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UNITED STATES BANKRUPTCY COURT EASTERN DISTRICT OF MISSOURI EASTERN DIVISION

In re: Chapter 11 Case No. 16-40120-705

(Jointly Administered) ARCH COAL, INC., et al., Objection Deadline:

1 February 16, 2016 Debtors. Hearing Date and Time (if necessary): February 23, 2016 10:00 a.m. (Prevailing Central Time)

Hearing Location (if necessary): Courtroom 7 South

NOTICE OF THE DEBTORS’ APPLICATION FOR AUTHORITY TO EMPLOY AND RETAIN PJT PARTNERS LP AS INVESTMENT BANKER FOR THE DEBTORS NUNC PRO TUNC TO THE PETITION DATE

PLEASE TAKE NOTICE that this application is scheduled for hearing on February 23, 2016, at 10:00 a.m. (prevailing Central Time), in Bankruptcy Courtroom 7 South, in the Thomas F. Eagleton U.S. Courthouse, 111 South Tenth Street, St. Louis, Missouri 63102.

WARNING: ANY RESPONSE OR OBJECTION TO THIS APPLICATION MUST BE FILED WITH THIS COURT BY FEBRUARY 16, 2016. A COPY MUST BE PROMPTLY SERVED UPON THE UNDERSIGNED. FAILURE TO FILE A TIMELY RESPONSE MAY RESULT IN THE COURT GRANTING THE RELIEF REQUESTED PRIOR TO THE HEARING DATE.

1 The Debtors are listed on Schedule 1 attached hereto. The employer tax identification numbers and addresses for each of the Debtors are set forth in the Debtors’ chapter 11 petitions.

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DEBTORS’ APPLICATION FOR AUTHORITY TO EMPLOY AND RETAIN PJT PARTNERS LP AS INVESTMENT BANKER FOR THE DEBTORS NUNC PRO TUNC TO THE PETITION DATE

NOW COME Arch Coal, Inc. (“Arch”) and its subsidiaries that are debtors and debtors

in possession in these proceedings (collectively, the “Debtors”) and move this Court for entry of

an order for the authority to retain and employ PJT Partners LP (“PJTP” or the “Advisor”) as

their investment banker nunc pro tunc to the Petition Date (as defined below) to perform the

services that will be required during these chapter 11 cases. In support of this Application (the

“Application”), the Debtors show the Court as follows:

Relief Requested

1. By this Application and pursuant to sections 327(a) and 328(a) of title 11

of the United States Code (the “Bankruptcy Code”), Rule 2014(a) of the Federal Rules of

Bankruptcy Procedure (the “Bankruptcy Rules”) and Rules 2014(A) and 2016-1(A) of the

Local Rules of the United States Bankruptcy Court for the Eastern District of Missouri (the

“Local Rules”), the Debtors seek entry of an order in substantially the form included herewith

(the “Proposed Order”):2 (i) authorizing the Debtors to employ and retain PJTP nunc pro tunc

to the Petition Date, as investment banker to the Debtors, under the terms and conditions set forth

in that certain engagement letter (the “Engagement Letter”) dated November 27, 2015, a copy

of which is annexed as Exhibit 1 to the Buschmann Declaration (as defined below) and

incorporated by reference herein, (ii) approving the terms of the Advisor’s employment,

including the proposed fee structure and indemnification provisions set forth in the Engagement

Letter, subject to the standards set forth in section 328 of the Bankruptcy Code, effective nunc

pro tunc to the Petition Date, provided that the proposed fee structure and indemnification

2 A copy of the Proposed Order will be made available on the Debtors’ case information website at https://cases.primeclerk.com/archcoal.

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provisions set forth in the Engagement Letter shall not be subject to the standard of review set

forth in section 330 of the Bankruptcy Code, except solely by the Office of the U.S. Trustee for

the Eastern District of Missouri (the “U.S. Trustee”), who, for the avoidance of doubt, shall be

entitled to review applications for payment of compensation and reimbursement of expenses of

the Advisor under section 330 of the Bankruptcy Code, and (iii) granting such other and further

relief as the Court deems appropriate. In support of this Application, the Debtors submit the

Declaration of Mark Buschmann in Support of Debtors’ Application for Authority to Employ and

Retain PJT Partners LP as Investment Banker for the Debtors Nunc Pro Tunc to the Petition

Date (the “Buschmann Declaration”) attached hereto as Exhibit A and the Declaration and

Statement of Annah Kim-Rosen in Support of Debtors’ Application for Authority to Employ and

Retain PJT Partners LP as Investment Banker for the Debtors Nunc Pro Tunc to the Petition

Date (the “Kim-Rosen Declaration”) attached hereto as Exhibit B.

Jurisdiction

2. This Court has jurisdiction over this Application under 28 U.S.C. § 1334.

Venue of this proceeding is proper pursuant to 28 U.S.C. § 1409. This is a core proceeding

within the meaning of 28 U.S.C. § 157(b)(2).

Background

3. The Debtors filed voluntary petitions for relief under chapter 11 of the

Bankruptcy Code on January 11, 2016 (the “Petition Date”).

4. The Debtors have continued in possession of their property and have

continued to operate and manage their businesses as debtors in possession pursuant to sections

1107(a) and 1108 of the Bankruptcy Code. No request has been made for the appointment of a

trustee or examiner.

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5. The Debtors’ cases are being jointly administered pursuant to Bankruptcy

Rule 1015(b) and the Order Directing Joint Administration of Chapter 11 Cases entered by this

Court on January 13, 2016 in each of the Debtors’ cases.

6. The Court entered the Order Establishing Certain Notice, Case

Management and Administrative Procedures on January 21, 2016 [ECF No. 155] (the “Case

Management Order”).

7. Additional information about the Debtors’ businesses and the events

leading up to the Petition Date can be found in the Declaration of John T. Drexler, Senior Vice

President and Chief Financial Officer of Arch Coal, Inc., filed on the Petition Date [ECF No. 3],

which is incorporated herein by reference.

The Advisor’s Qualifications

8. The Advisor is well qualified to serve as the Debtors’ investment

banker. As detailed in the Buschmann Declaration, the Advisor is an independent financial

advisory firm, listed on the New York Stock Exchange (ticker symbol: PJT). The Advisor’s

restructuring and reorganization advisory operation is one of the world’s leading advisory

services providers to companies and creditors in restructurings and bankruptcies. PJTP is a

wholly owned subsidiary of PJT Partners Holdings LP, of which PJT Partners, Inc. acts as sole

general partner. PJT Partners Inc. was formed in part through a multi-step merger and spin off

transaction whereby Blackstone Advisory Partners L.P.’s (“Blackstone”)3 restructuring and

advisory groups were spun-off to form PJTP and its affiliated operating entities.

3 One of Blackstone’s subsidiaries, GSO Capital Partners, LP (“GSO”), is a member of the Official Committee of Unsecured Creditors. GSO is the credit-oriented asset management subsidiary of Blackstone. Blackstone’s restructuring and advisory groups were separate and distinct from GSO.

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9. PJTP’s restructuring group has approximately 60 employees globally. The

members and senior executives of the Advisor’s restructuring and reorganization practice have

assisted and advised numerous chapter 11 debtors in the development of plans of reorganization

and are experienced in analyzing restructuring and related chapter 11 issues. The members and

senior executives of the Advisor’s restructuring and reorganization practice have been

particularly active in large, complex and high-profile bankruptcies and restructurings, having

advised in the following matters, among others, in their chapter 11 reorganizations:

AbitibiBowater Inc.; Adelphia Communications Corporation; Ambac Financial Group, Inc.;

Cengage Learning, Inc.; Central European Distribution Corp. (CEDC); Delta Air Lines, Inc.;

Dynegy Inc.; Eastman Kodak Company; Edison Mission Energy; Enron Corporation; Excel

Maritime Carriers, Ltd.; Genco Shipping & Trading Limited; Global Crossing Ltd.; Flag

Telecom Holdings Limited; Flying J. Inc.; Houghton Mifflin Harcourt Publishing Company; Lee

Enterprises Inc.; LightSquared Inc.; Los Angeles Dodgers LLC; LyondellBasell Industries;

Magnetation LLC; Mirant Corp.; NewPage Corporation; NTK Holdings, Inc.; Patriot Coal

Corporation; SemGroup; TerreStar Networks Inc.; Tribune Company; W.R. Grace & Co.; and

Winn-Dixie Stores, Inc. In addition, the restructuring group has provided general restructuring

advice to such major companies as Ford Motor Company, The Goodyear Tire & Rubber

Company and Xerox Corporation.

10. Since February 4, 2015, the Advisor was retained by the Debtors on a

prepetition basis to advise on the Debtors’ capital raising options and restructuring and

reorganization efforts. During this time, the Advisor has become intimately familiar with the

Debtors’ businesses, affairs, assets and contractual arrangements. The Advisor has worked

closely with the Debtors to analyze the Debtors’ financial positions and to assist the Debtors in

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evaluating various restructuring alternatives, including raising new capital. Accordingly, the

Advisor has the necessary background to deal effectively and efficiently with many financial

issues and problems that may arise in the context of the Debtors’ chapter 11 cases.

11. As a result of the prepetition work performed on behalf of the Debtors, the

Advisor has acquired significant knowledge of the Debtors’ financial affairs, debt structure,

business operations, capital structure, key stakeholders, financing documents and other related

material information. Likewise, in providing prepetition services to the Debtors, the Advisor’s

professionals have worked closely with the Debtors’ management, board of directors and other

advisors. If this Application is approved, several of the Advisor’s professionals, all with

substantial expertise in the areas discussed above, will continue to provide services to the

Debtors. Such personnel, including Timothy Coleman, Mark Buschmann and Scott Mates, will

lead the team of the Advisor’s professionals and will work closely with the Debtors’

management and other professionals throughout the reorganization process. Accordingly, as a

result of the Advisor’s representation of the Debtors prior to the commencement of these chapter

11 cases and the Advisor’s extensive experience in representing chapter 11 debtors, the Advisor

is well qualified to provide these services and represent the Debtors during their chapter 11

cases.

The Advisor’s Disinterestedness

12. To the best of the Debtors’ knowledge, except as set forth in the Kim-

Rosen Declaration: (i) the Advisor has no relevant connection with any of the Debtors, the

Debtors’ creditors, the U.S. Trustee, any person employed in the office of the U.S. Trustee or any

other party with an actual or potential interest in these chapter 11 cases or their respective

attorneys or accountants; (ii) the Advisor (and the Advisor’s professionals) are not creditors,

equity security holders or insiders of any of the Debtors; (iii) neither the Advisor nor any of its

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professionals is or was, within two years of the Petition Date, a director, officer or employee of

any of the Debtors; and (iv) neither the Advisor nor any of its professionals hold or represent an

interest materially adverse to any of the Debtors, their estates or any class of creditors or equity

security holders by reason of any direct or indirect relationship to, connection with or interest in

any of the Debtors, or for any other reason. Accordingly, the Debtors submit that the Advisor is

a “disinterested person” as defined in section 101(14) of the Bankruptcy Code, as modified by

section 1107(b) of the Bankruptcy Code, and the Advisor’s employment is permissible under

sections 327(a) and 328(a) of the Bankruptcy Code.

13. The Debtors’ knowledge, information and belief regarding the matters set

forth herein are based upon, and made in reliance on, the Kim-Rosen Declaration. The Advisor

will continue to monitor for any matters that might affect its disinterested status. To the extent

that any new relevant facts or relationships bearing on the matters described herein during the

period of the Advisor’s retention are discovered or arise, the Advisor will use reasonable efforts

to promptly file a supplemental declaration.

14. Before the Petition Date, the Debtors paid the Advisor $3,047,347.924 in

fees and expenses. The aforementioned amount includes out-of-pocket prepetition expenses

incurred by the Advisor and a $30,000 expense estimate.5

Services to Be Rendered

15. Subject to further order of this Court, and in accordance with the terms of

the Engagement Letter, the Debtors request the employment and retention of the Advisor to

4 This amount includes fees and expenses incurred pursuant to the terms of that certain engagement letter dated February 4, 2015 (the “Exchange Engagement Letter”), under which PJTP provided certain exchange- related investment banking services to the Debtors (the “Exchange Services”). The Exchange Services concluded in the fall of 2015 and the terms of the Exchange Engagement Letter no longer apply.

5 Upon conclusion of the Advisor’s employment, any portion of the expense estimate not applied to actual expenses incurred, shall be returned to the Debtors.

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render the following investment banking services to the Debtors as necessary, appropriate and

feasible and as may be requested by the Debtors:

(a) Assist in the evaluation of the Debtors’ businesses and prospects; (b) Assist in the development of the Debtors’ long-term business plan and related financial projections; (c) Assist in the development of financial data and presentations to the Debtors’ Boards of Directors, various creditors and other third parties; (d) Analyze the Debtors’ financial liquidity and evaluate alternatives to improve such liquidity; (e) Analyze various restructuring scenarios and the potential impact of these scenarios on the recoveries of those stakeholders impacted by the Restructuring (as defined below); (f) Assist the Debtors in arranging a financing if requested by the Debtors, including, but not limited to, debtor-in-possession financing and exit financing; (g) Provide strategic advice with regard to restructuring or refinancing the Debtors’ obligations; (h) Evaluate the Debtors’ debt capacity and alternative capital structures; (i) Participate in negotiations among the Debtors and their creditors, suppliers, lessors and other interested parties; (j) Value securities offered or to be offered by the Debtors in connection with a Restructuring; (k) Advise the Debtors and negotiate with lenders with respect to potential waivers or amendments of credit facilities; (l) Assist in arranging financing for the Debtors, as requested; (m) Provide expert witness testimony concerning any of the subjects encompassed by the other investment banking services; and (n) Provide such other advisory services as are customarily provided in connection with the analysis and negotiation of a Restructuring, as requested and mutually agreed.

16. The services that the Advisor will provide to the Debtors are necessary to

enable the Debtors to maximize the value of their estates. The Debtors believe that the services

will not duplicate the services that other professionals will be providing to the Debtors in these

chapter 11 cases. Specifically, the Advisor will carry out unique functions and will use

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reasonable efforts to coordinate with the Debtors’ other retained professionals to avoid

unnecessary duplication of services.

Professional Compensation

17. In consideration of the services to be provided by the Advisor, and as

more fully described in the Engagement Letter, subject to this Court’s approval, the Debtors and

the Advisor have agreed that the Advisor shall, in respect of its services, be paid in cash under

the following fee structure (the “Fee Structure”):6

(a) Monthly Fee. The Debtors shall pay the Advisor a monthly advisory fee (the “Monthly Fee”) of $250,000 in cash; the first Monthly Fee was payable on November 27, 2015 and additional installments of such Monthly Fee will be payable in advance by the 27th day of each subsequent month until the Engagement Letter is terminated.

(b) Capital Raising Fee. The Debtors shall pay the Advisor an additional fee for any financing arranged by PJTP, at the Debtors’ request (the “Capital Raising Fee”) of 0.75% of the total issuance size for senior debt financing (including debtor-in-possession financing), 3.0% of the total issuance size for junior debt financing and 5.0% of the issuance amount for equity financing, payable upon receipt of a binding commitment letter; provided that, if financing arranged by PJTP (and use of proceeds generated from such financing) is the only Restructuring7 undertaken, PJTP, in its sole discretion, may choose to be paid either the Capital Raising Fee or the Restructuring fee, but not both.

6 This summary of the Engagement Letter contained in this Application is qualified in its entirety by reference to the provisions of the Engagement Letter. To the extent that there is any discrepancy between the terms contained in this Application and those set forth in the Engagement Letter, the terms of the Engagement Letter shall control. Unless otherwise defined herein, capitalized terms used in this summary shall have the meanings ascribed to such terms in the Engagement Letter.

7 Except as otherwise provided in the Engagement Letter, a “Restructuring” shall be deemed to have been consummated upon (a) the binding execution and effectiveness of all necessary waivers, consents, amendments or restructuring agreements between the Debtors and their creditors involving the compromise of the face amount of such obligations (as defined in the Engagement Letter) or the conversion of all or part of such obligations into alternative securities, including equity, in the case of an out-of-court restructuring; (b) the execution, confirmation and consummation of a plan of reorganization pursuant to an order of the Bankruptcy Court, in the case of an in- court restructuring; or (c) in the case of a sale or other disposition of all or substantially all of the assets or equity of the Debtors, upon the closing of such sale. Notwithstanding the foregoing, (a) a Restructuring specifically shall be deemed to exclude any assumption at face value of obligations in connection with the sale or disposition of any subsidiaries, joint ventures, assets or lines of business of the Debtors and (b) in no event shall more than one Restructuring Fee be payable hereunder;

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(c) Restructuring Fee. The Debtors shall pay the Advisor an additional fee (the “Restructuring Fee”) equal to $13,500,000, payable in cash, upon the consummation of the Restructuring.

(d) Expense Reimbursements.

(i) In addition to the fees described above, the Debtors agree to reimburse the Advisor, promptly upon request, for its actual, reasonable and properly documented out-of-pocket expenses incurred during the Engagement (as defined below), including, but not limited to, travel and lodging, direct identifiable data processing, document production, publishing services and communication charges, courier services, working meals, reasonable fees and expenses of the Advisor’s counsel (not to exceed $25,000 without the Debtors’ written consent, such consent not to be unreasonably withheld, conditioned or delayed) and other necessary expenditures, payable upon rendition of invoices setting forth in reasonable detail the nature and amount of such expenses; provided, however, that PJTP shall not incur reimbursable out-of-pocket expenses in excess of $50,000 without the prior written approval (including via email) of the Debtors (such consent not to be unreasonably withheld, conditioned or delayed).

(ii) Further, in connection with the reimbursement and contribution provisions set forth in the Engagement Letter and Attachment A of the Engagement Letter (the “Indemnification Agreement”), the Debtors agree to reimburse each Indemnified Party for all actual, reasonable and documented out-of-pocket expenses (including actual, reasonable and documented fees, expenses and disbursements of counsel; provided, however, that in no event shall the Debtors be obligated to pay the fees and expenses of more than one counsel related to a request) as they are incurred in connection with investigating, preparing, pursuing, defending or assisting in the defense of any action, claim, suit, investigation or proceeding related to, arising out of or in connection with the engagement under the Engagement Letter or the Indemnification Agreement, whether or not pending or threatened, whether or not any Indemnified Party is a party, whether or not resulting in any liability and whether or not such action, claim, suit, investigation or proceeding is initiated or brought by the Debtors.

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18. The advisory services and compensation arrangement set forth in the

Engagement Letter do not encompass other investment banking services or transactions that may

be undertaken by the Advisor at the request of the Debtors, including the arranging of debt or

equity capital (except as provided in the Engagement Letter), issuing fairness opinions or any

other specific services not set forth in the Engagement Letter. The terms and conditions of any

such investment banking services, including compensation arrangements, would be set forth in a

separate written agreement between the Advisor and the appropriate party, and the Debtors and

the Advisor will seek authority from the Court for any such expanded retention.

19. The Debtors understand that the terms and conditions of the Advisor’s

employment are reasonable and comparable to compensation generally charged by financial

advisors and investment bankers of a similar stature for comparable engagements, both in and

out of court. Given the numerous issues that the Advisor may be required to address in these

chapter 11 cases, the Advisor’s commitment to the variable level of time and effort necessary to

address all such issues as they arise, and the market prices for the Advisor’s services for

engagements of this nature in both out-of-court and chapter 11 contexts, the Debtors agree that

the fee arrangements in the Engagement Letter are reasonable under the standards set forth

below.

20. The Debtors understand that the terms of the Advisor’s employment and

compensation, as described in the Engagement Letter, are consistent with employment and the

type of compensation arrangements typically entered into by the Advisor when providing

financial advisory services and investment banking services. The Advisor’s employment and

compensation arrangements are competitive with those entered into by other investment banking

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firms when rendering comparable services. The Advisor and the Debtors believe that the

foregoing compensation requirements are both reasonable and market-based.

21. In accordance with Local Rule 2016-2(B), the Debtors propose that

(a) PJTP be allowed to submit regular monthly invoices to the parties included in the Rule 9013-

3(D) Master Service List and (b) pursuant to Local Rule 2016-2(B), the Debtors be authorized to

pay up to 80% of fees and 100% of expenses on a monthly basis, subject to later court approval.8

22. To the best of the Debtors’ knowledge, information and belief, and except

and to the extent disclosed in the Buschmann Declaration, no promises have been received by the

Advisor as to compensation in connection with these chapter 11 cases other than as outlined in

the Engagement Letter, and the Advisor has no agreement with any other entity to share any

compensation received with any person other than the principals and employees of the Advisor.

The Indemnification Provisions Are Appropriate

23. As more fully described in the indemnification, reimbursement and

contribution provisions set forth in the Indemnification Agreement, the Debtors have agreed,

among other things, to indemnify and hold harmless the Advisor and other “Indemnified

Parties” (as defined in the Indemnification Agreement) from and against any losses, claims,

damages, expenses and liabilities whatsoever, whether they be joint or several (collectively,

“Liabilities”), related to, arising out of or in connection with the engagement (the

“Engagement”) under the Engagement Letter. The Debtors, however, will not be liable for any

losses, claims, damages or liabilities (or expenses relating thereto) that are finally judicially

determined by a court of competent jurisdiction to have resulted from the gross negligence, bad

8 The Debtors intend to request by motion an Order Establishing Procedures for Interim Monthly Compensation and Reimbursement of Expenses of Professionals, by which PJTP and certain other professionals would be compensated on an interim basis.

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faith, willful misconduct or fraud of an Indemnified Party (such provisions being the

“Indemnification Provisions”). However, the following conditions will apply with respect to

any such indemnification, reimbursement or contribution pursuant to the Indemnification

Provisions:

(a) All requests of Indemnified Parties for payment of indemnity, reimbursement or contribution pursuant to the Engagement Letter shall be made by means of an application (interim or final as the case may be) and shall be subject to review by the Court to ensure that payment of such indemnity, reimbursement or contribution conforms to the terms of the Engagement Letter and is reasonable based upon the circumstances of the litigation or settlement in respect of which indemnity, reimbursement or contribution is sought; provided, however, that in no event shall Indemnified Party be indemnified in the case of its own bad faith, fraud, gross negligence or willful misconduct.

(b) In the event that Indemnified Party seeks reimbursement from the Debtors for reasonable attorneys’ fees in connection with a request by Indemnified Party for payment of indemnity, reimbursement or contribution pursuant to the Engagement Letter, the invoices and supporting time records from such attorneys shall be included in Indemnified Party’s own application (both interim and final) and such invoices and time records shall be subject to the approval of the Court under the standards of sections 330 and 331 of the Bankruptcy Code without regard to whether such attorneys have been retained under section 327 of the Bankruptcy Code and without regard to whether such attorneys’ services satisfy section 330(a)(3)(C) of the Bankruptcy Code.

24. The Debtors submit that such indemnification is standard in the

specialized financial advisory industry and that the provision of such indemnification by the

Debtors is fair and reasonable considering the Advisor’s qualifications and the expectations of

other special financial advisors in connection with engagements of this scope and size.

Approval of Engagement Pursuant to Section 328(a) of the Bankruptcy Code

25. Section 328 of the Bankruptcy Code provides, in relevant part, that a

debtor “with the court’s approval, may employ or authorize the employment of a professional

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person under section 327 . . . on any reasonable terms and conditions of employment, including

on a retainer, on an hourly basis, on a fixed or percentage fee basis, or on a contingent fee basis.”

11 U.S.C. § 328(a). Thus, section 328(a) permits the Court to approve the terms of the Advisor’s

engagement as set forth in the Engagement Agreement, including the Fee Structure and the

Indemnification Agreement.

26. As recognized by numerous courts, Congress intended in section 328(a) to

enable debtors to retain professionals pursuant to specific fee arrangements to be determined at

the time of the court’s approval of the retention, subject to reversal only if the terms are found to

be “improvident in light of developments not capable of being anticipated at the time of the

fixing of such terms and conditions.” 11 U.S.C. § 328(a). See Donaldson, Lufkin & Jenrette Sec.

Corp. v. Nat’l Gypsum Co. (In re Nat’l Gypsum Co.), 123 F.3d 861, 862-63 (5th Cir. 1997) (“If

the most competent professionals are to be available for complicated capital restructuring and the

development of successful corporate reorganization, they must know what they will receive for

their expertise and commitment.”); see also Riker, Danzig, Scherer, Hyland & Perretti LLP v.

Official Comm. of Unsecured Creditors (In re Smart World Techs., LLC), 383 B.R. 869, 874

(S.D.N.Y. 2008) (quoting In re Nat’l Gypsum, 123 F.3d at 862-63).

27. The Debtors believe that the terms and provisions of the Engagement

Letter, including the Fee Structure and the Indemnification Agreement, are reasonable terms and

conditions of employment and should be approved under section 328(a) of the Bankruptcy Code.

Such terms and provisions appropriately reflect (i) the nature of the services to be provided by

the Advisor and (ii) the Fee Structure and indemnification provisions typically utilized by the

Advisor and other leading financial advisory firms, which do not bill their time on an hourly

basis and are generally compensated on a transactional basis. In particular, the Debtors believe

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that the Fee Structure creates a proper balance between fixed and monthly fees based on the

successful consummation of certain transactions.

28. The Debtors submit that the terms and provisions of the Engagement

Letter, including the Fee Structure and the Indemnification Agreement, are reasonable terms and

conditions of employment in light of (i) industry practice, (ii) market rates charged for

comparable services both in and out of the chapter 11 context and (iii) the Advisor’s

restructuring expertise as well as its capital markets knowledge and financing skills.

Maintenance of Time Records

29. The Advisor has requested, pursuant to section 328(a) of the Bankruptcy

Code, payment of its fees on a monthly and fixed-rate basis, which is customary in the

investment banking industry. It is not the general practice of investment banking firms,

including the Advisor, to keep detailed time records similar to those customarily kept by

attorneys. Accordingly, if the Court grants the Application, the Advisor will file interim and

final fee applications for the allowance of compensation for services rendered and

reimbursement of expenses incurred in accordance with the applicable provisions of the

Bankruptcy Code, the Bankruptcy Rules, the Local Rules, the Fee Guidelines and any applicable

orders of this Court. Because the Advisor is being compensated with a fixed Monthly Fee,

Capital Raising Fee and Restructuring Fee, the Debtors request that the Advisor not be required

to submit time records in support of its fee applications.

30. The Advisor will also maintain detailed records of any actual and

necessary costs and expenses incurred in connection with the aforementioned services. The

Advisor’s applications for compensation and expenses will be paid by the Debtors pursuant to

the terms of the Engagement Letter. Except as necessary to comply with an applicable order, all

such expense billings are in accordance with the Advisor’s customary practices.

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Notice

31. Consistent with the Case Management Order, the Debtors will serve notice

of this Application on (a) the Core Parties and (b) any Non-ECF Parties (collectively, the

“Notice Parties”). All parties who have requested electronic notice of filings in these cases

through the Court’s ECF system will automatically receive notice of this Application through the

ECF system no later than the day after its filing with the Court. A copy of this Application and

any order approving it will also be made available on the Debtors’ Case Information Website

(located at https://cases.primeclerk.com/archcoal). A copy of the Proposed Order will be made

available on the Debtors’ Case Information Website. The Proposed Order may be modified or

withdrawn at any time without further notice. If any significant modifications are made to the

Proposed Order, an amended Proposed Order will be made available on the Debtors’ Case

Information Website, and no further notice will be provided. In light of the relief requested, the

Debtors submit that no further notice is necessary.

No Prior Request

32. The Debtors have not previously sought the relief requested herein from

this or any other court.

WHEREFORE, the Debtors respectfully request that this Court:

(a) authorize the Debtors to retain and employ PJTP as their investment

banker in these chapter 11 cases on the terms and conditions set forth in

the Engagement Letter, effective nunc pro tunc to the Petition Date;

(b) approve the terms of PJTP’s employment, including the proposed Fee

Structure and Indemnification Agreement set forth in the Engagement

Letter, subject to the standards set forth in section 328 of the Bankruptcy

Code, effective nunc pro tunc to the Petition Date; and

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(c) grant the Debtors such other and further relief as is just and proper.

[Signature Page Follows]

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SCHEDULE 1 Debtor Entities

1. ACI Terminal, LLC 37. ICG Eastern, LLC 2. Allegheny Land Company 38. ICG Eastern Land, LLC 3. Apogee Holdco, Inc. 39. ICG Illinois, LLC 4. Arch Coal, Inc. 40. ICG Knott County, LLC 5. Arch Coal Sales Company, Inc. 41. ICG Natural Resources, LLC 6. Arch Coal West, LLC 42. ICG Tygart Valley, LLC 7. Arch Development, LLC 43. International Coal Group, Inc. 8. Arch Energy Resources, LLC 44. Jacobs Ranch Coal LLC 9. Arch Reclamation Services, Inc. 45. Jacobs Ranch Holdings I LLC 10. Arch Western Acquisition Corporation 46. Jacobs Ranch Holdings II LLC 11. Arch Western Acquisition, LLC 47. Juliana Mining Company, Inc. 12. Arch Western Bituminous Group, LLC 48. King Knob Coal Co., Inc. 13. Arch Western Finance LLC 49. Lone Mountain Processing, Inc. 14. Arch Western Resources, LLC 50. Marine Coal Sales Company 15. Arch of Wyoming, LLC 51. Melrose Coal Company, Inc. 16. Ark Land Company 52. Mingo Logan Coal Company 17. Ark Land KH, Inc. 53. Mountain Coal Company, L.L.C. 18. Ark Land LT, Inc. 54. Mountain Gem Land, Inc. 19. Ark Land WR, Inc. 55. Mountain Mining, Inc. 20. Ashland Terminal, Inc. 56. Mountaineer Land Company 21. Bronco Mining Company, Inc. 57. Otter Creek Coal, LLC 22. Catenary Coal Holdings, Inc. 58. Patriot Mining Company, Inc. 23. Catenary HoldCo, Inc. 59. P.C. Holding, Inc. 24. Coal-Mac, Inc. 60. Powell Mountain Energy, LLC 25. CoalQuest Development LLC 61. Prairie Coal Company, LLC 26. Cumberland River Coal Company 62. Prairie Holdings, Inc. 27. Energy Development Co. 63. Saddleback Hills Coal Company 28. Hawthorne Coal Company, Inc. 64. Shelby Run Mining Company, LLC 29. Hobet Holdco, Inc. 65. Simba Group, Inc. 30. Hunter Ridge, Inc. 66. Thunder Basin Coal Company, L.L.C. 31. Hunter Ridge Coal Company 67. Triton Coal Company, L.L.C. 32. Hunter Ridge Holdings, Inc. 68. Upshur Property, Inc. 33. ICG, Inc. 69. Vindex Energy Corporation 34. ICG, LLC 70. Western Energy Resources, Inc. 35. ICG Beckley, LLC 71. White Wolf Energy, Inc. 36. ICG East Kentucky, LLC 72. Wolf Run Mining Company Case 16-40120 Doc 280-1 Filed 02/09/16 Entered 02/09/16 19:10:16 Exhibit A - Declaration of Mark Buschmann Pg 1 of 25

Exhibit A Declaration of Mark Buschmann

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UNITED STATES BANKRUPTCY COURT EASTERN DISTRICT OF MISSOURI EASTERN DIVISION

In re: Chapter 11 Case No. 16-40120-705

(Jointly Administered) ARCH COAL, INC., et al., Objection Deadline:

1 February 16, 2016 Debtors. Hearing Date and Time (if necessary): February 23, 2016 10:00 a.m. (Prevailing Central Time)

Hearing Location (if necessary): Courtroom 7 South

DECLARATION OF MARK BUSCHMANN IN SUPPORT OF DEBTORS’ APPLICATION FOR AUTHORITY TO EMPLOY AND RETAIN PJT PARTNERS LP AS INVESTMENT BANKER FOR THE DEBTORS NUNC PRO TUNC TO THE PETITION DATE

Mark Buschmann makes this declaration under 28 U.S.C. § 1746 and states:

1. I am over the age of 18 and competent to testify. I am a Partner of PJT

Partners LP (“PJTP” or the “Advisor”), a financial advisory firm with its principal offices located at 280 Park Avenue, New York, NY 10017. I am authorized to execute this declaration

(the “Declaration”) on behalf of the Advisor. Unless otherwise stated in this Declaration, I have personal knowledge of the facts set forth herein.2

2. This Declaration is being submitted in connection with the proposed

retention of the Advisor as investment banker to Arch Coal, Inc. and its Debtor affiliates

1 The Debtors are listed on Schedule 1 attached to the Application. The employer tax identification numbers and addresses for each of the Debtors are set forth in the Debtors’ chapter 11 petitions.

2 Certain of the disclosures herein relate to matters within the knowledge of other professionals at PJTP.

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(collectively, the “Debtors”) to perform services as set forth in the engagement (the

“Engagement”) under that certain engagement letter (the “Engagement Letter”), dated

November 27, 2015, a copy of which is annexed as Exhibit 1 hereto, as modified by the Debtors’

Application for Authority to Employ and Retain PJT Partners LP as Investment Banker Nunc

Pro Tunc to the Petition Date (the “Application”).3

3. The Advisor believes that its services will not duplicate the services that other professionals will be providing to the Debtors in their chapter 11 cases. Specifically, the

Advisor will carry out unique functions and will use reasonable efforts to coordinate with the

Debtors’ other retained professionals to avoid the unnecessary duplication of services.

The Advisor’s Qualifications

4. PJTP is part of a leading independent financial advisory firm, whose

restructuring group, which consists of Blackstone Advisory Partners L.P.’s (“Blackstone”)4

historical restructuring and reorganization business, is one of the world’s leading restructuring

advisors. PJTP is a wholly owned subsidiary of PJT Partners Holdings LP, of which PJT

Partners, Inc. acts as sole general partner. PJT Partners Inc. was formed in part through a multi-

step merger and spin off transaction whereby Blackstone’s restructuring and advisory groups

were spun-off to form PJTP and its affiliated operating entities.

5. The Advisor’s professionals have extensive experience working with

financially troubled companies in complex financial restructurings. The members and senior

executives of the Advisor’s restructuring and reorganization practice have assisted and advised

3 Unless otherwise defined herein, each capitalized term shall have the meaning ascribed to such term in the Application.

4 One of Blackstone’s subsidiaries, GSO Capital Partners, LP (“GSO”), is a member of the Official Committee of Unsecured Creditors. GSO is the credit-oriented asset management subsidiary of Blackstone. Blackstone’s restructuring and advisory groups were separate and distinct from GSO.

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numerous chapter 11 debtors in the development of plans of reorganization and are experienced

in analyzing restructuring and related chapter 11 issues.

6. As a result of the Advisor’s prepetition engagement by the Debtors, the

Advisor has developed a reserve of institutional knowledge related to, and an intimate understanding of the Debtors and their business operations, capital structure, key stakeholders, financing documents and other material information, and therefore will be able to facilitate the

Debtors’ efforts to maximize the value of their estates in these chapter 11 cases. I believe that the Advisor and the professionals it employs are uniquely qualified to advise the Debtors in the matters for which the Advisor is proposed to be employed.

The Advisor’s Disinterestedness

7. In connection with its proposed retention by the Debtors in these cases,

PJTP undertook to determine whether PJTP had any conflicts or other relationships that might

cause it not to be disinterested or to hold or represent an interest adverse to any of the Debtors.

Annah Kim-Rosen, PJTP’s Chief Compliance Officer (the “Chief Compliance Officer”), is

responsible for, among other things, the day-to-day operation of the compliance function at

PJTP. As part of that job, she maintains, for purposes of monitoring and avoiding conflicts of interest, a list (the “Restricted List”) of companies with which PJTP or one of its affiliates is

doing business, either as an advisor or with respect to which PJTP is in possession of material

nonpublic information or has entered into a confidentiality agreement. The Chief Compliance

Officer and her staff have received the names of individuals and entities that may be parties in interest in these chapter 11 cases (the “Potential Parties in Interest List”) attached as

Schedule 1 to the Kim-Rosen Declaration, which is attached as Exhibit B to the Application, and

have compared this to the Restricted List to determine the existence of any possible conflicts (the

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“Conflict Check”). The results of the Conflict Check are disclosed in the Kim-Rosen

Declaration.

8. As part of its diverse practice, the Advisor appears in numerous cases, proceedings and transactions involving many different professionals, including attorneys, accountants, investment bankers and financial consultants, some of whom may represent claimants and parties in interest in the Debtors’ chapter 11 cases. Further, PJTP has in the past been and may in the future be represented by several attorneys and law firms in the legal community, some of whom may be involved in this proceeding. In addition, the Advisor has in the past worked, and will likely in the future work, with or against other professionals involved in this case in matters unrelated to this case. Based on our current knowledge of the professionals involved, and to the best of my knowledge, none of these business relations constitute interests materially adverse to the Debtors’ estates and none are in connection with these chapter 11 cases.

9. The Advisor and certain of its members and employees may have represented, may currently represent and likely will represent, in matters wholly unrelated to the

Debtors’ chapter 11 cases, entities that are Potential Parties in Interest in the Debtors’ chapter 11 cases.

10. As described earlier, PJTP was formed through a multi-step merger and spin off transaction whereby Blackstone’s historical restructuring and advisory groups were spun-off to form PTJP and its affiliated entities. GSO Capital Partners, LP (“GSO”), a subsidiary of Blackstone, has been appointed as a member of the Official Committee of

Unsecured Creditors in the Debtors’ chapter 11 cases. Historically, Blackstone’s restructuring and advisory groups operated separately from GSO and the spin-off was successfully completed

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in early October 2015. PJTP has examined the prior GSO connection and does not believe it

would in any way affect PJTP’s ability to represent the Debtors effectively.

11. PJTP does not believe that any of its involvement with any of the entities

on the Potential Parties in Interest List will adversely affect the Debtors in any way. PJTP has

not represented, does not represent and will not represent any entity on the Potential Parties in

Interest List in the Debtors’ chapter 11 cases nor have any relationship with any such entity that

would be adverse to the Debtors. PJTP does not believe that any potential relationship it may have with any entity on the Potential Parties in Interest List would interfere with or impair the

Advisor’s representation of the Debtors in their chapter 11 cases.

12. Given the size and breadth of PJTP’s client base, it is possible that PJTP may now or in the future be retained by one or more of the entities on the Potential Parties in

Interest List in unrelated matters without my knowledge. In addition, the Debtors have numerous customers, creditors and other parties with whom they may maintain business relationships and some may not be included as an entity on the Potential Parties in Interest List.

The Debtors have been informed that PJTP will conduct an ongoing review of its electronic files to ensure that no disqualifying circumstances have arisen. To the extent that PJTP discovers any such parties, or enters into any new, material relationship with an entity on the Potential Parties in Interest List, the Advisor will supplement this disclosure to the Court promptly. Other than as disclosed herein, to the best of my knowledge, PJTP has no other relationship with the Debtors of which I am aware.

13. To the best of my knowledge, except as set forth in the Kim-Rosen

Declaration: (i) the Advisor has no relevant connection with any of the Debtors, the Debtors’ creditors, the U.S. Trustee, any person employed in the office of the U.S. Trustee or any other

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party with an actual or potential interest in these chapter 11 cases or their respective attorneys or

accountants; (ii) the Advisor (and the Advisor’s professionals) are not creditors, equity security holders or insiders of any of the Debtors; (iii) neither the Advisor nor any of its professionals is

or was, within two years of the Petition Date, a director, officer or employee of any of the

Debtors; and (iv) neither the Advisor nor any of its professionals hold or represent an interest

materially adverse to any of the Debtors, their estates or any class of creditors or equity security

holders by reason of any direct or indirect relationship to, connection with or interest in any of

the Debtors, or for any other reason. Accordingly, I believe that the Advisor is a “disinterested

person” as defined in section 101(14) of the Bankruptcy Code, as modified by section 1107(b) of

the Bankruptcy Code, and the Advisor’s employment is permissible under sections 327(a) and

328(a) of the Bankruptcy Code.

14. I am not related or connected to and, to the best of my knowledge, no other professional of PJTP who will work on this engagement is related or connected to any

United States Bankruptcy Judge for the Eastern District of Missouri or any of the District Judges

for the Eastern District of Missouri who handle bankruptcy cases, or any employee in the Office

of the U.S. Trustee.

15. No promises have been received by the Advisor as to compensation in

connection with these chapter 11 cases other than as outlined in the Engagement Letter, and the

Advisor has no agreement with any other entity to share any compensation received with any

person other than the principals and employees of the Advisor.

16. PJTP will periodically review its files during the pendency of its

engagement by the Debtors to ensure that no conflicts or other disqualifying circumstances exist

or arise. If any new relevant facts or relationships are discovered or arise during the pendency of

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Professional Compensation

17. The Fee Structure described in the Application and Engagement Letter is consistent with the Advisor’s normal and customary billing practices for comparably sized and comparably complex cases and transactions, both in and out of court. Further, the Fee Structure was established to reflect the difficulty of the extensive assignment the Advisor has undertaken.

Accordingly, the Advisor believes that the proposed compensation arrangements are both reasonable and market-based.

18. The Advisor has requested, pursuant to section 328(a) of the Bankruptcy

Code, payment of its fees on a monthly and fixed-rate basis, which is customary in the investment banking industry. It is not the general practice of investment banking firms to keep detailed time records similar to those customarily kept by attorneys.

19. Accordingly, if the Application is granted, the Advisor requests to file fee applications for the allowance of compensation for services rendered at 120-day intervals and to receive monthly payment from Debtors for reimbursement of fees and expenses incurred in accordance with Local Rule 2016-2(B) and any other applicable provisions of the Bankruptcy

Code, the Bankruptcy Rules, the Local Rules and any applicable orders of this Court. Because the Advisor is being compensated with a fixed Monthly Fee, Capital Raising Fee and

Restructuring Fee, the Advisor requests that it not be required to submit time records in support of its fee applications.

20. Additionally, as more fully described in the indemnification, reimbursement and contribution provisions set forth in Attachment A of the Engagement Letter

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(the “Indemnification Agreement”), the Debtors have agreed, among other things, to indemnify

and hold harmless the Advisor and other “Indemnified Parties” (as defined in the Engagement

Letter) from and against any losses, claims, damages, expenses and liabilities whatsoever, whether they be joint or several, related to, arising out of or in connection with the engagement under the Engagement Letter (collectively, “Liabilities”), except for any Liabilities that are finally judicially determined by a court of competent jurisdiction to have resulted from the gross negligence, bad faith, willful misconduct or fraud of an Indemnified Party (such provisions being the “Indemnification Provisions”). However, the following conditions will apply with respect to any such indemnification, reimbursement or contribution pursuant to the Indemnification

Provisions:

(a) All requests of Indemnified Parties for payment of indemnity, reimbursement or contribution pursuant to the Engagement Letter shall be made by means of an application (interim or final as the case may be) and shall be subject to review by the Court to ensure that payment of such indemnity, reimbursement or contribution conforms to the terms of the Engagement Letter and is reasonable based upon the circumstances of the litigation or settlement in respect of which indemnity, reimbursement or contribution is sought; provided, however, that in no event shall Indemnified Party be indemnified in the case of its own bad faith, fraud, gross negligence or willful misconduct.

(b) In the event that Indemnified Party seeks reimbursement from the Debtors for reasonable attorneys’ fees in connection with a request by Indemnified Party for payment of indemnity, reimbursement or contribution pursuant to the Engagement Letter, the invoices and supporting time records from such attorneys shall be included in Indemnified Party’s own application (both interim and final) and such invoices and time records shall be subject to the Fee Guidelines and the approval of the Court under the standards of sections 330 and 331 of the Bankruptcy Code without regard to whether such attorneys have been retained under section 327 of the Bankruptcy Code and without regard to whether such attorneys’ services satisfy section 330(a)(3)(C) of the Bankruptcy Code.

21. Such expense reimbursement and indemnification, reimbursement and contribution provisions are standard in the investment banking industry, and the Advisor believes that such provisions are fair and reasonable.

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22. Before the Petition Date, the Debtors paid the Advisor $3,047,347.92.5

The aforementioned amount includes a $30,000.00 expense estimate.6

[Signature Page Follows]

5 This amount includes fees and expenses incurred pursuant to the terms of the Exchange Engagement Letter. The Exchange Services concluded in the fall of 2015 and the terms of the Exchange Engagement Letter no longer apply.

6 Upon conclusion of the Advisor’s employment, any portion of the expense estimate not applied to actual expenses incurred, shall be returned to the Debtors.

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Exhibit 1 to the Buschmann Declaration

(Engagement Letter)

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November 27, 2015

John Drexler Chief Financial Officer Arch Coal, Inc. One City Place, Suite 300 St. Louis, MO 63141

Dear Mr. Drexler: This letter confirms the understanding and agreement (the “Agreement”) between PJT Partners LP (“PJTP”) and Arch Coal, Inc. (together with any affiliates and subsidiaries, the “Company”) regarding the retention of PJTP by the Company effective as of the date hereof (the “Effective Date”) as its investment banker for the purposes set forth herein. Under this Agreement, PJTP will provide investment banking services to the Company in connection with a possible restructuring of certain liabilities of the Company and will assist the Company in analyzing, structuring, negotiating and effecting the Restructuring pursuant to the terms and conditions of this Agreement. As used in this Agreement, the term “Restructuring” shall mean, collectively, (i) any restructuring, reorganization (whether or not pursuant to chapter 11 (“Chapter 11”) of title 11 of the United States Code (the “Bankruptcy Code”)) and/or recapitalization of the Company and/or sale or other disposition of substantially all of the assets of the Company affecting the Company’s funded debt obligations, including, without limitation, senior secured debt, junior secured debt and unsecured debt (collectively, the “Obligations”), and/or (ii) any complete repurchase, refinancing, extension or repayment by the Company of any of the Obligations. The investment banking services to be rendered by PJTP will include the following: (a) Assist in the evaluation of the Company’s businesses and prospects; (b) Assist in the development of the Company’s long-term business plan and related financial projections; (c) Assist in the development of financial data and presentations to the Company’s Board of Directors, various creditors and other third parties; (d) Analyze the Company’s financial liquidity and evaluate alternatives to improve such liquidity;

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(e) Analyze various restructuring scenarios and the potential impact of these scenarios on the recoveries of those stakeholders impacted by the Restructuring; (f) Assist the Company in arranging a financing if requested by the Company, including, but not limited to, debtor-in-possession financing and exit financing; (g) Provide strategic advice with regard to restructuring or refinancing the Company’s Obligations; (h) Evaluate the Company’s debt capacity and alternative capital structures; (i) Participate in negotiations among the Company and its creditors, suppliers, lessors and other interested parties; (j) Value securities offered or to be offered by the Company in connection with a Restructuring; (k) Advise the Company and negotiate with lenders with respect to potential waivers or amendments of various credit facilities; (l) Assist in arranging financing for the Company, as requested; (m) Provide expert witness testimony concerning any of the subjects encompassed by the other investment banking services; and (n) Provide such other advisory services as are customarily provided in connection with the analysis and negotiation of a Restructuring, as requested and mutually agreed. Notwithstanding anything contained in this Agreement to the contrary, PJTP shall have no responsibility for designing or implementing any initiatives to improve the Company’s operations, profitability, cash management or liquidity. PJTP makes no representations or warranties about the Company’s ability to (i) successfully improve its operations, (ii) maintain or secure sufficient liquidity to operate its business, or (iii) successfully complete a Restructuring. PJTP is retained under this Agreement solely to provide advice regarding a Restructuring and is not being retained to provide “crisis management.” The Company will pay the following fees to PJTP for its investment banking services: (i) a monthly advisory fee (the “Monthly Fee”) in the amount of $250,000 per month, in cash, with the first Monthly Fee payable by November 27th and additional installments of such Monthly Fee payable in advance by the 27th of each subsequent month until this Agreement is terminated; (ii) a capital raising fee (the “Capital Raising Fee”) for any financing arranged by PJTP, at the Company’s request, earned and payable upon receipt of a binding commitment letter; provided that, if access to the financing is limited by orders of the Bankruptcy Court (as defined below) or otherwise, a proportionate fee with respect to each available commitment (irrespective of availability blocks, borrowing base, or other similar restrictions) shall instead be payable at such time

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of availability. The Capital Raising Fee will be calculated as 0.75% of the total issuance size for senior debt financing (including DIP financing), 3.0% of the total issuance size for junior debt financing, and 5.0% of the issuance amount for equity financing it being understood that, if financing arranged by PJTP (and use of proceeds generated from such financing) is the only Restructuring undertaken, PJTP, in its sole discretion, may choose to be paid either the Capital Raising Fee or the Restructuring fee, but not both; (iii) an additional fee (the “Restructuring Fee”) equal to $13,500,000, earned and payable in cash upon the consummation of a Restructuring. Except as otherwise provided herein, a Restructuring shall be deemed to have been consummated upon (a) the binding execution and effectiveness of all necessary waivers, consents, amendments or restructuring agreements between the Company and its creditors involving the compromise of the face amount of such Obligations or the conversion of all or part of such Obligations into alternative securities, including equity, in the case of an out-of-court restructuring; (b) the execution, confirmation and consummation of a Plan of Reorganization pursuant to an order of the Bankruptcy Court, in the case of an in-court restructuring; provided, however, that, in the event that the Company solicits acceptances for a prepackaged plan of reorganization under Chapter 11 to implement the Restructuring, then on the date established as the voting deadline for such acceptances or rejections, provided that at least one class of creditors impaired by such plan has accepted such plan; or (c) in the case of a sale or other disposition of all or substantially all of the assets or equity of the Company, upon the closing of such sale. Notwithstanding the foregoing, (a) a Restructuring specifically shall be deemed to exclude any assumption at face value of Obligations in connection with the sale or disposition of any subsidiaries, joint ventures, assets or lines of business of the Company, and (b) in no event shall more than one Restructuring Fee be payable hereunder; and (i) reimbursement of all actual, reasonable and properly documented out-of-pocket expenses incurred during this engagement, including, but not limited to, travel and lodging, direct identifiable data processing, document production, publishing services and communication charges, courier services, working meals, reasonable fees and expenses of PJTP’s counsel (not to exceed $25,000 without the Company’s prior consent, such consent not to be unreasonably withheld, conditioned or delayed) and other necessary expenditures, payable upon rendition of invoices setting forth in reasonable detail the nature and amount of such expenses, provided, however, that PJTP shall not incur reimbursable out-of- pocket expenses in excess of $50,000 without the prior written approval (including via email) of the Company (such consent not to be unreasonably withheld, conditioned or delayed).

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In the event that the Company is or becomes a debtor under Chapter 11, the Company shall use its best efforts to promptly apply to the bankruptcy court having jurisdiction over the Chapter 11 case or cases (the “Bankruptcy Court”) for the approval pursuant to sections 327 and 328 of the Bankruptcy Code of (A) this Agreement, including the attached indemnification agreement, and (B) PJTP’s retention by the Company under the terms of this Agreement and subject to the standard of review provided in section 328(a) of the Bankruptcy Code and not subject to any other standard of review under section 330 of the Bankruptcy Code. The Company shall supply PJTP with a draft of such application and any proposed order authorizing PJTP’s retention sufficiently in advance of the filing of such application and proposed order to enable PJTP and its counsel to review and comment thereon. PJTP shall have no obligation to provide any services under this Agreement in the event that the Company becomes a debtor under Chapter 11 unless PJTP’s retention under the terms of this Agreement is approved under section 328(a) of the Bankruptcy Code by a final order of the Bankruptcy Court no longer subject to appeal, rehearing, reconsideration or petition for certiorari, and which order is reasonably acceptable to PJTP in all respects. PJTP acknowledges that in the event that the Bankruptcy Court approves its retention by the Company, PJTP’s fees and expenses shall be subject to the jurisdiction and approval of the Bankruptcy Court under section 328(a) of the Bankruptcy Code and any applicable fee and expense guideline orders; provided, however, that the Company shall request that PJTP not be required to maintain time records or receipts for expenses in amounts less than $75. In the event that the Company becomes a debtor under Chapter 11 and PJTP’s engagement hereunder is approved by the Bankruptcy Court, the Company shall pay all fees and expenses of PJTP hereunder as promptly as practicable in accordance with the terms hereof. Prior to commencing a Chapter 11 case, the Company shall pay all invoiced amounts to PJTP in immediately available funds by wire transfer. With respect to PJTP’s retention under sections 327 and 328 of the Bankruptcy Code, the Company acknowledges and agrees that PJTP’s restructuring expertise as well as its capital markets knowledge, financing skills and mergers and acquisitions capabilities, some or all of which may be required by the Company during the term of PJTP’s engagement hereunder, were important factors in determining the amount of the various fees set forth herein, and that the ultimate benefit to the Company of PJTP’s services hereunder could not be measured merely by reference to the number of hours to be expended by PJTP’s professionals in the performance of such services. The Company also acknowledges and agrees that the various fees set forth herein have been agreed upon by the parties in anticipation that a substantial commitment of professional time and effort will be required of PJTP and its professionals hereunder over the life of the engagement, and in light of the fact that such commitment may foreclose other opportunities for PJTP and that the actual time and commitment required of PJTP and its professionals to perform its services hereunder may vary substantially from week to week or month to month, creating “peak load” issues for the firm. In addition, given the numerous issues which PJTP may be required to address in the performance of its services hereunder, PJTP’s commitment to the variable level of time and effort necessary to address all such issues as they arise, and the market prices for PJTP’s services for engagements of this nature in an out-of-court context, the Company agrees that the fee arrangements hereunder (including the Monthly Fee,

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Capital Raising Fee, and Restructuring Fee) are reasonable under the standards set forth in section 328(a) of the Bankruptcy Code. The advisory services and compensation arrangement set forth in this Agreement do not encompass other investment banking services or transactions that may be undertaken by PJTP at the request of the Company, including the arranging of debt or equity capital (except as provided above), issuing fairness opinions or any other specific services not set forth in this Agreement. The terms and conditions of any such investment banking services, including compensation arrangements, would be set forth in a separate written agreement between PJTP and the appropriate party. Except as contemplated by the terms hereof or as required by applicable law, regulation or legal process, for a period of two years from the date hereof, PJTP shall keep confidential all non-public information provided to it by or at the request of the Company, and shall not disclose such information to any third party or to any of its employees or advisors except to those persons who have a need to know such information in connection with PJTP’s performance of its responsibilities hereunder and who are advised of the confidential nature of the information and who agree to keep such information confidential. The Company will furnish or cause to be furnished to PJTP such information as PJTP and the Company reasonably believe to be necessary to the assignment (all such information so furnished being the “Information”). The Company further agrees that it will provide PJTP with reasonable access to the Company and its directors, officers, employees and advisers. The Company shall inform PJTP promptly upon becoming aware of any material developments relating to the Company that the Company reasonably expects may impact on the proposed Restructuring or if the Company becomes aware that any Information provided to PJTP is, or has become, untrue, unfair, inaccurate or misleading in any way. Furthermore, the Company warrants and undertakes to PJTP in respect of all Information supplied by the Company that, to the knowledge of the Company, the Company has not obtained any such Information other than by lawful means and that, to the knowledge of the Company, disclosure to PJTP will not breach any agreement or duty of confidentiality owed to third parties. The Company recognizes and confirms that PJTP (a) will use and rely primarily on the Information and on information available from generally recognized public sources in performing the services contemplated by this Agreement without having independently verified the same, (b) does not assume responsibility for the accuracy or completeness of the Information and such other information, (c) is entitled to rely upon the Information without independent verification, and (d) will not make an appraisal of any assets in connection with its assignment. Subject to PJTP’s compliance with all applicable laws and regulations, as reasonably practicable after written request by the Company following the termination of this Agreement, PJTP shall return or destroy, at the direction of the Company, all Information and any other non-public information received from the Company during the course of its engagement and, in the case of destruction, upon the Company’s written request, PJTP shall confirm that all Information has been so destroyed to the extent permissible.

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In the event that the Information belonging to the Company is stored electronically on PJTP’s computer systems, PJTP shall not be liable for any damages resulting from unauthorized access, misuse or alteration of such information by persons not acting on its behalf, provided that PJTP exercises the same degree of care in protecting the confidentiality of, and in preventing unauthorized access to, the Company’s information that it exercises with regard to its own most sensitive proprietary information.

Except as required by applicable law, regulation or legal process, any advice to be provided by PJTP under this Agreement shall not be disclosed publicly or made available to third parties (other than the Company’s other professional advisors, or, if appropriate in the Company’s judgment, in any filings in any Chapter 11 case of the Company) without the prior written consent of PJTP. All services, advice and information and reports provided by PJTP to the Company in connection with this assignment shall be for the sole benefit of the Company and shall not be relied upon by any other person.

The Company acknowledges and agrees that PJTP will provide its investment banking services exclusively to the members of the Board of Directors and senior management of the Company and not to the Company's shareholders or other constituencies. The Board of Directors and senior management will make all decisions for the Company regarding whether and how the Company will pursue any strategic or financial actions and on what terms and by what process. In so doing, the Board of Directors and senior management will also obtain the advice of the Company's legal, tax and other business advisors and consider such other factors which they consider appropriate before exercising their independent business judgment in respect of a Restructuring. The Company further acknowledges and agrees that PJTP has been retained to act solely as an investment banker to the Company and does not in such capacity act as a fiduciary for the Company or any other person. PJTP shall act as an independent contractor and any duties of PJTP arising out of its engagement pursuant to this Agreement shall be owed solely to the Company.

In consideration of PJTP’s agreement to provide investment banking services to the Company in connection with this Agreement, it is agreed that the Company will indemnify PJTP and its agents, representatives, members and employees. A copy of our standard form of indemnification agreement is attached to this Agreement as Attachment A (the “Indemnification Agreement”). PJTP’s engagement hereunder shall terminate upon the consummation of a Restructuring and otherwise may be terminated upon 30 days’ written notice without cause by either the Company or PJTP; termination for cause by either party will occur forthwith. Notwithstanding the foregoing, (a) the provisions relating to the payment of fees and expenses earned and accrued through the date of termination, the status of PJTP as an independent contractor and the limitation as to whom PJTP shall owe any duties will survive any such termination, and (b) any such termination shall not affect the Company’s obligations under the Indemnification Agreement or PJTP’s confidentiality obligations hereunder. In the event the Company

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terminates this Agreement without cause, but not in the event PJTP terminates this Agreement or the Company terminates this Agreement for cause, PJTP shall be entitled to the Restructuring Fee to the extent a Restructuring Fee has not previously been paid (but no additional Monthly Fee) in the event that at any time prior to the expiration of 12 months following the termination of this Agreement a Restructuring is consummated or a definitive agreement with respect to a Restructuring is executed and the transaction(s) contemplated under such definitive agreement are subsequently consummated. Termination by the Company for cause shall include gross negligence, bad faith, willful misconduct, fraud or a material breach of this Agreement by PJTP, which breach shall not have been cured within ten days following written notice by the Company that such breach is a material breach under this Agreement. The Company represents that neither it nor any of its affiliates under common control, nor, to the knowledge of the Company, any of their respective directors or officers, is an individual or entity (“Person”) that is, or is owned or controlled by a Person that is: (i) a Person with whom dealings are restricted or prohibited under U.S. economic sanctions (including those administered or enforced by the U.S. Department of Treasury’s Office of Foreign Assets Control) or similar sanctions imposed by another relevant sanctions authority (collectively, “Sanctions”); or (ii) to the knowledge of the Company, not in compliance in all material respects with all applicable anti-money laundering laws and Sanctions. The Company should be aware that PJTP and/or its affiliates may be providing or may in the future provide financial or other services to other parties with conflicting interests. However, consistent with PJTP’s policy to hold in confidence the affairs of its customers, PJTP will not use confidential information obtained from the Company except in connection with PJTP’s services to, and PJTP’s relationship with, the Company, nor will PJTP use on the Company’s behalf any confidential information obtained from any other customer. The parties hereto acknowledge and agree that the existing letter agreement, dated February 4, 2015, (the “Prior Letter”) by and between the Company and PJTP (as successor in interest to Blackstone Advisory Partners L.P.) shall terminate as of the date hereof and have no further force and effect. Notwithstanding the foregoing, (a) the provisions relating to the payment of fees and expenses earned and accrued through the date of termination, the status of PJTP as an independent contractor and the limitation as to whom PJTP shall owe any duties will survive any such termination, and (b) any such termination shall not affect the Company’s obligations pursuant to the indemnification agreement entered into in connection with the Prior Letter. This Agreement (including the Indemnification Agreement) embodies the entire agreement and understanding between the parties hereto and supersedes all prior agreements and understandings relating to the subject matter hereof. If any provision of this Agreement is determined to be invalid or unenforceable in any respect, such determination will not affect or impair such provision or the remaining provisions of this Agreement in any other respect, which will remain in full force and effect. No waiver, amendment or other modification of this Agreement shall be effective unless in writing and signed by each party to be bound thereby. This Agreement shall be governed by, and construed in accordance with, the laws of the State of

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ATTACHMENT A

November 27, 2015

PJT Partners LP 280 Park Avenue New York, NY 10017

INDEMNIFICATION AGREEMENT Ladies and Gentlemen:

This letter (the “Indemnification Agreement”) will confirm that we have engaged PJT Partners LP (“PJTP”) to advise and assist us in connection with the matters referred to in our letter of agreement dated as of November 27, 2015 (the “Engagement Letter”). In consideration of your agreement to act on our behalf in connection with such matters, we agree to indemnify and hold harmless you and your affiliates and your and their respective partners (both general and limited), members, officers, directors, employees and agents and each other person, if any, controlling you or any of your affiliates (you and each such other person being an “Indemnified Party”) from and against any losses, claims, damages, expenses and liabilities whatsoever, whether they be joint or several, related to, arising out of or in connection with the engagement (the “Engagement”) under the Engagement Letter and will reimburse each Indemnified Party for all actual, reasonable and documented out-of-pocket expenses (including actual, reasonable and documented fees, expenses and disbursements of counsel) as they are incurred in connection with investigating, preparing, pursuing, defending, or otherwise responding to, or assisting in the defense of any action, claim, suit, investigation or proceeding related to, arising out of or in connection with the Engagement or this Indemnification Agreement, whether or not pending or threatened, whether or not any Indemnified Party is a party, whether or not resulting in any liability and whether or not such action, claim, suit, investigation or proceeding is initiated or brought by us. We also agree to cooperate with PJTP and to give, and so far as it is able to procure the giving of, all such information and render all such assistance to PJTP as PJTP may reasonably request in connection with any such action, claim, suit, proceeding, investigation or judgment and not to take any action which might reasonably be expected to prejudice the position of PJTP or its affiliates in relation to any such action, claim, suit, proceeding, investigation or judgment without the consent of PJTP (such consent not to be unreasonably withheld). In the event that PJTP is requested or authorized by us or required by government regulation, subpoena or other legal process to produce documents, or to make its current or former personnel available as witnesses at deposition or trial, arising as a result of or in connection with the Engagement, we will, so long as PJTP is not a party to the

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proceeding in which the information is sought, pay PJTP the actual, reasonable and documented fees and expenses of its counsel incurred in responding to such a request. We will not, however, be liable under the foregoing indemnification provision for any losses, claims, damages or liabilities (or expenses relating thereto) that are finally judicially determined by a court of competent jurisdiction to have primarily resulted from the gross negligence, bad faith, willful misconduct or fraud of PJTP. We also agree that no Indemnified Party shall have any liability (whether direct or indirect, in contract or tort or otherwise) to us or our owners, parents, affiliates, security holders or creditors for or in connection with the Engagement except for any such liability for losses, claims, damages or liabilities incurred by us that are finally judicially determined by a court of competent jurisdiction to have primarily resulted from the gross negligence, bad faith, willful misconduct or fraud of PJTP.

If the indemnification provided for in the preceding paragraph is for any reason (other than the gross negligence, bad faith, willful misconduct or fraud of PJTP as provided above) unavailable to an Indemnified Party in respect of any losses, claims, damages or liabilities referred to herein, then, in lieu of indemnifying such Indemnified Party hereunder, we shall contribute to the amount paid or payable by such Indemnified Party as a result of such losses, claims, damages or liabilities (and expenses relating thereto) (i) in such proportion as is appropriate to reflect the relative benefits received (or anticipated to be received) by you, on the one hand, and us, on the other hand, from the Engagement or (ii) if and only if the allocation provided by clause (i) above is for any reason not available, in such proportion as is appropriate to reflect not only the relative benefits referred to in such clause but also the relative fault of each of you and us, as well as any other relevant equitable considerations; provided, however, to the extent permitted by applicable law, in no event shall your aggregate contribution to the amount paid or payable exceed the aggregate amount of fees actually received by you under the Engagement Letter. For the purposes of this Indemnification Agreement, the relative benefits to us and you of the Engagement shall be deemed to be in the same proportion as (a) the total value paid or contemplated to be paid or received or contemplated to be received by us, our security holders and our creditors in the transaction or transactions that are subject to the Engagement, whether or not any such transaction is consummated, bears to (b) the fees paid or to be paid to PJTP under the Engagement Letter (excluding any amounts paid as reimbursement of expenses).

Neither party to this Indemnification Agreement will, without the prior written consent of the other party (which consent will not be unreasonably withheld), settle or compromise or consent to the entry of any judgment in any pending or threatened claim, action, suit or proceeding in respect of which indemnification may be sought hereunder (a “Judgment”), whether or not we or any Indemnified Party are an actual or potential party to such claim, action, suit or proceeding. In the event that either party to this Indemnification Agreement seeks to settle or compromise or consent to the entry of any Judgment, each party agrees that such settlement, compromise or consent (i) shall include an unconditional release of the other parties hereunder and each Indemnified Party from all liability arising out of such claim, action, suit or proceeding, (ii) shall not include a statement as to, or an admission of, fault, culpability or a failure to act by or on behalf of any party hereunder and each Indemnified Party, and (iii) shall

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not impose any continuing obligations or restrictions on any party hereunder or any Indemnified Party.

Promptly after receipt by an Indemnified Party of notice of any complaint or the commencement of any action or proceeding with respect to which indemnification is being sought hereunder, such person will notify us in writing of such complaint or of the commencement of such action or proceeding, but failure to so notify us will not relieve us from any liability which we may have hereunder or otherwise, except to the extent that such failure materially prejudices our rights. If we so elect or are requested by such Indemnified Party, we will assume the defense of such action or proceeding, including the employment of counsel reasonably satisfactory to PJTP and the payment of the fees and disbursements of such counsel.

In the event, however, such Indemnified Party reasonably determines in its judgment that having common counsel would present such counsel with a conflict of interest or if we fail to assume the defense of the action or proceeding in a timely manner, then such Indemnified Party may employ separate counsel reasonably satisfactory to us to represent or defend it in any such action or proceeding and we will pay the fees and disbursements of such counsel; provided, however, that we will not be required to pay the fees and disbursements of more than one separate counsel for all Indemnified Parties in any jurisdiction in any single action or proceeding. In any action or proceeding the defense of which we assume, the Indemnified Party will have the right to participate in such litigation and to retain its own counsel at such Indemnified Party’s own expense.

The foregoing reimbursement, indemnity and contribution obligations of ours under this Indemnification Agreement shall be in addition to any rights that an Indemnified Party may have at common law or otherwise, and shall be binding upon and inure to the benefit of any successors, assigns, heirs and personal representatives of ours and such Indemnified Party. We agree that the indemnity and reimbursement obligations of ours set out herein shall be in addition to any liability which we may otherwise have under the Engagement Letter and applicable law and shall be binding upon and inure to the benefit of any successors, assigns, heirs and personal representatives of ours, PJTP and any such Indemnified Party.

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Exhibit B Declaration of Annah Kim-Rosen

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UNITED STATES BANKRUPTCY COURT EASTERN DISTRICT OF MISSOURI EASTERN DIVISION

In re: Chapter 11 Case No. 16-40120-705

(Jointly Administered) ARCH COAL, INC., et al., Objection Deadline:

1 February 16, 2016 Debtors. Hearing Date and Time (if necessary): February 23, 2016 10:00 a.m. (Prevailing Central Time)

Hearing Location (if necessary): Courtroom 7 South

DECLARATION OF ANNAH KIM-ROSEN IN SUPPORT OF DEBTORS’ APPLICATION FOR AUTHORITY TO EMPLOY AND RETAIN PJT PARTNERS LP AS INVESTMENT BANKER FOR THE DEBTORS NUNC PRO TUNC TO THE PETITION DATE

I, Annah Kim-Rosen, declare:

1. I am the Chief Compliance Officer of PJT Partners LP (“PJT”).2 As part of my

job, I am responsible for maintaining, for purposes of monitoring and avoiding conflicts of

interest, a list of companies with which PJT or one of its affiliates is doing business, either as an

advisor or with respect to which PJT or one of its affiliates is in possession of material,

nonpublic information or has entered into a confidentiality agreement.

1 The Debtors are listed on Schedule 1 attached to the Application. The employer tax identification numbers and addresses for each of the Debtors are set forth in the Debtors’ chapter 11 petitions.

2 Unless otherwise defined herein, each capitalized term shall have the meaning ascribed to such term in the Application.

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2. On January 26, 2016, my colleagues and I received a list of Parties-In-Interest

(“PII”) from the above-captioned debtors and debtors-in-possession (the “Debtors”), which is attached hereto as Schedule 1.

3. I have undertaken a review of the PII to determine possible connections relating to the Debtors and, subject to the foregoing limitations and the following disclosures, no material connections have been found.

a. PJT has been engaged to provide financial advisory services to the official committee of unsecured creditors of James River Coal Company, an affiliate of one of the PII, in connection with James River Coal Company’s chapter 11 case. Akin Gump Strauss Hauer & Feld LLP, another of the PII, is counsel to the committee. This engagement is wholly unrelated to the Debtors and these chapter 11 cases, and PJT does not believe that the interests of the Debtors or their estates are adversely affected by this engagement.

b. PJT has been engaged to provide financial advisory services to the official committee of unsecured creditors of Quiksilver, Inc. in connection with Quiksilver, Inc.’s chapter 11 case. Akin Gump Strauss Hauer & Feld LLP, one of the PII, is counsel to the committee. This engagement is wholly unrelated to the Debtors and these chapter 11 cases, and PJT does not believe that the interests of the Debtors or their estates are adversely affected by this engagement.

c. PJT has been engaged by a client of Kirkland & Ellis LLP, one of the PII, whose identity cannot be disclosed for confidentiality reasons, for an engagement, the nature of which cannot be disclosed for confidentiality reasons. This engagement is wholly unrelated to the Debtors and these chapter 11 cases, and PJT does not believe that the interests of the Debtors or their estates are adversely affected by this engagement.

d. PJT has been engaged to provide financial advisory services to Samson Resources Corporation in connection with Samson Resources Corporation’s chapter 11 case. Kirkland & Ellis LLP, one of the PII, is counsel to Samson Resources Corporation. This engagement is wholly unrelated to the Debtors and these chapter 11 cases, and PJT does not believe that the interests of the Debtors or their estates are adversely affected by this engagement.

e. PJT has been engaged to provide financial advisory services to Magnum Hunter Resources Corporation in connection with Magnum

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Hunter Resources Corporation’s chapter 11 case. Kirkland & Ellis LLP, one of the PII, is counsel to Magnum Hunter Resources Corporation. This engagement is wholly unrelated to the Debtors and these chapter 11 cases, and PJT does not believe that the interests of the Debtors or their estates are adversely affected by this engagement.

f. PJT has been engaged to provide financial advisory services to the official committee of unsecured creditors of Molycorp Inc. in connection with Molycorp Inc.’s chapter 11 case. Tennenbaum Capital Partners, LLC, one of the PII, is a creditor of Molycorp Inc. This engagement is wholly unrelated to the Debtors and these chapter 11 cases, and PJT does not believe that the interests of the Debtors or their estates are adversely affected by this engagement.

g. PJT has been engaged to provide financial advisory services to Panrico S.A.U., an affiliate of Oaktree Capital Management, L.P., one of the PII, in connection with a potential transaction. This engagement is wholly unrelated to the Debtors and these chapter 11 cases, and PJT does not believe that the interests of the Debtors or their estates are adversely affected by this engagement.

h. PJT has been engaged to provide financial advisory services to Walter Energy, Inc., one of the PII, in connection with Walter Energy, Inc.’s U.S. and Canadian bankruptcy proceedings. Paul, Weiss, Rifkind, Wharton & Garrison LLP, another of the PII, is counsel to Walter Energy, Inc. This engagement is wholly unrelated to the Debtors and these chapter 11 cases, and PJT does not believe that the interests of the Debtors or their estates are adversely affected by this engagement.

i. PJT has been engaged to provide financial advisory services to one of the PII, whose identity cannot be disclosed for confidentiality reasons, in connection with an engagement, the nature of which cannot be disclosed for confidentiality reasons. This engagement is wholly unrelated to the Debtors and these chapter 11 cases, and PJT does not believe that the interests of the Debtors or their estates are adversely affected by this engagement.

j. PJT has been engaged to provide financial advisory services to a group of lenders to Paragon Offshore plc in connection with a potential restructuring of Paragon Offshore plc. Certain of the PII are lenders to Paragon Offshore plc. This engagement is wholly unrelated to the Debtors and these chapter 11 cases, and PJT does not believe that the interests of the Debtors or their estates are adversely affected by this engagement.

k. PJT has been engaged to provide financial advisory services to Magnetation LLC in connection with Magnetation LLC’s chapter 11

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case. Davis Polk & Wardwell LLP, one of the PII, is counsel to Magnetation LLC. This engagement is wholly unrelated to the Debtors and these chapter 11 cases, and PJT does not believe that the interests of the Debtors or their estates are adversely affected by this engagement.

l. PJT has been engaged to provide financial advisory services to an affiliate of Verizon Wireless, one of the PII, in connection with an asset sale to Frontier Communications Corp. This engagement is wholly unrelated to the Debtors and these chapter 11 cases, and PJT does not believe that the interests of the Debtors or their estates are adversely affected by this engagement.

4. PJT currently holds no direct or indirect interest in any debt or equity securities of the Debtors.

5. To the best of my knowledge, except as disclosed herein: (i) PJT has no material connection with any of the Debtors, the Debtors’ creditors, the United States Trustee for the

Eastern District of Missouri (the “U.S. Trustee”), any person employed in the office of the U.S.

Trustee or any other party with an actual or potential interest in these chapter 11 cases or their respective attorneys or accountants; (ii) PJT (and PJT’s professionals) are not creditors, equity security holders or insiders of any of the Debtors; (iii) neither PJT nor any of its professionals is or was, within two years of the date of the Debtors’ filing of these chapter 11 cases, a director, officer, or employee of the Debtors; and (iv) neither PJT nor its professionals holds or represents an interest materially adverse to the Debtors, their estates or any class of creditors or equity security holders by reason of any direct or indirect relationship to, connection with, or interest in the Debtors, or for any other reason. Accordingly, I believe that PJT is a “disinterested person” as defined in section 101(14) of the Bankruptcy Code, as modified by section 1107(b) of the

Bankruptcy Code and PJT’s employment is permissible under sections 327(a) and 328(a) of the

Bankruptcy Code.

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6. PJT has performed reasonable due diligence for possible conflicts with the PII in the Debtors’ chapter 11 cases. The following is a list of the categories that PJT has searched with respect to the PII:

(a) Officers and Directors (2012 to Present); (b) Affiliations of Directors (Board Memberships, Charitable Organizations, etc.); (c) Debtors; (d) Non-Debtor Affiliates; (e) Joint Ventures, Partnerships and Consortiums; (f) Five Percent and Greater Shareholders and Beneficial Owners; (g) Significant Business Partners; (h) Attorneys, Professionals and Financial Advisors (Including Accountants and Investment Banks); (i) Certain Known Term Lenders; (j) Significant Financial Institutions (Including Administrative Agents, Lenders and Equipment Financing); (k) Significant Equipment Lessors; (l) Unions; (m) Surety Issuers; (n) Surety Obligees; (o) Letter of Credit Banks; (p) Letter of Credit Beneficiaries; (q) Significant Taxing Authorities; (r) Royalty Contract Counterparties; (s) Regulatory Agencies; (t) Parties to Significant Litigation; (u) Significant Suppliers, Shippers, Warehousemen and Vendors; (v) Insurers; (w) Insurance Brokers; (x) U.S. Trustee’s Office for the Eastern District of Missouri; (y) Bankruptcy Judges for the Eastern District of Missouri; (z) Top 3 Secured Creditors;

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(aa) Certain Known 2020 Noteholders; (bb) Top 50 Unsecured Creditors; (cc) Utilities; (dd) Significant Customers; (ee) Significant Competitors; (ff) Known Second Lien Noteholders; and (gg) Unsecured Creditors’ Committee.

7. The list of PII was provided by the Debtors and may change during the pendency of the Debtors’ chapter 11 cases. Should PJT learn that a relationship with any of the PII should be disclosed in the future, a supplemental declaration with such disclosure will be promptly filed.

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Schedule 1 to the Kim-Rosen Declaration

ARCH COAL, INC.: POTENTIAL PARTIES IN INTEREST

Officers and Directors (2012 to present) Consortium for Clean Coal Utilization, Allen Kelley Washington University Arnold Hammons DKRW Advanced Fuels Charles Steele Knight Hawk Holdings, LLC David D. Freudenthal Millennium Bulk Terminals-Longview, LLC Deck S. Slone Mining Department, Missouri University of Derek LaBell Science & Technology Douglas H. Hunt National Coal Counsel Erwin Sass National Mining Association George C. Morris III Tongue River Holding Company Ian Valladores Hopkins J. Thomas Jones University of Wyoming Energy Resources James A. Sabala Council Jeff Strobel World Coal Association John A. Ziegler, Jr. John McDaniel Debtors John O’Hare ACI Terminal, LLC John T. Drexler Allegheny Land Company John W. Eaves Apogee Holdco, Inc. John W. Lorson Arch Coal Sales Company, Inc. Jolene Mermis Arch Coal West, LLC Keith Williams Arch Coal, Inc. Kenneth Cochran Arch Development, LLC Kent Smith Arch Energy Resources, LLC Kevin Burns Arch of Wyoming, LLC Low Lei Hyang Doreen Arch Reclamation Services, Inc. Matthew Giljum Arch Western Acquisition Corporation Patricia F. Godley Arch Western Acquisition, LLC Paul A. Lang Arch Western Bituminous Group, LLC Paul T. Hanrahan Peter I. Wold Arch Western Finance LLC Renato Paladino Arch Western Resources, LLC Robert C. Jones Ark Land Company Rowdy Smith Ark Land KH, Inc. Theodore D. Sands Ark Land LT, Inc. Wesley M. Taylor Ark Land WR, Inc. William Rowlands Ashland Terminal, Inc. William Stewart Bronco Mining Company, Inc. Catenary Coal Holdings, Inc. Affiliations of Directors (Board Memberships, Catenary Holdco, Inc. Charitable Organizations, etc.) Coal-Mac, Inc. Advanced Emissions Solutions, Inc. CoalQuest Development LLC American Coal Foundation Cumberland River Coal Company American Coalition for Clean Coal Electricity Energy Development Co. Business Council Hawthorne Coal Company, Inc. Business Roundtable Hobet Holdco, Inc. Coal Utilization Research Council Hunter Ridge Coal Company CoaLogix

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Hunter Ridge Holdings, Inc. Hunter Ridge, Inc. Joint Ventures, Partnerships and Consortiums ICG Beckley, LLC Black Thunder Marketing, LLC ICG East Kentucky, LLC Dominion Terminal Associates ICG Eastern Land, LLC Knight Hawk Holdings, LLC ICG Eastern, LLC Millennium Bulk Terminals-Longview, LLC ICG Illinois, LLC The Sycamore Group, LLC ICG Knott County, LLC Tongue River Holding Co., LLC ICG Natural Resources, LLC ICG Tygart Valley, LLC Five Percent and Greater Shareholders and Beneficial Owners ICG, Inc. BlackRock Inc. ICG, LLC Schneider Capital Management Corporation International Coal Group, Inc. State Street Corporation Jacobs Ranch Coal LLC The Vanguard Group Jacobs Ranch Holdings I LLC Jacobs Ranch Holdings II LLC Significant Business Partners Juliana Mining Company, Inc. Alpha Terminal Company, LLC King Knob Coal Co., Inc. Anker West Virginia Mining Company, Inc. Lone Mountain Processing, Inc. BNSF Railway Co. Marine Coal Sales Company CBR Investments, LLC Melrose Coal Company, Inc. Dominion Terminal Associates Mingo Logan Coal Company Emily Gibson Coal Co. Mountain Coal Company, LLC James River Coal Terminal Company Mountain Gem Land, Inc. Meritage Crude Oil, LLC Mountain Mining, Inc. Millennium Bulk Logistics, Inc. Mountaineer Land Company Millennium Bulk Terminals-Longview, LLC Otter Creek Coal, LLC Peabody Terminals, Inc. P.C. Holding, Inc. Tongue River Railroad Co., Inc. Patriot Mining Company, Inc. TRR Financing, LLC

Powell Mountain Energy, LLC Attorneys, Professionals and Financial Prairie Coal Company, LLC Advisors (Including Accountants and Prairie Holdings, Inc. Investment Banks) Saddleback Hills Coal Company Akin Gump Strauss Hauer & Feld LLP Shelby Run Mining Company, LLC Blackstone Advisory Partners LP Simba Group, Inc. Bank of America Merrill Lynch (Merrill Lynch, The Sycamore Group, LLC Pierce, Fenner & Smith Incorporated) Thunder Basin Coal Company, LLC Brown Rudnick LLP Triton Coal Company, LLC Bryan Cave LLP Upshur Property, Inc. Citigroup Global Markets Inc. Vindex Energy Corporation Cleary Gottlieb Steen & Hamilton LLP Western Energy Resources, Inc. Davis Polk & Wardwell LLP White Wolf Energy, Inc. Dinsmore & Shohl LLP Wolf Run Mining Company Ernst & Young LLP FTI Consulting, Inc. Non-Debtor Affiliates Jefferies LLC Arch Coal Asia-Pacific Pte. Ltd. Kaye Scholer LLP Arch Coal Australia Holdings Pty Ltd. Kirkland & Ellis LLP Arch Coal Australia Pty Ltd. Kramer Levin Naftalis & Frankel LLP Mayer Brown LLP Arch Coal Europe Limited Moelis and Company Arch of Australia Pty Ltd. Paul, Weiss, Rifkind, Wharton & Garrison LLP Arch Receivable Company, LLC

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PJT Partners Inc. Thrivent Financial Prime Clerk LLC Seward & Kissel LLP Significant Financial Institutions (Including Shearman & Sterling LLP Administrative Agents, Lenders and Equipment Financing) Certain Known Term Lenders Atlantic Asset Securitization LLC Allstate Investment Management Company Bank Leumi USA Archview ERISA Master Fund Ltd. Bank of America, N.A. Archview Fund LP Bank of Montreal Archview Master Fund Ltd. BB&T Capital Markets Babson Capital Management LLC BBVA Securities Inc. Blackstone Alternative Multi-Strategy Subfund BMO Capital Markets Corp. IV LLC Branch Banking and Trust Company Boston Management and Research Caterpillar Financial Services Corporation Caspian Focused Credit Fund, LP CIBC Inc. Caspian Focused Opportunities Fund, LP Citibank, N.A. Caspian HLSC1, LLC Citigroup Global Markets Inc. Caspian SC Holdings, LP Commerce Bank, N.A. Caspian Select Credit Master Fund, Ltd. Caspian Compass Bank Solitude Master Fund, LP Credit Agricole Corporate and Investment Bank Caspian Thematic Credit Fund LP Credit Industriel Et Commercial Columbia Management Investment Advisers, Credit Suisse AG, Cayman Islands Branch LLC Credit Suisse Securities (USA) LLC Eaton Vance Management Inc. Fifth Third Bank GoldenTree 2004 Trust First Commonwealth Bank GoldenTree Asset Management, LP Goldman Sachs Bank USA GoldenTree Insurance Fund Series Interests of ING Capital LLC the SALI Multi-Series Fund LP Market Street Funding LLC Golub Capital Merrill Lynch, Pierce, Fenner & Smith Highland Capital Management LP Incorporated Marathon Asset Management LP Mizuho Corporate Bank, Ltd. Mariner LDC Morgan Stanley Bank, N.A. Napier Park Global Capital LP Morgan Stanley Senior Funding, Inc. Oak Hill Advisors, LP Natixis Securities Americas LLC Oak Hill Credit Partners PNC Bank, National Association Oaktree Opportunities Fund IX Delaware, LP PNC Capital Markets LLC Onex Credit Partners, LLC PT. Bank Negara Indonesia (Persero) Tbk, New Super Caspian Cayman Fund Limited York Agency Tennenbaum Capital Partners, LLC RBC Capital Markets, LLC Trilogy Capital Management, LLC RBS Securities Inc. Wellington Management Company LLP Regions Bank Whitebox Credit Partners LP Royal Bank of Canada Whitebox Multi-Strategy Partners LP Santander Bank, N.A. Whitebox Relative Value Partners LP Sovereign Bank Oaktree Capital Management LP Sumitomo Mitsui Banking Corporation Caspian Capital LP The Huntington National Bank Invesco Senior Secured Management Inc. The Royal Bank of Scotland PLC Silver Point Capital, LP U.S. Bank National Association Avenue Capital Group UBS AG Archview Investment Group UBS AG, Stamford Branch Monarch Alternative Capital LP UBS Loan Finance LLC Luminus Management UMB Bank National Association Brown Brothers Harriman & Co, as agent for Union Bank, N.A. OppenheimerFunds Inc. United Bank, Inc.

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Wells Fargo Bank, N.A. Montana Department of Natural Resources Pennsylvania Department of Environmental Significant Equipment Lessors Protection Caterpillar Financial Services Corporation Sate of Wyoming US Bancorp Equipment Finance, Inc. State of Illinois Xerox Corporation State of West Virginia State of Wyoming Unions United States Forest Service U.S. Miners’ Union United States Department of the Interior United States Department of Agriculture Surety Issuers Gunnison National Forest ACE Bond Services United States Department of the Interior, Bureau ACE Insurance S.A.-N.V. of Land Management ACE-USA Virginia Department of Health American Guarantee and Liability Insurance Virginia Department of Mined Land Reclaimed Company Virginia Department of Mines, Minerals and Arch Insurance Company Energy Argonaut Insurance Company West Virginia Department of Highways Bond Safeguard Insurance Company, Illinois West Virginia Department of Transportation Colonial American Casualty and Surety West Virginia Division of Environmental Company Protection Fidelity and Deposit Company of Maryland West Virginia Division of Labor Greenwich Insurance Company Wyoming Department of Environmental Quality Indemnity Insurance Company of North Wyoming Department of Workforce Services America Indemnity National Insurance Company Letter of Credit Banks Insurance Company of North America PNC Bank, National Association Lexon Insurance Company, Texas Regions Bank Pacific Employers Insurance Company Westchester Fire Insurance Company XL Reinsurance America, Inc. Letter of Credit Beneficiaries XL Specialty Insurance Company Arch Insurance Co. Zurich American Insurance Company Chartis Commonwealth of Kentucky

Elkhorn Hazard Coal Surety Obligees Federal Insurance Canada Revenue Agency Great Northern Properties Colorado Department of Natural Resources Lexon Insurance Company Commonwealth of Kentucky National Union Fire Insurance Co . Commonwealth of Virginia Northwest Alloys David Scott Gibson and O’Dean Terry Office of Workers’ Compensation Illinois Department of Mines and Minerals Old Republic Insurance Company Illinois Department of Natural Resources Pacific Employers Insurance Company Illinois Department of Transportation St. Paul Fire and Marine James Weekley United States Army Corp of Engineers Kentucky Department for Natural Resources Virginia Workers’ Compensation Kentucky Energy and Environment Cabinet West Virginia Commissioner of Insurance Kentucky Labor Cabinet Zurich American Insurance Company Kentucky Transportation Cabinet

Lee County Health Department Significant Taxing Authorities Maryland Department of the Environment Colorado Department of Revenue Maryland Department of Transportation Illinois Department of Revenue Maryland State Highway Administration Kentucky Department of Revenue Montana Department of Environmental Quality

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Maryland Department of Assessments & American International Reinsurance Company Taxation Ltd. Virginia Department of Taxation American International Reinsurance JLT Park West Virginia State Tax Department Ltd. Wyoming Department of Revenue American International Reinsurance Lockton UK Royalty Contract Counterparties Argo Re Ltd. – Bermuda Phoenix Coal Corporation Aspen Specialty United Affiliates Corporation AWAC (Bermuda) United States Department of the Interior AXIS United States Bureau of Land Management Beazley – U.K. Utah School and Institutional Trust Lands Berkley Insurance Company Administration Berkshire Hathaway Inc. Berkshire Hathaway International Insurance Ltd. Regulatory Agencies (e.g., Department of Berkshire Hathaway Specialty Insurance Interior, Mine Safety Administration, OSHA, Brit – U.K. and State and Local Regulators) Brit – U.S. Army Corps of Engineers Endurance American Specialty Insurance Internal Revenue Service Company Wyoming Department of Environmental Federal Insurance Company (Chubb) Quality, Land Quality Division Hanseatic Insurance Company Ltd. Office of Surface Mining Insurance Company of the State of Pennsylvania United States Securities and Exchange International Insurance of Hanover Commission Ironshore (Bermuda) United States Department of Interior Ironshore Insurance Ltd United States Environmental Protection Agency Liberty Mutual Utility Air Regulatory Group Lloyd’s of London West Virginia Department of Environmental Markel Bermuda Ltd. Protection MSIG Insurance (Singapore) Pte. Ltd. Munich Re Parties to Significant Litigation National Liability & Fire Insurance Company Allegheny Energy Supply National Union Fire Environmental Protection Agency National Union Fire Insurance Company Ohio Valley Environmental Coalition (OVEC) National Union Fire Insurance Company of Patriot Coal Corporation Pittsburgh, PA Sycamore No. 2 mine Oil Casualty Insurance Ltd. UMWA 1974 Pension Plan RLI Insurance Company RSUI Indemnity Significant Suppliers, Shippers, Starr Insurance & Reinsurance Ltd. Warehousemen, and Vendors Starr Surplus Lines Insurance Company Burlington Northern Sante Fe Railroad Swiss Re Corporate Solutions Insurance China CSX Railroad Ltd. Norfolk Southern Railroad Twin City Fire Insurance Company Union Pacific Railroad U.S. Specialty Insurance Company Validus Insurers XL Insurance Co SE – Irish Branch AIG Europe Limited XL Specialty Insurance Company AIG Specialty Insurance Company Zurich American Insurance Company Allianz Zurich Insurance PLC Allied World Assurance Company Ltd. American Guarantee & Liability Insurance Insurance Brokers Company AON Risk Central Inc. Lockton UK

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Marsh Top 50 Unsecured Creditors Travers Aviation UMB Bank (Unsecured Notes Due 2021 @ 7.25%) United States Trustee’s Office UMB Bank (Unsecured Notes Due 2019 @ 7%) Barbara J. Dorsey US Bank NA Cynthia E. Moore UMB Bank (Unsecured Notes Due 2019 @ Daniel J. Casamatta 9.875%) Karen R. Wilson-Smith Kinder Morgan Operating L.P. Kathy Lickenbrock Office Of Natural Resources Revenue Leonora S. Long Joy Global Margaret E. Slaughter BNSF Railway Martha M. Dahm Union Pacific Railroad Company Paul Randolph CSX Transportation Sandra Herling Wyoming Machinery Mine Safety And Health Administration Bankruptcy Judges (E.D. Mo.) Environmental Protection Agency Barry S. Schermer State Of Wyoming Charles E. Rendlen, III MCRL LLC Kathy Surratt-States Fairmont Supply Caterpillar Top 3 Secured Creditors Eagle Creek Mining LLC PNC Bank, National Association Nelson Brothers UMB Bank, N.A. Acin, LLC Wilmington Trust National Association Greer Industries URS Energy & Construction, Inc. Certain Known 2020 Noteholders Colane Corporation Aberdeen Asset Management Cecil I Walker Bucks Funding LLC L&H Industrial FS Global Credit Opportunities Fund Bridgestone GSO Aiguille Des Grands Montets Fund I LP Major Drilling America, Inc. GSO Aiguille Des Grands Montets Fund II LP Wire Rope Industries Ltd. GSO Aiguille Des Grands Montets Fund III LP Interstate Power Systems GSO Cactus Credit Opportunities Fund LP United Affiliates GSO Capital Partners LP Flanders GSO Churchill Partners LP NRG Power Marketing Inc. GSO Coastline Credit Partners LP HAMM Equipment Inc. GSO Palmetto Opportunistic Investment Delta-Montrose Electric Association Partners LP Nalco GSO Special Situations Master Fund LP Komatsu Equipment Hutchin Hill Capital Primary Fund Ltd. SLS West Hutchin Hill Capital, LP Dan’s Marine Service, Inc. KKR Debt Investors II (2006) (Ireland) LP Ace Trucking Inc. Maryland State Retirement and Pension System Micon O’Connor Global Multi-Strategy Alpha Master Menard Electric Cooperative Limited JH Fletcher Oregon Public Employees Retirement Fund Minova Presidio Investors Limited Marta – Balfour Beatty Spruce Investors II Limited Partnership Morgan H. Lyons Jr. Spruce Investors Limited United States Department of Health & Human Steamboat Credit Opportunities Master Fund LP Services Stonehill Capital Management LLC Kentucky Utilities Company UBS O’Connor LLC St. James Stevedoring Partners York Capital Management LLC Big Horn Tire Mount Gunnison Fuel Company

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Mighty Mite Corporation Utilities Mingo County PSD A-1 Sanitation, LLC Missouri American Water ACC Business Monongahela Power Company Adrian PSD Morgantown Utility Board Allegheny Power Mountain Telephone – Data System Allied Services LLS Mountain Telephone System Allied Waste Services Mountaineer Gas Company Ameren CIPS Mt. Hope Water Association Ameren Missouri Mt. Top Public Service District Amerencilco MWStar Waste Holdings Corp. American Electric Power Nix Sanitary Service Appalachian Power Company Oak Hill Garbage Disposal Inc. Appalachian Wireless Old Dominion Power Company Area Disposal Service Inc. Pleasant Valley Public Service District AT&T Potomac Edison AT&T Mobility Powder River Energy Corporation Beckley Water Company Putnam County Fire Service Board Big Sandy Two-Way Communication Putnam Public Service District Black Mountain Utilities Qwest Busy Bee Septic Systems Rocky Mountain Power Cannonsburg Water District Rumpke of Kentucky Inc. Carbon Power & Light Inc. Sanitation District #4, Ashland, Kentucky CenturyLink Smalleys Sanitation, Inc. City of Gillette Sourcegas, LLC Citynet LLC St. Charles Water & Sewage Authority Clarksburg Water Board Stewart’s Sanitation Comcast Sun Valley Public Service District Cowen Public Service District Sunrise Sanitation Services Inc. Crosiers Sanitary Service Inc. TDS Telecom Cumberland Valley RECC Thacker Grigsby Telephone Company Delta County Telecomm, Inc. Two-Way Radio Service Inc. Delta-Montrose Electric Association U.S. Cellular DirecTV Union Oil & Gas Inc. Dominion Hope Union Telephone Company East Kentucky Water, Inc. Utility Boards, Buckhannon, WV Ferrell Gas Verizon Wireless Ford Branch Landfill Village of Williamsville Frontier – Phoenix, AZ Waddell Inc. Frontier – Rochester, NY Wallace Bros. Disposal, Inc. Frontier – West Virginia, Inc. Walls Sanitation, Inc. G&G Communications, Inc. Waste Management Guardian Protection Services West Side Telecommunications Harrison Rural Electric West Virginia American Water Co. Hazard Utilities West Virginia Paging InterCall Windstream Paetec Kentucky Power Company Wireless USA Kentucky Utilities Company Wireless Works, Inc. Knott County Water & Sewer District Y&Y Services, Inc. Laclede Gas Company Zinn Hoe Service Inc. Lumos Networks Lusk Disposal Service Inc. Significant Customers Menard Electric Cooperative Allegheny Energy Supply Metropolitan St. Louis Sewer District Southern Company

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Tennessee Valley Authority Known Second Lien Noteholders U.S. Steel Bennett Management Corporation

Significant Competitors Unsecured Creditors’ Committee Alpha Natural Resources, Inc. Pension Benefit Guaranty Corporation Cloud Peak Energy Kinder Morgan, Inc. CONSOL Energy Inc. UMB Bank, National Association Patriot Coal Corporation GSO Capital Partners, LP Peabody Energy Corp. Nelson Brothers, LLC Walter Energy, Inc. Bennett Management Corporation Wyoming Machinery Company