Document:

exv10w44

 

EXHIBIT 10.44

EXECUTION COPY

EMPLOYMENT AGREEMENT

     EMPLOYMENT AGREEMENT, dated as of March 26, 2007 (this “Agreement”), between American Railcar
Industries, Inc., a Delaware corporation (the “Company”) and Mr. Alan C. Lullman (the “Employee”),
having a current address at 13303 Cross Land Drive, Town & Country, Missouri 63131.

1. Employment

(a) Upon the terms and conditions hereinafter set forth, the Company hereby agrees to employ the
Employee and the Employee hereby agrees to become so employed. During the Term of Employment (as
hereinafter defined), the Employee shall be employed in the position of Senior Vice President,
Sales, Marketing & Services of the Company, reporting to James J. Unger, Chief Executive Officer of
the Company and the Board of Directors of the Company (the “Board”), and as an officer of
subsidiaries of the Company as specified and directed by the Board from time to time, and shall
perform such duties, consistent with such status and position, as are specified from time to time
by, and shall serve in such capacities at the pleasure of, the Company and the Board, subject to
the terms hereof.

(b) During the Term of Employment (as hereinafter defined), the Employee shall devote all of his
professional attention, on a full time basis, to the business and affairs of the Company and shall
use his best efforts to advance the best interest of the Company and shall comply with all of the
policies of the Company, including, without limitation, such policies with respect to legal
compliance, conflicts of interest, confidentiality and business ethics as are from time to time in
effect.

(c) During the Term of Employment, the Employee shall not directly or indirectly render services
to, or otherwise act in a business or professional capacity on behalf of or for the benefit of, any
other “Person” (as defined below) as an employee, advisor, member of a board or similar governing
body, independent contractor, agent, consultant, representative or otherwise, whether or not
compensated. “Person” or “person”, as used in this Agreement, means any individual, partnership,
limited partnership, corporation, limited liability company, trust, estate, cooperative,
association, organization, proprietorship, firm, joint venture, joint stock company, syndicate,
company, committee, government or governmental subdivision or agency, or other entity.

2. Term

The employment period of the Employee hereunder shall commence on January 1, 2007, and shall
continue through December 31, 2009 (December 31, 2009 being the “Expiration Date”), unless earlier
terminated as set forth in this Agreement.

 

 

3. Compensation

For all services to be performed by the Employee under this Agreement, during the Term of
Employment, the Employee shall be compensated in the following manner:

     (a) Base Compensation

The Company will pay the Employee a salary (the “Base Salary”) at an annual rate of $250,000 per
full 365-day year. The Base Salary shall be payable in accordance with the normal payroll practice
of the Company. The Base Salary will be reviewed periodically by the Board of Directors as is
customary with other officers. Following such review, the Board of Directors may, at its absolute
and sole discretion, increase (but shall not be required to increase) the Base Salary or other
benefits.

     (b) Bonus Compensation

The Company will pay the Employee an annual bonus for each calendar year of employment ending on or
after December 31, 2007, calculated based on the achievement of objective performance targets for
the Company to be set by the Board (or a committee thereof) not later than March 31 for each such
calendar year, of up to 50% of Base Salary, if such performance targets are met. The compensation
payable as contemplated in the preceding sentence of this section 3(b) is referred to herein as
“Bonus Compensation”. The Bonus Compensation in respect of any calendar year shall be paid no
later than March 15 of the following calendar year or such later day as permissible under Section
409A of the Internal Revenue Code of 1986, as amended from time to time, (the “Code”) and the
guidance issued thereunder from time to time, but in any event no later than promptly following
completion of the audited financial statements of the Company for the calendar year in question
(such date, the “Bonus Payment Date”).

 

 

     (c) Taxes

All amounts paid to the Employee under or pursuant to this Agreement, including, without
limitation, the Base Salary and any Bonus Compensation, if any, any other compensation or benefits,
whether in cash or in kind, shall be subject to normal federal, state and, if applicable, local or
foreign tax withholding and deductions imposed by any one or more federal, state, local and or
foreign governments, or pursuant to any foreign or domestic applicable law, rule or regulation.

4. Benefits.

During the Term of Employment, and in addition to any benefits and perquisites to which the
Employee is otherwise entitled pursuant to this Agreement, the Employee shall be entitled to
receive healthcare, group term life insurance, group long-term disability insurance, 401(k)
participation, vacation, and other similar employee benefits at least equal to those currently or
subsequently received by other senior employees of the Company as such may be provided by the
Company in its sole and absolute discretion from time to time. In addition, during the Term of
Employment, the Employee shall be entitled to reimbursement for the reasonable use of an automobile
and for the payment of reasonable athletic club dues (but, not including initiation fees) on terms
consistent to those received by other senior employees of the Company.

5. Termination

This Agreement shall terminate (subject to Section 9(f) below) and the Term of Employment and the
employment of Employee hereunder shall end, on the first to occur of any of the following (each a
“Termination Event”):

	 	(a)	 	The Expiration Date;
	 
	 	(b)	 	The: (i) death of the Employee or (ii) reasonable determination of the Board,
which determination shall be reached in consultation with appropriate medical
professionals, that the Employee has become physically or mentally incapacitated so as
to be unable to perform the essential functions of Employee’s duties to the Company for
60 consecutive days, even with reasonable accommodation, (the “Disability);
	 
	 	(c)	 	The discharge of the Employee by the Company with or without Cause; or
	 
	 	(d)	 	the resignation of the Employee for Good Reason (without limiting the effect of
such resignation, the Employee agrees to provide the Company not less than 30 days
prior written notice of such resignation.

The Company may discharge the Employee at any time, for any reason or no reason, with or without
Cause. As used herein, “Cause” is defined as the Employee’s: (i) failure to perform substantially
the duties of the Senior Vice President, Sales, Marketing & Services of the Company (other than any
such failure resulting from incapacity due to Disability), (ii) charged with any crime other than
traffic violations, (iii) engagement in an act of fraud or of willful dishonesty towards the
Company, (iv) material breach of this Agreement, (v) willful misconduct or gross negligence in the
performance of Employee’s duties hereunder, or (vi) violation of a federal or state securities law
or

 

 

regulation. As used herein, “Good Reason” means the occurrence of any one or more of the following
events without the express consent of the Employee: (i) a material breach by Company of its
obligations under this Agreement, (ii) a material diminution in Employee’s position of duties of
Senior Vice President, Sales, Marketing and Services of the Company as set forth in this Agreement,
(iii) any reduction in Employee’s Base Salary or benefits, or (iv) any relocation of Employee’s
assigned workplace to an area outside of the greater St. Louis metropolitan area. A Good Reason
shall not exist until the Company has first failed to cure such failure or breach within thirty
days of having been given written notice of such failure or breach by the Employee. To the extent
the Employee is discharged or resigns, or is otherwise terminated or is deemed terminated, in each
case as provided herein, from his position with the Company, he shall be and be deemed to have
ceased his employment in the same manner with all of the subsidiaries of the Company.

6. Effect of Termination

In the event of termination of the Employee’s employment hereunder, all rights of the Employee
under this Agreement, including all rights to compensation, shall end and the Employee shall only
be entitled to be paid the amounts set forth in this Section 6 below; provided,
that, the obligations of the Company to make any payment required pursuant to this Section
6 (other than (x) any amounts of the Employee’s Base Salary previously earned and accrued and (y)
in accordance with the Company’s policy, unreimbursed business expenses of the Employee, ((x) and
(y) collectively, the “Accrued Obligations”), but with the exception of the Accrued Obligations
being payable under clause (c) below), is conditioned upon (i) execution and delivery by the
Employee to the Company of a settlement and release agreement in favor of the Company, its
affiliates and their respective officers, directors, employees, agents and equity holders in
respect of the Employee’s employment with the Company and the termination thereof in form
substantially as set forth in Exhibit A, attached hereto, and (ii) such agreement, once executed by
the Employee and delivered to the Company, becomes irrevocable, enforceable and final under the
applicable law.

	 	(a)	 	In the event that the Employee’s employment is terminated for the reason set
forth in Section 5(a) above (i.e., Expiration Date), then, in lieu of any other
payments of any kind (including without limitation, any severance payments), the
Employee shall be entitled to receive, within thirty (30) days following the date on
which the Termination Event in question occurred (the “Clause (a) Termination Date”)
(or, in the case of any Bonus Compensation, as soon as practicable following the
calculation thereof):

	 	(i)	 	the Employee’s Accrued Obligations, due and unpaid to the
Employee from the Company as of the Clause (a) Termination Date; and
	 
	 	(ii)	 	any amounts of Bonus Compensation earned and due in respect of a
completed calendar year, which remains unpaid to the Employee as of the Clause
(a) Termination Date.

	 	(b)	 	In the event that the Employee’s employment is terminated for the reason set
forth in Section 5(b) above (i.e., death or Disability), then, in lieu of any other
payments of

 

 

	 	 	 	any kind (including without limitation, any severance payments), the Employee shall
be entitled to receive, within thirty (30) days following the date on which the
Termination Event in question occurred (the “Clause (b) Termination Date”) (or, in
the case of any Bonus Compensation, as soon as practicable following the calculation
thereof):

	 	(i)	 	the Employee’s Accrued Obligations, due and unpaid to the
Employee from the Company as of the Clause (b) Termination Date;
	 
	 	(ii)	 	any amounts of Bonus Compensation earned and due with respect to
a completed calendar year, which remains unpaid to the Employee as of the Clause
(b) Termination Date; and
	 
	 	(iii)	 	a pro-rated portion of the Bonus Compensation computed as set
forth below.

	 	(c)	 	In the event that the Employee’s employment is terminated due to the discharge
of the Employee by the Company without Cause (which the Company is free to do at any
time in its sole and absolute discretion) or the Employee’s termination of this
Agreement for Good Reason, then, in lieu of any other payments of any kind (including,
without limitation, any severance payments), the Employee shall be entitled to receive,
within thirty (30) days following the date on which the Termination Event in question
occurred (the “Clause (c) or (d) Termination Date”) (other than in the case of (iv),
which shall be paid in accordance with normal payroll practice of the Company or, in
the case of any Bonus Compensation, as soon as practicable following the calculation
thereof):

	 	(i)	 	the Employee’s Accrued Obligations, due and unpaid to the
Employee from the Company as of the Clause (c) or (d) Termination Date;
	 
	 	(ii)	 	any amounts of Bonus Compensation earned and due with respect to
a completed calendar year, which remains unpaid to the Employee as of the Clause
(c) or (d) Termination Date;
	 
	 	(iii)	 	a pro-rated portion of the Bonus Compensation computed as set
forth below; and
	 
	 	(iv)	 	a continuation of the payment, in accordance with the normal
payroll practice of the Company, of amounts of Base Salary that the Employee
would have earned through the Expiration Date had he continued to be employed by
the Company through the Expiration Date.

	 	(d)	 	In the event of any termination of the Employee’s employment, the Employee
shall be under no obligation to seek other employment, but in the event the Employee
becomes employed following any such termination, the Company shall be entitled to an
offset of the payments paid or to be paid under clause (iv) of Section 6(c) above,

 

 

	 	 	 	on account of any remuneration or other benefit attributable to any subsequent
employment that the Employee may obtain. The Employee shall correctly disclose to
the Company all such remuneration or other benefit, and if there is a written
employment agreement in connection therewith, provide the Company with a copy
thereof.
	 
	 	(e)	 	For the purpose of this Section 6, any Bonus Compensation shall be deemed to be
earned and to become due and payable with respect to any calendar year only if the Term
of Employment has continued through December 31, of such year and, with respect to the
amounts, if any, of such Bonus Compensation for any year, shall be determined based
upon the level of attainment of the applicable performance targets for such year. In
the event that, pursuant to the terms of this Section 6, the Employee is entitled to
receive any pro rated Bonus Compensation, such pro ration shall be determined following
December 31 of the calendar year in which the Employee ceases to be employed hereunder,
but shall be paid no later than the following Bonus Payment Date, and shall be
calculated by multiplying the Bonus Compensation that would have been deemed earned and
to become due and payable in accordance with the terms of this Agreement with respect
to the calendar year in which the Employee ceases to be employed hereunder if the Term
of Employment had continued through December 31 of such year as determined based upon
the applicable performance targets for such year, by a fraction, the numerator of which
is the number of days from (and including) January 1 of such year through (and
including) the last day of employment hereunder, and the denominator of which is 365.

7. Non-Disclosure

During the Term of Employment and at all times thereafter, the Employee shall hold in a fiduciary
capacity for the benefit of the Company and each of its affiliates, all secret or confidential
information, knowledge or data, including, without limitation, trade secrets, sources of supplies
and materials, customer lists and their identity, designs, production and design techniques and
methods, identity of investments, identity of contemplated investments, business opportunities,
valuation models and methodologies, processes, technologies, and any other intellectual property
relating to the business of the Company or its affiliates, and their respective businesses, (i)
obtained by the Employee during the Employee’s employment by the Company and any of the
subsidiaries of the Company and (ii) not otherwise in the public domain, (“Confidential
Information”). The Employee also agrees to keep confidential and not disclose any personal
information regarding any controlling Person of the Company, including Carl C. Icahn, or any of its
or his affiliates and their employees, and any member of the immediate family of any such Person
(and all such personal information shall be deemed “Confidential Information” for the purposes of
this Agreement). The Employee shall not, without the prior written consent of the Company (acting
at the direction of the Board): (i) except to the extent compelled pursuant to the order of a court
or other body having jurisdiction over such matter or based upon the advice of counsel that such
disclosure is legally required, communicate or divulge any Confidential Information to anyone other
than the Company and those designated by the Company; or (ii) use any Confidential Information for
any purpose other than the performance of his duties pursuant to this Agreement. The Employee will
assist the Company or its designee, at the

 

 

Company’s expense, in obtaining a protective order, other appropriate remedy or other reliable
assurance that confidential treatment will be accorded any Confidential Information disclosed
pursuant to the terms of this Agreement.

All processes, know-how, technologies, trade-secrets information, intellectual property and
inventions (collectively, “Inventions”) conceived, developed, invented, made or found by the
Employee, alone or with others, during the Term of Employment and out of the performance of his
duties and responsibilities hereunder, whether or not patentable and whether or not on the
Company’s or any of its subsidiaries’ time or with the use of the Company’s or any of its
subsidiaries’ facilities or materials, shall be the property of the Company or its respective
subsidiary, as the case may be, and shall be promptly and fully disclosed by the Employee to the
Company. The Employee shall perform all necessary acts (including, without limitations, executing
and delivering any confirmatory assignments, power of attorney, documents, or instruments requested
by the Company or any of its subsidiaries) to vest title to any such Invention in the Company or
the applicable subsidiary and to enable the Company or the applicable subsidiary, at their expense,
to secure and maintain domestic and/or foreign patents or any other rights for such Inventions.

All right, title and interest in all copyrightable material that the Employee shall conceive or
originate individually or jointly or commonly with others, and that arise during the term of his
employment with the Company and out of the performance of his duties and responsibilities under
this Agreement, shall be the property of the Company and are hereby assigned by the Employee to the
Company, along with ownership of any and all copyrights in the copyrightable material. Upon
request and without further compensation therefor, but at no expense to the Employee, the Employee
shall execute any and all papers and perform all other acts necessary to assist the Company to
obtain and register copyrights on such materials in any and all countries. Where applicable, works
of authorship created by the Employee for the Company in performing his duties and responsibilities
hereunder shall be considered “works made for hire,” as defined in the U.S. Copyright Act.

8. Non-Compete and Non-Solicitation

	 	(a)	 	In addition to, and not in limitation of, all of the other terms and provisions
of this Agreement, the Employee agrees that during the Term of Employment, the Employee
will comply with the provisions of Section 1 above.
	 
	 	(b)	 	Unless the Employee’s employment is terminated by the Company without Cause,
for the later of (i) a period of one (1) year following the last day of the Term of
Employment or (ii) the period during which the Company continues to pay Base Salary to
the Employee after termination of employment under Section 6(c)(iv), the Employee will
not, either directly or indirectly, as principal, agent, owner, employee, director,
partner, investor, shareholder (other than solely as a holder of not more than 1% of
the issued and outstanding shares of any public corporation), consultant, advisor or
otherwise howsoever own, operate, carry on or engage in the operation of or have any
financial interest in or provide, directly or indirectly, financial assistance to or
lend money to or guarantee the debts or obligations of any Person carrying on or
engaged in any business that is similar to or competitive with the business conducted

 

 

	 	 	 	by the Company or any of its subsidiaries during or on the date of termination of
Employee’s employment. The business of manufacturing, selling and/or distributing
railcars and railcar parts and other related products shall be and be deemed to be
“competitive” with the business conducted by the Company for the purposes hereof.
	 
	 	(c)	 	The Employee covenants and agrees with the Company and its subsidiaries that,
during the Term of Employment and for the later of (i) one (1) year following the last
day of the Term of Employment or (ii) the period during which the Company continues to
pay Base Salary to the Employee under Section 6(c)(iv) thereafter, the Employee shall
not directly, or indirectly, for herself or for any other Person:

	 	(i)	 	solicit, interfere with or endeavor to entice away from the
Company or any of its subsidiaries or affiliates, any customer, client or any
Person in the habit of dealing with any of the foregoing;
	 
	 	(ii)	 	attempt to direct or solicit any customer or client away from the
Company or any of its subsidiaries or affiliates;
	 
	 	(iii)	 	interfere with, entice away or otherwise attempt to obtain the
withdrawal of any employee of the Company or any of its subsidiaries or
affiliates; or
	 
	 	(iv)	 	advise any Person not to do business with the Company or any of
its subsidiaries or affiliates.

The Employee represents to and agrees with the Company that the enforcement of the restrictions
contained in Section 7 and Section 8 (the Non-Disclosure and Non-Compete and Non-Solicitation
sections respectively) would not be unduly burdensome to the Employee and that such restrictions
are reasonably necessary to protect the legitimate interests of the Company. The Employee agrees
that the remedy of damages for any breach by the Employee of the provisions of either of these
sections may be inadequate and that the Company shall be entitled to injunctive relief, without
posting any bond. This section constitutes an independent and separable covenant that shall be
enforceable notwithstanding any right or remedy that the Company may have under any other provision
of this Agreement or otherwise.

9. Miscellaneous

	 	(a)	 	This Agreement constitutes the entire agreement between the parties with
respect to the subject matter hereof and supersedes all previous written, and all
previous or contemporaneous oral negotiations, understandings, arrangements, and
agreements, and may be amended, modified or changed only by a written instrument
executed by the Employee and the Company.
	 
	 	(b)	 	This Agreement and all of the provisions hereof shall inure to the benefit of
and be binding upon the legal representative, heirs, distributees, successors (whether
by merger, operation of law or otherwise) and assigns of the parties hereto; provided,

 

 

	 	 	 	however, that the Employee may not delegate any of the Employee’s duties hereunder,
and may not assign any of the Employee’s rights hereunder, and any such purported or
attempted assignment or delegation shall be null and void and of no legal effect. In
the event the Company assigns this Agreement and its successor assumes the Company’s
obligations hereunder in writing or by operation of law, (i) the Company shall be
released from all of its obligations hereunder, and (ii) all of the references to the
Company, and to the Board, shall be deemed to be references to the Company’s
successor and to the governing body of such successor, respectively. The Company
and all of its future or current subsidiaries shall be and be deemed to be
third-party beneficiaries of this Agreement.
	 
	 	(c)	 	This Agreement will be interpreted and the rights of the parties determined in
accordance with the laws of the United States applicable thereto and the internal laws
of the State of New York.
	 
	 	(d)	 	The Employee covenants and represents that (i) he is not a party to any
contract, commitment, restrictive covenant or agreement, nor is he subject to, or bound
by, any order, judgment, decree, law, statute, ordinance, rule, regulation or other
restriction of any kind or character, which would prevent or restrict his from entering
into and performing his obligations under this Agreement, (ii) he is free to enter into
the arrangements contemplated herein, (iii) he is not subject to any agreement or
obligation that would limit his ability to act on behalf of the Company or any of its
subsidiaries, and (iv) his termination of his existing employment, his entry into the
employment contemplated herein and his performance of his duties in respect thereof,
will not violate or conflict with any agreement or obligation to which he is subject.
Employee has delivered to the Company true and complete copies of any currently
effective employment agreement, non-competitive agreement or similar agreement to which
Employee is subject.
	 
	 	(e)	 	The Employee acknowledges that he has had the assistance of legal counsel in
reviewing and negotiating this Agreement.
	 
	 	(f)	 	This Agreement and all of its provisions (other than the provisions of Section
5, Section 6, Section 7, Section 8, and Section 9 hereof, which shall survive
termination) shall terminate upon the Employee ceasing to be an employee of the Company
for any reason.
	 
	 	(g)	 	All notices and other communications hereunder shall be in writing; shall be
delivered by hand delivery to the other party or mailed by registered or certified
mail, return receipt requested, postage prepaid or by a nationally recognized courier
service such as Federal Express; shall be deemed delivered upon actual receipt; and
shall be addressed as follows:

If to the Company:

 

 

American Railcar Industries, Inc.

100 Clark Street

St. Charles, Missouri 63301

Facsimile:     (636) 940-6044

Attention:     James J. Unger, President and Chief Executive Officer

If to the Employee:

At the last known principal residence address reflected in the payroll records of the
Company, or to such other address as either party shall have furnished to the other
in writing in accordance herewith.

[Signature Page Follows]

 

 

	 	 	 	 	 
	AMERICAN RAILCAR INDUSTRIES, INC.
	 
	 	 	 	 
	By:
	 	/s/ James J. Unger 	 	 
	 

	 	 	 	 
	 

	 	Name: James J. Unger	 	 
	 	 	Title: President and Chief Executive Officer

	 	 	 	 	 
	Date:
	 	March 26, 2007 	 	 
	 

	 	 	 	 

	 	 	 	 	 
	EMPLOYEE:
	 
	 	 	 	 
	By:
	 	/s/ Alan C. Lullman 	 	 
	 

	 	 	 	 
	 

	 	Alan C. Lullman	 	 
	 
	 	 	 	 
	Date: March 26, 2007

[Signature page to Al Lullman Employment Agreement]

 

 

[FORM OF RELEASE]

Exhibit A

GENERAL RELEASE OF ALL CLAIMS

     This General Release of All Claims is made in consideration of severance payments and other
benefits provided to the undersigned employee under the Employment Agreement with American Railcar
Industries, Inc., a Delaware corporation (the “Company”), dated as of March 26, 2007 (“Employment
Agreement”). Unless otherwise defined herein, the terms defined in the Employment Agreement shall
have the same defined meaning in this General Release.

     1. For valuable consideration to be paid to Employee, upon expiration of the seven day
revocation period provided in Section 10 herein, in lump sum or as salary continuation as provided
for in Section 6 of the Employment Agreement and to which he is not contractually entitled to
absent the execution of this General Release, the adequacy of which is hereby acknowledged, the
undersigned (“Employee”), for himself, his spouse, heirs, administrators, children,
representatives, executors, successors, assigns, and all other persons claiming through Employee,
if any (collectively, “Releasers”), does hereby release, waive, and forever discharge the Company
and the Company’s subsidiaries, parents, affiliates, related organizations, employees, officers,
directors, shareholders, attorneys, successors, and assigns as well as all Related Parties
(collectively, the “Releasees”) from, and does fully waive any obligations of Releasees to
Releasers for, any and all liability, actions, charges, causes of action, demands, damages, or
claims for relief, remuneration, sums of money, accounts or expenses (including, without
limitation, attorneys’ fees and costs) of any kind whatsoever (collectively, the “Released
Claims”), whether known or unknown or contingent or absolute, which heretofore has been or which
hereafter may be suffered or sustained, directly or indirectly, by Releasers in consequence of,
arising out of, or in any way relating to Employee’s employment with the Company or any of its
affiliates and the termination of Employee’s employment including the payment of Employee’s Accrued
Obligations under Section 6 of the Employment Agreement. The foregoing release and discharge,
waiver and covenant not to sue includes, but is not limited to, all claims, and any obligations or
causes of action arising from such claims, under common law including any state or federal
discrimination, fair employment practices or any other employment-related statute or regulation (as
they may have been amended through the date of this agreement) prohibiting discrimination or
harassment based upon any protected status including, without limitation, race, color, religion,
national origin, age, gender, marital status, disability, handicap, veteran status or sexual
orientation. Without limitation, specifically included in this paragraph are any claims arising
under the Federal Rehabilitation Act of 1973, Age Discrimination in Employment Act of 1967, as
amended (“ADEA”), the Older Workers Benefit Protection Act, Title VII of the Civil Rights Act of
1964, as amended by the Civil Rights Act of 1991, the Equal Pay Act, the Americans With
Disabilities Act, the National Labor Relations Act, the Fair Labor Standards Act, the Employee
Retirement Income Security Act of 1974, the Family Medical Leave Act of 1993, the Consolidated
Omnibus Budget Reconciliation Act of 1985, and any similar state statutes. The foregoing release
and discharge also expressly includes any Released Claims under any state or federal common law
theory, including, without limitation wrongful or retaliatory discharge, breach of express or
implied contract, promissory estoppel, unjust enrichment, breach of covenant of good faith and fair
dealing, violation of

Confidential

 

public policy, defamation, interference with contractual relations, intentional or negligent
infliction of emotional distress, invasion of privacy, misrepresentation, deceit, fraud or
negligence. This also includes a release by Employee of any Released Claims for alleged physical
or personal injury, emotional distress relating to or arising out of Employee’s employment with the
Company or the termination of that employment; and any Released Claims under the WARN Act or any
similar law, which requires, among other things, that advance notice be given of certain work force
reductions. This release and waiver applies to any Released Claims or rights that may arise after
the date Employee signs this General Release.

     2. Excluded from this General Release are any claims which cannot be waived by law, including
but not limited to the right to participate in an investigation conducted by certain government
agencies. Employee does, however, waive Employee’s right to any monetary recovery should any
agency (such as the Equal Employment Opportunity Commission) pursue any claims on Employee’s
behalf. Employee represents and warrants that Employee has not filed any complaint, charge, or
lawsuit against the Releasees with any government agency or any court. Also excluded from this
General Release are any amounts due and payable under Section 6 other than Employee’s Accrued
Obligations.

     3. Employee agrees never to sue Releasees in any forum for any Released Claims covered by the
above waiver and release language, except that Employee may bring a claim under the ADEA to
challenge this General Release. If Employee violates this General Release by suing Releasees,
other than under the ADEA or as otherwise set forth in Section 1 hereof, Employee shall be liable
to the Company for its attorneys’ fees and other litigation costs incurred in defending against
such a suit. Nothing in this General Release is intended to reflect any party’s belief that
Employee’s waiver of claims under ADEA is invalid or unenforceable, it being the interest of the
parties that such claims are waived.

     4. Employee acknowledges and recites that:

     (a) Employee has executed this General Release knowingly and voluntarily;

     (b) Employee has read and understands this General Release in its entirety;

     (c) Employee has been advised and directed orally and in writing (and this subparagraph (c)
constitutes such written direction) to seek legal counsel and any other advice he wishes with
respect to the terms of this General Release before executing it;

     (d) Employee’s execution of this General Release has not been forced by any employee or agent
of the Company, and Employee has had an opportunity to negotiate the terms of this General Release
and that the agreements and obligations herein are made voluntarily, knowingly and without duress,
and that neither the Company nor its agents have made any representation inconsistent with the
General Release; and

     (e) Employee has been offered 21 calendar days after receipt of this General Release to
consider its terms before executing it.

     6. This General Release shall be governed by the internal laws (and not the choice of laws) of
the State of New York, except for the application of pre-emptive Federal law.

Confidential

 

     7. Employee represents that he has returned all property belonging to the Company including,
without limitation, keys, access cards, computer software and any other equipment or property.
Employee further represents that he has delivered to the Company all documents or materials of any
nature belonging to it, whether an original or copies of any kind, including any trade secrets or
proprietary information.

     8. Employee agrees to keep confidential the existence of this General Release, as well as all
of its terms and conditions and not to disclose to any person or entity the existence, terms and
conditions of this General Release except to his attorney, financial advisors and/or members of his
immediate family provided they agree to keep confidential the existence, terms and conditions of
this General Release. In the event that Employee believes that he is compelled by law to divulge
the existence, terms or conditions of this General Release in a manner prohibited by the preceding
sentence, he agrees to notify Company (by notifying counsel to the Company) of the basis for the
belief before actually divulging such information. Employee hereby confirms that as of the date of
signing this General Release, he has not disclosed the existence, terms or conditions of this
General Release, except as provided for herein.

     9. Employee represents that he has been provided notice of his right to elect continuation of
medical benefits under COBRA and that he is not entitled to any other benefits under the Company’s
employee benefit plans except as provided for therein or under Section 6 of the Employment
Agreement.

     10. Employee shall have 7 days from the date hereof to revoke this General Release by
providing written notice of the revocation to the Company, as provided in Section 9 of the
Employment Agreement, in which event this General Release shall be unenforceable and null and void.

[Signature Page Follows]

Confidential

 

     PLEASE READ THIS GENERAL RELEASE CAREFULLY. IT CONTAINS A RELEASE OF ALL KNOWN AND UNKNOWN
CLAIMS.

	 	 	 	 	 
	 

	 	EMPLOYEE:
	 	 
	 
	 	 	 	 
	 
	 	/s/ Alan C. Lullman 	 	 
	 

	 	 	 	 
	 

	 	Alan C. Lullman	 	 

Date: March 26, 2007

Confidentialexv10w17

 

Exhibit 10.17

PURCHASE AND SALE AGREEMENT

Dated as of February 3, 2006

by and among

VARIOUS ENTITIES LISTED ON SCHEDULE I,

as the Originators

and

ARCH COAL, INC.

 

 

CONTENTS

	 	 	 	 	 	 	 
	Clause	 	Subject Matter	 	Page	 
	ARTICLE I

AGREEMENT TO PURCHASE AND SELL

1

	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	 	Purchase and Sale 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
	 	 	4	 
	 	 	 
	 	 	 	 
	ARTICLE III

PAYMENT OF PURCHASE PRICE

5

	SECTION 3.1	 	Purchases
	 	 	5	 
	SECTION 3.2	 	Settlement as to Specific Receivables and Dilution
	 	 	5	 
	SECTION 3.3	 	Reconveyance of Receivables
	 	 	6	 
	 	 	 
	 	 	 	 
	ARTICLE IV

CONDITIONS OF PURCHASES

6

	SECTION 4.1	 	Conditions Precedent to Initial Purchase
	 	 	6	 
	SECTION 4.2	 	Certification as to Representations and Warranties
	 	 	7	 
	SECTION 4.3	 	Additional Originators
	 	 	7	 
	 	 	 
	 	 	 	 
	ARTICLE V

REPRESENTATIONS AND WARRANTIES OF THE ORIGINATORS

8

	SECTION 5.1	 	Existence and Power
	 	 	8	 
	SECTION 5.2	 	Company and Governmental Authorization, Contravention
	 	 	8	 
	SECTION 5.3	 	Binding Effect of Agreement
	 	 	8	 
	SECTION 5.4	 	Accuracy of Information
	 	 	9	 
	SECTION 5.5	 	Actions, Suits
	 	 	9	 
	SECTION 5.6	 	Taxes
	 	 	9	 
	SECTION 5.7	 	Compliance with Applicable Laws
	 	 	9	 
	SECTION 5.8	 	Reliance on Separate Legal Identity
	 	 	9	 
	SECTION 5.9	 	Investment Company
	 	 	9	 
	SECTION 5.10	 	Perfection
	 	 	9	 
	SECTION 5.11	 	Creation of Receivables
	 	 	10	 
	SECTION 5.12	 	Credit and Collection Policy
	 	 	10	 

Purchase and Sale Agreement

(Arch Coal)

 

 

CONTENTS

	 	 	 	 	 	 	 
	Clause	 	Subject Matter	 	Page	 
	SECTION 5.13	 	Enforceability of Contracts
	 	 	10	 
	SECTION 5.14	 	Location and Offices
	 	 	10	 
	SECTION 5.15	 	Good Title
	 	 	10	 
	SECTION 5.16	 	Names
	 	 	10	 
	SECTION 5.17	 	Nature of Receivables
	 	 	10	 
	SECTION 5.18	 	Bulk Sales, Margin Regulations, No Fraudulent Conveyance
	 	 	10	 
	SECTION 5.19	 	Solvency
	 	 	11	 
	SECTION 5.20	 	Licenses, Contingent Liabilities, and Labor Controversies
	 	 	11	 
	SECTION 5.21	 	Reaffirmation of Representations and Warranties by the Originator
	 	 	11	 
	 	 	 
	 	 	 	 
	ARTICLE VI

COVENANTS OF THE ORIGINATORS

11

	SECTION 6.1	 	Affirmative Covenants
	 	 	11	 
	SECTION 6.2	 	Reporting Requirements
	 	 	13	 
	SECTION 6.3	 	Negative Covenants
	 	 	13	 
	SECTION 6.4	 	Substantive Consolidation
	 	 	15	 
	 	 	 
	 	 	 	 
	ARTICLE VII

ADDITIONAL RIGHTS AND OBLIGATIONS IN RESPECT OF RECEIVABLES

17

	SECTION 7.1	 	Rights of the Company
	 	 	17	 
	SECTION 7.2	 	Responsibilities of the Originators
	 	 	17	 
	SECTION 7.3	 	Further Action Evidencing Purchases
	 	 	18	 
	SECTION 7.4	 	Application of Collections
	 	 	18	 
	 	 	 
	 	 	 	 
	ARTICLE VIII

PURCHASE AND SALE TERMINATION EVENTS

18

	SECTION 8.1	 	Purchase and Sale Termination Events
	 	 	18	 
	SECTION 8.2	 	Remedies
	 	 	19	 
	 	 	 
	 	 	 	 
	ARTICLE IX

INDEMNIFICATION

19

	SECTION 9.1	 	Indemnities by the Originators
	 	 	19	 
	 	 	 
	 	 	 	 
	ARTICLE X

MISCELLANEOUS

21

	SECTION 10.1	 	Amendments, etc
	 	 	21	 
	SECTION 10.2	 	Notices, etc
	 	 	21	 
	SECTION 10.3	 	No Waiver; Cumulative Remedies
	 	 	22	 
	SECTION 10.4	 	Binding Effect; Assignability
	 	 	22	 

Purchase and Sale Agreement

 

 

CONTENTS

	 	 	 	 	 	 	 
	Clause	 	Subject Matter	 	Page	 
	SECTION 10.5	 	Governing Law
	 	 	22	 
	SECTION 10.6	 	Costs, Expenses and Taxes
	 	 	22	 
	SECTION 10.7	 	SUBMISSION TO JURISDICTION
	 	 	22	 
	SECTION 10.8	 	WAIVER OF JURY TRIAL
	 	 	23	 
	SECTION 10.9	 	Captions and Cross References; Incorporation by Reference
	 	 	23	 
	SECTION 10.10	 	Execution in Counterparts
	 	 	23	 
	SECTION 10.11	 	Acknowledgment and Agreement
	 	 	23	 
	SECTION 10.12	 	No Proceeding
	 	 	24	 

Purchase and Sale Agreement

 

 

SCHEDULES

	 	 	 
	Schedule I

	 	List of Originators
	Schedule II

	 	Location of Each Originator
	Schedule III

	 	Location of Books and Records of Each Originator
	Schedule IV

	 	Trade Names

EXHIBITS

	 	 	 
	Exhibit A

	 	Form of Purchase Report
	Exhibit B

	 	Form of Joinder Agreement

Purchase and Sale Agreement

 

 

     THIS PURCHASE AND SALE AGREEMENT (as amended, restated, supplemented or otherwise
modified from time to time, this “Agreement”), dated as of February 3, 2006 is entered into
by and among the VARIOUS ENTITIES LISTED ON SCHEDULE I HERETO (each, an “Originator” and
collectively, “Originators”), and ARCH COAL, INC., a Delaware corporation (the
“Company”).

DEFINITIONS

     Unless otherwise indicated herein, capitalized terms used and not otherwise defined in this
Agreement are defined in Exhibit I to the 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 Arch Receivable Company, LLC, as Seller
(the “Seller”), Arch Coal Sales Company, Inc., as initial Servicer, Market Street Funding
LLC, as Issuer, the 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 Originators are operating subsidiaries of the Company;

     2. The Originators generate Receivables in the ordinary course of their businesses;

     3. The Originators, in order to finance their respective businesses, wish to sell Receivables
to the Company, and the Company is willing to purchase Receivables from the Originators, on the
terms and subject to the conditions set forth herein;

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

     5. The Originators and the Company acknowledge that the Company will sell and contribute the
Receivables purchased by it hereunder and the related security (together with accounts receivable
originated by the Company and the related security) to the Seller, from time to time, pursuant to
that certain Sale and Contribution Sale Agreement, dated as of the date hereof (as the same may be
amended, restated, supplemented or otherwise modified from time to time, the “Sale and
Contribution Agreement”), between the Company, as transferor (in such capacity, the
“Transferor”) and the Seller, as buyer, and that thereafter the Seller 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
Purchasers under the Receivables Purchase Agreement.

     NOW, THEREFORE, in consideration of the premises and the mutual agreements herein contained,
the parties hereto agree as follows:

ARTICLE I

AGREEMENT TO PURCHASE AND SELL

Purchase and Sale Agreement

 

 

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

          (a) each Receivable of such Originator that existed and was owing to such Originator at
the closing of such Originator’s business on January 1,
2006 (the “Cut-off Date”)

          (b) each Receivable generated by such Originator from and including the Cut-off Date to
but excluding the Purchase and Sale Termination Date;

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

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

          (e) all books and records of such Originator 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 such Originator on or after the Cut-off Date,
including, without limitation, all funds which either are received by such Originator, 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 such Originator,
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); and

          (g) all right, 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, and any related investment property acquired with any such collections or other
proceeds (as such term is defined in the applicable UCC).

All purchases hereunder shall be made without recourse, but shall be made pursuant to, and in
reliance upon, the representations, warranties and covenants of the Originators 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 proceeds and rights
described in clauses (c) through (g) (collectively, the “Related Rights”)
is herein called the “Purchase Facility.”

Purchase and Sale Agreement

(Arch Coal)

2

 

     SECTION 1.2 Timing of Purchases.

          (a) Closing Date Purchases. Each Originator’s entire right, title and interest in (i)
each Receivable that existed and was owing to such Originator at the Cut-off Date, (ii) all
Receivables created by such Originator from and including the Cut-off Date, to and including the
Closing Date, and (iii) all Related Rights with respect thereto automatically shall be deemed to
have been sold by such Originator to the Company on the Closing Date.

          (b) Subsequent Purchases. After the Closing Date, until the Purchase and Sale
Termination Date, each Receivable and the Related Rights generated by each Originator shall be
deemed to have been sold by such Originator to the Company immediately (and without further action)
upon the creation of such Receivable.

     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 Originators
in accordance with Article III.

     SECTION 1.4 Purchase and Sale Termination Date. The “Purchase and Sale 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 Originators shall have given written notice to the
Company, the Seller and the Administrator at or prior to 10:00 a.m. (New York City time) that the
Originators desire to terminate this Agreement.

     SECTION 1.5 Intention of the Parties. It is the express intent of each
Originator and the Company that each conveyance by such Originator to the Company pursuant to this
Agreement of the Receivables and Related Rights, 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 sale and absolute assignment (without recourse except as provided herein) of
such Receivables and Related Rights by such Originator to the Company (rather than the grant of a
security interest to secure a debt or other obligation of such Originator) 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 such
Originator. 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 such
Originator, then, it is the intent of such Originator 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)
such Originator shall be deemed to have granted to the Company as of the Closing Date, and such
Originator hereby grants to the Company, a security interest in, to and under all of such
Originator’s right, title and interest in and to: (A) the Receivables and the Related Rights now
existing and hereafter created by such Originator transferred or purported to be transferred
hereunder, (B) all monies due or to become due and all amounts received with respect thereto, (C)
all books and records of

Purchase and Sale Agreement

(Arch Coal)

3

 

such Originator to the extent related to any of the foregoing, and (D) all proceeds and
products of any of the foregoing to secure all of such Originator’s obligations hereunder.

ARTICLE II

PURCHASE REPORT; CALCULATION OF PURCHASE PRICE

     SECTION 2.1 Purchase Report. On the Closing Date and on the 21st day of each calendar
month thereafter (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 each
Originator a report in substantially the form of Exhibit A (each such report being herein
called a “Purchase Report”) setting forth, among other things:

          (a) Receivables purchased by the Company from each Originator on the Closing Date (in the case
of the Purchase Report to be delivered on the Closing Date);

          (b) Receivables purchased by the Company from each Originator 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

          (c) the calculations of reductions of the Purchase Price for any Receivables as provided in
Section 3.2 (a) and(b).

     SECTION 2.2 Calculation of Purchase Price. The “Purchase Price” to be paid to
each Originator for the Receivables that are purchased hereunder from such Originator 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 Originators are open for business.

Purchase and Sale Agreement

(Arch Coal)

4

 

     “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 Purchases.

     (a) Initial Purchase Price Payment. On the terms and subject to the conditions
set forth in this Agreement, the Company agrees to pay to each Originator the Purchase Price
for the purchase to be made from such Originator on the Closing Date in cash.

     (b) Subsequent Purchase Price Payments. On each Payment Date subsequent to the
Closing Date, on the terms and subject to the conditions set forth in this Agreement, the
Company shall pay to each Originator the Purchase Price for the Receivables generated by
such Originator on such Payment Date in cash.

     SECTION 3.2 Settlement as to Specific Receivables and Dilution.

          (a) If (i) on the day of purchase of any Receivable from an Originator 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 such 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, then the Purchase Price with respect to such Receivable shall be reduced by an amount
equal to the Outstanding Balance of such Receivable and shall be accounted to such Originator 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 such Originator.

          (b) If, on any day, the Outstanding Balance of any Receivable purchased hereunder is reduced
or adjusted as a result of any defective, rejected, returned goods or services, or any discount or
other adjustment made by any Originator, the Company or the Servicer or any setoff or dispute
between 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 such Originator), then the Purchase Price
with respect to such Receivable shall be reduced by the amount of such net reduction and shall be
accounted to such Originator as provided in clause (c) below.

          (c) Any reduction in the Purchase Price 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 such Originator hereunder;
provided, however if there have been no purchases of Receivables from such
Originator (or insufficiently large purchases of Receivables) to create a Purchase Price sufficient
to so apply

Purchase and Sale Agreement

(Arch Coal)

5

 

such credit against, the amount of such credit shall be paid in cash to the Company by such
Originator.

     SECTION 3.3 Reconveyance of Receivables. In the event that an Originator has
paid to the Company the full Outstanding Balance of any Receivable pursuant to Section 3.2,
the Company shall reconvey such Receivable to such Originator, without representation or warranty,
but free and clear of all liens, security interests, charges, and encumbrances created by the
Company or the Seller.

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 (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 each Originator
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 such
Originator;

          (b) Good standing certificates for each Originator 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 such Originator’s organization and each jurisdiction where such Originator
is qualified to transact business;

          (c) A certificate of the Secretary or Assistant Secretary of each Originator 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, the Seller and the Administrator (as the total assignee of the Company) may conclusively
rely until such time as the Servicer, the Company, the Seller 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 each
Originator duly certified by the Secretary of State of the jurisdiction of such Originator’s
organization as of a recent date, together with a copy of the by-laws of such Originator, each duly
certified by the Secretary or an Assistant Secretary of such Originator;

          (e) Originals of the proper financing statements (Form UCC-1) that have been duly authorized
and name each Originator as the debtor/seller and the Company as the buyer/assignor (and the
Administrator, for the benefit of the Purchasers, as secured party/assignee) of the Receivables
generated by such Originator as may be necessary or, in the Company’s or the Administrator’s
opinion, desirable under the UCC of all appropriate jurisdictions to perfect the Company’s
ownership interest in all Receivables and such other

Purchase and Sale Agreement

(Arch Coal)

6

 

rights, accounts, instruments and moneys (including, without limitation, Related Security) in
which an ownership or security interest has been assigned to it hereunder;

          (f) A written search report from a Person satisfactory to the Company and the Administrator
(as the total assignee of the Company) listing all effective financing statements that name the
Originators as debtors or sellers and that are filed in all jurisdictions in which filings may be
made against such Person pursuant to the applicable UCC, together with copies of such financing
statements (none of which, except for those described in the foregoing clause (e) (and/or
released or terminated as the case may be on or prior to the date hereof pursuant to the Release
Agreement), shall cover any Receivable or any Related Rights which are to be sold to the Company
hereunder), and tax, ERISA and judgment lien search reports from a Person satisfactory to the
Company and the Administrator showing no evidence of such liens filed against any Originator;

          (g) Favorable opinions, addressed to each Rating Agency, the Administrator and each Purchaser,
in form and substance reasonably satisfactory to the Administrator, of (i) Bryan Cave LLP, counsel
for the Seller, the Originators, the Servicer, the Transferor and ACI, covering such matters as the
Administrator may reasonably request, including, without limitation, certain organizational and New
York enforceability matters, certain bankruptcy matters, certain UCC perfection and priority
matters, and (ii) Robert G. Jones, Vice President — Law, General Counsel and Secretary of
ACI; and

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

     SECTION 4.2 Certification as to Representations and Warranties. Each Originator, by
accepting the Purchase Price related to each purchase of Receivables generated by such Originator,
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 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 as of such earlier date).

     SECTION 4.3 Additional Originators. Additional Persons may be added as Originators
hereunder, with the prior written consent of the Company and the Administrator; provided
that the following conditions are satisfied on or before the date of such addition:

          (a) The Company shall have given the Administrator at least thirty days prior written notice
of such proposed addition and the identity of the proposed additional Originator and shall have
provided such other information with respect to such proposed additional Originator as the
Administrator may reasonably request;

Purchase and Sale Agreement

(Arch Coal)

7

 

          (b) such proposed additional Originator has executed and delivered to the Company and the
Administrator an agreement substantially in the form attached hereto as Exhibit B (a
“Joinder Agreement”)

          (c) such proposed additional Originator has delivered to the Company and the Administrator (as
the total assignee of the Company) each of the documents with respect to such Originator described
in Sections 4.1 and 4.2, in each case in form and substance satisfactory to the
Company and the Administrator (as the total assignee of the Company); and

          (d) no Purchase and Sale Termination Date shall have occurred and be continuing.

ARTICLE V

REPRESENTATIONS AND WARRANTIES OF THE ORIGINATORS

     In order to induce the Company to enter into this Agreement and to make purchases hereunder,
each Originator hereby represents and warrants with respect to itself that each representation and
warranty concerning it or the Receivables sold 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. Such Originator is duly organized, validly existing
and in good standing under the laws of the jurisdiction of its organization, and 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 could not reasonably be expected to have a
Material Adverse Effect.

     SECTION 5.2 Company and Governmental Authorization. Contravention. The execution,
delivery and performance by such Originator of this Agreement are within such Originator’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, and, do not
contravene, or constitute a default under, any provision of applicable law or regulation or of the
organizational documents of such Originator or of any agreement, judgment, injunction, order,
decree or other instrument binding upon such Originator or result in the creation or imposition of
any lien (other than liens in favor of the Company, the Seller and Administrator under the
Transaction Documents) on assets of such Originator or any of its Subsidiaries.

     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
such Originator enforceable against such Originator 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.

Purchase and Sale Agreement

(Arch Coal)

8

 

     SECTION 5.4 Accuracy of Information. All information heretofore furnished by such
Originator 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 such Originator to the Company or the Administrator in writing
pursuant to this Agreement or any Transaction Document will be, 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 such Originator’s knowledge, threatened against or affecting such Originator 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. Such Originator 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. Such Originator is in compliance with the
requirements of all applicable laws, rules, regulations and orders of all Governmental Authorities
except to the extent that the failure to comply could not reasonably be expected to have a Material
Adverse Effect. In addition, no Receivable sold hereunder contravenes any laws, rules or
regulations applicable thereto or to such Originator.

     SECTION 5.8 Reliance on Separate Legal Identity. Such Originator acknowledges that
each of the Purchasers and the Administrator are entering into the Transaction Documents to which
they are parties in reliance upon the Seller’s identity as a legal entity separate from such
Originator and the Transferor.

     SECTION 5.9 Investment Company. Such Originator is not an “investment company,” or a
company “controlled” by an “investment company” within the meaning of the Investment Company Act of
1940, as amended. In addition, such Originator is not a “holding company,” a “subsidiary company”
of a “holding company” or an “affiliate” of a “holding company” or of a “subsidiary company” of a
“holding company” within the meaning of the Public Utility Holding Company Act of 1935, as amended.

     SECTION 5.10 Perfection. Immediately preceding its sale of each Receivable hereunder,
such Originator was the owner of such Receivable sold or purported to be sold, free and clear of
any Adverse Claims (other than any Adverse Claim created prior to the date hereof in favor of PNC
pursuant to the revolving credit agreement of ACI in effect on the date hereof, as may be amended,
restated, supplemented or otherwise modified from time to time, which such Adverse Claim has been
released pursuant to the Release Agreement), and each such sale hereunder constitutes a valid sale,
transfer and assignment of all of such Originator’s right, title and interest in, to and under the
Receivables sold by it, free and clear of any Adverse Claims. On or before

Purchase and Sale Agreement

(Arch Coal)

9

 

the date hereof and before the generation by such Originator 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 such Originator 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.

     SECTION 5.11 Creation of Receivables. Such Originator has exercised at least
the same degree of care and diligence in the creation of the Receivables sold or otherwise conveyed
hereunder as it has exercised in connection with the creation of receivables originated by it and
not so transferred hereunder.

     SECTION 5.12 Credit and Collection Policy. Such Originator has complied in all
material respects with its Credit and Collection Policy in regard to each Receivable sold by it
hereunder and the related Contract.

     SECTION 5.13 Enforceability of Contracts. Each Contract related to any Receivable sold
by such Originator 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 such Originator has fully performed its obligations under such Contract.

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

     SECTION 5.15 Good Title. Upon the creation of each new Receivable sold 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 to it hereunder, free and clear of any Adverse Claim.

     SECTION 5.16 Names. Except as described in Schedule IV, such Originator 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 hereunder
and included in the calculation of Net Receivables Pool Balance is, on the date of such purchase,
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 such Originator

Purchase and Sale Agreement

(Arch Coal)

10

 

hereunder will conflict with or contravene Regulation T, U or X of the Federal Reserve Board.
No purchase hereunder constitutes a fraudulent transfer or conveyance 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 Solvency. On the date hereof, and on the date of each purchase hereunder
(both before and after giving effect to such purchase), such Originator shall be Solvent.

     SECTION 5.20 Licenses, Contingent Liabilities, and Labor Controversies.

          (a) Such Originator has not failed 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 such Originator that have had (or could
reasonably be expected to have) a Material Adverse Effect.

     SECTION 5.21 Reaffirmation of Representations and Warranties by the
Originator. On each day that a new Receivable is created, and when sold to the Company
hereunder, such Originator 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 ORIGINATORS

     SECTION 6.1 Affirmative Covenants. At all times from the date hereof until the latest
of the Facility Termination Date, the date on which no Capital of or Discount in respect of the
Purchased Interest shall be outstanding, the date the LC Participation Amount is cash
collateralized in full, and the date all other amounts owed by the Seller, any Originator or the
Transferor under the Transaction Documents to any Purchaser, the Administrator and any other
Indemnified Party or Affected Person shall be paid in full, each Originator shall, unless the
Administrator and the Company shall otherwise consent in writing:

          (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. Such Originator will, at such Originator’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 such Originator for the purpose of examining such books and

Purchase and Sale Agreement

(Arch Coal)

11

 

records, and to discuss matters relating to the Receivables, other Related Rights or such
Originator’s performance hereunder or under the other Transaction Documents to which it is a party
with any of the officers, directors, employees or independent public accountants of such Originator
(provided that representatives of such Originator 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 Originator’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 such Originator 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 such Originator (including records
adequate to permit the daily identification of each new such Receivable and all Collections of, and
adjustments to, each existing such Receivable). Such Originator 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 such Originator’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, at its own expense, in all material respects with all provisions, covenants and
other promises required to be observed by it under all Contracts or other documents or agreements
related to the Receivables.

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

          (f) Receivable Purchase Agreement. Perform and comply in all material respects with
each covenant and other undertaking in the Receivables Purchase Agreement and the Sale and
Contribution Agreement that the Company undertakes to cause such Originator 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 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 be
reasonably expected to have a Material Adverse Effect.

          (h) Location of Records. Keep its location (as such term is defined in the applicable
UCC), and the offices where it keeps its records concerning or related to Receivables,

Purchase and Sale Agreement

(Arch Coal)

12

 

at the address(es) referred to in Schedule II or Schedule III, respectively,
or, upon 30 days’ prior written notice to the Company and the Administrator (as the Company’s
assignee), at such other locations in jurisdictions where all action required by Section
7.3 shall have been taken and completed.

          (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 COAL, INC.
PURSUANT TO A PURCHASE AND SALE AGREEMENT, DATED AS OF FEBRUARY 3,
2006, BETWEEN THE ORIGINATORS NAMED THEREIN 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 PURCHASERS
UNI)ER THE RECEIVABLES PURCHASE AGREEMENT, DATED AS OF FEBRUARY 3,
2006, AMONG ARCH RECEIVABLE COMPANY, LLC, ARCH COAL SALES COMPANY,
INC., MARKET STREET FUNDING LLC, THE VARIOUS LC PARTICIPANTS FROM
TIME TO TIME PARTY THERETO AND PNC BANK, NATIONAL ASSOCIATION, AS
ADMINISTRATOR AND AS LC BANK.”

     SECTION 6.2 Reporting Requirements. From the date hereof until the first day following
the Purchase and Sale Termination Date, each Originator will, unless the Company and the
Administrator shall otherwise consent in writing, furnish to the Company and the
Administrator:

          (a) Purchase and Sale Termination Events. As soon as possible, and in any event within
three (3) Business Days after such Originator becomes aware of the occurrence of each Purchase and
Sale Termination Event or each event which with notice or the passage of time or both would become
a Purchase and Sale Termination Event (an “Unmatured Purchase and Sale Termination Event”),
a written statement of the chief financial officer, treasurer or other officer of such Originator
describing such Purchase and Sale Termination Event or Unmatured Purchase and Sale Termination
Event and the action that such Originator 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 such Originator 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 such
Originator as the Company or the Administrator may from time to time reasonably request in order to
protect the interests of the Company, the Purchasers 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 latest of
the Facility Termination Date, the date on which no Capital of or Discount in respect of the

Purchase and Sale Agreement

(Arch Coal)

13

 

Purchased Interest shall be outstanding, the date the LC Participation Amount is cash
collateralized in full, and the date all other amounts owed by the Seller, any Originator or the
Transferor under the Transaction Documents to any Purchaser, the Administrator and any other
Indemnified Party or Affected Person shall be paid in full, each Originator 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, other than the security interests and liens created prior to the
date hereof in favor of PNC to secure its obligations under the revolving credit agreement of ACI
in effect on the date hereof, as amended, restated, supplemented or otherwise modified from time to
time, which such security interests and liens have been released pursuant to the Release Agreement,
upon or with respect to, any Receivable sold or otherwise conveyed or purported to be sold 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

          (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 by it that is sold or otherwise conveyed hereunder, or amend, modify or waive, in
any material respect, any term or condition of any Contract related thereto (which term or
condition relates to payments under, or the enforcement of, such Contract).

          (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 (jj) above, without the prior written consent of the Administrator. No Originator shall
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 by it that is sold by it hereunder to become evidenced by
any “instrument” or “chattel paper” (as defined in the applicable UCC).

          (e) Mergers. Acquisitions. Sales, etc. (i) 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 30 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
Purchasers, 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 such
Originator (including the filing of any UCC financing statements, the receipt of certificates and
other requested documents from public officials and all

Purchase and Sale Agreement

(Arch Coal)

14

 

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);
provided, that (i) the Originators shall be permitted to, prior to the date hereof, have granted
security interests and liens in favor of PNC to secure their respective obligations under the
revolving credit agreement of the Company in effect on the date hereof, as may be amended,
restated, supplemented or otherwise modified from time to time, which such security interests and
liens covering Receivables and Related Rights have been released pursuant to the Release Agreement,
and (ii) any member of the Arch Western Group shall be permitted to transfer any of its assets
(other than the assets sold or purported to be sold by it under the Transaction Documents) to any
other member of the Arch Western Group.

          (f) Lock-Box Banks. Make any changes in its instructions to Obligors regarding
Collections on Receivables sold 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.

          (g) Accounting for Purchases. Account for or treat (whether in financial statements or
otherwise) the transactions contemplated hereby in any manner other than as sales of the
Receivables and Related Rights by such Originator to the Company.

          (h) 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 such Originator 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.

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

          (a) such Originator shall not be involved in the day to day management of the Seller;

          (b) such Originator shall maintain separate corporate records and books of account from
the Seller and otherwise will observe corporate formalities and have a separate area from
the Seller for its business (which may be located at the same address as the Seller, and, to
the extent that it and the Seller have offices in the same location, there shall be a fair
and appropriate allocation of overhead costs between them, and each shall bear its fair
share of such expenses);

Purchase and Sale Agreement

(Arch Coal)

15

 

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

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

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

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

          (g) such Originator shall not conduct any of the business of the Seller in its own
name;

          (h) such Originator shall not pay any liabilities of the Seller out of its own funds or
assets;

          (i) such Originator shall maintain an arm’s-length relationship with the Seller;

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

          (k) such Originator shall not acquire obligations of the Seller;

          (1) such Originator shall allocate fairly and reasonably overhead or other expenses
that are properly shared with the Seller, including, without limitation, shared office
space;

          (m) such Originator shall identify and hold itself out as a separate and distinct
entity from the Seller;

          (n) such Originator shall correct any known misunderstanding respecting its separate
identity from the Seller;

          (o) such Originator shall not enter into, or be a party to, any transaction with the
Seller, except in the ordinary course of its business and on terms

Purchase and Sale Agreement

(Arch Coal)

16

 

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) such Originator shall not pay the salaries of the Seller’s employees, if any; and

          (q) to the extent not already covered in paragraphs (a) through (p) above, such
Originator 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. Each Originator hereby authorizes the Company, the
Servicer or their respective designees or assignees under the Sale and Contribution Agreement or
the Receivables Purchase Agreement (including, without limitation, the Administrator) to take any
and all steps in such Originator’s name necessary or desirable, in their respective determination,
to collect all amounts due under any and all Receivables sold or otherwise conveyed or purported to
be conveyed by it hereunder, including, without limitation, endorsing the name of such Originator
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 Originators. Anything herein to the contrary
notwithstanding:

          (a) Collection Procedures. Each Originator agrees to direct its respective Obligors to
make payments of Receivables sold or otherwise conveyed or purported to be conveyed by it hereunder
directly to the relevant Lock-Box Account at a Lock-Box Bank. Each Originator further agrees to
transfer any Collections of Receivables 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 Purchasers).

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

          (c) None of the Company, the Servicer, the Purchasers 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
Purchasers or the Administrator be obligated to perform any of the obligations of such Originator
thereunder.

          (d) Each Originator hereby grants to the Administrator an irrevocable power of attorney, with
full power of substitution, coupled with an interest, during the occurrence and

Purchase and Sale Agreement

(Arch Coal)

17

 

continuation of a Purchase and Sale Termination Event to take in the name of such Originator
all steps necessary or advisable to endorse, negotiate or otherwise realize on any writing or other
right of any kind held or transmitted by such Originator or transmitted or received by the Company
(whether or not from such Originator) in connection with any Receivable sold or otherwise conveyed
or purported to be conveyed by it hereunder or Related Right.

     SECTION 7.3 Further Action Evidencing Purchases. Each Originator 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 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, such Originator will:

          (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).

Each Originator 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 such Originator, relative to all or any of the
Receivables sold or otherwise conveyed or purported to be conveyed by it hereunder and Related
Rights now existing or hereafter generated by such Originator. If any Originator 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 such Originator.

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

ARTICLE VIII

PURCHASE AND SALE TERMINATION EVENTS

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

Purchase and Sale Agreement

(Arch Coal)

18

 

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

          (b) Any Originator 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 one (1) Business Day; or

          (c) Any representation or warranty made or deemed to be made by any Originator (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; or

          (d) Any Originator 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 such Originator’s knowledge or notice thereof

     SECTION 8.2 Remedies.

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

          (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 Originators. Without limiting any other rights which
the Company may have hereunder or under applicable law, each Originator, severally and for itself
alone, jointly and severally with each other Originator, hereby agrees to indemnify the Company and
each of its officers, directors, employees and agents (each of the foregoing Persons being
individually called a “Purchase and Sale 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 “Purchase and Sale Indemnified Amounts”) awarded against or incurred by any of them
arising out of or as a result of the failure of such Originator to perform its obligations under
this Agreement or any other Transaction Document, or arising out of the claims asserted against a
Purchase and Sale Indemnified Party relating to the transactions contemplated herein or therein or
the use of proceeds thereof or therefrom; excluding, however, (i) Purchase and Sale
Indemnified Amounts to the extent resulting from gross negligence or willful misconduct on the part
of such Purchase and Sale Indemnified Party, (ii) any

Purchase and Sale Agreement

(Arch Coal)

19

 

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 and (iii) any net income or franchise tax imposed on such Purchase
and Sale Indemnified Party by the jurisdiction under the laws of which such Purchase and Sale
Indemnified Party is organized or any political subdivision thereof Without limiting the foregoing,
and subject to the exclusions set forth in the preceding sentence, each Originator, severally for
itself alone, jointly and severally with each Originator, shall indemnify each Purchase and Sale
Indemnified Party for Purchase and Sale Indemnified Amounts relating to or resulting from:

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

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

          (c) the failure by such Originator to comply with any applicable law, rule or
regulation with respect to any Receivable generated by such Originator sold or otherwise
transferred or purported to be transferred hereunder or the related Contract, or the
nonconformity of any Receivable generated by such Originator sold or otherwise transferred
or purported to be transferred hereunder or the related Contract with any such applicable
law, rule or regulation;

          (d) the failure by such Originator to vest and maintain vested in the Company an
ownership interest in the Receivables generated by such Originator sold 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 such Originator 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 by such Originator sold or otherwise transferred or purported to be
transferred hereunder, whether at the time of any purchase 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 by such Originator sold
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;

Purchase
and Sale Agreement

(Arch Coal)

20

 

          (g) any product liability claim arising out of or in connection with services that
are the subject of any Receivable generated by such Originator; and

          (h) any tax or governmental fee or charge (other than any tax excluded pursuant to
clause (iii) in the proviso to the preceding sentence), 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 such
Originator or any Related Security connected with any such Receivables.

If for any reason the indemnification provided above in this Section 9.1 is unavailable to
a
Purchase and Sale Indemnified Party or is insufficient to hold such Purchase and Sale
Indemnified Party harmless, then each of the Originators, severally and for itself, jointly and
severally with each other Originator, shall contribute to the amount paid or payable by such
Purchase and Sale 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 each
Originator, with the prior written consent of the Administrator.

          (b) No failure or delay on the part of the Company, the Servicer, any Originator, 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 any Originator 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 communication) and shall
be delivered or sent by facsimile, or by overnight mail, to the intended party at the mailing
address or facsimile number of such party set forth under its name on the signature pages hereof or
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

Purchase and Sale Agreement

(Arch Coal)

21

 

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, 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.

     SECTION 10.4 Binding Effect Assignability. This Agreement shall be binding upon and
inure to the benefit of the Company and each Originator and their respective successors and
permitted assigns. No Originator may 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 any Originator
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 GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

     SECTION 10.6 Costs. Expenses and Taxes. In addition to the obligations of the
Originators under Article IX, each Originator, severally and for itself alone, jointly and
severally with each Originator, 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 Purchase and Sale 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

Purchase and Sale Agreement

(Arch Coal)

22

 

AT ITS ADDRESS SPECIFIED Th1 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 ANY ORIGINATOR 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 UNI)ER 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 RELATIONSFHP 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
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, each Originator
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 Seller
pursuant to the Sale and Contribution Agreement and then by the Seller to the Administrator (for
the benefit of the Purchasers) pursuant to the Receivables Purchase Agreement, and each Originator
consents to such assignments. Each of the parties hereto acknowledges and agrees that the
Purchasers and the Administrator are third party beneficiaries of the rights of the Company arising
hereunder and under the other Transaction Documents to which any Originator is a party.

Purchase and Sale Agreement

(Arch Coal)

23

 

     SECTION 10.12 No Proceeding. Each Originator hereby agrees that it will not
institute, or join any other Person in instituting, against the Seller any Insolvency Proceeding so
long as any of the Seller’s obligations under the Receivables Purchase Agreement remains
outstanding and for at least one year and one day following the day on which the Seller’s
obligations under the Receivables Purchase Agreement are paid in full. Each Originator further
agrees that notwithstanding any provisions contained in this Agreement to the contrary, the Seller
shall not, and shall not be obligated to, pay any amount to such Originator pursuant to this
Agreement or any other Transaction Document unless the Seller 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 Seller 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 Seller by such Originator 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.

[Signature Pages Follow]

Purchase and Sale Agreement

(Arch Coal)

24

 

     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/ James E. Florczak	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	James E. Florczak	 	 
	 

	 	Title:
	 	Treasurer	 	 
	 
	 	 	 	 	 	 
	 

	 	Address:
	 	One CityPlace Drive, Suite 300 St. Louis,
Missouri 63141	 	 
	 
	 	 	 	 	 	 
	 	 	Attention: James E. Florczak	 	 
	 	 	Telephone: 314-994-2785	 	 
	 	 	Facsimile: 314-994-2739	 	 

Purchase and Sale Agreement

(Arch Coal)

S-I

 

	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 	 	ORIGINATORS:	 	 
	 
	 	 	 	 	 	 
	 	 	ARCH COAL SALES COMPANY, 1NC.,

as an Originator	 	 
	 

	 	By:
	 	/s/ James E. Florczak	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	James E. Florczak	 	 
	 

	 	Title:
	 	Vice President and Treasurer	 	 
	 
	 	 	 	 	 	 
	 

	 	Address:
	 	One CityPlace Drive, Suite 300 St. Louis,
Missouri 63141	 	 
	 
	 	 	 	 	 	 
	 	 	Attention: James E. Florczak	 	 
	 	 	Telephone: 314-994-2785	 	 
	 	 	Facsimile: 314-994-2739	 	 
	 
	 	 	 	 	 	 
	 	 	ARCH COAL TERMINAL, INC.,

as an Originator	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ James E. Florczak	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	James E. Florczak	 	 
	 

	 	Title:
	 	Vice President and Treasurer	 	 
	 
	 	 	 	 	 	 
	 

	 	Address:
	 	One CityPlace Drive, Suite 300 St. Louis,
Missouri 63141	 	 
	 
	 	 	 	 	 	 
	 	 	Attention: James E. Florczak	 	 
	 	 	Telephone:314-994-2785	 	 
	 	 	Facsimile: 314-994-2739	 	 

Purchase and Sale Agreement

(Arch Coal)

S-2

 

	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 	 	ARCH ENERGY RESOURCES, INC.,

as an Originator	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ James E. Florczak	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	James E. Florczak	 	 
	 

	 	Title:
	 	Vice President and Treasurer	 	 
	 
	 	 	 	 	 	 
	 

	 	Address:
	 	One CityPlace Drive, Suite 300 St. Louis,
Missouri 63141	 	 
	 
	 	 	 	 	 	 
	 	 	Attention: James E. Florczak	 	 
	 	 	Telephone:314-994-2785	 	 
	 	 	Facsimile: 314-994-2739	 	 
	 
	 	 	 	 	 	 
	 	 	ARCH OF WYOMING, LLC,

as an Originator	 	 
	 
	 

	 	By:
	 	/s/ James E. Florczak	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	James E. Florczak	 	 
	 

	 	Title:
	 	Vice President and Treasurer	 	 
	 
	 	 	 	 	 	 
	 

	 	Address:
	 	One CityPlace Drive, Suite 300 St. Louis,
Missouri 63141	 	 
	 
	 	 	 	 	 	 
	 	 	Attention: James E. Florczak	 	 
	 	 	Telephone: 314-994-2785	 	 
	 	 	Facsimile: 314-994-2739	 	 

Purchase
and Sale Agreement

(Arch Coal)

S-3

 

	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 	 	ARCH WESTERN RESOURCES, LLC,

as an Originator	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ James E. Florczak	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	James E. Florczak	 	 
	 

	 	Title:
	 	Vice President and Treasurer	 	 
	 
	 	 	 	 	 	 
	 

	 	Address:
	 	One CityPlace Drive, Suite 300 St. Louis,
Missouri 63141	 	 
	 
	 	 	 	 	 	 
	 	 	Attention: James E. Florezak	 	 
	 	 	Telephone: 314-994-2785	 	 
	 	 	Facsimile: 314-994-2739	 	 
	 
	 	 	 	 	 	 
	 	 	ASHLAND TERMINAL, INC.,

as an Originator	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ James E. Florczak	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	James E. Florczak	 	 
	 

	 	Title:
	 	Vice President and Treasurer	 	 
	 
	 	 	 	 	 	 
	 

	 	Address:
	 	One CityPlace Drive, Suite 300 St. Louis,
Missouri 63141	 	 
	 
	 	 	 	 	 	 
	 	 	Attention: James E. Florczak	 	 
	 	 	Telephone: 314-994-2785	 	 
	 	 	Facsimile: 314-994-2739	 	 

Purchase and Sale Agreement

(Arch Coal)

S-4

 

	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 	 	CANYON FUEL COMPANY, LLC,

as an Originator	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ James E. Florczak	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	James E. Florczak	 	 
	 

	 	Title:
	 	Vice President and Treasurer	 	 
	 
	 	 	 	 	 	 
	 

	 	Address:
	 	One CityPlace Drive, Suite 300 St.
Louis, Missouri 63141	 	 
	 
	 	 	 	 	 	 
	 

	 	Attention:
	 	James E. Florczak	 	 
	 

	 	Telephone:
	 	314-994-2785	 	 
	 

	 	Facsimile:
	 	314-994-2739	 	 
	 
	 	 	 	 	 	 
	 	 	CATENARY COAL HOLDINGS, INC.,

as an Originator	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ James E. Florczak	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	James B. Florczak	 	 
	 

	 	Title:
	 	Vice President and Treasurer	 	 
	 
	 	 	 	 	 	 
	 

	 	Address:
	 	One CityPlace Drive, Suite 300 St. Louis,
Missouri 63141	 	 
	 
	 	 	 	 	 	 
	 	 	Attention: James E. Florczak	 	 
	 	 	Telephone:314-994-2785	 	 
	 	 	Facsimile:314-994-2739	 	 

Purchase and Sale Agreement

(Arch Coal)

S-5

 

	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 	 	COAL-MAC, INC., 

as an Originator	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ James E. Florczak	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	James E. Florczak	 	 
	 

	 	Title:
	 	Vice President and Treasurer	 	 
	 
	 	 	 	 	 	 
	 

	 	Address:
	 	One CityPlace Drive, Suite 300 St. Louis,
Missouri 63141	 	 
	 
	 	 	 	 	 	 
	 	 	Attention: James E. Florczak	 	 
	 	 	Telephone: 314-994-2785	 	 
	 	 	Facsimile: 314-994-2739	 	 
	 
	 	 	 	 	 	 
	 	 	CUMBERLAND RIVER COAL COMPANY,

as an Originator	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ James E. Florczak	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	James E. Florczak	 	 
	 

	 	Title:
	 	Vice President and Treasurer	 	 
	 
	 	 	 	 	 	 
	 

	 	Address:
	 	One CityPlace Drive, Suite 300 St.
Louis, Missouri 63141	 	 
	 
	 	 	 	 	 	 
	 	 	Attention: James E. Florczak	 	 
	 	 	Telephone:314-994-2785	 	 
	 	 	Facsimile: 314-994-2739	 	 

Purchase and Sale Agreement

(Arch Coal)

S-6

 

	 	 	 	 	 	 	 	 	 
	 	 	LONE MOUNTAIN PROCESSING, INC.,

as an Originator	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	/s/ James E. Florczak	 	 
	 	 	 	 	 	 	 
	 	 	Name:	 	James E. Florczak	 	 
	 	 	Title:	 	Vice President and Treasurer	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	Address:	 	One CityPlace Drive, Suite 300 St. Louis,	 	 
	 

	 	 	 	 	 	Missouri 63141	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	Attention: James E. Florczak	 	 
	 	 	Telephone:314-994-2785	 	 
	 	 	Facsimile: 314-994-2739	 	 

	 	 	 	 	 	 	 	 	 
	 	 	MINGO LOGAN COAL COMPANY,

as an Originator	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	/s/ James E. Florczak	 	 
	 	 	 	 	 	 	 
	 	 	Name:	 	James E. Florczak	 	 
	 	 	Title:	 	Vice President and Treasurer	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	Address:	 	One CityPlace Drive, Suite 300 St. Louis,	 	 
	 

	 	 	 	 	 	Missouri 63141	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	Attention: James E. Florczak	 	 
	 	 	Telephone:314-994-2785	 	 
	 	 	Facsimile: 314-994-2739	 	 

Purchase and Sale Agreement

(Arch Coal)

S-7

 

	 	 	 	 	 	 	 	 	 
	 	 	MOUNTAIN COAL COMPANY, L.L.C.,

as an Originator	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	/s/ James E. Florczak	 	 
	 	 	 	 	 	 	 
	 	 	Name:	 	James E. Florczak	 	 
	 	 	Title:	 	Vice President and Treasurer	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	Address:	 	One CityPlace Drive, Suite 300 St. Louis,	 	 
	 

	 	 	 	 	 	Missouri 63141	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	Attention: James E. Florczak	 	 
	 	 	Telephone: 314-994-2785	 	 
	 	 	Facsimile: 314-994-2739	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	MOUNTAIN MINING, INC.,

as an Originator	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	/s/ James E. Florczak	 	 
	 	 	 	 	 	 	 
	 	 	Name:	 	James E. Florczak	 	 
	 	 	Title:	 	Vice President and Treasurer	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	Address:	 	One CityPlace Drive, Suite 300 St. Louis,	 	 
	 

	 	 	 	 	 	Missouri 63141	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	Attention: James E. Florczak	 	 
	 	 	Telephone: 314-994-2785	 	 
	 	 	Facsimile: 314-994-2739	 	 

Purchase and Sale Agreement

(Arch Coal)

S-8

 

	 	 	 	 	 	 	 	 	 
	 	 	THUNDER BASIN COAL COMPANY, L.L.C.,

as an Originator	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	/s/ James E. Florczak	 	 
	 	 	 	 	 	 	 
	 	 	Name:	 	James E. Florczak	 	 
	 	 	Title:	 	Vice President and Treasurer	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	Address:	 	One CityPlace Drive, Suite 300 St. Louis,	 	 
	 

	 	 	 	 	 	Missouri 63141	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	Attention: James E. Florczak	 	 
	 	 	Telephone: 314-994-2785	 	 
	 	 	Facsimile: 314-994-2739	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	TRITON COAL COMPANY, LLC,

as an Originator	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	/s/ James E. Florczak	 	 
	 	 	 	 	 	 	 
	 	 	Name:	 	James E. Florczak	 	 
	 	 	Title:	 	Vice President and Treasurer	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	Address:	 	One CityPlace Drive, Suite 300 St. Louis,	 	 
	 

	 	 	 	 	 	Missouri 63141	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	Attention: James E. Florczak	 	 
	 	 	Telephone: 314-994-2785	 	 
	 	 	Facsimile: 314-994-2739	 	 

Purchase and Sale Agreement

(Arch Coal)

S-9

 

Schedule I

LIST OF ORIGINATORS

Arch Coal Sales Company, Inc.

Arch Coal Terminal, Inc.

Arch Energy Resources, Inc.

Arch of Wyoming, LLC

Arch Western Resources, LLC

Ashland Terminal, Inc.

Canyon Fuel Company, LLC

Catenary Coal Holdings, Inc.

Coal-Mac, Inc.

Cumberland River Coal Company

Lone Mountain Processing, Inc.

Mingo Logan Coal Company

Mountain Coal Company, L.L.C.

Mountain Mining, Inc.

Thunder Basin Coal Company, L.L.C.

Triton Coal Company, LLC

Purchase and Sale Agreement

(Arch Coal)

Schedule I-I

 

 

Schedule II

LOCATION OF EACH ORIGINATOR

	 	 	 
	Originator	 	Location
	Arch Coal Sales Company, Inc.

	 	Delaware
	Arch Coal Terminal, Inc.

	 	Delaware
	Arch Energy Resources, Inc.

	 	Delaware
	Arch of Wyoming, LLC

	 	Delaware
	Arch Western Resources, LLC

	 	Delaware
	Ashland Terminal, Inc.

	 	Delaware
	Canyon Fuel Company, LLC

	 	Delaware
	Catenary Coal Holdings, Inc.

	 	Delaware
	Coal-Mac, Inc.

	 	Kentucky
	Cumberland River Coal Company

	 	Delaware
	Lone Mountain Processing, Inc.

	 	Delaware
	Mingo Logan Coal Company

	 	Delaware
	Mountain Coal Company, L.L.C.

	 	Delaware
	Mountain Mining, Inc.

	 	Delaware
	Thunder Basin Coal Company, L.L.C.

	 	Delaware
	Triton Coal Company, LLC

	 	Delaware

Purchase and Sale Agreement

(Arch Coal)

Schedule II-1

 

 

Schedule III

LOCATION OF BOOKS AND RECORDS OF EACH ORIGINATOR

One CityPlace Drive, Suite 300

St. Louis, Missouri 63141

Purchase and Sale Agreement

(Arch Coal)

Schedule III-1

 

 

Schedule IV 

TRADE NAMES

	 	 	 
	Legal Name	 	Trade Names
	Arch Coal Sales Company, Inc.
	 	 
	Arch Coal Terminal, Inc.
	 	 
	Arch Energy Resources, Inc.
	 	 
	Arch of Wyoming, LLC
	 	 
	Arch Western Resources, LLC
	 	 
	Ashland Terminal, Inc.
	 	 
	Canyon Fuel Company, LLC
	 	 
	Catenary Coal Holdings, Inc.
	 	 
	Coal-Mac, Inc.

	 	Phoenix Coal-Mac Mining, Inc.
	Cumberland River Coal Company

	 	Arch of the North Fork
	Lone Mountain Processing, Inc.
	 	 
	Mingo Logan Coal Company
	 	 
	Mountain Coal Company, L.L.C.
	 	 
	Mountain Mining, Inc.
	 	 
	Thunder Basin Coal Company, L.L.C.
	 	 
	Triton Coal Company, LLC
	 	 

Purchase and Sale Agreement

(Arch Coal)

Schedule IV-1

 

 

Exhibit A

FORM OF PURCHASE REPORT

			
	Originator:	 	[Name of Originator]

			
	Purchaser:	 	Arch Coal, Inc.

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) = $        
             	 

Purchase and Sale Agreement

(Arch Coal)

Exhibit A-1

 

 

Exhibit B

FORM OF JOINDER AGREEMENT

     THIS JOINDER AGREEMENT, dated as of                      20___(this “Agreement”) is
executed by                      a [corporation] organized under the laws of                      (the
“Additional Originator”), with its principal place of business located at                     .

BACKGROUND:

     A. Arch Coal, Inc., a Delaware corporation (the “Company”) and the various entities
from time to time party thereto, as Originators (collectively, the “Originators”), have
entered into that certain Purchase and Sale Agreement, dated as of February 3, 2006 (as amended,
restated, supplemented or otherwise modified through the date hereof, and as it may be further
amended, restated, supplemented or otherwise modified from time to time, the “Purchase and Sale
Agreement”).

     B. The Additional Originator desires to become a Originator pursuant to Section 4.3 of
the Purchase and Sale Agreement.

     NOW, THEREFORE, in consideration of the foregoing and other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the Additional Originator hereby
agrees as follows:

     SECTION 1. Definitions. Capitalized terms used in this Agreement and not otherwise
defined herein shall have the meanings assigned thereto in the Purchase and Sale Agreement or in
the Receivables Purchase Agreement (as defined in the Purchase and Sale Agreement).

     SECTION 2. Transaction Documents. The Additional Originator hereby agrees
that it shall be bound by all of the terms, conditions and provisions of, and shall be
deemed to be a party to (as if it were an original signatory to), the Purchase and Sale Agreement
and each of the other relevant Transaction Documents. From and after the later of the date hereof
and the date that the Additional Originator has complied with all of the requirements of
Section 4.3 of the Purchase and Sale Agreement, the Additional Originator shall be an
Originator for all purposes of the Purchase and Sale Agreement and all other Transaction Documents.
The Additional Originator hereby acknowledges that it has received copies of the Purchase and Sale
Agreement and the other Transaction Documents.

     SECTION 3. Representations and Warranties. The Additional Originator hereby makes all
of the representations and warranties set forth in Article V (to the extent applicable) of
the Purchase and Sale Agreement as of the date hereof (unless such representations or warranties
relate to an earlier date, in which case as of such earlier date), as if such representations and
warranties were fully set forth herein. The Additional Originator hereby represents and warrants
that its location (as defined in the applicable UCC) is [                    ] and the
offices where the Additional Originator keeps all of its Records and Related Security is as
follows:

Purchase and Sale Agreement

(Arch Coal)

Exhibit B-1

 

 

      
                
                
            

      
                 
                
           

       
                 
                
          

     SECTION 4. Miscellaneous. This Agreement shall be governed by, and construed in
accordance with, the internal laws of the State of New York. This Agreement is executed by the
Additional Originator for the benefit of the Company, and its assigns, and each of the foregoing
parties may rely hereon. This Agreement shall be binding upon, and shall inure to the benefit
of, the Additional Originator and its successors and permitted assigns.

[Signature Pages Follow]

Purchase and Sale Agreement

(Arch Coal)

Exhibit B-2

 

 

     IN WITNESS WHEREOF, the undersigned has caused this Agreement to be executed by its duly
authorized officer as of the date and year first above written.

[NAME OF ADDITIONAL ORIGINATOR]

	 	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 

	 	 

Consented to:

	 	 	 	 	 	 	 
	ARCH COAL, INC.	 	 
	 
	 	 	 	 	 	 
	By:
	 	 	 	 	 	 
	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	Acknowledged by:	 	 
	 
	 	 	 	 	 	 
	PNC BANK, NATIONAL ASSOCIATION,

as Administrator	 	 
	 
	 	 	 	 	 	 
	By:
	 	 	 	 	 	 
	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 

	 	 

Purchase and Sale Agreement

(Arch Coal)

Exhibit B-3

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00120-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00120-of-00352.parquet"}]]