding the foregoing, nothing herein shall (A) prevent the Company, the Warrant Agent or any agent of the Company or the Warrant Agent from giving effect to any written certification, proxy or other authorization furnished by the Depositary or (B) impair, as between the Depositary and the Agent Members, the operation of customary practices of the Depositary governing the exercise of the rights of a holder of a beneficial interest in any Global Warrant.  The rights of beneficial owners in a Global Warrant shall be exercised through the Depositary subject to the applicable procedures of the Depositary except to the extent set forth herein or in a Warrant Certificate.

 

(c)          Definitive Securities.  Except as provided in Section 2.04 or 2.05, owners of beneficial interests in Global Warrants will not be entitled to receive physical delivery of Definitive Warrants.

 

(d)         Warrant Certificates.  Warrant Certificates shall be in substantially the form attached as Exhibit A hereto and shall be typed, printed, lithographed or engraved or produced

 

4

 

by any combination of such methods or produced in any other manner permitted by the rules of any securities exchange on which the Warrants may be listed, all as determined by the Officer or Officers executing such Warrant Certificates, as evidenced by their execution thereof.  Any Warrant Certificate shall have such insertions as are required by this Agreement and may have such letters, numbers or other marks of identification and such legends and endorsements, stamped, printed, lithographed or engraved thereon, (i) as the Company may deem appropriate and as are not inconsistent with the provisions of this Agreement (and which letters, numbers, marks of identification, legends or endorsements do not affect the rights, duties, immunities or obligations of the Warrant Agent), (ii) as may be required to comply with this Agreement, any applicable law or any rule of any securities exchange on which the Warrants may be listed, or (iii) as may be necessary to conform to customary usage.

 

Section 2.02.                          Execution and Countersignature.

 

(a)         Execution by the Company.  At least one Officer shall sign the Warrant Certificates for the Company by manual or facsimile signature.  If an Officer whose signature is on a Warrant Certificate no longer holds that office at the time the Warrant Agent countersigns the Warrant Certificate, the Warrants evidenced by such Warrant Certificate shall be valid nevertheless.

 

(b)         Countersignature by the Warrant Agent.  The Warrant Agent shall initially countersign, either by manual or facsimile signature, and deliver Warrant Certificates evidencing, in the aggregate, 1,914,856 Warrants.  Each Warrant Certificate shall be dated the date of its countersignature by the Warrant Agent.

 

(c)          Subsequent Issue of Warrant Certificates.  At any time and from time to time after the execution of this Agreement, the Warrant Agent shall upon receipt of a written order of the Company signed by an Officer countersign, by either manual or facsimile signature, and issue a Warrant Certificate evidencing the number of Warrants specified in such order; provided that the Warrant Agent shall be entitled to receive, in connection with such countersignature of Warrants described in this Section 2.02(c), an Officer’s Certificate and an Opinion of Counsel of the Company to the effect that issuance and execution of such Warrants is authorized or permitted by this Agreement and the organizational documents of the Company.  Such written order of the Company shall specify the number of Warrants to be evidenced on the Warrant Certificate to be countersigned, the date on which such Warrant Certificate is to be countersigned and the number of Warrants then authorized.  Each Warrant Certificate shall be dated the date of its countersignature by the Warrant Agent.

 

(d)         Validity of Warrant Certificates.  The Warrants evidenced by a Warrant Certificate shall not be valid until an authorized signatory of the Warrant Agent countersigns the Warrant Certificate either manually or by facsimile signature. Such signature shall be solely for the purpose of authenticating the Warrant Certificate and shall be conclusive evidence that the Warrant Certificate so countersigned has been duly authenticated and issued under this Agreement.  Countersigned Warrant Certificates may be delivered, notwithstanding the fact that the persons or any one of them who countersigned the Warrants shall have ceased to be proper

 

5

 

signatories prior to the delivery of such Warrants or were not proper signatories on the date of this Agreement.

 

Section 2.03.                          Registry.

 

The Warrants shall be issued in registered form only.  The Warrant Agent shall keep a registry (the “Registry”) of the Warrant Certificates and of their transfer and exchange. The Registry shall show the names and addresses of the respective Holders and the date and number of Warrants evidenced on the face of each of the Warrant Certificates, and record all exchanges, exercise, cancellation and transfers of the Warrants. The Holder of any Global Warrant will be the Depositary or a nominee of the Depositary in whose name such Global Warrant is registered.  The Warrant holdings of Agent Members will be recorded on the books of the Depositary.  The beneficial interests in any Global Warrant held by customers of Agent Members will be reflected on the books and records of such Agent Members and will not be known to the Warrant Agent, to the Company or to the Depositary.  Any Warrant Certificate may be surrendered for transfer, cancellation, exchange or exercise, in accordance with its terms, at the office of the Warrant Agent designated for such purpose.  The Company and the Warrant Agent may deem and treat any Person in whose name a Warrant Certificate is registered in the Registry as the absolute owner of such Warrant Certificate for all purposes whatsoever and neither the Company nor the Warrant Agent shall be affected by notice to the contrary.

 

Section 2.04.                          Transfer and Exchange.

 

(a)         Transfer and Exchange of Global Warrants.

 

(i)                                     The transfer and exchange of Global Warrants or beneficial interests therein shall be effected through the book-entry system maintained by the Depositary, in accordance with this Agreement and the Warrant Certificates and the procedures of the Depositary therefor.

 

(ii)                                  Notwithstanding any other provisions of this Agreement (other than the provisions set forth in Section 2.05), a Global Warrant may only be transferred as a whole, and not in part, and only by (A) the Depositary, to a nominee of the Depositary, (B) a nominee of the Depositary, to the Depositary or another nominee of the Depositary, or (C) the Depositary or any such nominee to a successor Depositary or its nominee.

 

(iii)                               In the event that a Global Warrant is exchanged and transferred for Definitive Warrants pursuant to Section 2.05, such Warrants may be exchanged only in accordance with Section 9 of the Warrant Certificate and such procedures as are substantially consistent with the provisions of this Section 2.04 and the requirements of any Warrant Certificate and such other procedures as may from time to time be adopted by the Company that are not inconsistent with the terms of this Agreement or of any Warrant Certificate.

 

(b)         Cancellation or Adjustment of Global Warrant.  At such time as all beneficial interests in a Global Warrant have been exchanged for Definitive Warrants, repurchased,

 

6

 

exercised or canceled, such Global Warrant shall be returned by the Depositary for cancellation or retained and canceled by the Warrant Agent. At any time prior to such cancellation, if any beneficial interest in a Global Warrant is exchanged (including, without limitation, for Definitive Warrants and/or New Warrants), repurchased, exercised or canceled, the number of Warrants represented by such Global Warrant shall be reduced and the Warrant Agent shall make an adjustment on its books and records to reflect such reduction; provided that, in the case of an adjustment on account of an exercise of Warrants, the Warrant Agent shall have no duty or obligation to make such adjustment until it has received notice from the Holder of the amount thereof.

 

(c)          Obligations with Respect to Transfers and Exchanges of Warrants.

 

(i)                                     To permit registrations of transfers and exchanges, the Company shall execute and the Warrant Agent shall countersign, either by manual or facsimile signature, Global Warrants and Definitive Warrants as required pursuant to the provisions of Section 2.02 and this Section 2.04. A transferor of a Global Warrant or a Definitive Warrant shall deliver to the Warrant Agent a written instruction of transfer in the form attached to the relevant Warrant Certificate as Annex C, duly executed by the Holder thereof or by its attorney, duly authorized in writing. Additionally, prior to registration of any transfer or exchange of a Warrant, the requirements for the Warrant issued upon such transfer or exchange to be issued in a name other than the registered Holder shall be met. Such requirements include, inter alia, a signature guarantee from an eligible guarantor institution participating in a signature guarantee program approved by the Securities Transfer Association (at a guarantee level reasonably acceptable to the Company’s transfer agent), and any other reasonable evidence of authority that may be required by the Warrant Agent. Upon satisfaction of the conditions in this clause (i), the Warrant Agent shall, in accordance with such instructions, register the transfer or exchange of the relevant Global Warrant or Definitive Warrant.

 

(ii)                                  No service charge shall be made to a Holder for any registration of transfer or exchange, but the Company may require payment from a Holder of a sum sufficient to cover any transfer tax, assessments or similar governmental charge payable in connection therewith as set forth in the Warrant Certificate. The Warrant Agent shall have no duty or obligation pursuant to any Section of this Agreement requiring the payment of taxes, assessments, and/or governmental charges unless and until the Warrant Agent is satisfied that all such taxes, assessments, and/or governmental charges have been paid.

 

(iii)                               All Warrants issued upon any transfer or exchange pursuant to the terms of this Agreement shall be the valid obligations of the Company, entitled to the same benefits under this Agreement as the Warrants surrendered upon such transfer or exchange.

 

(d)         No Obligation of the Warrant Agent.

 

(i)                                     The Warrant Agent shall have no responsibility or obligation to any beneficial owner of a Global Warrant, any Agent Member or other Person with

 

7

 

respect to the accuracy of the records of the Depositary or its nominee or of any participant or member thereof, with respect to any ownership interest in the Warrants or with respect to the delivery to any Agent Member, beneficial owner or other Person (other than the Depositary) of any notice or the payment of any amount, under or with respect to such Warrants.  All notices and communications to be given to the Holders and all payments to be made to Holders under the Warrants shall be given or made only to or upon the order of the registered Holders (which shall be the Depositary or its nominee in the case of a Global Warrant).  Except as set forth in the Warrant Certificate, the rights of beneficial owners in any Global Warrant shall be exercised only through the Depositary subject to the applicable rules and procedures of the Depositary.  The Warrant Agent may rely and shall be fully protected in relying upon information furnished by the Depositary with respect to its members, participants and any beneficial owners.

 

(ii)                                  The Warrant Agent shall have no obligation or duty to monitor, determine or inquire as to compliance with any restrictions on transfer imposed under this Agreement or under applicable law with respect to any transfer of any interest in any Warrant (including any transfer between or among the Agent Members or beneficial owners in any Global Warrant) other than to require delivery of such certificates and other documentation or evidence as are expressly required by, and to do so if and when expressly required by, the terms of this Agreement and the Warrant Certificate, and to examine the same to determine substantial compliance as to form with the express requirements hereof and thereof.

 

Section 2.05.                          Definitive Warrants.

 

(a)         Issuance of Definitive Warrants.  Beneficial interests in a Global Warrant deposited with the Depositary or with the Custodian pursuant to Section 2.01 shall be transferred to each beneficial owner thereof in the form of Definitive Warrants evidencing a number of Warrants equivalent to such owner’s beneficial interest in such Global Warrant, in exchange for such Global Warrant, only if such transfer complies with Section 2.04 and (i) the Depositary notifies the Company that it is unwilling or unable to continue as Depositary for such Global Warrant or if at any time the Depositary ceases to be a “clearing agency” registered under the Exchange Act and, in each such case, a successor Depositary is not appointed by the Company within 90 days of such notice, (ii) the Company, in its sole discretion, notifies the Warrant Agent in writing that it elects to cause the issuance of Definitive Warrants under this Agreement in accordance with the applicable rules and procedures of the Depositary, or (iii) the Company shall be adjudged a bankrupt or insolvent or make an assignment for the benefit of its creditors or institute proceedings to be adjudicated a bankrupt or shall consent to the filing of a bankruptcy proceeding against it, or shall file a petition or answer or consent seeking reorganization under federal bankruptcy laws or any other similar applicable federal or state law, or shall consent to the filing of any such petition, or shall consent to the appointment of a receiver or custodian of all or any substantial part of its property, or shall admit in writing its inability to pay or meet its debts as they mature, or if a receiver or custodian of it or all or any substantial part of its property shall be appointed, or if a public officer shall have taken charge or control of the Company or of its property or affairs, for the purpose of rehabilitation, conservation or liquidation.

 

8

 

(b)         Surrender of Global Warrants and Exchange for Definitive Warrants.  Any Global Warrant that is to be exchanged, in whole or in part, for Definitive Warrants pursuant to this Section 2.05 shall be surrendered by the Depositary to the Warrant Agent, to be so exchanged, in whole or from time to time in part, without charge, and the Warrant Agent shall countersign, either by manual or facsimile signature, and deliver to each beneficial owner of such Global Warrant (or, in the case of clause (ii) in Section 2.05(a), to each beneficial owner requesting such an exchange) in the name of such beneficial owner, Definitive Warrants evidencing a number of Warrants equivalent to such beneficial owner’s beneficial interest in the Global Warrant.  The Warrant Agent shall register such exchange in the Registry, and if the entire Global Warrant has been exchanged for Definitive Warrants the surrendered Global Warrant shall be canceled by the Warrant Agent.

 

(c)          Validity of Definitive Warrants.  All Definitive Warrants issued upon transfer pursuant to this Section 2.05 shall be the valid obligations of the Company, evidencing the same obligations of the Company and entitled to the same benefits under this Agreement as the Global Warrant surrendered upon such transfer.

 

(d)         Definitive Warrant Certificates.  In the event of the occurrence of any of the events specified in Section 2.05(a), the Company will promptly make available to the Warrant Agent a reasonable supply of Definitive Warrants in definitive, fully registered form.

 

(e)          No Liability.  Neither the Company nor the Warrant Agent will be liable or responsible for any registration or transfer of any Warrants that are registered or to be registered in the name of a fiduciary or the nominee of a fiduciary.

 

Section 2.06.                          Replacement Certificates.

 

If a mutilated Warrant Certificate is surrendered to the Warrant Agent or if the Holder of a Warrant Certificate provides evidence reasonably satisfactory to the Company and the Warrant Agent that the Warrant Certificate has been lost, destroyed or wrongfully taken, the Company shall issue and the Warrant Agent shall countersign, by either manual or facsimile signature, a replacement Warrant Certificate of like tenor and representing an equivalent number of Warrants, if the reasonable requirements of the Warrant Agent and Section 8-405 of the Uniform Commercial Code as in effect in the State of New York are met.  In the case of the Warrant Certificate that is lost, destroyed or wrongfully taken, if required by the Warrant Agent or the Company, such Holder shall furnish an indemnity sufficient in the judgment of the Company and the Warrant Agent to protect the Company and the Warrant Agent from any loss that either of them may suffer if a Warrant Certificate is replaced.  The Company and the Warrant Agent may charge the Holder for their reasonable, out-of-pocket expenses in replacing a Warrant Certificate prior to issuing and delivering a replacement Warrant Certificate to such Holder.  Every replacement Warrant Certificate evidences an additional obligation of the Company.

 

Section 2.07.                          Outstanding Warrants.

 

Subject to Section 6.02, the Warrants outstanding at any time are all Warrants evidenced on all Warrant Certificates authenticated by the Warrant Agent except for those

 

9

 

canceled by it and those delivered to it for cancellation.  The Company shall not sell, and shall use commercially reasonable efforts to prevent any Affiliate of the Company from selling, any Warrant if the Warrant would constitute a “restricted security” (within the meaning of Rule 144 under the Securities Act) upon such resale.

 

If a Warrant Certificate is replaced pursuant to Section 2.06, the Warrants evidenced thereby cease to be outstanding unless the Warrant Agent and the Company receive proof satisfactory to them that the replaced Warrant Certificate is held by a bona fide purchaser.

 

Section 2.08.                          Cancellation.

 

In the event the Company shall purchase or otherwise acquire Definitive Warrants, the same shall thereupon be delivered to the Warrant Agent for cancellation.

 

The Warrant Agent and no one else shall cancel and destroy all Warrant Certificates surrendered for transfer, exchange, replacement, exercise or cancellation and deliver a certificate of such destruction to the Company unless the Company directs the Warrant Agent to deliver any canceled Warrant Certificates to the Company.  The Company may not issue new Warrant Certificates to replace Warrant Certificates to the extent they evidence Warrants that have been exercised or Warrants that the Company has purchased or otherwise acquired.

 

Section 2.09.                          CUSIP Numbers.

 

In issuing the Warrants, the Company may use CUSIP numbers (if then generally in use) and, if so, the Warrant Agent shall use CUSIP numbers in notices as a convenience to Holders; provided that any such notice may state that no representation is made as to the correctness of such CUSIP numbers either as printed on the Warrant Certificates or as contained in any notice and that reliance may be placed only on the other identification numbers printed on the Warrant Certificates.

 

Section 2.10.                          Withholding and Reporting Requirements.

 

The Company shall comply with all applicable tax withholding and reporting requirements imposed by any governmental unit, and all distributions, including deemed distributions, pursuant to the Warrants will be subject to applicable withholding and reporting requirements.  Notwithstanding any provision to the contrary, the Company will be authorized to (i) take any actions that may be necessary or appropriate to comply with such withholding and reporting requirements, (ii) apply a portion of any cash distribution to be made under the Warrants to pay applicable withholding taxes, (iii) liquidate a portion of any non-cash distribution to be made under the Warrants to generate sufficient funds to pay applicable withholding taxes or (iv) establish any other mechanisms the Company believes are reasonable and appropriate, including requiring Holders to submit appropriate tax and withholding certifications (such as IRS Forms W-9 and the appropriate IRS Forms W-8, as applicable) and/or requiring Holders to pay the withholding tax amount to the Company in cash as a condition of receiving the benefit of any antidilution adjustment pursuant to Article IV.

 

10

 

Section 2.11.                          Proxies.

 

The registered Holder of a Global Warrant may grant proxies and otherwise authorize any Person, including Agent Members and Persons that may hold beneficial interests through Agent Members, to take any action that a Holder is entitled to take under this Agreement or the Warrants.

 

ARTICLE III

 

EXERCISE TERMS

 

Section 3.01.                          Exercise.

 

The Exercise Price of each Warrant, the Warrant Share Number, the number of Warrants evidenced by any Warrant Certificate and the Exercise Period of each Warrant shall be set forth in the related Warrant Certificate. The Exercise Price of each Warrant and the Warrant Share Number are subject to adjustment pursuant to the terms set forth in the Warrant Certificate.

 

Section 3.02.                          Manner of Exercise and Issuance of Shares.

 

Warrants may be exercised in the manner set forth in Sections 3 and 4 of the Warrant Certificate, and upon any such exercise, if any Shares are issuable pursuant to Section 4 of the Warrant Certificate, such Shares shall be issued in the manner set forth in Section 5 of the Warrant Certificate.

 

Section 3.03.                          Covenants Relating to Common Stock Issuable Upon Warrant Exercise.

 

(a)         Common Stock Certificates.  The Warrant Agent is hereby authorized to request from time to time from any stock transfer agents of the Company those stock certificates required to honor outstanding Warrants upon exercise thereof in accordance with the terms of this Agreement and the applicable Warrant Certificate, and the Company agrees to authorize and direct such transfer agents to comply with all such requests of the Warrant Agent. The Company shall supply such transfer agents with duly executed stock certificates for such purposes and shall provide or otherwise make available any cash that may be payable upon exercise of Warrants as provided herein and in each Warrant Certificate.

 

(b)         Common Stock Reserve.  The Company hereby confirms that it previously has authorized and instructed its transfer agent and registrar for the Common Stock to create a special account for the reserve of a number of shares of Common Stock equal to the aggregate Warrant Share Number for all outstanding Warrants to be issued upon exercise of the Warrants, and such reserve account shall be maintained until the earlier of (1) the latest Expiration Time of any Warrant and (2) the time at which all Warrants have been canceled.

 

Section 3.04.                          Exercise Calculations.

 

To the extent applicable, the Company shall calculate and transmit to the Warrant Agent, and the Warrant Agent shall have no obligation under this Agreement to calculate, the number of Shares deliverable pursuant to any exercise of Warrants. The number of Shares to be

 

11

 

issued on such exercise will be determined by the Company (with written notice thereof to the Warrant Agent) as set forth in the Warrant Certificate. The Warrant Agent shall have no duty or obligation to investigate or confirm whether the Company’s determination of the number of Shares to be issued on such exercise is accurate or correct.

 

ARTICLE IV

 

ANTIDILUTION PROVISIONS

 

Section 4.01.                          Antidilution Adjustments; Notice of Adjustment.

 

The Exercise Price and the Warrant Share Number shall be subject to adjustment from time to time as provided in Section 13 of the Warrant Certificate.  Whenever the Exercise Price or the Warrant Share Number is so adjusted or is proposed to be adjusted as provided in Section 13 of the Warrant Certificate, the Company shall deliver to the Warrant Agent the notices or statements, and shall cause a copy of such notices or statements to be sent or communicated to each Holder pursuant to Section 6.03, as provided in Section 13(M) of the Warrant Certificate.

 

Section 4.02.                          Adjustment to Warrant Certificate.

 

The form of Warrant Certificate need not be changed because of any adjustment made pursuant to the Warrant Certificate (except as expressly provided in Section 13(G) of the Warrant Certificate), and Warrant Certificates issued after such adjustment may state the same Exercise Price and the same Warrant Share Number as are stated in the Warrant Certificates initially issued pursuant to this Agreement. The Company, however, may at any time in its sole discretion make any ministerial change in the form of Warrant Certificate that it may deem appropriate to give effect to such adjustments and that does not affect the substance of the Warrant Certificate, and any Warrant Certificate thereafter issued or countersigned, whether in exchange or substitution for an outstanding Warrant Certificate or otherwise, may be in the form as so changed.  In the event of any such change, the Company shall give prompt notice thereof to all registered Holders and, if appropriate, notation thereof shall be made on all Warrant Certificates thereafter surrendered for registration of transfer or exchange.

 

ARTICLE V

 

WARRANT AGENT

 

Section 5.01.                          Appointment of Warrant Agent.

 

The Company hereby appoints the Warrant Agent to act as agent for the Company in accordance with the provisions of this Agreement and the Warrant Agent hereby accepts such appointment.  The Warrant Agent shall not be liable for anything that it may do or refrain from doing in connection with this Agreement, except for its own gross negligence, willful misconduct, fraud or bad faith. Notwithstanding anything in this Agreement to the contrary, in no event shall the Warrant Agent be liable for special, punitive, incidental, indirect or consequential loss or damage of any kind whatsoever (including but not limited to lost profits),

 

12

 

even if the Warrant Agent has been advised of the likelihood of such loss or damage and regardless of the form of the action. The rights and obligations of the parties set forth in this Section 5.01 shall survive the termination of this Agreement and the resignation, replacement or removal of the Warrant Agent.

 

Section 5.02.                          Rights and Duties of Warrant Agent.

 

(a)         Agent for the Company.  In acting under this Warrant Agreement and in connection with the Warrant Certificates, the Warrant Agent is acting solely as agent of the Company and does not assume any obligation of agency or trust or any relationship of agency or trust for or with any of the holders of Warrant Certificates or beneficial owners of Warrants.

 

(b)         Counsel.  The Warrant Agent may consult with counsel reasonably satisfactory to it, and the advice of such counsel shall be full and complete authorization and protection to the Warrant Agent in respect of any action taken, suffered or omitted by it hereunder in good faith and in accordance with the advice of such counsel.

 

(c)          Documents.  The Warrant Agent shall be protected and shall incur no liability for or in respect of any action taken or thing suffered by it, absent gross negligence, willful misconduct or bad faith, in reliance upon any Warrant Certificate, notice, direction, consent, certificate, affidavit, statement or other paper or document reasonably believed by it to be genuine and to have been presented or signed by the proper officers or other parties of the Company.  The Warrant Agent shall not take any instructions or directions except those given in accordance with this Agreement.

 

(d)         No Implied Obligations.  The Warrant Agent shall be obligated to perform only such duties as are specifically set forth herein and in the Warrant Certificates, and no implied or inferred duties, responsibility or obligations of the Warrant Agent shall be read into this Agreement or the Warrant Certificates against the Warrant Agent. The Warrant Agent shall not be under any obligation to take any action hereunder that may cause it to incur any expense or liability for which it does not receive indemnity if such indemnity is reasonably requested.  The Warrant Agent shall not be accountable or under any duty or responsibility for the use by the Company of any of the Warrant Certificates countersigned by the Warrant Agent and delivered by it to the Holders or on behalf of the Holders pursuant to this Agreement or for the application by the Company of the proceeds of the Warrants.  The Warrant Agent shall have no duty or responsibility in the case of any default by the Company in the performance of its covenants or agreements contained herein or in the Warrant Certificates or in the case of the receipt of any written demand from a Holder with respect to such default, including any duty or responsibility to initiate or attempt to initiate any proceedings at law or otherwise. The Warrant Agent shall have no duty or responsibility to ensure compliance with any applicable federal or state securities law in connection with the issuance, transfer or exchange of any Warrants under this Agreement.

 

(e)          Not Responsible for Adjustments or Validity of Stock. The Warrant Agent shall not at any time be under any duty or responsibility to any Holder to determine whether any facts exist that may require an adjustment of the Warrant Share Number or the Exercise Price or to calculate any such adjustment, or to make any determination with respect to the nature or extent of any adjustment when made, or with respect to the method employed, herein or in any

 

13

 

supplemental agreement provided to be employed, in making the same.  The Warrant Agent shall not be accountable with respect to the validity or value of any Shares or of any securities or property that may at any time be issued or delivered upon the exercise of any Warrant or upon any adjustment pursuant to Section 13 of the Warrant Certificate, and it makes no representation with respect thereto.  The Warrant Agent shall not be responsible for any failure of the Company to make any cash payment or to issue, transfer or deliver any Shares or stock certificates upon the surrender of any Warrant Certificate for the purpose of exercise or upon any adjustment pursuant to Section 13 of the Warrant Certificate, or to comply with any of the covenants of the Company contained in the Warrant Certificate or this Agreement.

 

(f)           Notices or Demands Addressed to the Company.  If the Warrant Agent receives any notice or demand addressed to the Company by the Holder of a Warrant, the Warrant Agent shall promptly forward such notice or demand to the Company.

 

(g)          Ambiguity.  In the event the Warrant Agent reasonably believes any ambiguity or uncertainty exists hereunder or in any Warrant Certificate, notice, instruction, direction, request or other communication, paper or document received by the Warrant Agent hereunder, the Warrant Agent shall notify the Company in writing as soon as practicable, and upon delivery of such notice may, in its sole discretion, refrain from taking any action, and shall be fully protected and shall not be liable in any way to the Company or any Holder or other Person for refraining from taking such action, unless the Warrant Agent receives written instructions signed by the Company which eliminate such ambiguity or uncertainty to the reasonable satisfaction of the Warrant Agent. Notwithstanding anything in this Agreement to the contrary, the Warrant Agent is authorized and directed hereby to comply with any orders, judgments, or decrees of any court that it believes has jurisdiction over it and, absent gross negligence, willful misconduct, fraud or bad faith, will not be liable as a result of its compliance with the same.

 

Section 5.03.                          Individual Rights of Warrant Agent.

 

Subject to its obligations hereunder, the Warrant Agent and any stockholder, director, officer or employee of the Warrant Agent may buy, sell or deal in any of the Warrants or other securities of the Company or its affiliates or become pecuniarily interested in transactions in which the Company or its affiliates may be interested, or contract with or lend money to the Company or its affiliates or otherwise act as fully and freely as though it were not the Warrant Agent under this Agreement. Nothing herein shall preclude the Warrant Agent from acting in any other capacity for the Company or for any other legal entity.

 

Section 5.04.                          Warrant Agent’s Disclaimer.

 

The Warrant Agent shall not be responsible for, and makes no representation as to the validity or adequacy of, this Agreement (except the due and valid authorized execution and delivery of this Agreement by the Warrant Agent) or the Warrant Certificates (except the due countersignature of the Warrant Certificate(s) by the Warrant Agent) and it shall not be responsible for any statement in this Agreement or the Warrant Certificates other than its countersignature thereon; nor will the Warrant Agent be under any duty or responsibility to

 

14

 

insure compliance with any applicable federal or state securities laws in connection with the issuance, transfer or exchange of Warrant Certificates.

 

Section 5.05.                          Compensation and Indemnity.

 

(a)         Compensation of Warrant Agent.  The Company agrees to pay the Warrant Agent the compensation to be agreed upon with the Company for all services rendered by the Warrant Agent under this Agreement and to reimburse the Warrant Agent upon request for all reasonable out-of-pocket expenses, including the reasonable and documented counsel fees and expenses, incurred by the Warrant Agent in connection with the preparation, delivery, administration, execution and amendment of this Agreement and the performance of the services rendered by the Warrant Agent under this Agreement. The Company is not obligated to reimburse any expense incurred by the Warrant Agent through gross negligence, willful misconduct, fraud or bad faith.

 

(b)         Indemnification by the Company.  The Company shall indemnify and hold harmless the Warrant Agent and its officers and directors against any loss, liability or expense (including reasonable attorneys’ fees and expenses) incurred by it (each, a “Loss” and, collectively, “Losses”) without gross negligence, willful misconduct, fraud or bad faith on its part arising out of or in connection with the acceptance, administration, exercise or performance of its duties under this Agreement. The Company shall further indemnify and hold the Warrant Agent harmless from and against any Loss arising out of or attributable to the Warrant Agent’s acting on the written instructions of the Company, so long as the Warrant Agent so acted without gross negligence, willful misconduct, fraud or bad faith. The Warrant Agent shall notify the Company promptly of any claim for which it may seek indemnity. The costs and expenses incurred by the Warrant Agent in successfully enforcing its right of indemnification hereunder shall be paid by the Company. The Company is not obligated to indemnify the Warrant Agent against any loss or liability incurred by the Warrant Agent through willful misconduct, gross negligence, fraud or bad faith. The rights and obligations of the parties set forth in Sections 5.05(a) and (b) shall survive the termination of this Agreement and the resignation, replacement or removal of the Warrant Agent.

 

Section 5.06.                          Successor Warrant Agent.

 

(a)         Company to Provide and Maintain Warrant Agent.  The Company agrees for the benefit of the Holders that there shall at all times be a Warrant Agent hereunder until all the Warrants have been exercised or canceled or are no longer exercisable.

 

(b)         Resignation and Removal.  The Warrant Agent may at any time resign by giving written notice to the Company of such intention on its part, specifying the date on which its desired resignation shall become effective; provided that such date shall not be less than 90 days after the date on which such notice is given unless the Company otherwise agrees.  The Warrant Agent hereunder may be removed at any time by the filing with it of an instrument in writing signed by or on behalf of the Company and specifying such removal and the date when it shall become effective, which date shall not be less than 90 days after such notice is given unless the Warrant Agent otherwise agrees.  Any removal under this Section 5.06(b) shall take effect upon the appointment by the Company as hereinafter provided of a successor Warrant Agent

 

15

 

(which shall be (i) a bank or trust company, (ii) organized under the laws of the United States of America or one of the states thereof, (iii) authorized under the laws of the jurisdiction of its organization to exercise corporate trust powers, (iv) having a combined capital and surplus of at least $50,000,000 (as set forth in its most recent reports of condition published pursuant to law or to the requirements of any United States federal or state regulatory or supervisory authority) and (v) having an office in the Borough of Manhattan, the City of New York) and the acceptance of such appointment by such successor Warrant Agent.

 

(c)          Company to Appoint Successor.  In the event that at any time the Warrant Agent resigns, is removed, becomes incapable of acting, fails to perform any of its obligations hereunder or under any Warrant Certificate in accordance with the terms hereof or thereof, is adjudged bankrupt or insolvent, commences a voluntary case under the federal bankruptcy laws, as now or hereafter constituted, or under any other applicable federal or state bankruptcy, insolvency or similar law, consents to the appointment of or taking possession by a receiver, custodian, liquidator, assignee, trustee, sequestrator or other similar official of the Warrant Agent or its property or affairs, makes an assignment for the benefit of creditors, admits in writing its inability to pay its debts generally as they become due, or takes corporate action in furtherance of any such action, or a decree or order for relief by a court having jurisdiction in the premises has been entered in respect of the Warrant Agent in an involuntary case under the federal bankruptcy laws, as now or hereafter constituted, or any other applicable federal or state bankruptcy, insolvency or similar law, or a decree or order by a court having jurisdiction in the premises has been entered for the appointment of a receiver, custodian, liquidator, assignee, trustee, sequestrator or similar official of the Warrant Agent or of its property or affairs, or any public officer takes charge or control of the Warrant Agent or of its property or affairs for the purpose of rehabilitation, conservation, winding up or liquidation, a successor Warrant Agent, meeting the qualifications specified in Section 5.06(b), shall be appointed by the Company by an instrument in writing, filed with the successor Warrant Agent.  In the event that a successor Warrant Agent is not appointed by the Company, a successor Warrant Agent, qualified as aforesaid, may be appointed by the Warrant Agent or the Warrant Agent may petition a court to appoint a successor Warrant Agent.  Upon the appointment as aforesaid of a successor Warrant Agent and acceptance by the successor Warrant Agent of such appointment, the Warrant Agent shall cease to be Warrant Agent hereunder; provided that in the event of the resignation of the Warrant Agent under this subsection (c), such resignation shall be effective on the earlier of (i) the date specified in the Warrant Agent’s notice of resignation and (ii) the appointment and acceptance of a successor Warrant Agent hereunder.

 

(d)         Successor to Expressly Assume Duties.  Any successor Warrant Agent appointed hereunder shall execute, acknowledge and deliver to its predecessor and to the Company an instrument accepting such appointment hereunder, and thereupon such successor Warrant Agent, without any further act, deed or conveyance, shall become vested with all the rights and obligations of such predecessor with like effect as if originally named as Warrant Agent hereunder, and such predecessor, upon payment of its charges and disbursements then unpaid, shall thereupon become obligated to transfer, deliver and pay over, and such successor Warrant Agent shall be entitled to receive, all monies, securities and other property on deposit with or held by such predecessor, as Warrant Agent hereunder.

 

16

 

(e)          Successor by Merger.  Any entity into which the Warrant Agent hereunder may be merged or consolidated, or any entity resulting from any merger or consolidation to which the Warrant Agent is a party, or any entity to which the Warrant Agent sells or otherwise transfers all or substantially all of its assets and business (including with respect to the administration of this Agreement), shall be the successor Warrant Agent under this Agreement without the execution or filing of any paper or any further act on the part of any of the parties hereto; provided that it is open for business on each Business Day and (i) (A) is organized under the laws of the United States of America or one of the states thereof, (B) is authorized under the laws of the jurisdiction of its organization to exercise corporate trust or stock transfer powers and (C) has a combined capital and surplus of at least $50,000,000 or (ii) is an Affiliate of an entity that meets the requirements set forth in clause (i).

 

Section 5.07.                          Representations of the Company.

 

The Company represents and warrants to the Warrant Agent that:

 

(a)         the Company has been duly organized and is validly existing under the laws of the jurisdiction of its incorporation;

 

(b)         this Agreement has been duly authorized, executed and delivered by the Company and is enforceable against the Company in accordance with its terms, except as may be limited by bankruptcy, insolvency, moratorium, reorganization and other similar laws affecting the enforcement of creditors’ rights generally and general equitable principles, regardless of whether such enforceability is considered in a proceeding at law or in equity; and

 

(c)          the execution and delivery of this Agreement does not, and the issuance of the Warrants in accordance with the terms of this Agreement and the Warrant Certificates will not, (i) violate the Company’s certificate of incorporation or by-laws, (ii) violate any law or regulation applicable to the Company or order or decree of any court or public authority having jurisdiction over the Company, or (iii) result in a breach of any material mortgage, indenture, contract, agreement or undertaking to which the Company is a party or by which it is bound, except in the case of (ii) and (iii) for any violations or breaches that would not reasonably be expected to have a material adverse effect on the Company and its subsidiaries, taken as a whole.

 

ARTICLE VI

 

MISCELLANEOUS

 

Section 6.01.                          Persons Benefitting.

 

Nothing in this Agreement is intended or shall be construed to confer upon any Person other than the Company, the Warrant Agent, the Holders and the owners of a beneficial interest in any Global Warrant any right, remedy or claim under or by reason of this Agreement or any part hereof.

 

17

 

Section 6.02.                          Amendment.

 

This Agreement and the Warrants may be amended by the parties hereto without the consent of any Holder for the purpose of curing any ambiguity, or of curing, correcting or supplementing any defective provision contained herein or therein or adding or changing any other provisions with respect to matters or questions arising under this Agreement or the Warrants as the Company, acting in good faith, and the Warrant Agent may deem necessary or desirable; provided that such amendment shall not adversely affect the rights of any of the Holders in any material respect.  Any amendment or supplement to this Agreement or the Warrants, or any waiver hereunder or thereunder, in each case, that has an adverse effect on the interests of any of the Holders or owners of a beneficial interest in a Global Warrant in any material respect shall require the written consent of the Holders of a majority of the then outstanding Warrants.  Notwithstanding anything herein to the contrary and without limitation of the immediately foregoing sentence, the consent of each Holder affected thereby shall be required for any amendment or supplement pursuant to which (i) the Exercise Price would be increased, the Warrant Share Number would be decreased or the kind or amount of other property issuable upon exercise of the Warrants would be changed or decreased, as applicable (in each case, other than pursuant to adjustments provided for in Section 13 of the Warrant Certificate), (ii) the time period during which the Warrants are exercisable would be shortened, (iii) any change adverse to such Holder would be made to the antidilution provisions set forth in Article IV of this Agreement or Section 13 of the Warrant Certificate (including all definitions used therein) (excluding any amendment following a Reorganization, pursuant to Section 13(G) of the Warrant Certificate), (iv) such Holder’s right to exercise the Warrants and receive Shares upon such exercise, or the ability of any Holder or Agent Member (on behalf of itself or any beneficial owner) to enforce such right, would otherwise be materially impaired, or (v) the percentage of Holders required to amend the Warrants or this Agreement or grant a waiver thereunder or hereunder would be reduced.  In determining whether the Holders of the required number of Warrants have concurred in any direction, waiver or consent, Warrants owned by the Company or by any Affiliate of the Company shall be disregarded and deemed not to be outstanding, except that, for the purpose of determining whether the Warrant Agent shall be protected in relying on any such direction, waiver or consent, only Warrants that the Warrant Agent knows are so owned shall be so disregarded.  Also, subject to the foregoing, only Warrants outstanding at the time shall be considered in any such determination.  The Company and the Warrant Agent may set a record date for any such direction, waiver or consent and only the Holders as of such record date shall be entitled to make or give such direction, waiver or consent. The Warrant Agent shall have no duty to determine whether any such amendment or supplement would have an effect on the rights or interests of the holders of the Warrants.  Upon receipt by the Warrant Agent of an Officer’s Certificate and an Opinion of Counsel, each stating that all conditions precedent to the execution of the amendment or supplement have been complied with and such execution is permitted by this Agreement and the Warrant Certificate, the Warrant Agent shall join in the execution of such amendment or supplement; provided that the Warrant Agent may, but shall not be obligated to, execute any such amendment or supplement which affects the rights or changes or increases the duties or obligations of the Warrant Agent. Promptly following execution of any amendment or supplement to this Agreement or the Warrant Certificate, the Company shall send a copy thereof to the Warrant Agent and cause such document to be sent or communicated to the Warrantholders and holders

 

18

 

of a beneficial interest in a Global Warrant in the manner set forth in Section 21 of the Warrant Certificate; provided that failure to deliver such copy to the Warrant Agent or otherwise deliver such document to all Warrantholders or holders of a beneficial interest in a Global Warrant or any defect therein shall not affect the validity of such amendment or supplement. As a condition precedent to the Warrant Agent’s execution of any such amendment or supplement, the Company shall deliver to the Warrant Agent an Officer’s Certificate that states that the proposed amendment or supplement is in compliance with the terms of this Section 6.02.

 

Section 6.03.                          Notices.

 

Any notice or communication shall be in writing and delivered in person, by certified or registered mail, or nationally-recognized courier, or by facsimile or e-mail transmission, if acceptable to the parties, addressed as follows:

 

if to the Company:

 

Arch Coal, Inc.

City Place One

St. Louis, MO 63141

Attention: General Counsel

Telephone: (314) 994-2700

Facsimile: (314) 994-2734

 

with a copy to:

 

Brian M. Resnick

Davis Polk & Wardwell LLP

450 Lexington Avenue

New York, NY 10017

Telephone:  (212) 450-4213

Facsimile:  (212) 701-5213

 

if to the Warrant Agent:

 

American Stock Transfer & Trust Company, LLC

6201 15th Avenue

Brooklyn, NY 11219

Attention:  Corporate Actions

Telephone:  (718) 921-8200

 

The Company or the Warrant Agent by notice to the other may designate additional or different addresses for subsequent notices or communications.

 

Any notice or communication mailed to a Holder shall be mailed to the Holder at the Holder’s address as it appears on the Registry and shall be sufficiently given if so mailed within the time prescribed.  Any notice to the owners of a beneficial interest in a Global Warrant shall be distributed through the Depositary in accordance with the procedures of the Depositary.

 

19

 

Communications to such owners shall be deemed to be effective at the time of dispatch to the Depositary.

 

Failure to provide a notice or communication to a Holder or owner of a beneficial interest in a Global Warrant or any defect in it shall not affect its sufficiency with respect to other Holders or owners of a beneficial interest in a Global Warrant. If a notice or communication is provided in the manner provided above, it is duly given, whether or not the intended recipient actually receives it.

 

Section 6.04.                          Governing Law.

 

This Agreement will be governed by and construed in accordance with the laws of the State of New York applicable to contracts made and to be performed entirely within such State.

 

Section 6.05.                          Successors.

 

All agreements of the Company in this Agreement and the Warrants shall bind its successors and permissible assigns. All agreements of the Warrant Agent in this Agreement shall bind its successors and permissible assigns.

 

Section 6.06.                          Multiple Originals; Counterparts.

 

The parties may sign any number of copies of this Agreement. Each signed copy shall be an original, but all of them together represent the same agreement. One signed copy is enough to prove this Agreement. A signature to this Agreement transmitted electronically shall have the same authority, effect, and enforceability as an original signature.

 

Section 6.07.                          Inspection of Agreement.

 

A copy of this Agreement shall be made available at all reasonable times for inspection by any registered Holder or owner of a beneficial interest in a Global Warrant at the office of the Warrant Agent (or successor warrant agent) designated for such purpose.

 

Section 6.08.                          Table of Contents.

 

The table of contents and headings of the Articles and Sections of this Agreement have been inserted for convenience of reference only, are not intended to be considered a part hereof and shall not modify or restrict any of the terms or provisions hereof.

 

Section 6.09.                          Severability.

 

The provisions of this Agreement are severable, and if any clause or provision shall be held invalid, illegal or unenforceable in whole or in part in any jurisdiction, then such invalidity or unenforceability shall affect in that jurisdiction only such clause or provision, or part thereof, and shall not in any manner affect such clause or provision in any other jurisdiction or any other clause or provision of this Agreement in any jurisdiction.

 

20

 

Section 6.10.         Customer Identification Program.

 

Each Person that is a party hereto acknowledges that the Warrant Agent is subject to the customer identification program (“Customer Identification Program”) requirements under the USA PATRIOT Act and its implementing regulations, and that the Warrant Agent must obtain, verify and record information that allows the Warrant Agent to identify each such Person. Accordingly, prior to accepting an appointment hereunder, the Warrant Agent may request information from any such Person that will help the Warrant Agent to identify such Person, including without limitation, as applicable, such Person’s physical address, tax identification number, organizational documents, certificate of good standing or license to do business. Each Person that is a party hereto agrees that the Warrant Agent cannot accept an appointment hereunder unless and until the Warrant Agent verifies each such Person’s identity in accordance with the Customer Identification Program requirements.

 

Section 6.11.         Confidentiality.

 

The Warrant Agent and the Company agree that all books, records, information and data pertaining to the business of the other party, including inter alia, personal, non-public Warrantholder information, which are exchanged or received pursuant to the negotiation or the carrying out of this Agreement, including the fees for services, shall remain confidential, and shall not be voluntarily disclosed to any other person, except as may be required by law, including, without limitation, pursuant to subpoenas from state or federal government authorities (e.g., in divorce and criminal actions).

 

Section 6.12.         Force Majeure.

 

Notwithstanding anything to the contrary contained herein, the Warrant Agent will not be liable for any delays or failures in performance resulting from acts beyond its reasonable control including, without limitation, acts of God, terrorist acts, shortage of supply, breakdowns or malfunctions, interruptions or malfunction of computer facilities, or loss of data due to power failures or mechanical difficulties with information storage or retrieval systems, labor difficulties, war, or civil unrest.

 

[Remainder of page intentionally left blank]

 

21

 

IN WITNESS WHEREOF, the parties have caused this Warrant Agreement to be duly executed as of the date first written above.

 

	
 
    	
ARCH   COAL, INC.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
by
    	
/s/   Robert G. Jones
    
	
 
    	
 
    	
Name:
    	
Robert   G. Jones
    
	
 
    	
 
    	
Title:
    	
Senior Vice President —   Law, General Counsel and Secretary
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
AMERICAN   STOCK TRANSFER & TRUST COMPANY, LLC,
    
	
 
    	
as   Warrant Agent
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
by
    	
/s/   Paula Caroppoli
    
	
 
    	
Name:
    	
Paula   Caroppoli
    
	
 
    	
Title:
    	
Senior Vice President 
    

 

22

 

EXHIBIT A

 

FORM OF SERIES A WARRANT

 

23

 

FORM OF SERIES A WARRANT

 

[Global Warrant Legend]

 

[UNLESS THIS GLOBAL WARRANT IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), NEW YORK, NEW YORK, TO ARCH COAL, INC. OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY WARRANT CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

 

TRANSFERS OF THIS GLOBAL WARRANT SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR’S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL WARRANT SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE WARRANT AGREEMENT REFERRED TO ON THE REVERSE HEREOF.]

 

NO AFFILIATE OF ARCH COAL, INC. THAT OWNS THIS SECURITY (OR ANY INTEREST HEREIN) MAY SELL THIS SECURITY (OR ANY INTEREST HEREIN) IF UPON SUCH RESALE THIS SECURITY (OR SUCH INTEREST) WOULD CONSTITUTE A “RESTRICTED SECURITY” WITHIN THE MEANING OF RULE 144 UNDER THE SECURITIES ACT OF 1933, AS AMENDED.

 

A-1

 

[GLOBAL][DEFINITIVE] WARRANT
 representing

 

SERIES A WARRANTS

 

to acquire
 shares of 
 Common Stock
 of
 ARCH COAL, INC.

 

	
No.  [     ]
    	
CUSIP No.: 039380 118
    

 

1.             Definitions.  Unless the context otherwise requires, when used herein the following terms shall have the meanings indicated. Any capitalized terms used but not defined herein that are defined in the Warrant Agreement shall have the meanings set forth in the Warrant Agreement.

 

“Affiliate” shall have the meaning ascribed to it in the Warrant Agreement.

 

“Agent Members” shall have the meaning ascribed to it in the Warrant Agreement.

 

“Bankruptcy Code” means title 11 of the United States Code, 11 U.S.C. §§ 101 et seq.

 

“Black Scholes Payment” means, for any Warrant, the lesser of (A) (i) the fair value of such Warrant as determined by the Valuation Bank, based on Black Scholes option pricing inputs selected within one month prior to the public announcement of the relevant Repurchase Reorganization, multiplied by (ii) the Black Scholes Proportion; provided that the volatility input used to determine such fair value in clause (i) shall be the lesser of (x) 50% and (y) the 180-day historical volatility of the Common Stock as shown at the time of determination on Bloomberg or, if such information is not available, as determined in a commercially reasonably manner by the Valuation Bank and (B) (x) the Maximum Payment Amount, multiplied by (y) 59.287452%, multiplied by (z) the Black Scholes Proportion.

 

“Black Scholes Proportion” means a fraction, (x) the numerator of which is the aggregate Fair Market Value of all consideration other than Reporting Stock received by holders of Common Stock comprising the Exchange Property in the relevant Repurchase Reorganization and (y) the denominator of which is the sum of (a) the aggregate Fair Market Value of the Reporting Stock (if any) received as consideration by holders of Common Stock comprising the Exchange Property in the relevant Repurchase Reorganization and (b) the aggregate Fair Market Value of all consideration other than Reporting Stock received by holders of Common Stock comprising the Exchange Property in the relevant Repurchase Reorganization.

 

“Board of Directors” means the board of directors of the Company.

 

“Business Day” shall have the meaning ascribed to it in the Warrant Agreement.

 

A-2

 

“Capital Stock” means (A) with respect to any Person that is a corporation or company, any and all shares, interests, participations or other equivalents (however designated) of capital or capital stock of such Person and (B) with respect to any Person that is not a corporation or company, any and all partnership or other equity interests in such Person.

 

“Charter” means, with respect to any Person, its certificate or articles of incorporation, articles of association, or similar organizational document.

 

“Common Stock” means the Company’s Class A Common Stock, $0.01 par value per share, subject to Section 13(G).

 

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

 

“Confirmation Order” means the Order Confirming Debtors’ Joint Plan of Reorganization under Chapter 11 of the Bankruptcy Code of Arch Coal, Inc., et al., Chapter 11 Case No. 16-40120-705 dated as of September 13, 2016.

 

“Continuing Reorganization” means (x) any Reorganization that is consummated on or after October 5, 2021, (y) any Reorganization that is consummated prior to October 5, 2021 in which Reporting Stock accounts for 90% or more of the Fair Market Value of the relevant Exchange Property or (z) for any Warrant, any Elective Reorganization in respect of which the relevant Warrantholder elects (or is deemed to have elected) for such Warrant to be subject to Section 13(G).

 

“Custodian” shall have the meaning ascribed to it in the Warrant Agreement.

 

“Definitive Warrant” means a Warrant Certificate in definitive form that is not deposited with the Depositary or with the Custodian.

 

“Depositary” means The Depository Trust Company, its nominees and their respective successors.

 

“Determination Date” means, in respect of any exercise of Warrants, the relevant Exercise Date for such exercise.

 

“Elective Reorganization” means any Reorganization that is consummated prior to October 5, 2021 in which Reporting Stock accounts for less than 90% of the Fair Market Value of the relevant Exchange Property.

 

“Exchange” means the principal U.S. national or regional securities exchange on which the Common Stock is then listed or, if the Common Stock is not then listed on a U.S. national or regional securities exchange, the principal other market on which the Common Stock is then traded.

 

“Exchange Act” means the U.S. Securities Exchange Act of 1934, as amended, or any successor statute, and the rules and regulations promulgated thereunder.

 

“Exchange Property” means, with respect to any Reorganization, the cash, securities or other property that the Common Stock is converted into, is exchanged for or becomes the right to receive, in each case, in such Reorganization.

 

“Exercise Date” shall have the meaning ascribed to it in Section 3.

 

A-3

 

“Exercise Notice” means a notice in the form attached hereto as Annex B delivered by the Warrantholder to the Warrant Agent in accordance with Section 6.03 of the Warrant Agreement to exercise the Warrant.

 

“Exercise Period” shall have the meaning ascribed to it in Section 3.

 

“Exercise Price” means $57.00 per Share subject to any adjustment or adjustments in accordance with Section 13.

 

“Expiration Time” shall have the meaning ascribed to it in Section 3.

 

“Fair Market Value” means:

 

(i)            in the case of shares of stock that are listed on a Principal Exchange on the day as of which Fair Market Value is being determined, the daily volume-weighted average price of such stock as reported in composite transactions for United States exchanges and quotation systems for such determination date, as displayed under the heading “Bloomberg VWAP” on the applicable Bloomberg page for such shares in respect of the period from the scheduled open of trading until the scheduled close of trading of the primary trading session on such determination date (or, if such volume-weighted average price is unavailable, the Fair Market Value of such shares as determined pursuant to clause (ii) below); provided that, with respect to any determination of Fair Market Value pursuant to this clause (i), the Company, in its good faith determination, shall make appropriate adjustments to such daily volume-weighted average price to account for any adjustments to the Exercise Price and Warrant Share Number that become effective, or any event requiring any adjustments to the Exercise Price and Warrant Share Number where the ex-date, record date, effective date, expiration date or issuance date, as the case may be, of the event occurs, on such determination date;

 

(ii)           in the case of securities not covered by (i) above, the Fair Market Value of such securities shall be determined by the Valuation Bank, using one or more valuation methods that the Valuation Bank in its best professional judgment determines to be most appropriate, assuming such securities are fully distributed and are to be sold in an arm’s-length transaction and there was no compulsion on the part of any party to such sale to buy or sell and taking into account all relevant factors;

 

(iii)          in the case of cash, the amount thereof; and

 

(iv)          in the case of other property, the Fair Market Value of such property shall be determined by the Valuation Bank, using one or more valuation methods that the Valuation Bank in its best professional judgment determines to be most appropriate, assuming such property is to be sold in an arm’s-length transaction and there was no compulsion on the part of any party to such sale to buy or sell and taking into account all relevant factors.

 

“Global Warrant” means a Warrant Certificate in global form that is deposited with the Depositary or with the Custodian.

 

“Market Disruption Event” means (i) a failure by the Exchange to open for trading during its regular trading session or (ii) the occurrence or existence prior to 1:00 p.m. New York City time on any day on which the Exchange is open for trading for more than one half-hour period in the aggregate during regular trading hours of any suspension or limitation imposed on trading (by reason of movements

 

A-4

 

in price exceeding limits permitted by the Exchange or otherwise) in the Common Stock or in any options contracts or futures contracts relating to the Common Stock.

 

“Maximum Payment Amount” means (I) prior to the first anniversary of the Plan Effective Date (as such term is defined in the Plan Term Sheet), $23.50, (II) on or after the first anniversary of the Plan Effective Date (as such term is defined in the Plan Term Sheet) and prior to the second anniversary of the Plan Effective Date (as such term is defined in the Plan Term Sheet), $20.89, (III) on or after the second anniversary of the Plan Effective Date (as such term is defined in the Plan Term Sheet) and prior to the third anniversary of the Plan Effective Date (as such term is defined in the Plan Term Sheet), $18.28 and (IV) on or after the third anniversary of the Plan Effective Date (as such term is defined in the Plan Term Sheet) and prior to the fifth anniversary of the Plan Effective Date (as such term is defined in the Plan Term Sheet), $15.67.

 

“Net Settlement” shall have the meaning ascribed to it in Section 4(A).

 

“New Warrants” shall have the meaning ascribed to it in Section 13(H).

 

“Person” shall have the meaning ascribed to it in the Warrant Agreement.

 

“Physical Settlement” shall have the meaning ascribed to it in Section 4(A).

 

“Plan Term Sheet” means the “Plan Term Sheet,” In re: Arch Coal, Inc., et al., Case No. 16-40120, agreed to by (i) Arch Coal Inc. and its subsidiaries that are debtors in the relevant chapter 11 proceedings, (ii) holders of more than 66 2/3% of the outstanding principal amount of loans under the credit facility under the Credit Agreement dated as of June 14, 2011, as amended, restated, supplemented or otherwise modified from time to time, among Arch Coal Inc., Wilmington Trust, N.A., as successor administrative agent, the lenders, and the other agents and parties thereto, and (iii) the official committee of unsecured creditors appointed in the relevant chapter 11 cases and certain of its members in their individual capacities.

 

“Principal Exchange” means each of The New York Stock Exchange, The NASDAQ Global Market and The NASDAQ Global Select Market (or any of their respective successors).

 

“Registry” shall have the meaning ascribed to it in the Warrant Agreement.

 

“Reorganization” means any consolidation, merger, statutory share exchange, business combination or similar transaction with a third party, any sale, lease or other transfer to a third party of substantially all of the consolidated assets of the Company and its Subsidiaries, or any recapitalization, reclassification or transaction that results in a change of the Common Stock (other than as described in Section 13(A)), in each case, in which the Common Stock is converted into, is exchanged for or becomes the right to receive cash, securities or other property.

 

“Reporting Stock” means common stock listed on a U.S. national or regional securities exchange or common stock of a company that provides publicly available financial reporting, and holds management calls regarding the same, in each case, no less than quarterly.

 

“Repurchase Reorganization” means, for any Warrant, any Elective Reorganization in respect of which the relevant Warrantholder elects for such Warrant to be subject to Section 13(H).

 

A-5

 

“SEC” means the U.S. Securities and Exchange Commission.

 

“Securities Act” means the U.S. Securities Act of 1933, as amended, or any successor statute, and the rules and regulations promulgated thereunder.

 

“Settlement Date” shall have the meaning ascribed to it in Section 5.

 

“Shares” shall have the meaning ascribed to it in Section 2.

 

“Spin-Off” shall have the meaning ascribed to it in Section 13(D).

 

“Subsidiary” means, with respect to any Person, any corporation, partnership, joint venture, limited liability company or other entity (x) of which such Person or a subsidiary of such Person is a general partner or (y) of which a majority of the voting securities or other voting interests, or a majority of the securities or other interests of which having by their terms ordinary voting power to elect a majority of the board of directors or persons performing similar functions with respect to such entity, is directly or indirectly owned by such Person and/or one or more subsidiaries thereof.

 

“Trading Day” means a day on which (i) no Market Disruption Event occurs and (ii) trading in the Common Stock occurs on the Exchange; provided that if the Common Stock is not so listed or traded, “Trading Day” means a Business Day.

 

“Transfer Agent” means American Stock Transfer & Trust Company, LLC, as transfer agent of the Company, and any successor transfer agent.

 

“Unit of Exchange Property” means, with respect to any Reorganization, the type and amount of Exchange Property that the holder of one share of Common Stock is entitled to receive in such Reorganization.

 

“Valuation Bank” means an independent, nationally recognized investment bank reasonably selected by the Company.

 

“Valuation Period” shall have the meaning ascribed to it in Section 13(D).

 

“Warrant” means a right to acquire a number of shares of Common Stock calculated pursuant to Section 4, which is designated as a Series A Warrant.  References herein to “Warrant” shall include the Global Warrant where the context requires.  For the avoidance of doubt, “Warrant” does not include any other warrants.

 

“Warrant Agent” shall have the meaning ascribed to it in Section 18.

 

“Warrant Agreement” shall have the meaning ascribed to it in Section 18.

 

“Warrant Certificate” means a registered certificate evidencing Warrants.

 

“Warrantholder” means a registered owner of Warrants as set forth in the Registry.

 

“Warrant Share Number” means one, as subsequently adjusted from time to time pursuant to the terms of this Warrant Certificate and the Warrant Agreement.

 

A-6

 

2.             Number of Shares; Exercise Price.  This certifies that, for value received, [Cede & Co.]1[         ]2, and any of its registered assigns, is the registered owner of [the number of Warrants set forth on Annex A hereto]3[         Warrants]4, each of which entitles the Warrantholder, upon exercise thereof pursuant to Section 3, to acquire from the Company a number of fully paid and nonassessable shares of Common Stock (each a “Share” and collectively the “Shares”) calculated pursuant to Section 4.  The Warrant Share Number and the Exercise Price are subject to adjustment as provided herein, and unless otherwise specified, all references to “Warrant Share Number” and “Exercise Price” herein shall be deemed to include any such adjustment or series of adjustments.

 

3.             Exercise of Warrant; Term.  Subject to Section 2, to the extent permitted by applicable laws and regulations, each Warrant is exercisable by the relevant Warrantholder, at any time or from time to time during the Exercise Period by (i) the surrender of such Warrant to the Warrant Agent and the delivery to the Warrant Agent of the Exercise Notice annexed hereto, duly completed and executed (or to the Company or to such other office or agency of the Company in the United States as the Company may designate by notice in writing to the Warrantholders pursuant to Section 21), together with payment for transfer taxes as set forth in Section 8 and (ii) if such Warrantholder validly elects Physical Settlement in accordance with Section 4(A), paying to the Company the applicable Exercise Price. The “Exercise Period” shall commence upon the execution and delivery of this Warrant Certificate by the Company on the date hereof and shall continue up to, and including, the Expiration Time.  The “Expiration Time” shall be 5:00 p.m. New York City time on the seventh anniversary of the date of execution and delivery of this Warrant Certificate or, if such day is not a Business Day, the next succeeding day that is a Business Day.  The “Exercise Date” shall be the date on which a Warrantholder surrenders the Warrant and delivers an Exercise Notice in conformity with this Section 3 and, if applicable, pays the Exercise Price in conformity with this Section 3 (unless such surrender, delivery and payment (if applicable) occur after 5:00 p.m. New York City time on a Business Day or on a date that is not a Business Day, in which event the Exercise Date shall be the next following Business Day).  In the case of a Global Warrant, any person with a beneficial interest in such Global Warrant shall effect compliance with the requirements of this Section 3 through the relevant Agent Members in accordance with the procedures of the Depositary.

 

In the case of a Global Warrant, whenever some but not all of the Warrants represented by such Global Warrant are exercised in accordance with the terms thereof and of the Warrant Agreement, such Global Warrant shall be surrendered by the Warrantholder to the Warrant Agent, which shall cause an adjustment to be made to Annex A to such Global Warrant so that the number of Warrants represented thereby will be equal to the number of Warrants theretofore represented by such Global Warrant less the number of Warrants then exercised.  The Warrant Agent shall thereafter promptly return such Global Warrant to the Warrantholder or its nominee or custodian.  In the case of a Definitive Warrant, whenever some but not all of the Warrants represented by such Definitive Warrant are exercised in accordance with the terms thereof and of the Warrant Agreement, the Warrantholder shall be entitled, at the request of such Warrantholder, to receive from the Company within a reasonable time, and in any event not exceeding five Business Days, a new Definitive Warrant in substantially identical form for the number of Warrants equal to the number of Warrants theretofore represented by such Definitive Warrant less the number of Warrants then exercised.

 

1                                           Include for Global Warrant.

2                                           Include for Definitive Warrant.

3                                           Include for Global Warrant.

4                                          Include for Definitive Warrant.

 

A-7

 

If this Warrant Certificate shall have been exercised in full, the Warrant Agent shall promptly cancel such certificate following its receipt thereof from the Warrantholder or the Depositary, as applicable.

 

Notwithstanding anything in this Warrant Certificate to the contrary, in the case of Warrants evidenced by a Global Warrant, any Agent Member may, without the consent of the Warrant Agent or any other person, on its own behalf and on behalf of any beneficial owner for which it is acting, enforce, and may institute and maintain any suit, action or proceeding against the Company suitable to enforce, or otherwise in respect of, its right to exercise, and to receive Shares for, its Warrants as provided in the Global Warrant, and to enforce the Warrant Agreement.

 

A Warrantholder shall be deemed to own and have all of the rights associated with any Shares or other securities or property to which it is entitled pursuant to this Warrant Certificate as of the close of business on the relevant Determination Date upon the exercise of the Warrants in accordance with this Section 3 and Section 5 below.

 

The Exercise Price in connection with any Physical Settlement of a Warrant may be paid either by wire transfer of immediately available funds to an account designated by the Company or by certified or official bank check or bank cashier’s check payable to the order of the Company or, in respect of a Global Warrant, otherwise in accordance with the applicable procedures of the Depositary.

 

4.             Settlement.

 

(A)          Notwithstanding any provisions herein to the contrary, a Warrantholder that elects to exercise a Warrant shall elect to either (i) pay the applicable Exercise Price in respect of such Warrant to the Company (“Physical Settlement”) or (ii) net settle such Warrant in accordance with Section 4(C) in lieu of paying the Exercise Price (“Net Settlement”), by marking the applicable box in the relevant Exercise Notice or, in respect of a Global Warrant, otherwise in accordance with the applicable procedures of the Depositary.

 

(B)          In the event that a Warrantholder validly elects Physical Settlement in respect of any exercise of any Warrants evidenced by this Warrant Certificate in accordance with Sections 3 and 4(A) hereof, the Warrantholder shall receive, and the Company shall issue to such Warrantholder in accordance with Section 5 below, a number of Shares for each Warrant so exercised equal to the Warrant Share Number (as of the Determination Date).

 

(C)          In the event that Net Settlement applies in respect of any exercise of any Warrants evidenced by this Warrant Certificate in accordance with Sections 3 and 4(A) hereof, the Warrantholder shall receive, and the Company shall issue to such Warrantholder in accordance with Section 5 below, a number of Shares for each Warrant so exercised equal to the greater of (x) zero and (y) “X” as determined pursuant to the following formula:

 

	
X =
    	
Y  x
    	
(A – B)
    
	
 
    	
 
    	
A
    

 

Where:

 

Y = the Warrant Share Number (as of the Determination Date);

 

A-8

 

A = the Fair Market Value of one share of the Common Stock (as of the Determination Date); and

 

B = the Exercise Price (as of the Determination Date).

 

The Company shall make all calculations under this Section 4, and the Warrant Agent shall have no duty or obligation to verify or confirm the Company’s calculations.

 

5.             Issuance of Shares; Authorization; Listing.  Shares issued upon the exercise of Warrants evidenced by this Warrant Certificate shall be (i) issued in such name or names as the exercising Warrantholder may designate and (ii) delivered by the Transfer Agent to such Warrantholder or its nominee or nominees (A) if the Shares are delivered through the facilities of the Depositary, via book-entry transfer crediting the account of such Warrantholder (or the relevant Agent Member for the benefit of such Warrantholder) through the Depositary’s DWAC system (if the Transfer Agent participates in such system), or (B) otherwise in certificated form by physical delivery to the address specified by the Warrantholder in the Exercise Notice.  The Company shall use its commercially reasonable efforts to cause its Transfer Agent to be a participant in the Depositary’s DWAC system.  The Company shall cause the number of full Shares to which such Warrantholder shall be entitled to be so delivered by the Transfer Agent within a reasonable time, and in any event on or prior to the fourth Business Day after the applicable Determination Date (such date of delivery, the “Settlement Date”).

 

The Company hereby represents, warrants and covenants that any Shares issued upon the exercise of Warrants evidenced by this Warrant Certificate in accordance with the provisions of Sections 3, 4 and 5 will be duly and validly authorized and issued, fully paid and nonassessable and free from all liens and charges (other than liens or charges created by a Warrantholder).  The Company agrees that the Shares so issued will be deemed to have been issued to a Warrantholder for all purposes as of the close of business on the applicable Determination Date, notwithstanding that the stock transfer books of the Company may then be closed or certificates representing such Shares may not be actually delivered on such date.  The Company will at all times reserve and keep available, out of its authorized but unissued Common Stock, solely for the purpose of providing for the exercise of Warrants evidenced by this Warrant Certificate, the aggregate Warrant Share Number for all Warrants evidenced by this Warrant Certificate.  The Company will procure, at its sole expense, the listing of the Shares issuable upon exercise of the Warrants evidenced by this Warrant Certificate, subject to issuance or notice of issuance, on all principal stock exchanges on which the Common Stock is then listed or traded.  The Company will use its reasonable best efforts to ensure that the Shares may be issued without violation of any law or regulation applicable to the Company or of any requirement applicable to the Company of any securities exchange on which the Shares are listed or traded.

 

6.             No Fractional Shares or Scrip.  No fractional Shares or scrip representing fractional Shares shall be issued upon any exercise of Warrants evidenced by this Warrant Certificate.  In lieu of any fractional Share to which a Warrantholder would otherwise be entitled upon an exercise of Warrants, such Warrantholder shall be entitled to receive a cash payment equal to the value of such fractional Share based on the Fair Market Value of the Common Stock as of the applicable Determination Date. The number of full Shares that shall be issuable upon an exercise of Warrants by a Warrantholder at any time shall be computed on the basis of the aggregate number of Shares which may be issuable pursuant to the Warrants being exercised by that Warrantholder at that time.  The beneficial owners of the Warrants and the Warrantholder, by their acceptance hereof, expressly agree to receive cash in lieu of any fractional Share in accordance with this Section 6 and hereby waive their right to receive a physical certificate representing such fractional Share upon exercise of any Warrant.

 

A-9

 

Whenever a payment for fractional Shares is to be made by the Warrant Agent under any section of this Warrant Certificate or the Warrant Agreement, the Company shall (i) provide to the Warrant Agent in reasonable detail the facts related to such payments and the prices and/or formulas utilized in calculating such payments, and (ii) provide sufficient monies to the Warrant Agent in the form of fully collected funds to make such payments.

 

7.             No Rights as Stockholders; Transfer Books.  Warrants evidenced by this Warrant Certificate do not entitle the Warrantholder or the owner of any beneficial interest in such Warrants to any voting rights or other rights as a stockholder of the Company prior to the applicable Determination Date.  The Company will at no time close its transfer books against transfer of the Warrants in any manner that interferes with the timely transfer and exercise of the Warrants.

 

8.             Charges, Taxes and Expenses.  Issuance of Shares in certificated or book-entry form to a Warrantholder upon the exercise of Warrants evidenced by this Warrant Certificate shall be made without charge to the Warrantholder for any documentary, stamp or similar issue or transfer taxes (other than any such taxes due because the Warrantholder requests such Shares to be issued in a name other than the Warrantholder’s name) or other incidental expense in respect of the issuance of such Shares, all of which such taxes, if any, and expenses shall be paid by the Company.  The Warrantholder shall pay to the Company a sum sufficient to cover any documentary, stamp or similar issue or transfer taxes due because the Warrantholder requests Shares to be issued in a name other than the Warrantholder’s name, and the Company may refuse to deliver any such Shares until it receives a sum sufficient to pay such taxes.

 

9.             Transfer/Assignment.  Subject to compliance with applicable securities laws and the requirements set forth in the Warrant Agreement, this Warrant Certificate and all rights hereunder are transferable, in whole or in part, upon the books of the Company (or an agent duly appointed by the Company) by the registered holder hereof in person or by duly authorized attorney, and one or more new Warrant Certificates shall be made and delivered by the Company, of the same tenor and date as this Warrant Certificate but registered in the name of one or more transferees, upon surrender of this Warrant Certificate, duly endorsed, to the office or agency of the Company described in Section 3.  All expenses and other charges payable in connection with the preparation, execution and delivery of the new Warrant Certificate pursuant to this Section 9 shall be paid by the Company, except the Warrantholder of the old Warrant Certificate surrendered for transfer shall pay to the Company a sum sufficient to cover any documentary, stamp or similar issue or transfer tax due because the name of the Warrantholder of the new Warrant Certificate issued upon such transfer is different from the name of the Warrantholder of the old Warrant Certificate surrendered for transfer.

 

If this Warrant Certificate is a Global Warrant, then so long as the Global Warrant is registered in the name of the Depositary, (a) the holders of beneficial interests in the Warrants evidenced thereby shall have no rights under this Warrant Certificate with respect to the Global Warrant held on their behalf by the Depositary or the Custodian, and (b) the Depositary may be treated by the Company, the Warrant Agent and any agent of the Company or the Warrant Agent as the absolute owner of the Global Warrant for all purposes whatsoever, except, in each case, to the extent set forth herein.  Accordingly, any such owner’s beneficial interest in the Global Warrant will be shown only on, and the transfer of such interest shall be effected only through, records maintained by the Depositary or the Agent Members, and neither the Company nor the Warrant Agent shall have any responsibility with respect to such records maintained by the Depositary or the Agent Members.  Notwithstanding the foregoing, nothing herein shall (i) prevent the Company, the Warrant Agent or any agent of the Company or the Warrant Agent from giving effect to any written certification, proxy or other authorization furnished by

 

A-10

 

the Depositary or (ii) impair, as between the Depositary and the Agent Members, the operation of customary practices governing the exercise of the rights of a holder of a beneficial interest in any Warrant.  Except as otherwise may be provided in this Warrant Certificate or the Warrant Agreement, the rights of beneficial owners in a Global Warrant shall be exercised through the Depositary subject to the applicable procedures of the Depositary.  Any holder of the Global Warrant shall, by acceptance of the Global Warrant, agree that transfers of beneficial interests in the Global Warrant may be effected only through a book-entry system maintained by the Depositary, and that ownership of a beneficial interest in the Warrants represented thereby shall be required to be reflected in book-entry form.

 

A Global Warrant shall be exchanged for Definitive Warrants, and Definitive Warrants may be transferred or exchanged for a beneficial interest in a Global Warrant, only at such times and in the manner specified in the Warrant Agreement. The holder of a Global Warrant may grant proxies and otherwise authorize any person, including Agent Members and persons that may hold beneficial interests in such Global Warrant through Agent Members, to take any action that a Warrantholder is entitled to take under a Warrant or the Warrant Agreement.

 

10.          Exchange of Warrants.  This Warrant Certificate is exchangeable, upon the surrender hereof by the Warrantholder to the Warrant Agent, for a new Warrant Certificate or Warrant Certificates of like tenor and representing the same aggregate number of Warrants.

 

11.          Compliance with Law.  The Warrants are issued in reliance upon the exemption from the registration requirements of Section 5 of the Securities Act provided by section 1145 of the Bankruptcy Code.  To the extent the Company determines that the exemption from registration provided under section 1145 of the Bankruptcy Code is not available with respect to any issuance or transfer of Warrants, the Warrant Certificates representing such Warrants may be stamped or otherwise imprinted with a legend, and the Registry may include a restrictive notation with respect to such Warrants, in substantially the following form:

 

THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT IN COMPLIANCE THEREWITH.

 

Any legend or restrictive notation referenced in this Section 11 shall be removed from the Warrant Certificates or Registry at any time after the restrictions described in such legend or restrictive notation cease to be applicable; provided that the Company may request from any Warrantholder opinions, certificates or other evidence that such restrictions have ceased to be applicable before removing such legend or restrictive notation.

 

12.          Saturdays, Sundays, Holidays, etc.  If the last or appointed day for the taking of any action or the expiration of any right required or granted herein shall not be a Business Day, then such action may be taken or such right may be exercised on the next succeeding day that is a Business Day.

 

13.          Adjustments and Other Rights.  The Exercise Price and the Warrant Share Number shall be subject to adjustment from time to time as set forth in this Section 13; provided that no single event shall give rise to an adjustment under more than one subsection of this Section 13 (other than in the case of a dividend or other distribution of different types of property, in which case Section 13(A), 13(B), 13(C) or 13(D) shall apply to the appropriate parts of each such dividend or distribution); provided

 

A-11

 

further that any issuance of Common Stock upon exercise of the Warrants shall not itself give rise to any adjustment under this Section 13.

 

(A)          Adjustments upon Certain Transactions.  The Exercise Price and Warrant Share Number shall be adjusted pursuant to the formulas below in the event the Company (i) pays a dividend or makes any other distribution with respect to its Common Stock solely in shares of its Common Stock, (ii) subdivides or reclassifies its outstanding shares of Common Stock into a greater number of shares or (iii) combines or reclassifies its outstanding shares of Common Stock into a smaller number of shares.  Such adjustments shall become effective (x) in the case of clause (i) above, at the open of business on the ex-date for such dividend or distribution or (y) in the case of clause (ii) or (iii) above, at the open of business on the effective date of such event. In the event that a dividend or distribution described in clause (i) above is not so paid or made, the Exercise Price and the Warrant Share Number shall be readjusted, effective as of the date when the Board of Directors determines not to make such dividend or distribution, as the case may be, to be the Exercise Price and the Warrant Share Number that would be in effect if such dividend or distribution had not been declared.

 

	
Ua =
    	
Ub  x
    	
Oa 
    
	
 
    	
 
    	
Ob
    
	
 
    	
 
    	
 
    
	
Pa =
    	
Pb  x
    	
Ob 
    
	
 
    	
 
    	
Oa
    

 

Where:

 

Ub = Warrant Share Number before the adjustment

 

Ua = Warrant Share Number after the adjustment

 

Pb = Exercise Price before the adjustment

 

Pa = Exercise Price after the adjustment

 

Ob = Number of shares of Common Stock outstanding immediately before the transaction in question

 

Oa = Number of shares of Common Stock outstanding immediately after the transaction in question

 

(B)          Certain Rights, Options and Warrants.  The Exercise Price and Warrant Share Number shall be adjusted pursuant to the formulas below in the event the Company issues to all or substantially all holders of the Common Stock any rights, options or warrants (other than in connection with a shareholder rights plan) entitling them, for a period of not more than 60 calendar days after the announcement date of such issuance, to subscribe for or purchase shares of the Common Stock at a price per share that is less than the average of the Fair Market Values of one share of Common Stock for the 10 consecutive Trading Day period ending on, and including, the Trading Day immediately preceding the announcement date of such issuance; provided that the Exercise Price shall not be increased (and Warrant Share Number shall not be decreased) as a result of this Section 13(B).  Such adjustments shall be made

 

A-12

 

successively whenever any such rights, options or warrants are issued and shall become effective at the open of business on the ex-date for such issuance. To the extent that shares of the Common Stock are not delivered after the expiration of such rights, options or warrants, the Exercise Price and the Warrant Share Number shall be readjusted to be the Exercise Price and the Warrant Share Number that would then be in effect had the adjustment with respect to the issuance of such rights, options or warrants been made on the basis of delivery of only the number of shares of Common Stock actually delivered.  In the event that such rights, options or warrants are not so issued, the Exercise Price and the Warrant Share Number shall be readjusted to be the Exercise Price and the Warrant Share Number that would then be in effect if such ex-date had not occurred.  For purposes of this Section 13(B), in determining whether any rights, options or warrants entitle the holders to subscribe for or purchase shares of the Common Stock at less than such average of the Fair Market Values of one share of Common Stock for the 10 consecutive Trading Day period ending on, and including, the Trading Day immediately preceding the announcement date of such issuance, and in determining the aggregate offering price of such shares of Common Stock, there shall be taken into account the Fair Market Value of any consideration received by the Company for such rights, options or warrants and any amount payable on exercise or conversion thereof.

 

	
Ua =
    	
Ub  x
    	
Ob + X
    
	
 
    	
 
    	
Ob + Y
    
	
 
    	
 
    	
 
    
	
Pa =
    	
Pb  x
    	
Ob + Y
    
	
 
    	
 
    	
Ob + X
    

 

Where:

 

Ub = Warrant Share Number before the adjustment

 

Ua = Warrant Share Number after the adjustment

 

Pb = Exercise Price before the adjustment

 

Pa = Exercise Price after the adjustment

 

Ob = Number of shares of Common Stock outstanding immediately before the transaction in question

 

X = Number of shares of Common Stock issuable pursuant to such rights, options or warrants

 

Y = Number of shares of Common Stock equal to the aggregate price payable to exercise such rights, options or warrants, divided by the average of the Fair Market Values of one share of Common Stock over the 10 consecutive Trading Day period ending on, and including, the Trading Day immediately preceding the announcement date of the issuance of such rights, options or warrants

 

(C)          Certain Dividends and Distributions.  If the Company dividends or distributes shares of securities, evidences of indebtedness, assets, cash, rights, options or warrants (other than (i) dividends, distributions or issuances for which an adjustment is made pursuant to Section 13(A) or

 

A-13

 

Section 13(B) and (ii) Spin-Offs as to which the provisions of Section 13(D) below shall apply) to all or substantially all holders of the Common Stock, the Exercise Price and Warrant Share Number shall be adjusted pursuant to the formulas below.  Such adjustments shall become effective at the open of business on the ex-date for such dividend or distribution. In the event that such dividend or distribution is not so paid or made, the Exercise Price and the Warrant Share Number shall be readjusted, effective as of the date when the Board of Directors determines not to make such dividend or distribution, as the case may be, to be the Exercise Price and the Warrant Share Number that would be in effect if such dividend or distribution had not been declared.

 

	
Ua =
    	
Ub  x
    	
M
    
	
 
    	
 
    	
M-D
    
	
 
    	
 
    	
 
    
	
Pa =
    	
Pb  x
    	
M-D 
    
	
 
    	
 
    	
M
    

 

Where:

 

Ub = Warrant Share Number before the adjustment

 

Ua = Warrant Share Number after the adjustment

 

Pb = Exercise Price before the adjustment

 

Pa = Exercise Price after the adjustment

 

M = Average of the Fair Market Values of one share of Common Stock for the 10 consecutive Trading Day period ending on, and including, the Trading Day immediately preceding the ex-date for such dividend or distribution

 

D = Fair Market Value of such dividend or distribution made per share of Common Stock as of the ex-date; provided that if such Fair Market Value is determined by reference to the actual or when-issued trading market for any securities, such determination shall consider the prices in such market over the 10 consecutive Trading Day period ending on, and including, the Trading Day immediately preceding such ex-date

 

(D)          Spin-Offs.  If the Company pays a dividend or makes any other distribution on the Common Stock of shares of Capital Stock of any class or series, or similar equity interest, of or relating to a Subsidiary or other business unit of the Company, that are, or, when issued, will be, listed or admitted for trading on a U.S. national securities exchange (a “Spin-Off”), the Exercise Price and Warrant Share Number shall be adjusted pursuant to the formulas below.  Such adjustments shall become effective at the close of business on the last Trading Day of the 10 consecutive Trading Day period beginning on, and including, the ex-date for such Spin-Off (the “Valuation Period”).

 

	
Ua =
    	
Ub  x
    	
D + M
    
	
 
    	
 
    	
M
    

 

A-14

 

	
Pa =
    	
Pb  x
    	
M
    
	
 
    	
 
    	
D + M
    

 

Where:

 

Ub = Warrant Share Number before the adjustment

 

Ua = Warrant Share Number after the adjustment

 

Pb = Exercise Price before the adjustment

 

Pa = Exercise Price after the adjustment

 

M = Average of the Fair Market Values of one share of Common Stock over the Valuation Period

 

D = Average of the Fair Market Values of such Capital Stock or similar equity interest distributed to holders of the Common Stock applicable to one share of the Common Stock over the Valuation Period

 

If the Determination Date for any exercise of Warrants occurs during the Valuation Period, the reference in the definition of “Valuation Period” to “10” shall be deemed replaced with such lesser number of Trading Days as have elapsed between the ex-date for such Spin-Off and such Determination Date in determining the Exercise Price and Warrant Share Number.

 

(E)           Tender and Exchange Offers.  If a publicly-announced tender or exchange offer made by the Company or any of its Subsidiaries for the Common Stock (other than a Reorganization) shall be consummated, to the extent that the cash and Fair Market Value of any other consideration included in the payment per share of Common Stock exceeds the average of the Fair Market Values of one share of Common Stock over the 10 consecutive Trading Day period ending on, and including, the tenth Trading Day immediately following the date on which such tender or exchange offer is consummated, then the Exercise Price and the Warrant Share Number shall be adjusted pursuant to the formulas below; provided that the Exercise Price shall not be increased (and Warrant Share Number shall not be decreased) as a result of this Section 13(E).  Such adjustments shall be determined at the close of business on the tenth Trading Day immediately following the date on which such tender or exchange offer is consummated, but shall become effective as of the date on which such tender or exchange offer expires.

 

	
Ua =
    	
Ub  x
    	
(Oa x M) + E 
    
	
 
    	
 
    	
Ob x M
    
	
 
    	
 
    	
 
    
	
Pa =
    	
Pb  x
    	
Ob x M
    
	
 
    	
 
    	
(Oa x M) + E
    

 

Where:

 

A-15

 

Ub = Warrant Share Number before the adjustment

 

Ua = Warrant Share Number after the adjustment

 

Pb = Exercise Price before the adjustment

 

Pa = Exercise Price after the adjustment

 

M = Average of the Fair Market Values of one share of Common Stock over the 10 consecutive Trading Day period ending on, and including, the tenth Trading Day immediately following the date on which such tender or exchange offer is consummated

 

E = Aggregate Fair Market Value of all cash and any other consideration paid or payable for shares of Common Stock in such tender or exchange offer

 

Ob = Number of shares of Common Stock outstanding immediately before giving effect to such tender or exchange offer

 

Oa = Number of shares of Common Stock outstanding immediately after giving effect to such tender or exchange offer

 

If the Determination Date for any exercise of Warrants occurs on or after the date on which such tender or exchange offer expires and prior to the tenth Trading Day immediately following the date on which such tender or exchange offer is consummated, references in this Section 13(E) to “tenth Trading Day immediately following the date on which such tender or exchange offer is consummated” shall be deemed replaced by references to such Determination Date and references in this Section 13(E) to “10” shall be deemed replaced with such lesser number of Trading Days as have elapsed between the date on which such tender or exchange offer is consummated and such Determination Date, in each case, in determining the Exercise Price and Warrant Share Number.

 

(F)           Elective Reorganizations.  On or prior to the fifth Business Day immediately following the occurrence of any Elective Reorganization, the Company shall notify each Warrantholder and the Warrant Agent of such occurrence and the related Black-Scholes Payment payable per Warrant pursuant to Section 13(H).  Upon the occurrence of any Elective Reorganization, each Warrantholder shall have the right, on or prior to the tenth Business Day immediately following such occurrence, to elect for such Elective Reorganization to be (x) deemed to be and treated as a Continuing Reorganization, in which case, in connection with such Elective Reorganization, the Warrants held by such Warrantholder shall be governed by Section 13(G) or (y) deemed to be and treated as a Repurchase Reorganization, in which case, in connection with such Elective Reorganization, the Warrants held by such Warrantholder shall be governed by Section 13(H).  If any Warrantholder has not made the election described in the immediately preceding sentence or any Warrantholder exercises its Warrants, in each case, on or prior to the tenth Business Day immediately following the occurrence of any Elective Reorganization, such Warrantholder shall be deemed to have elected for such Elective Reorganization to be deemed to be and treated as a Continuing Reorganization.

 

In the case of any Reorganization that is consummated prior to October 5, 2021 in which holders of Common Stock may make an election as between different types of Exchange Property, for purposes of determining whether such Reorganization is an Elective Reorganization, the Exchange Property shall be deemed to be comprised of (x) the weighted average of the types and amounts of

 

A-16

 

consideration received by the holders of Common Stock that affirmatively make such an election or (y) if less than 5% of the holders of Common Stock affirmatively make such an election, the types and amounts of consideration actually received by the holders of Common Stock.

 

(G)          Continuing Reorganizations.  In the case of any Continuing Reorganization, then, following the effective time of such Continuing Reorganization, a Warrantholder’s right to receive Shares upon exercise of the Warrants evidenced by this Warrant Certificate shall be converted into the right to exercise such Warrants to acquire, with respect to each Share that would have otherwise been deliverable hereunder, one Unit of Exchange Property; provided that if the Exchange Property consists solely of cash, upon the consummation of such Continuing Reorganization, each Warrantholder shall receive, and the Company shall deliver to such Warrantholder, in respect of each Warrant such Warrantholder holds, at the same time and upon the same terms as holders of Common Stock receive the cash in exchange for their shares of Common Stock, an amount of cash equal to the greater of (i) (x) the amount of cash that such Warrantholder would have received if such Warrantholder owned, as of the record date for such Continuing Reorganization, a number of shares of Common Stock equal to the Warrant Share Number in effect on such record date, minus (y) the Exercise Price in effect on such record date multiplied by the Warrant Share Number in effect on such record date and (ii) $0, and upon the Company’s delivery of such cash (if any) in respect of such Warrant, such Warrant shall be deemed to have been exercised in full and canceled. With respect to any exercise of Warrants following the effective time of such Continuing Reorganization, the number of Units of Exchange Property issuable upon exercise of a Warrant shall be calculated pursuant to Section 4; provided that, with respect to each Determination Date following such Continuing Reorganization, each reference in Section 4 to a “Share” or a “share of Common Stock” shall be deemed to refer to a Unit of Exchange Property.

 

In the case of any Continuing Reorganization in which holders of Common Stock may make an election as between different types of Exchange Property, a Warrantholder shall be deemed to have elected to receive upon exercise of the Warrants (x) the weighted average of the types and amounts of consideration received by the holders of Common Stock that affirmatively make such an election or (y) if less than 5% of the holders of Common Stock affirmatively make such an election, the types and amounts of consideration actually received by the holders of Common Stock.  The Company shall not consummate any Continuing Reorganization unless the Company first shall have made appropriate provision to ensure that applicable provisions of this Warrant Certificate (including, without limitation, the applicable provisions of this Section 13) shall immediately after giving effect to such Continuing Reorganization be assumed by and binding on the other party to such Continuing Reorganization (or the surviving entity, successor, parent company and/or issuer of the Exchange Property, as appropriate) and applicable to any Exchange Property deliverable upon the exercise of Warrants, pursuant to a customary assumption agreement.  Any such assumption agreement shall also include any amendments to this Warrant Certificate necessary to effect the changes to the terms of the Warrants described in this Section 13(G) and preserve the intent of the provisions of this Warrant Certificate (including, without limitation, the adjustment provisions in this Section 13).  The provisions of this Section 13(G) shall similarly apply to successive Continuing Reorganizations.

 

The Company shall notify the Warrant Agent of any proposed Reorganization reasonably prior to the consummation thereof so as to provide the Warrantholders with a reasonable opportunity to confirm compliance with the terms hereof and, if they elect, to exercise the Warrants in accordance with the terms and conditions hereof prior to consummation of such Reorganization, and the Company shall cause such notice to be sent or communicated to the Warrantholders and holders of a beneficial interest in a Global Warrant in the manner set forth in Section 21 hereof; provided that in the case of a transaction which requires notice to be given to the holders of the Common Stock, the Warrant Agent and the

 

A-17

 

Warrantholders and holders of a beneficial interest in a Global Warrant shall be provided the same notice given to the holders of the Common Stock.

 

(H)          Repurchase Reorganizations. On or prior to the fifteenth Business Day immediately following the occurrence of any Repurchase Reorganization, the Company shall, upon delivery of the related Warrant Certificate to the Company (x) pay each applicable Warrantholder an amount of cash per Warrant equal to the Black Scholes Payment and (y) to the extent any portion of Exchange Property in respect of such Repurchase Reorganization is comprised of Reporting Stock, exchange such Warrants for new warrants and related warrant certificates (the “New Warrants”) with terms consistent with the terms set forth in this Warrant Certificate and issued under a warrant agreement with terms consistent with the Warrant Agreement, as if Section 13(G) applied to such Warrants; provided that (1) each New Warrant shall relate to a number (which, for the avoidance of doubt, may be less than one) of shares of Reporting Stock that a holder of one share of Common Stock received in the relevant Repurchase Reorganization, multiplied by the Warrant Share Number and (2) the “Exercise Price” of the New Warrants shall be equal to the Exercise Price of the Warrants evidenced by this Warrant Certificate, multiplied by one minus the Black Scholes Proportion.  For the avoidance of doubt, following the occurrence of any Repurchase Reorganization, each applicable Warrantholder shall not be entitled to any payment or delivery, or other rights, with respects to its Warrants, other than as set forth in the immediately preceding sentence.  No Warrants to which this Section 13(H) applies may be exercised during the period beginning on the date that the relevant Warrantholder elects for the relevant Elective Reorganization to be deemed to be and treated as a Repurchase Reorganization and ending on, and including, the fifteenth Business Day immediately following the occurrence of such Elective Reorganization (or, if later, the date on which such Warrantholder delivers the related Warrant Certificate to the Company).

 

The provisions of Section 13(G) above and this Section 13(H) are subject, in all cases, to any applicable requirements under the Securities Act and the Exchange Act and the respective rules and regulations promulgated thereunder. Where there is any inconsistency between the requirements of the Securities Act or the Exchange Act or the rules and regulations promulgated thereunder and the requirements of Section 13(G) above or this Section 13(H), the requirements of the Securities Act and the Exchange Act and the respective rules and regulations promulgated thereunder shall supersede.

 

(I)            Record Owners.  Notwithstanding this Section 13 or any other provision of this Warrant Certificate or the Warrant Agreement, if an adjustment to the Warrant Share Number and the Exercise Price becomes effective on the ex-date for any dividend, distribution or other event, and a Warrantholder that has exercised its Warrants on or after such ex-date and on or prior to the related record date would be treated as the record owner of the shares of Common Stock due upon exercise as of the related Exercise Date as described in Section 3 based on an adjusted Warrant Share Number and Exercise Price for the dividend or distribution corresponding to such ex-date, then, notwithstanding the Warrant Share Number and Exercise Price adjustment provisions in this Section 13, the Warrant Share Number and Exercise Price adjustment relating to the dividend or distribution corresponding to such ex-date shall not be made for such exercising Warrantholder. Instead, such Warrantholder shall be treated as if such Warrantholder were the record owner of the shares of Common Stock without giving effect to the adjustment in question and participate in the related dividend, distribution or other event giving rise to such adjustment.

 

(J)            Certain Other Events.   The Company may make decreases in the Exercise Price and/or increases in the Number of Warrants as the Board of Directors deems advisable in good faith in order to avoid or diminish any income tax to holders of the Common Stock resulting from any dividend

 

A-18

 

or distribution of stock (or rights to acquire stock) or from any event treated as such for income tax purposes.

 

(K)          Shareholder Rights Plans.  If the Company has a shareholder rights plan in effect upon any exercise of Warrants, each share of Common Stock issued upon such exercise shall be entitled to receive the appropriate number of rights, if any, and the certificates representing the Common Stock issued upon such exercise shall bear such legends, if any, in each case as may be provided by the terms of any such shareholder rights plan, as the same may be amended from time to time. However, if, prior to any exercise of Warrants, the rights have separated from the shares of Common Stock in accordance with the provisions of the applicable shareholder rights plan, the Exercise Price and Warrant Share Number shall be adjusted at the time of separation as if the Company made a distribution of the type for which an adjustment is made pursuant to Section 13(C), subject to readjustment in the event of the expiration, termination or redemption of such rights.

 

(L)           Rounding of Calculations; Minimum Adjustments.  All calculations under this Section 13 shall be made to the nearest one-tenth (1/10th) of a cent or to the nearest one-hundredth (1/100th) of a share, as the case may be. Any provision of this Section 13 to the contrary notwithstanding, no adjustment in the Exercise Price or the Warrant Share Number shall be made if the amount of such adjustment would be less than $0.01 or one-tenth (1/10th) of a share of Common Stock, but any such amount shall be carried forward and an adjustment with respect thereto shall be made at the time of and together with any subsequent adjustment which, together with such amount and any other amount or amounts so carried forward, shall aggregate $0.01 or 1/10th of a share of Common Stock, or more, or upon exercise of a Warrant if it shall earlier occur.

 

(M)         Notice of Adjustment.  Whenever the Warrant Share Number, the number of shares of stock or property other than Common Stock issuable upon the exercise of the Warrants or the Exercise Price is adjusted, or the type of securities or property to be delivered upon exercise of the Warrants is changed, as herein provided, the Company shall deliver to the Warrant Agent a notice of such adjustment or adjustments and shall deliver to the Warrant Agent a statement setting forth the Warrant Share Number, the number and type of shares of stock or property other than Common Stock issuable upon the exercise of a Warrant and the Exercise Price after such adjustment, setting forth a brief statement of the facts requiring such adjustment and setting forth the computation by which such adjustment was made, and the Company shall cause such notice and statement to be sent or communicated to the Warrantholders and holders of a beneficial interest in a Global Warrant in the manner set forth in Section 21 hereof.  Any failure by the Company to deliver such notice or statement shall not affect the validity of the relevant adjustments.

 

(N)          Notice of Action.  In the event that the Company shall propose to take any action of the type described in this Section 13 (but only if the action of the type described in this Section 13 would result in an adjustment in the Exercise Price or the Warrant Share Number or a change in the type of securities or property to be delivered upon exercise of a Warrant), the Company shall deliver to the Warrant Agent a notice and shall cause such notice to be sent or communicated to the Warrantholders and holders of a beneficial interest in a Global Warrant in the manner set forth in Section 21 hereof, which notice shall specify the record date, if any, with respect to any such action and the approximate date on which such action is to take place. Such notice shall also set forth the facts with respect thereto as shall be reasonably necessary to indicate the effect on the Exercise Price and the number, kind or class of shares or other securities or property which shall be deliverable upon exercise of a Warrant. In the case of any action which would require the fixing of a record date, such notice shall be given at least 10 days prior to the date so fixed, and in case of all other action, such notice shall be given at least 15 days prior to the

 

A-19

 

taking of such proposed action. Failure to give such notice, or any defect therein, shall not affect the legality or validity of any such action.

 

(O)          Adjustment Rules.  If an adjustment in the Exercise Price made hereunder would reduce the Exercise Price to an amount below $0.01 then such adjustment in the Exercise Price made hereunder shall reduce the Exercise Price to $0.01 and not lower.

 

(P)           Proceedings Prior to Any Action Requiring Adjustment.  As a condition precedent to the taking of any action which would require an adjustment pursuant to this Section 13, the Company shall take any action which may be necessary, including obtaining regulatory, New York Stock Exchange, NASDAQ Global Market, NASDAQ Global Select Market or other applicable national securities exchange or stockholder approvals or exemptions, in order that the Company may thereafter validly and legally issue as fully paid and nonassessable all Shares that a Warrantholder is entitled to receive upon exercise of a Warrant pursuant to Section 4, after giving effect to the adjustment that would be made under this Section 13.

 

14.          Notice of Dividends and Distributions.  At any time when the Company declares any dividend or other distribution on the Common Stock and the Common Stock is not listed on a national securities exchange, it shall give notice to the Warrant Agent of any such declaration not less than 15 days prior to the related record date for payment of the dividend or distribution so declared and shall cause such notice to be sent or communicated to the Warrantholders and holders of a beneficial interest in a Global Warrant in the manner set forth in Section 21 hereof.

 

15.          No Impairment.  The Company will not, by amendment of its Charter or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms to be observed or performed hereunder by the Company, but will at all times in good faith assist in the carrying out of all the provisions of this Warrant Certificate and in taking of all such action as may be necessary or appropriate in order to protect the rights of the Warrantholders.

 

16.          Governing Law.  This Warrant Certificate and the Warrants evidenced hereby will be governed by and construed in accordance with the laws of the State of New York applicable to contracts made and to be performed entirely within such State.

 

17.          Binding Effect; Countersignature by Warrant Agent.  This Warrant Certificate shall be binding upon any successors or assigns of the Company.  This Warrant Certificate shall not be valid until an authorized signatory of the Warrant Agent (as defined below) or its agent as provided in the Warrant Agreement (as defined below) countersigns this Warrant Certificate. Such signature shall be solely for the purpose of authenticating this Warrant Certificate and shall be conclusive evidence that this Warrant Certificate has been countersigned under the Warrant Agreement.

 

18.          Warrant Agreement; Amendments.  This Warrant Certificate is issued under and in accordance with a Warrant Agreement dated as of October 5, 2016 (the “Warrant Agreement”), between the Company and American Stock Transfer & Trust Company, LLC (the “Warrant Agent,” which term includes any successor Warrant Agent under the Warrant Agreement), and is subject to the terms and provisions contained in the Warrant Agreement, to all of which terms and provisions the beneficial owners of the Warrants and the Warrantholders consent by acceptance hereof.  The Warrant Agreement is hereby incorporated herein by reference and made a part hereof.  Reference is hereby made to the Warrant Agreement for a statement of the respective rights, limitations of rights, duties and

 

A-20

 

obligations of the Company, the Warrant Agent and the Warrantholders and beneficial owners of the Warrants.  A copy of the Warrant Agreement may be obtained for inspection by the Warrantholders upon written request to the Warrant Agent at the address of the Warrant Agent (or successor warrant agent) set forth in the Warrant Agreement.  The Warrant Agreement and this Warrant Certificate may be amended and supplemented and the observance of any term of the Warrant Agreement or this Warrant Certificate may be waived only to the extent provided in the Warrant Agreement or this Warrant Certificate.

 

19.          Prohibited Actions.  The Company agrees that it will not take any action which would entitle the Warrantholders to an adjustment of the Exercise Price if the aggregate Warrant Share Number after such action for the Warrants evidenced by this Warrant Certificate, together with all shares of Common Stock then outstanding and all shares of Common Stock then issuable upon the exercise of, or underlying, all outstanding options, warrants, conversion and other rights (without duplication), would exceed the total number of shares of Common Stock then authorized by its Charter.

 

20.          Reports to Warrantholders. In the event that the shares of Common Stock underlying the Warrants are deregistered or become otherwise not subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act, the Company will provide to the Warrantholders, on a continuous basis for so long as any Warrants remain outstanding, any and all quarterly and annual financial and other information with respect to the Company and its Subsidiaries as is provided to the holders of the Common Stock, in each case, in the form in which such information is so provided to the holders of the Common Stock (which may include, without limitation, posting such information to the Company’s public website or a password-protected website created by the Company for such purpose).

 

21.          Notices.  Any notice or communication mailed to the Warrantholders shall be mailed to each Warrantholder at the Warrantholder’s address as it appears in the Registry and shall be sufficiently given if so mailed within the time prescribed.  Any notice to holders of a beneficial interest in a Global Warrant shall be distributed through the Depositary in accordance with the procedures of the Depositary.  Communications to such holders shall be deemed to be effective at the time of dispatch to the Depositary.

 

A-21

 

IN WITNESS WHEREOF, the Company has caused this Warrant Certificate to be duly executed by a duly authorized officer.  This Warrant Certificate shall not be valid or obligatory for any purpose until it shall have been countersigned by the Warrant Agent.

 

Dated:  [          ]

 

	
 
    	
ARCH COAL, INC.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Countersigned by: 
    
	
 
    	
 
    
	
 
    	
AMERICAN STOCK   TRANSFER & TRUST COMPANY, LLC, as Warrant Agent
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Authorized Signatory
    

 

[SIGNATURE PAGE TO WARRANT CERTIFICATE]

 

A-22

 

ANNEX A

 

[Annex A to Global Warrant]5

 

The initial number of Warrants represented by this Global Warrant is [        ].

 

The following decreases in the number of Warrants represented by this Global Warrant have been made as a result of the exercise, cancellation, exchange or redemption of certain Warrants represented by this Global Warrant:

 

	
Date of Exercise/
   Cancellation/
   Exchange
   of Warrants
    	
 
    	
Number of
   Warrants
   Exercised/
   Canceled/
   Exchanged
    	
 
    	
Total Number of
   Warrants Represented
   Hereby Following Such
   Exercise/
   Cancellation/
   Exchange
    	
 
    	
Notation Made
   by Warrant
   Agent/Custodian
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    

 

5              Include for Global Warrant.

 

A-A-1

 

ANNEX B

 

FORM OF EXERCISE NOTICE

 

(TO BE EXECUTED ONLY UPON EXERCISE OF SERIES A WARRANTS)

 

DATE:           , 20     

 

	
TO:
    	
American Stock Transfer & Trust Company,   LLC
    
	
 
    	
6201 15th Avenue
    
	
 
    	
Brooklyn, NY 11219
    
	
 
    	
Attention: Corporate Actions
    
	
 
    	
 
    
	
RE:
    	
Election to Purchase Common Stock
    

 

The undersigned registered holder of [                    ] Series A Warrants irrevocably elects to exercise the number of Series A Warrants set forth below represented by the Global Warrant (or, in the case of a Definitive Warrant, the Warrant Certificate enclosed herewith), and surrenders all right, title and interest in the number of Series A Warrants exercised hereby to the Company, and directs that the shares of Common Stock or other securities or property delivered upon exercise of such Series A Warrants, and any interests in the Global Warrant or Definitive Warrant representing unexercised Series A Warrants, be registered or placed in the name and at the address specified below and delivered thereto.

 

	
Number of Series A   Warrants:
    	
 
    	
 
    

 

 

	
 
    	
Warrantholder:
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    
				

 

 

	
Settlement:
    	
 ̈ Physical Settlement and payment of $                by wire transfer of immediately available funds
    
	
 
    	
 
    	
 
    
	
 
    	
 ̈ Physical Settlement and payment of $                by certified or official bank or bank cashier’s check
    
	
 
    	
 
    	
 
    
	
 
    	
 ̈ Net Settlement
    

 

 

Signature guaranteed by*:

 

* The signature must correspond with the name as written upon the face of the within Warrant Certificate in every particular, without alteration or enlargement or any change whatever, and must be guaranteed by a participant in a Medallion Signature Guarantee Program at a guarantee level reasonably acceptable to the Company’s transfer agent.

 

A-B-1

 

Securities and/or check to be issued to:

 

If in book-entry form through the Depositary:

 

	
Depositary Account   Number:
    	
 
    	
 
    
	
 
    
	
Name of Agent Member:
    	
 
    	
 
    
					

 

If in definitive form:

 

	
Social   Security Number
    
	
or Other Identifying   Number:
    	
 
    	
 
    
	
 
    
	
Name:
    	
 
    	
 
    
	
 
    
	
Street Address:
    	
 
    	
 
    
	
 
    
	
City, State and Zip   Code:
    	
 
    	
 
    
									

 

Any unexercised Series A Warrants evidenced by the exercising Warrantholder’s interest in the Global Warrant or Definitive Warrant, as the case may be, to be issued to:

 

If in book-entry form through the Depositary:

 

	
Depositary Account   Number:
    	
 
    	
 
    
	
 
    
	
Name of Agent Member:
    	
 
    	
 
    
					

 

If in definitive form:

 

	
Social   Security Number 
    
	
or Other Identifying   Number:
    	
 
    	
 
    
	
 
    
	
Name:
    	
 
    	
 
    
	
 
    
	
Street Address:
    	
 
    	
 
    
	
 
    
	
City, State and Zip   Code:
    	
 
    	
 
    
									

 

A-B-2

 

ANNEX C

 

Form of Assignment

 

For value received, the undersigned registered Warrantholder of the within Warrant Certificate hereby sells, assigns and transfers unto the Assignee(s) named below (including the undersigned with respect to any Series A Warrants constituting a part of the Series A Warrants evidenced by the within Warrant Certificate not being assigned hereby) all of the right, title and interest of the undersigned under the within Warrant Certificate with respect to the number of Series A Warrants set forth below and does irrevocably constitute and appoint [           ], the undersigned’s attorney, to make such transfer on the books of the Company maintained for the purpose, with full power of substitution in the premises.

 

	
Name of Assignees
    	
 
    	
Address
    	
 
    	
Number of Warrants
    	
 
    	
Social Security
   Number or other
   Identifying Number
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    

 

 

Dated:

 

 

	
 
    	
Holder:
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    

 

 

Signature guaranteed by*:

 

* The signature must correspond with the name as written upon the face of the within Warrant Certificate in every particular, without alteration or enlargement or any change whatever, and must be guaranteed by a participant in a Medallion Signature Guarantee Program at a guarantee level reasonably acceptable to the Company’s transfer agent.

 

A-C-1

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00263-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00263-of-00352.parquet"}]]