Document:

Exhibit
10.2

       

      ArcLight
Energy Partners Fund I, L.P.

      ArcLight
Energy Partners Fund II, L.P.

      c/o
ArcLight Capital Partners LLC

      200
Clarendon Street, 55th Floor

      Boston,
MA  02117

       

      April 2,
2008

       

      Bridge Facility Commitment
Letter

       

      Patriot
Coal Corporation

      12312
Olive Boulevard, Suite 400

      St. Louis,
Missouri 63141

      

      Attention:  Mark
N. Schroeder

      
 

      Ladies and
Gentlemen:

       

      You have
advised ArcLight Energy Partners Fund I, L.P. and ArcLight Energy Partners Fund
II, L.P. (collectively, “ArcLight” or “us”) that Patriot Coal
Corporation (the “Borrower”
or “you”) intends to
acquire (the “Transaction”)
Magnum Coal Company (“Magnum”) pursuant to an agreement
and plan of merger dated as of April 2, 2008 (the “Merger
Agreement”).  In that connection, you have requested that
ArcLight commit to provide to the Borrower a subordinated second lien bridge
loan facility in a principal amount of $150,000,000 (the “Bridge
Facility”).

       

      ArcLight
is pleased to advise you of its commitment to provide the entire amount of the
Bridge Facility upon the terms and subject to the conditions set forth or
referred to in this commitment letter (the “Commitment
Letter”) and in the Summary of Terms and Conditions attached hereto as
Exhibit A (the
“Term
Sheet”; capitalized terms not otherwise defined herein shall have the
meanings set forth in the Term Sheet).  You and ArcLight have
discussed the desire to have other lenders participate in the Bridge Facility
and ArcLight agrees to assist you in your efforts to obtain commitments from
other potential lenders approved by ArcLight for the Bridge
Facility.

       

      In
connection with the Bridge Facility, you agree promptly to prepare and provide
to ArcLight all information with respect to the Borrower, its subsidiaries and
the other transactions contemplated hereby, including all financial information
and projections (the “Projections”),
as we may reasonably request in connection with the Bridge
Facility.  In connection with the Bridge Facility, you hereby
represent and covenant that to the best of your knowledge (a) all information
(other than Projections) provided to ArcLight, including any updates and
supplements thereof (the “Information”),
when taken as a whole will be correct in all material respects and will not,
when taken as a whole, contain any untrue statement of a material fact or omit
to state a material fact necessary in order to make the statements contained
therein, not misleading in any material respect under the circumstances under
which such statements are made at the time such statements are made, and
(b) the Projections that have been 

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

       

      or will be
made available to ArcLight or any of your representatives have been or will be
prepared in good faith based upon reasonable assumptions (it being understood
that the Projections are as to future events and are not viewed as facts and
that actual results during the period or periods covered may differ
significantly from the projected results and such difference may be
material).  You understand that ArcLight and any other potential
participants in the Bridge Facility may use and rely on the Information and
Projections without independent verification thereof.

       

      As
consideration for ArcLight’s commitment hereunder, you agree to pay to ArcLight
the non-refundable fees set forth in the Fee Letter dated as of the date hereof
and delivered herewith (the “Fee
Letter”).

       

      ArcLight’s
commitment hereunder is subject to (a) the absence of a Parent Material
Adverse Effect (as defined in the Merger Agreement) as of the date hereof, (b)
the negotiation, execution and delivery on or before September 30, 2008 of
definitive documentation with respect to the Bridge Facility reasonably
satisfactory to ArcLight and its counsel on Acceptable Bridge Terms (as defined
in the Term Sheet) and (c) the conditions set forth herein and in the Term
Sheet.  Notwithstanding anything herein to the contrary, ArcLight
agrees that the execution and delivery of the Merger Agreement and consummation
of the transactions contemplated thereby shall not constitute a material adverse
condition or a material adverse change hereunder.  Those matters that
are not covered by the provisions hereof and of the Term Sheet are subject to
the approval and agreement of ArcLight and the Borrower.

       

      You agree
to indemnify and hold harmless ArcLight, its affiliates and its respective
officers, directors, employees, advisors, and agents in their respective
capacities as the provider of the Bridge Facility (each, an “indemnified
person”) from and against any and all third party claims, damages and
liabilities to which any such indemnified person may become subject arising out
of or in connection with this Commitment Letter, the Bridge Facility, the use of
the proceeds thereof or any claim, litigation, investigation or proceeding
relating to any of the foregoing, regardless of whether any indemnified person
is a party thereto, and to reimburse each indemnified person upon demand for any
reasonable legal or other expenses incurred in connection with investigating or
defending any of the foregoing; provided that the
foregoing indemnity will not, as to any indemnified person, apply to losses,
claims, damages, liabilities or related expenses to the extent they are found by
a final, non-appealable judgment of a court to arise from the willful misconduct
or gross negligence of such indemnified person.  No indemnified person
shall be liable for any damages arising from the use by others of Information or
other materials obtained through electronic, telecommunications or other
information transmission systems other than where such damages are found by a
final, non-appealable judgment of a court to arise from the willful misconduct
or gross negligence of such indemnified person, and neither you  nor
any indemnified person shall be liable for any special, indirect, consequential
or punitive damages in connection with the Bridge Facility.

       

      This
Commitment Letter and the Fee Letter shall not be assignable by any party hereto
without the prior written consent of the other parties hereto (and any purported
assignment without such consent shall be null and void), is intended to be
solely for the benefit of the parties hereto and is not intended to confer any
benefits upon, or create any rights in favor of, any person other than the
parties hereto.  This Commitment Letter may not be amended or waived
except by an instrument in writing signed by you and ArcLight.  This
Commitment Letter may 

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

       

      be
executed in any number of counterparts, each of which shall be an original, and
all of which, when taken together, shall constitute one
agreement.  Delivery of an executed signature page of this Commitment
Letter by facsimile transmission shall be effective as delivery of a manually
executed counterpart hereof.  This Commitment Letter (including the
attached exhibit) and the Fee Letter set forth the entire understanding of the
parties hereto as to the scope of the obligations of ArcLight under this
Commitment Letter.  This Commitment Letter shall supersede all prior
understandings and proposals, whether written or oral, between ArcLight and you
relating to the Bridge Facility or the transactions contemplated under this
Commitment Letter.  This Commitment Letter shall be governed
by, and construed in accordance with, the laws of the State of New
York.  To the fullest
extent permitted by applicable law, the Borrower hereby irrevocably submits to
the non-exclusive jurisdiction of the Supreme Court of the State of New York
sitting in New York County and the United States Federal District Court for the
Southern District of New York and any appellate court from any thereof in
respect of any suit, action or proceeding arising out of or relating to the
provisions of this Commitment Letter or the Fee Letter and irrevocably agrees
that all claims in respect of any such suit, action or proceeding may be heard
and determined in any such court.  The parties hereto hereby waive, to
the fullest extent permitted by applicable law, any objection that they may now
or hereafter have to the laying of venue of any such suit, action or proceeding
brought in any such court, and any claim that any such suit, action or
proceeding brought in any such court has been brought in an inconvenient
forum.  THE
PARTIES HERETO HEREBY WAIVE, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW,
ANY RIGHT TO TRIAL BY JURY WITH RESPECT TO ANY ACTION OR PROCEEDING ARISING OUT
OF OR RELATING TO THIS COMMITMENT LETTER OR THE FEE LETTER.

       

      This
Commitment Letter is delivered to you on the understanding that neither this
Commitment Letter, the Term Sheet or the Fee Letter nor any of their terms or
substance shall be disclosed, directly or indirectly, to any other person except
(a) that this Commitment Letter and the Term Sheet may be disclosed to your and
your affiliates’ and Magnum and Magnum’s affiliates’ officers, directors,
employees, agents and advisors, including your bank group who are directly
involved in the consideration of this matter or the Merger Agreement (or both)
(provided that
this Commitment Letter and Term Sheet may be disclosed to your bank group only
upon the condition that you shall direct such bank group to keep this Commitment
Letter and Term Sheet, and all of the terms and the substance contained therein,
strictly confidential) or (b) as may be compelled in a judicial or
administrative proceeding or as otherwise required by law, including applicable
securities laws (in which case you agree to inform us promptly
thereof).

       

      The
confidentiality provisions contained herein and in the Fee Letter shall remain
in full force and effect notwithstanding the termination of this Commitment
Letter or ArcLight’s commitment hereunder.  Notwithstanding the
foregoing, all obligations of the parties under this Commitment Letter, shall
automatically terminate and be superseded by the provisions of the definitive
documentation relating to the Bridge Facility upon the execution thereof, and
each party shall automatically be released from all liability in connection
therewith at such time.

       

      This Commitment Letter has been and is
made solely for the benefit of the parties hereto, the indemnified persons, and
their respective successors and assigns, and nothing in this Commitment Letter,
expressed or implied, is intended to confer or does confer on any other person
or entity any rights or remedies under or by reason of this Commitment Letter or
the agreements of the parties contained herein.

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

       

      If the
foregoing correctly sets forth our agreement, please indicate your acceptance of
the terms hereof and of the Term Sheet and the Fee Letter by returning to us
executed counterparts hereof and of the Fee Letter not later than 5:00 p.m., New
York City time, on April 2, 2008.  The commitments and agreements of
the parties hereto will automatically expire (a) at such time in the event
ArcLight has not received such executed counterparts in accordance with the
immediately preceding sentence, (b) upon termination of the Merger Agreement and
(c) on September 30, 2008 (the “Termination
Date”) if the Closing Date has not yet occurred.  Each party
hereto may terminate their respective commitments and agreements under this
Commitment Letter at any time if any material breach or material default that,
in each case, is not capable of being cured occurs in the performance of any of
your obligations to any of the parties hereto with respect to the
Transaction.  You may terminate your agreements under this Commitment
Letter at any time prior to the Drawdown Date upon written notice to us, in
which case ArcLight’s commitments and agreements under this Commitment Letter
will automatically expire; provided, however, that all
amounts due and owing under the Fee Letter shall have been paid in
full.

       

      [REMAINDER
OF PAGE LEFT BLANK INTENTIONALLY]

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

       

      ArcLight
is pleased to have been given the opportunity to assist you in connection with
this important financing.

       

      
        
          	Very
      truly yours,	 
	 	 	 
	ARCLIGHT
      ENERGY PARTNERS FUND I, L.P.	 
	 	 	 
	
                  By:

                	
                  ArcLight
      PEF GP, LLC, its General Partner

                	 
	 	 	 
	
                  By:

                	
                  ArcLight
      Capital Holdings, LLC, its Manager

                	 
	 	 	 
	 	 	 
	
                  By:

                	
                  /s/ Daniel R. Revers

                	 
	 	
                  Name:  Daniel
      R. Revers

                	 
	 	
                  Title:    Manager

                	 
	 	 	 
	 	 	 
	
                  By:

                	
                  /s/ Robb E. Turner

                	 
	 	
                  Name:  Robb
      E. Turner

                	 
	 	
                  Title:    Manager

                	 
	 	 	 
	 	 	 
	ARCLIGHT
      ENERGY PARTNERS FUND II, L.P.	 
	 	 	 
	
                  By:

                	
                  ArcLight
      PEF GP II, LLC, its General Partner

                	 
	 	 	 
	
                  By:

                	
                  ArcLight
      Capital Holdings, LLC, its Manager

                	 
	 	 	 
	 	 	 
	
                  By:

                	
                  /s/ Daniel R. Revers

                	 
	 	
                  Name:  Daniel
      R. Revers

                	 
	 	
                  Title:    Manager

                	 
	 	 	 
	 	 	 
	
                  By:

                	
                  /s/ Robb E. Turner

                	 
	 	
                  Name:  Robb
      E. Turner

                	 
	 	
                  Title:    Manager

                	 

        

      

       

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

       

      Accepted
and agreed to

      as of the
date first

      written
above by:

      

      PATRIOT
COAL CORPORATION

      

      By: 
 /s/ Mark N.
Schroeder                         

      Name: Mark
N. Schroeder

      Title:
Senior Vice President & Chief Financial Officer

       

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

       

      Exhibit
A

         to the Commitment
Letter

      

      

      BRIDGE
FACILITY

      

      Summary
of Terms and Conditions

      

      April
2, 2008

      

      Capitalized terms used and not
otherwise defined herein are used with the meanings attributed thereto in the
Commitment Letter dated April 2, 2008 (the “Commitment
Letter”), from ArcLight to the Company, of which this Summary of Terms
and Conditions forms an integral part.  For the avoidance of doubt, it
is understood that the Bridge Facility Documentation shall be on (a) the terms
and conditions set forth in this Term Sheet, the Commitment Letter and the Fee
Letter, and (b) such other terms and conditions not materially less favorable,
taken as a whole, to the Company than those set forth in the Existing Credit
Agreement (collectively, the “Acceptable Bridge
Terms”).

       

       

      
        
          	
                  Borrower:

                	
                  Patriot
      Coal Corporation (“Patriot”
      or the “Company”).

                
	 
      	 
      
	
                  Lenders:

                	
                  ArcLight
      Energy Partners Fund I, L.P. and ArcLight Energy Partners Fund II, L.P.
      (collectively, “ArcLight”
      or the “Lender”).

                
	 
      	 
      
	
                  Guarantors:

                	
                  The
      Guarantors under the Existing Credit Agreement.

                
	 
      	 
      
	
                  Facility:

                	
                  Up
      to U.S.$150,000,000 loan facility (the “Loan”)
      under the unconditional guarantee of the Guarantors subordinated as to
      lien and payment priority on the terms set forth in the Intercreditor
      Agreement (the “Guarantees”).  Once repaid or prepaid, the Loan
      may not be reborrowed.

                
	 
      	 
      
	
                  Use
      of Proceeds:

                	
                  The
      proceeds of the Loan shall be used by the Company to  repay a
      portion of the senior secured indebtedness of Magnum Coal Company (“Magnum”)
      and to pay related fees and expenses.

                
	 
      	 
      
	
                  Availability:

                	
                  Upon
      three business days’ prior notice, all or a portion of the Loan will be
      available in a single drawdown on the date upon which all such conditions
      precedent described below are satisfied, such date to occur no later than
      the Termination Date (such date, the “Drawdown
      Date”).

                

        

         

         

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

         

         

        
          	 
      	
                  Any
      amounts undrawn on the Drawdown Date will be cancelled and shall not be
      available for drawings thereafter.

                
	 	 
	
                  Fees:

                	
                  As
      set forth in the Fee Letter.

                
	 
      	 
      
	
                  Interest
      Rate:

                	
                  One
      month LIBOR plus 5.00% per annum (the “Initial
      Interest
      Rate”);
      provided,
      however that LIBOR shall never be less than 3.25%.  Accrued
      interest shall be payable in arrears on the last business day of each
      month following the Drawdown Date and upon Maturity and prepayment of any
      amounts under the Loan.  The portion of interest payable
      hereunder which exceeds the Initial Interest Rate shall be mandatorily
      paid-in-kind.

                
	 
      	 
      
	
                  Default
      Rate:

                	
                  The
      then-current interest rate plus 2.00% per annum.

                
	 
      	 
      
	
                  Maturity
      Date:

                	
                  April
      30, 2012.

                
	 
      	 
      
	
                  Repayment:

                	
                  Principal
      shall be repaid in a single payment on the earlier of (a) the Maturity
      Date and (b) the date of the Optional Prepayment or the Mandatory
      Prepayment, each as described below.

                
	 
      	 
      
	
                  Optional
      Prepayment:

                	
                  The
      Company may, at its option, upon notice to ArcLight, at any time or from
      time to time after the date that is six months after the Drawdown Date,
      voluntarily prepay the Bridge Facility in full (but not in part) subject
      to payment of a premium, calculated as a percentage of the then
      outstanding Loan balance, plus accrued and unpaid interest thereon (as set
      forth in the chart below); provided, that
      such notice must be received by ArcLight not later than 11:00 a.m., three
      (3) business days prior to such voluntary prepayment.  If such
      notice is given by the Company, the Company shall make such prepayment and
      such payment shall be due and payable on the date specified
      therein.

                

        

      

       

      
        
          	 
      	
                  Payment
      Date

                	 
      	
                  Premium

                
	 
      	 
      	 
      	 
      
	 
      	
                  Month
      7

                	 
      	
                  7.00%

                
	 
      	
                  Month
      8

                	 
      	
                  7.75%

                
	 
      	
                  Month
      9

                	 
      	
                  8.50%

                
	 
      	
                  Month
      10

                	 
      	
                  9.25%

                
	 
      	
                  Month
      11

                	 
      	
                  10.00%

                
	 
      	
                  (or
      thereafter)

                	 
      	 
      

        

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      
        
          	 
      	
                  The
      Company may not optionally prepay the Loan prior to the seventh month
      subsequent to the Drawdown Date.

                
	 
      	 
      
	
                  Mandatory
      Prepayment:

                	
                  Beginning
      on the date which is the first day of the eleventh month subsequent to
      Drawdown Date, the Company  shall  prepay the Loan in
      full (and not in part), on request from the Lender not later than 11:00
      a.m., three (3) business days prior to such mandatory prepayment (the
      “Lender
      Notice”), subject to payment of a premium, calculated as 10.00% of
      the then outstanding Loan balance (excluding any portion of such balance
      in respect of any accrued interest added to principal as contemplated by
      the penultimate proviso of this paragraph) (the “Prepayment
      Premium”), plus accrued and unpaid interest thereon (the full
      amount of the Loan being prepaid, including such accrued and unpaid
      interest thereon and the Prepayment Premium, the “Put
      Amount”); provided, however, that
      beginning on the date which is the first day of the twelfth month
      subsequent to the Drawdown Date, if the Company shall fail to prepay the
      Put Amount, then the then-current interest rate of the Bridge Facility
      will increase by 200 basis points and shall increase by an additional 200
      basis points at the end of each 180-day period thereafter; and provided
      further, that
      the total interest payable by the Company shall not exceed the maximum
      rate permitted by applicable law; and provided
      further, that
      that the principal amount of the Loan on a going-forward basis to which
      such Initial Interest Rate increases (which, for the avoidance of doubt,
      shall include all increases set forth above) shall be applicable shall be
      equal to the Put Amount.

                
	 
      	 
      
	 
      	
                  The
      Lender may not require a mandatory prepayment of the Loan prior to the
      first day of the eleventh month subsequent to the Drawdown
      Date.

                
	 
      	 
      
	
                  Documentation:

                	
                  Promissory
      note and other customary credit documents as ArcLight reasonably
      determines to be appropriate in connection therewith (the “Bridge
      Facility Documentation”). The Bridge Facility Documentation shall
      be on the Acceptable Bridge Terms and otherwise reasonably satisfactory in
      form and substance to ArcLight and its counsel, and all legal matters in
      connection with the transaction contemplated hereby shall be reasonably
      satisfactory to such counsel.

                
	 
      	 
      
	
                  Conditions
      Precedent to

                	 
      

        

         

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

         

         

         

        
          	
                  Drawdown:

                	
                  The
      availability of the Bridge Facility shall be conditioned upon the
      continuing satisfaction on or before the Termination Date of the
      conditions precedent set forth below (the date upon which all such
      conditions precedent shall be satisfied, the “Closing
      Date”):

                
	 
      	 
      
	 
      	
                  a)
      evidence of corporate authority, incumbency, and
    signatures;

                
	 
      	 
      
	 
      	
                  b)
      execution and delivery of Bridge Facility Documentation and receipt of
      legal opinions required under the Bridge Facility
      Documentation;

                
	 
      	 
      
	 
      	
                  c)
      absence of any default or event of default (excluding any default or event
      of default with respect to any representation or warranty not included in
      clause (ii) below); continuing accuracy of representation and warranties;
      provided
      that the only representations and warranties the making of which
      shall be a condition to availability of the Loan on the Drawdown Date
      shall be such of the representations and warranties (i) made by or on
      behalf of the Company and its subsidiaries in the Merger Agreement as are
      material to the interests of the Lender, but only to the extent that
      Magnum has a right not to consummate the merger and related transactions
      contemplated by the Merger Agreement and (ii) set forth herein relating to
      corporate power and authority, due authorization, execution and delivery,
      in each case as they relate to the entering into and performance of the
      Bridge Facility Documentation, the enforceability of the Bridge Facility
      Documentation, Federal Reserve margin regulations, the Investment Company
      Act and the status of the Loan as senior debt;

                
	 
      	 
      
	 
      	
                  d)
      consummation of the merger and related transactions contemplated by the
      Merger Agreement in accordance with the terms thereof, and no provision
      thereof shall have been waived, amended, supplemented or otherwise
      modified by the Company that would be materially adverse to the interests
      of the Lender (solely in that capacity);

                
	 
      	 
      
	 
      	
                  e)
      the consummation of the amendment of that certain Credit Agreement, dated
      as of October 31, 2007, among the Company, the lenders party thereto, and
      Bank of America, N.A., as administrative agent thereunder (the “Existing
      Credit Agreement”) (which amendment is attached as Appendix 7);
      confirmation that the Company has no other indebtedness other
    

                

        

         

         

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

         

         

        
          	 
      	
                  than
      as permitted under the Existing Credit Agreement; and the same has not
      been waived, amended, supplemented or otherwise modified in any manner
      materially adverse to the interests of the Lender without the Lender's
      consent, such consent not to be unreasonably withheld or
      delayed;

                   

                
	 
      	
                  f)  all
      documents and instruments required to perfect the ArcLight’s second
      priority security interest in the collateral under the Bridge Facility
      shall, pursuant to the Bridge Facility Documentation, have been
      executed;

                
	 
      	 
      
	 
      	
                  g)
      certified copies of all necessary governmental approvals and consents for
      the Loan; and

                
	 
      	 
      
	 
      	
                  h) a
      solvency certificate from the chief financial officer of the Company,
      which shall document the solvency of the Company after giving effect to
      the Transaction.

                
	 
      	 
      
	
                  Representations

                	 
      
	
                  and
      Warranties:

                	
                  As
      set forth in Appendix
      1.

                
	 
      	 
      
	
                  Affirmative

                	 
      
	
                  Covenants:

                	
                  As
      set forth on Appendix
      2.

                
	 
      	 
      
	
                  Financial

                	 
      
	
                  Covenants:

                	
                  a)
      EBITDA to consolidated interest expense to be not less than a ratio of
      4.00, at the end of each fiscal quarter for the prior four quarters,
      calculated and using such defined financial and other terms as set forth
      in the Existing Credit Agreement; and

                
	 	 
	 
      	
                  b)
      Total debt at the end of each fiscal quarter to EBITDA for the prior four
      quarters not to exceed a ratio of 2.75, calculated and using such defined
      financial and other terms as set forth in the Existing Credit
      Agreement.

                
	 	 
	
                  Negative

                	 
      
	
                  Covenants:

                	
                  As
      set forth on Appendix
      3.

                
	 	 
	
                  Events
      of Default:

                	
                  As
      set forth on Appendix 4
      (collectively, the “Events of
      Default”).

                
	 	 
	
                  Collateral:

                	
                  The
      Loan shall constitute a secured “silent” second lien obligation of the
      Company that is subordinated in right of payment and the Guarantees shall
      constitute a secured “silent” second lien obligation of the Guarantors
      that is subordinated in 

                

        

         

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

         

         

         

        
          	 
      	
                  right
      of payment, all as set forth in the Intercreditor Agreement, the form of
      which is set forth as Appendix
      6.

                   

                
	 
      	
                  The
      Bridge Facility shall be secured by the Collateral, as defined in the
      Existing Credit Agreement.  The priority of the security
      interests and related creditor rights between the Existing Credit
      Agreement and the Bridge Facility will be set forth in an intercreditor
      agreement, the form of which is attached as Appendix
      6.

                
	 
      	 
      
	
                  Certain
      Definitions:

                	
                  As
      set forth on Appendix
      5.

                
	 	 
	
                  Taxes:

                	
                  Any
      and all payments made in connection with the Loans shall be made in U.S.
      dollars free and clear of any and all current or future taxes, deductions,
      charges, set-offs or counterclaims on Acceptable Bridge Terms and in a
      manner not more favorable to the Lender than the terms available to the
      lenders under the Existing Credit Agreement.

                
	 
      	 
      
	
                  Assignment
      and

                	 
      
	
                  Participations:

                	
                  The
      Lender, in its sole discretion, may assign all or a portion of the Loan
      under the facility, or may sell participations therein, to another person
      or persons.

                
	 
      	 
      
	
                  Governing
      Law and

                	 
      
	
                  Jurisdiction:

                	
                  The
      State of New York and submission to New York jurisdiction and waiver of
      jury trial, to the same extent as set forth in the Existing Credit
      Agreement.

                
	 
      	 
      
	
                  Expenses:

                	
                  The
      Company shall reimburse ArcLight for all reasonable and documented
      out-of-pocket expenses incurred in the preparation, negotiation, execution
      of the Bridge Facility Documentation and enforcement of the Loans, to the
      same extent as set forth in the Existing Credit
  Agreement.

                

        

      

       

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

       

       

      Appendix 1
to the Term
Sheet

       

       

      Representations
and Warranties to be Incorporated

      into
the Bridge Facility1

      

      

      
        Below are
the representations and warranties set forth in Article V of that
certain Credit Agreement, dated as of October 31, 2007, among the Company, the
lenders party thereto, and Bank of America, N.A., as administrative agent
thereunder, as amended as of the date hereof (the “Existing Credit
Agreement”). Capitalized terms used and not otherwise defined herein are
used with the meanings attributed thereto in (i) the Commitment Letter dated
April 2, 2008 (the “Commitment
Letter”), from ArcLight to the Company, of which this Appendix 1 forms an
integral part, or (ii) the Existing Credit Agreement, in each case as
appropriate.  All section references set forth below, or any use of
the phrases “herein,” “hereunder,” or similar phrases, shall refer to the
relevant sections of the Existing Credit Agreement.  For the avoidance
of doubt, it is understood that the representations and warranties contained in
the Bridge Facility Documentation shall (i) with respect to the matters set
forth below, be in the form set forth below, with such modifications as shall be
necessary to give effect to the terms and conditions set forth in the Term
Sheet, the Commitment Letter, the Fee Letter and, where applicable, to permit
and give effect to the existence of the Existing Credit Agreement, and (ii) in
the case of all other matters, be on Acceptable Bridge Terms.

         

      

      

        
          

        

      

       

      The Borrower represents and warrants to
the Administrative Agent and the Lenders that:

      

      5.01. Existence, Qualification and
Power.  Each Loan Party (a) (i) is duly organized or formed
and, validly existing and (ii) in good standing under the Laws of the
jurisdiction of its incorporation or organization, (b) has all requisite power
and authority and all requisite governmental licenses, authorizations, consents
and approvals to (i) own or lease its assets and carry on its business and (ii)
execute, deliver and perform its obligations under the Loan Documents and
Related Documents to which it is a party and consummate the Transactions, and
(c) is duly qualified and is licensed and, as applicable, in good standing,
under the Laws of each jurisdiction where its ownership, lease or operation of
properties or the conduct of its business requires such qualification or
license; except in each case referred to in clause (a)(ii), (b)(i) or (c), to
the extent that failure to do so could not reasonably be expected to have a
Material Adverse Effect.

       

      5.02. Authorization; No
Contravention.  The execution, delivery and performance by each
Loan Party of each Loan Document and Related Document to 

       

      
        
______________  

        
          
             1 To
conform to final amendment to the Existing Credit Agreement upon satisfactory
review of the same by ArcLight and its counsel.

          

        

      

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

       

      which such
Person is a party, (a) have been duly authorized by all necessary corporate or
other organizational action, and (b) do not and will not (i) contravene the
terms of any of such Person’s Organization Documents; (ii) conflict with or
result in any breach or contravention of, or the creation of any Lien (except
for any Liens that may arise under the Loan Documents) under, or require any
payment to be made under (A) any Contractual Obligation to which such Person is
a party or affecting such Person or the properties of such Person or any of its
Subsidiaries or (B) any order, injunction, writ or decree of any Governmental
Authority or any arbitral award to which such Person or its property is subject;
or (c) violate any Law, except in each case referred to in clause (b)(ii) or (c)
to the extent that failure to do so could not reasonably be expected to have a
Material Adverse Effect.

       

      5.03. Governmental Authorization;
Other Consents.  (a) No approval, consent, exemption,
authorization, or other action by, or notice to, or filing with, any
Governmental Authority and (b) no material approval, consent, exemption,
authorization, or other action by, or notice to, or filing with any other
Person, in each case, is necessary or required in connection with (i) the
execution, delivery or performance by any Loan Party of this Agreement or any
other Loan Document or Related Document, or for the consummation of the
Transaction, (ii) the grant by any Loan Party of the Liens granted by it
pursuant to the Collateral Documents or (iii) the perfection of the Liens
created under the Collateral Documents (including the first priority nature
thereof), (x) except for those approvals, consents, exemptions, authorizations
or other actions which have already been obtained, taken, given or made and are
in full force and effect, (y) any filings required to perfect the Liens created
under the Collateral Documents and (z) those landlord consents required with
respect to the leasehold mortgages required to be delivered
hereunder.  All applicable waiting periods in connection with the
Transactions have expired without any action having been taken by any
Governmental Authority restraining, preventing or imposing materially adverse
conditions upon the Transaction or the rights of the Loan Parties or their
Subsidiaries freely to transfer or otherwise dispose of, or to create any Lien
on, any properties now owned or hereafter acquired by any of them.

       

      5.04. Binding
Effect.  This Agreement has been, and each other Loan Document,
when delivered hereunder, will have been, duly executed and delivered by each
Loan Party that is party thereto.  This Agreement constitutes, and
each other Loan Document when so delivered will constitute, a legal, valid and
binding obligation of such Loan Party, enforceable against each Loan Party that
is party thereto in accordance with its terms, subject to applicable bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and other Laws
relating to or affecting creditors’ rights generally, general principles of
equity, regardless of whether considered in a proceeding in equity or at law and
an implied covenant of good faith and fair dealing.

       

      5.05. Financial Statements; No
Material Adverse Effect.  (a)  The Audited Financial
Statements of the Borrower and its Subsidiaries (i) were prepared in accordance
with GAAP consistently applied throughout the period covered thereby, except as
otherwise expressly noted therein; (ii) fairly present in all material respects
the 

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

       

      financial
condition of the Borrower and its Subsidiaries as of the date thereof and their
results of operations for the period covered thereby in accordance with GAAP
consistently applied throughout the period covered thereby, except as otherwise
expressly noted therein; and (iii) show all material indebtedness and other
material liabilities, direct or contingent, of the Borrower and its Subsidiaries
as of the date thereof, including material liabilities for Taxes, material
commitments and material Indebtedness.

       

      (b) The
unaudited consolidated balance sheet of the Borrower and its Subsidiaries dated
June 30, 2007, and the related consolidated statements of income or operations,
shareholders’ equity and cash flows for the fiscal quarter ended on that date
(i) were prepared in accordance with GAAP consistently applied throughout the
period covered thereby, except as otherwise expressly noted therein, and (ii)
fairly present in all material respects the financial condition of the Borrower
and its Subsidiaries as of the date thereof and their results of operations for
the period covered thereby, subject, in the case of clauses (i) and (ii), to the
absence of footnotes and to normal year-end audit adjustments.

       

      (c) Since June
30, 2007, there has been no event or circumstance, either individually or in the
aggregate, that has had or could reasonably be expected to have a Material
Adverse Effect.

       

      (d) The
consolidated pro forma balance sheet of the Borrower and its Subsidiaries as at
June 30, 2007, and the related consolidated pro forma statements of income and
cash flows of the Borrower and its Subsidiaries for the six months then ended,
certified by the chief financial officer or treasurer of the Borrower, copies of
which have been furnished to the Administrative Agent, fairly present in all
material respects the consolidated pro forma financial condition of the Borrower
and its Subsidiaries as at such date and the consolidated pro forma results of
operations of the Borrower and its Subsidiaries for the period ended on such
date, in each case giving effect to the Transaction, all in accordance with
GAAP.

       

      (e) The
consolidated forecasted balance sheet and statements of income and cash flows of
the Borrower and its Subsidiaries delivered pursuant to Section 4.01 or Section
6.01(d) were prepared in good faith on the basis of the assumptions stated
therein, which assumptions were believed to be reasonable in light of the
conditions existing at the time of delivery of such forecasts.

       

      5.06. Litigation.  There
are no actions, suits, proceedings, claims or disputes pending or, to the
knowledge of the Borrower, threatened, at law, in equity, in arbitration or
before any Governmental Authority, by or against the Borrower or any of its
Subsidiaries or against any of their properties or revenues that (a) purport to
affect or pertain to this Agreement, any other Loan Document, any Related
Document or the consummation of the Transaction, or (b) except as specifically
disclosed in public filings prior to the date hereof, as to which there is a
reasonable possibility of an adverse determination and that could reasonably be
expected to have a Material Adverse Effect.

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

       

      5.07. No
Default.  Neither the Borrower nor any Subsidiary is in default
under or with respect to any Contractual Obligation that could, either
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.  No Default has occurred and is continuing or would
result from the consummation of the transactions contemplated by this Agreement
or any other Loan Document.

       

      5.08. Ownership of Property;
Liens; Investments.  (a)  The Borrower and each of
its Subsidiaries has good record title to, or valid leasehold, easement or other
sufficient real property interests in, all real property necessary or used in
the ordinary conduct of its business, except for such defects in title as could
not, individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.

       

      (b) Schedule
7.01(i) sets forth a complete and accurate list as of the Closing Date of all
Liens on the property or assets of the Borrower and each of its Subsidiaries,
showing as of the date hereof the lienholder thereof, the principal amount of
the obligations secured thereby and the property or assets of the Borrower or
such Subsidiary subject thereto.

       

      (c) Schedule
5.08(c) sets forth a complete and accurate list as of the Closing Date of the
locations of all mines owned or leased by the Borrower or any of its
Subsidiaries.

       

      (d) To the
best knowledge of the Borrower, the legal description attached as Exhibit A to
each Mortgage accurately and completely describes the Mortgaged Property
intended to be covered thereby.

       

      (e) Schedule
7.03 sets forth a complete and accurate list as of the Closing Date of all
Investments held by the Borrower and any of its Subsidiaries on the date hereof,
showing as of the date hereof the amount, obligor or issuer and maturity, if
any, thereof.

       

      5.09. Environmental
Compliance.  Except as disclosed in the Borrower’s most recent
annual and quarterly reports filed with the SEC or on Schedule 5.09, or as
otherwise could not reasonably be expected to have a Material Adverse
Effect:

       

      (a) The
facilities and properties currently or formerly owned, leased or operated by the
Borrower or any of its Subsidiaries (the “Properties”) do not contain, and have
not previously contained, any Hazardous Materials in amounts or concentrations
which (i) constitute or constituted a violation of, or (ii) could reasonably be
expected to give rise to liability under, any applicable Environmental
Law.

       

      (b) None of
the Borrower nor any of its Subsidiaries has received any notice of violation,
alleged violation, non-compliance, liability or potential liability regarding
environmental matters or compliance with Environmental Laws with regard to any
of the Properties or the business operated by the Borrower or any of its
Subsidiaries 

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

       

      (the
“Business”), or any prior business for which the Borrower has retained liability
under any Environmental Law.

       

      (c) Hazardous
Materials have not been transported or disposed of from the Properties in
violation of, or in a manner or to a location which could reasonably be expected
to give rise to liability under, any applicable Environmental Law, nor have any
Hazardous Materials been generated, treated, stored or disposed of at, on or
under any of the Properties in violation of, or in a manner that could
reasonably be expected to give rise to liability under, any applicable
Environmental Law.

       

      (d) No
judicial proceeding or governmental or administrative action is pending or, to
the knowledge of the Borrower, threatened under any Environmental Law to which
the Borrower or any of its Subsidiaries is or, to the knowledge of the Borrower,
will be named as a party or with respect to the Properties or the Business, nor
are there any consent decrees or other decrees, consent orders, administrative
orders or other orders, or other similar administrative or judicial requirements
outstanding under any Environmental Law with respect to the Properties or the
Business.

       

      (e) There has
been no release or threat of release of Hazardous Materials at or from the
Properties, or arising from or related to the operations of the Borrower or any
of its Subsidiaries in connection with the Properties or otherwise in connection
with the Business, in violation of or in amounts or in a manner that could
reasonably be expected to give rise to liability under any applicable
Environmental Laws.

       

      (f) The
Properties and all operations at the Properties are in compliance with all
applicable Environmental Laws.

       

      (g) The
Borrower and each of its Subsidiaries (i) hold all Environmental Permits (each
of which is in full force and effect and is not subject to appeal) required for
any of their current operations or for the current ownership, operation or use
of the Properties, including all Environmental Permits required for the coal
mining-related operations of the Borrower or any of its Subsidiaries or any
pending construction or expansion related thereto; (ii) are, or have been, in
compliance with all Environmental Permits; and (iii) have used commercially
reasonable efforts to cause all contractors, lessees and other Persons
occupying, operating or using the mines on the Properties to comply with all
Environmental Laws and obtain all Environmental Permits required for the
operation of the mines.

       

      (h) To the
knowledge of the Borrower, none of the Properties have any associated direct or
indirect acid mine drainage.

       

      5.10. Mining.

       

      (a) The
Borrower and each of its Subsidiaries has, in the amounts and forms required
pursuant to Environmental Law, obtained all performance bonds and surety bonds,
or otherwise provided any financial assurance required under 

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

       

      Environmental
Law for Reclamation or otherwise (collectively, “Mining Financial
Assurances”).

       

      (b) There have
been no accidents, explosions, implosions, collapses or flooding at or otherwise
related to the Properties that have, directly or indirectly, resulted in, or
could reasonably be expected to result in, a Material Adverse
Effect.

       

      5.11. Insurance.  The
properties of the Borrower and its Subsidiaries are insured with financially
sound and reputable insurance companies which may be Affiliates of the Borrower,
in such amounts (after giving effect to any self-insurance compatible with the
following standards), with such deductibles and covering such risks as are
customarily carried by companies engaged in similar businesses and owning
similar properties in localities where the Borrower or the applicable Subsidiary
operates.

       

      5.12. Taxes.  The
Borrower and its Subsidiaries have filed all Federal, state and other tax
returns and reports required to be filed, and have paid all Federal, state and
other Taxes, assessments, fees and other governmental charges levied or imposed
upon them or their properties, income or assets otherwise due and payable (other
than those which are being contested in good faith by appropriate proceedings
diligently conducted and for which adequate reserves have been provided in
accordance with GAAP), except where the failure to do any of the foregoing could
not reasonably be expected to result in a Material Adverse Effect; no material
tax Lien has been filed and, to the knowledge of the Borrower, no material claim
is being asserted or audit being conducted, with respect to any material Tax,
fee or other charge of the Borrower or any of its Subsidiaries.  There
is no proposed tax assessment against the Borrower or any Subsidiary that would,
reasonably be likely to have a Material Adverse Effect.  Neither any
Loan Party nor any Subsidiary thereof is party to any tax sharing agreement,
other than the Tax Separation Agreement.  The Spin-Off will not be
taxable to the Borrower, Peabody or any of their respective Subsidiaries or
Affiliates.

       

      5.13. ERISA
Compliance.

       

      (a) Except as
could not reasonably be expected, individually or in the aggregate, to have a
Material Adverse Effect, each Plan is in compliance in all material respects
with the applicable provisions of ERISA, the Code and other Federal or state
Laws (except that with respect to any Multiemployer Plan which is a Plan, such
representation is deemed made only to the knowledge of the
Borrower).  With respect to each Plan, no “accumulated funding
deficiency” (within the meaning of Section 412 of the Code) has occurred, and no
application for a funding waiver or an extension of any amortization period
pursuant to Section 412 of the Code has been made.

       

      (b) There are
no pending or, to the knowledge of the Borrower, threatened claims, actions or
lawsuits, or action by any Governmental Authority, with respect to any Plan that
could reasonably be expected to have a Material Adverse Effect.  There
has been no nonexempt “prohibited transaction” (as defined in Section 406 of

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

       

      ERISA) or
violation of the fiduciary responsibility rules with respect to any Plan that
has resulted or could reasonably be expected to result in a Material Adverse
Effect.

       

      (c) Except as
could not reasonably be expected, individually or in the aggregate, to have a
Material Adverse Effect: (i) No ERISA Event has occurred or is reasonably
expected to occur; (ii) no Pension Plan has any Unfunded Pension Liability;
(iii) neither the Borrower nor any ERISA Affiliate has incurred, or reasonably
expects to incur, any liability under Title IV of ERISA with respect to any
Pension Plan (other than premiums due and not delinquent under Section 4007 of
ERISA); (iv) neither the Borrower nor any ERISA Affiliate has incurred, or
reasonably expects to incur, any liability (and no event has occurred which,
with the giving of notice under Section 4219 of ERISA, would result in such
liability) under Section 4201 or 4243 of ERISA with respect to a Multiemployer
Plan; and (v) neither the Borrower nor any ERISA Affiliate has engaged in a
transaction that could be subject to Section 4069 or 4212(c) of
ERISA.

       

      5.14. Subsidiaries; Equity
Interests; Loan Parties.  As of the Closing Date, the Borrower
has no Subsidiaries other than those specifically disclosed in Schedule 5.14,
and all of the outstanding Equity Interests in such Subsidiaries have been
validly issued, are fully paid and non-assessable and are owned by each Person
in the percentages specified on Schedule 5.14 free and clear of all Liens except
those created under the Collateral Documents or permitted by this Agreement and
the other Loan Documents.  Schedule 5.14 indicates which subsidiaries
are Loan Parties as of the Closing Date showing (as to each Loan Party) the
jurisdiction of its incorporation, the address of its principal place of
business and its U.S. taxpayer identification number or, in the case of any
non-U.S. Loan Party that does not have a U.S. taxpayer identification number,
its unique identification number issued to it by the jurisdiction of its
incorporation.

       

      5.15. Margin Regulations;
Investment Company Act.  (a)  The Borrower is not
engaged and will not engage, principally or as one of its important activities,
in the business of purchasing or carrying margin stock (within the meaning of
Regulation U issued by the FRB), or extending credit for the purpose of
purchasing or carrying margin stock.  Following the application of the
proceeds of each Borrowing or drawing under each Letter of Credit, not more than
25% of the value of the assets (either of the Borrower only or of the Borrower
and its Subsidiaries on a consolidated basis) subject to the provisions of
Section 7.01, Section 7.04 or Section 7.05 or subject to any restriction
contained in any agreement or instrument between the Borrower and any Lender or
any Affiliate of any Lender relating to Indebtedness and within the scope of
Section 8.01(e) will be margin stock.

       

      (b) None of
the Borrower, any Person Controlling the Borrower, or any Subsidiary is or is
required to be registered as an “investment company” under the Investment
Company Act of 1940.

       

      5.16. Disclosure.  No
report, financial statement, certificate or other information furnished (in
writing) by or on behalf of any Loan Party to the 

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

       

      Administrative
Agent or any Lender in connection with the transactions contemplated hereby and
the negotiation of this Agreement or delivered hereunder or under any other Loan
Document, taken as a whole with any other information furnished or publicly
available, contains any material misstatement of fact or omits to state any
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not materially misleading as of the
date when made or delivered; provided, that with
respect to any forecast, projection or other statement regarding future
performance, future financial results or other future developments, the Borrower
represents only that such information was prepared in good faith based upon
assumptions believed to be reasonable at the time such information was prepared
(it being understood that any such information is subject to significant
uncertainties and contingencies, may of which are beyond the Borrower’s control,
and that no assurance can be given that the future developments addressed in
such information can be realized).

       

      5.17. Compliance with
Laws.  The Borrower and each Subsidiary thereof is in
compliance in all material respects with the requirements of all Laws (including
any zoning, building, ordinance, code or approval or any building or mining
permits) and all orders, writs, injunctions and decrees applicable to it or to
its properties, except in such instances in which (a) such requirement of Law or
order, writ, injunction or decree is being contested in good faith by
appropriate proceedings diligently conducted or (b) the failure to comply
therewith, either individually or in the aggregate, could not reasonably be
expected to have a Material Adverse Effect.

       

      5.18. Intellectual Property;
Licenses, Etc.  The Borrower and each of its Subsidiaries own,
or possess the right to use, all of the trademarks, service marks, trade names,
copyrights, patents, patent rights, franchises, licenses and other intellectual
property rights (collectively, “IP Rights”) that are reasonably necessary for
the operation of their respective businesses, except where the failure to own or
possess the right to use such IP Rights could not reasonably be expected to have
a Material Adverse Effect.  To the best knowledge of the Borrower, the
use of such IP Rights by the Borrower or any Subsidiary does not infringe upon
any rights held by any other Person, except for any infringement that could not
reasonably be expected to have a Material Adverse Effect.  Except as
specifically disclosed in Schedule 5.18, no claim or litigation regarding any of
the foregoing is pending or, to the best knowledge of the Borrower, threatened,
which, either individually or in the aggregate, could reasonably be expected to
have a Material Adverse Effect.

       

      5.19. Solvency.  (a)  As
of the Closing Date, after giving effect to the Transaction on such date, the
Borrower is together with its Subsidiaries on a consolidated basis,
Solvent.

       

      (b) The
Borrower does not intend to, and does not believe that it or any of its
Subsidiaries will, incur debts beyond its ability to pay such debts as they
mature, taking into account the timing and amounts of cash to be received by it
or any such Subsidiary and the timing and amounts of cash to be payable on or in
respect of its Indebtedness or the Indebtedness of any such
Subsidiary,

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

       

      5.20. Casualty,
Etc.  Neither the businesses nor the properties of the Borrower
or any of its Subsidiaries have been affected by any fire, explosion, accident,
strike, lockout or other labor dispute, drought, storm, hail, earthquake,
embargo, act of God or of the public enemy or other casualty (whether or not
covered by insurance) that, either individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect.

       

      5.21. Labor
Matters.  Except as specifically disclosed on Schedule 5.21,
there are no collective bargaining agreements or Multiemployer Plans covering
the employees of the Borrower or any of its Subsidiaries as of the Closing Date.
(a) As of the Closing Date, neither the Borrower nor any Subsidiary has suffered
any strikes, walkouts, work stoppages or other material labor difficulty within
the last five years, and (b) since the Closing Date, neither the Borrower not
any subsidiary has suffered any strikes, walkouts, work stoppages or other
material labor difficulty that could reasonably be expected to result in a
Material Adverse Effect.

       

      5.22. Collateral
Documents.  The provisions of the Collateral Documents are
effective to create in favor of the Administrative Agent for the benefit of the
Secured Parties a legal, valid and enforceable Lien on all right, title and
interest of the Collateral owned by the Loan Parties and described
therein.  Except for filings contemplated hereby and by the Collateral
Documents, no filing or other action will be necessary to perfect such
Liens.

       

      5.23. Use of
Proceeds.  The Borrower will use the proceeds of the Loans
solely as provided for in Section 6.11.

       

      5.24. Coal Act; Black Lung
Act.

       

      (a) The
Borrower, each of its Subsidiaries and its “related persons” (as defined in the
Coal Act) are in compliance in all material respects with the Coal Act and any
regulations promulgated thereunder, and none of the Borrower, its Subsidiaries
or its related persons has any liability under the Coal Act, except as disclosed
in the Borrower’s financial statements or which could reasonably be expected to
have a Material Adverse Effect or with respect to premiums or other material
payments required thereunder which have been paid when due.

       

      (b) The
Borrower and each of its Subsidiaries are in compliance in all material respects
with the Black Lung Act, and neither the Borrower nor any of its Subsidiaries
has either incurred any Black Lung Liability or assumed any other Black Lung
Liability, except as disclosed in the Borrower’s financial statements or which
could reasonably be expected to have a Material Adverse Effect or with respect
to premiums, contributions or other material payments required thereunder which
have been paid when due.

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

       

       

      Appendix 2
to the Term 
Sheet

       

      Affirmative
Covenants to be Incorporated

      into
the Bridge Facility2

      

      

      
        Below are
the affirmative covenants set forth in Article
VI  of  that certain Credit Agreement, dated as of
October 31, 2007, among the Company, the lenders party thereto, and Bank of
America, N.A., as administrative agent thereunder, as amended as of the date
hereof (the “Existing Credit
Agreement”). Capitalized terms used and not otherwise defined herein are
used with the meanings attributed thereto in (i) the Commitment Letter dated
April 2, 2008 (the “Commitment
Letter”), from ArcLight to the Company, of which this Appendix 2 forms an
integral part, or (ii) the Existing Credit Agreement, in each case as
appropriate.  All section references set forth below, or any use of
the phrases “herein,” “hereunder,” or similar phrases, shall refer to the
relevant sections of the Existing Credit Agreement.  For the avoidance
of doubt, it is understood that the affirmative covenants contained in the
Bridge Facility Documentation shall (i) with respect to the matters set forth
below, be in the form set forth below, with such modifications as shall be
necessary to give effect to the terms and conditions set forth in the Term
Sheet, the Commitment Letter, the Fee Letter and, where applicable, to permit
and give effect to the existence of the Existing Credit Agreement, and (ii) in
the case of all other matters, be on Acceptable Bridge Terms.

         

      

      

        
          

        

      

       

      So long as any Lender shall have any
Commitment hereunder, any Loan or other Obligation hereunder shall remain unpaid
or unsatisfied (other than in respect of contingent obligations, indemnities and
expenses related thereto not then payable or in existence as of the later of the
Maturity Date or the Letter of Credit Expiration Date), or any Letter of Credit
shall remain outstanding, the Borrower shall, and shall (except in the case of
the covenants set forth in Sections 6.01 and 6.02 (a) – (g)) cause each
Subsidiary to:

      

      6.01. Financial
Statements.  Deliver to the Administrative Agent and each
Lender, in form and detail reasonably satisfactory to the Administrative
Agent:

       

      (a) as soon as
available, but in any event within 90 days after the end of each fiscal year of
the Borrower (commencing with the fiscal year ended December 31, 2007), a
consolidated balance sheet of the Borrower and its Subsidiaries as at the end of
such fiscal year, and the related consolidated statements of income or
operations, changes in shareholders’ equity and cash flows for such fiscal year,
setting forth in each case in comparative form the figures for the previous
fiscal year, all in reasonable detail and prepared in accordance with GAAP, such
consolidated statements to be audited and accompanied by a report and opinion of
an independent certified public accountant of 

       

      
        ______________  
          
             2 To
conform to final amendment to the Existing Credit Agreement upon satisfactory
review of the same by ArcLight and its counsel.

          

           

           

        

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

       

      nationally
recognized standing, which report and opinion shall be prepared in accordance
with generally accepted auditing standards and shall not be subject to any
“going concern” or like qualification or exception or any qualification or
exception as to the scope of such audit; and

       

      (b) as soon as
available, but in any event within 45 days after the end of each of the first
three fiscal quarters of each fiscal year of the Borrower (commencing with the
fiscal quarter ended March 31, 2008), a consolidated balance sheet of the
Borrower and its Subsidiaries as at the end of such fiscal quarter, and the
related consolidated statements of income or operations, changes in
shareholders’ equity and cash flows for such fiscal quarter and for the portion
of the Borrower’s fiscal year then ended, setting forth in each case in
comparative form the figures for the corresponding fiscal quarter of the
previous fiscal year and the corresponding portion of the previous fiscal year,
all in reasonable detail, such consolidated statements to be certified by a
Responsible Officer of the Borrower as fairly presenting in all material
respects the financial condition, results of operations, changes in
shareholders’ equity and cash flows of the Borrower and its Subsidiaries in
accordance with GAAP, subject only to normal year-end audit adjustments and the
absence of footnotes.

       

      As to any
information contained in materials furnished pursuant to Section 6.02(d), the
Borrower shall not be separately required to furnish such information under
Section 6.01(a) or (b) above, but the foregoing shall not be in derogation of
the obligation of the Borrower to furnish the information and materials
described in Sections 6.01(a) and (b) above at the times specified
therein.

      

      6.02. Certificates; Other
Information.  Deliver to the Administrative Agent, in form and
detail reasonably satisfactory to the Administrative Agent:

      

      (a) concurrently
with the delivery of the financial statements referred to in Section 6.01(a), a
certificate of its independent certified public accountants reporting on such
financial statements and stating that in performing their audit nothing came to
their attention that caused them to believe the Borrower failed to comply with
the financial covenants set forth in Section 7.11, except as specified in such
certificate;

      

      (b) concurrently
with the delivery of the financial statements referred to in Sections 6.01(a)
and (b) (commencing with the delivery of the financial statements for the fiscal
quarter ended March 31, 2008), a duly completed Compliance Certificate signed by
a Responsible Officer of the Borrower,  which shall include detailed
computations of the financial covenants;

      

      (c) promptly
after any request by the Administrative Agent, copies of any detailed audit
reports, management letters or recommendations submitted to the board of
directors (or the audit committee of the board of directors) of any Loan Party
by independent accountants in connection with the accounts or books of the
Borrower or any of its Subsidiaries, or any audit of any of them;

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
 

      (d) promptly
after the same are available, copies of each annual report, proxy or financial
statement or other report or communication sent to the stockholders of the
Borrower, and copies of all annual, regular, periodic and special reports and
registration statements which the Borrower may file or be required to file with
the SEC under Section 13 or 15(d) of the Securities Exchange Act of 1934, or
with any national securities exchange, and in any case not otherwise required to
be delivered to the Administrative Agent pursuant hereto;

      

      (e) unless
otherwise required to be delivered to the Lenders hereunder, promptly after the
furnishing thereof, copies of any statement or report furnished to any holder of
debt securities of any Loan Party or of any of its Subsidiaries pursuant to the
terms of any indenture or similar agreement and not otherwise required to be
furnished to the Lenders pursuant to Section 6.01 or any other clause of this
Section 6.02;

      

      (f) as soon as
available, but in any event prior to the date audited financial statements are
required to be delivered, a report summarizing the insurance coverage
(specifying type, amount and carrier) in effect for each Loan Party and its
Subsidiaries and containing such additional information as the Administrative
Agent, or any Lender through the Administrative Agent, may reasonably
specify;

      

      (g) promptly,
and in any event within five Business Days after receipt thereof by the Borrower
or any Subsidiary, copies of each material notice or other correspondence
received from the SEC (or comparable agency in any applicable non-U.S.
jurisdiction) concerning any material investigation or possible material
investigation or other material inquiry by such agency regarding financial or
other operational results of the Borrower or any Subsidiary;

      

      (h) unless
otherwise required to be delivered to the Lenders hereunder, not later than ten
days after receipt thereof by the Borrower or any Subsidiary, copies of all
notices of default, non-compliance or any other material matters (excluding
those delivered pursuant to the relevant agreement in the ordinary course of
business), material requests and other material documents (including amendments,
waivers and other modifications) so received under or pursuant to any Related
Document and, from time to time upon request by the Administrative Agent, such
other information and reports regarding the Related Documents as the
Administrative Agent may reasonably request;

      

      (i) as soon as
available, but in any event within the time period in which the Borrower must
deliver its annual audited financials under Section 6.01(a), a report
supplementing Schedule 5.08(c), identifying all Material Owned Real Property and
Material Leased Real Property acquired or disposed of by any Loan Party during
such fiscal year;

      

      (j) promptly,
such additional information regarding the business, financial, legal or
corporate affairs of the Borrower or any Subsidiary, or compliance 

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

       

      with the
terms of the Loan Documents, as the Administrative Agent or any Lender may from
time to time reasonably request;

      

      (k) not later
than 90 days after the end of each fiscal year of the Borrower, a copy of
summary projections by the Borrower of the operating budget and cash flow budget
of the Borrower and its Subsidiaries for the succeeding fiscal year, such
projections to be accompanied by a certificate of a Responsible Officer to the
effect that such projections have been prepared based on assumptions believed by
the Borrower to be reasonable.

      

      Documents
required to be delivered pursuant to Section 6.01(a) or (b) or Section 6.02(d)
(to the extent any such documents are included in materials otherwise filed with
the SEC) may be delivered electronically and if so delivered, shall be deemed to
have been delivered on the date (i) on which the Borrower posts such documents,
or provides a link thereto on the Borrower’s website on the Internet at the
website address listed on Schedule 10.02; (ii) on which such documents are
posted on the Borrower’s behalf on an Internet or intranet website, if any, to
which each Lender and the Administrative Agent have access (whether a
commercial, third-party website or whether sponsored by the Administrative
Agent); or (iii) on which such documents are filed for public availability of
the SEC’s Electronic Data Gathering and Retrieval system; provided, that the
Borrower shall notify the Administrative Agent and each Lender (by telecopier or
electronic mail) of the posting of any such documents and provide to the
Administrative Agent by electronic mail electronic versions (i.e., soft copies)
of the documents required to be delivered pursuant to Section 6.01(a) or (b) or
Section 6.02(a).  Notwithstanding anything contained herein, in every
instance the Borrower shall be required to provide paper copies of the
Compliance Certificates required by Section 6.02(b) to the Administrative
Agent.  Except for such Compliance Certificates, the Administrative
Agent shall have no obligation to request the delivery or to maintain copies of
the documents referred to above, and in any event shall have no responsibility
to monitor compliance by the Borrower with any such request for delivery, and
each Lender shall be solely responsible for requesting delivery to it or
maintaining its copies of such documents.

      

      The
Borrower hereby acknowledges that (a) the Administrative Agent and/or the
Arranger will make available to the Lenders and the L/C Issuer materials and/or
information provided by or on behalf of the Borrower hereunder (collectively,
“Borrower Materials”) by posting the Borrower Materials on IntraLinks or another
similar electronic system (the “Platform”) and (b) certain of the Lenders may be
“public-side” Lenders (i.e., Lenders that do not wish to receive material
non-public information with respect to the Borrower or its securities) (each, a
“Public Lender”).  The Borrower hereby agrees that so long as the
Borrower is the issuer of any outstanding debt or equity securities that are
registered or issued pursuant to a private offering or is actively contemplating
issuing any such securities (w) all Borrower Materials that are to be made
available to Public Lenders shall be clearly and conspicuously marked “PUBLIC”
which, at a minimum, shall mean that the word “PUBLIC” shall appear prominently
on the first page thereof; (x) by 

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

       

      marking
Borrower Materials “PUBLIC,” the Borrower shall be deemed to have authorized the
Administrative Agent, the Arranger, the L/C Issuer and the Lenders to treat the
Borrower Materials as not containing any material non-public information with
respect to the Borrower or its securities for purposes of United States Federal
and state securities laws (provided, however, that to the extent the Borrower
Materials constitute Information, they shall be treated as set forth in Section
10.07); (y) all Borrower Materials marked “PUBLIC” are permitted to be made
available through a portion of the Platform designated “Public Investor;” and
(z) the Administrative Agent and the Arranger shall be entitled to treat the
Borrower Materials that are not marked “PUBLIC” as being suitable only for
posting on a portion of the Platform not designated “Public
Investor.”  Notwithstanding the foregoing, the Borrower shall not be
under any obligation to mark the Borrower Materials “PUBLIC.”  In
connection with the foregoing, each party hereto acknowledges and agrees that
the foregoing provisions are not in derogation of their confidentiality
obligations under Section 10.07.

      

      6.03. Notices.  Notify
the Administrative Agent:

      

      (a) promptly,
of the occurrence of any Default or Event of Default;

      

      (b) promptly,
of any event which could reasonably be expected to have a Material Adverse
Effect;

      

      (c) of the
occurrence of any ERISA Event that, individually, or in the aggregate, would be
reasonably likely to have a Material Adverse  Effect, as soon as
possible and in any event within 30 days after the Borrower knows or has
obtained notice thereof;

      

      (d) of any
material change in accounting policies or financial reporting practices by any
Loan Party or any Subsidiary thereof, including any determination by the
Borrower referred to in Section 2.10(b);

      

      (e) promptly
after the occurrence thereof, notice of any Environmental Liability Claim
against or by the Borrower or any of its Subsidiaries that could (i) reasonably
be expected to have a Material Adverse Effect or (ii) cause any property
described in the Mortgages to be subject to any additional material restrictions
on ownership, occupancy, use or transferability under any Environmental
Law;

      

      (f) promptly
after the occurrence thereof, notice of any accidents, explosions, implosions,
collapses or flooding at or otherwise related to the Properties that result in
(i) any fatality or (ii) the trapping of any Person in any mine for more than
twenty-four hours; and

      

      (g) promptly
after the occurrence thereof, notice of any matter that could reasonably be
expected to result in an injunction or the issuance of any closure order
pursuant to any Environmental Law or pursuant to any Environmental Permit that

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

       

      could
reasonably be expected to directly or indirectly result in the closure or
cessation of operation of any mine for a period of more than 5 consecutive
days.

      

      Each
notice pursuant to this Section shall be accompanied by a statement of a
Responsible Officer of the Borrower setting forth details of the occurrence
referred to therein and stating what action the Borrower has taken and proposes
to take with respect thereto.

      

      6.04. Payment of
Obligations.  Pay and discharge as the same shall become due
and payable (a) all Tax liabilities, assessments and governmental charges or
levies upon it or its properties or assets, unless the same are being contested
in good faith by appropriate proceedings diligently conducted and adequate
reserves in accordance with GAAP are being maintained by the Borrower or such
Subsidiary, except where failure to do so could not reasonably be expected to
result in a Material Adverse Effect; (b) all lawful claims which, if unpaid,
would by law become a Lien upon any material portion of the Collateral; and (c)
all Indebtedness, as and when due and payable, but subject to any subordination
provisions contained in any instrument or agreement evidencing such
Indebtedness, except where failure to do so could not reasonably be expected to
result in a Material Adverse Effect.

      

      6.05. Preservation of Existence,
Etc.  With respect to the Borrower and each of its
Subsidiaries, (a) preserve, renew and maintain in full force and effect its
legal existence and good standing under the Laws of the jurisdiction of its
organization except in a transaction permitted by Section 7.04 or 7.05;
provided, however, that the Borrower and its Subsidiaries may consummate the
Spin-Off; (b) take all reasonable action to maintain all rights, privileges,
permits, licenses and franchises necessary for the normal conduct of its
business, except to the extent that failure to do so could not reasonably be
expected to have a Material Adverse Effect; and (c) preserve or renew all of its
registered patents, trademarks, trade names and service marks, the
non-preservation of which could reasonably be expected to have a Material
Adverse Effect.

      

      6.06. Maintenance of
Properties.  With respect to the Borrower and each of its
Subsidiaries, maintain, preserve and protect all of its material properties and
equipment necessary in the operation of its business in good working order and
condition (ordinary wear and tear and damage by fire or other casualty or taking
by condemnation excepted); except where the failure to do so could not
reasonably be expected to have a Material Adverse Effect.

      

      6.07. Maintenance of
Insurance.  Maintain with financially sound and reputable
insurance companies which may be Affiliates of the Borrower, insurance with
respect to its properties and business against loss or damage of the kinds
customarily insured against by Persons engaged in the same or similar business,
of such types and in such amounts (after giving effect to any self-insurance
compatible with the following standards) as are customarily carried by companies
engaged in similar businesses and owning similar properties in localities where
the Borrower or the applicable Subsidiary 

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

       

      operates, except to the
extent the failure to do so could not
reasonably be expected to have a Material Adverse Effect.  Without
limiting the generality of the foregoing, the Borrower and its Subsidiaries will
maintain or cause to be maintained (a) flood insurance with respect to
each Flood Hazard Property that is located in a community that participates in
the National Flood Insurance Program, in each case in compliance with any
applicable regulations of the Board of Governors of the Federal Reserve System,
(b) liability insurance, (c) business interruption insurance, and (d)
replacement value casualty insurance on the Collateral under such policies of
insurance, with such insurance companies, in such amounts, with such
deductibles, and covering such risks as would be carried or maintained under
similar circumstances by Persons of established reputation engaged in similar
businesses.  Each such policy of insurance shall (i) name the
Administrative Agent, on behalf of Secured Parties, as an additional insured
thereunder as its interests may appear, (ii) in the case of each casualty
insurance policy, contain a loss payable clause or endorsement, reasonably
satisfactory in form and substance to the Administrative Agent, that names the
Administrative Agent, on behalf of the Secured Parties, as the loss payee
thereunder and provide for at least thirty days’ prior written notice to the
Administrative Agent of any modification or cancellation of such
policy.

      

      6.08. Compliance with
Laws.  Comply in all material respects with the requirements of
all Laws and all orders, writs, injunctions and decrees applicable to it or to
its business or property, except in such instances in which (a) such requirement
of Law or order, writ, injunction or decree is being contested in good faith by
appropriate proceedings diligently conducted; or (b) the failure to comply
therewith could not reasonably be expected to have a Material Adverse
Effect.

      

      6.09. Books and
Records.  (a) Maintain proper books of record and account, in
which in all material respects full, true and correct entries in conformity with
GAAP consistently applied shall be made of all material financial transactions
and matters involving the assets and business of the Borrower or such
Subsidiary, as the case may be; and (b) maintain such books of record and
account in material conformity with all applicable requirements of any
Governmental Authority having regulatory jurisdiction over the Borrower or such
Subsidiary, as the case may be.

      

      6.10. Inspection
Rights.  Permit representatives and independent contractors of
the Administrative Agent and each Lender to visit and inspect any of its
properties, to examine its corporate, financial and operating records, and make
copies thereof or abstracts therefrom (except to the extent (i) any such access
is restricted by a Requirement of Law or (ii) any such agreements, contracts or
the like are subject to a written confidentiality agreement with a non-Affiliate
that prohibits the Borrower or any of its Subsidiaries from granting such access
to the Administrative Agent or the Lenders; provided, that with respect to such
confidentiality restrictions affecting the Borrower or any of its Subsidiaries,
a Responsible Officer is made available to such Lender to discuss such
confidential information to the extent permitted), and to discuss the business,
finances and accounts with its officers and independent public accountants at
such reasonable times during normal business hours and as often as may be
reasonably 

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

       

      desired,
provided, that the Administrative Agent or such Lender shall give Borrower
reasonable advance notice prior to any contact with such accountants and give
the Borrower the opportunity to participate in such discussions.

      

      6.11. Use of
Proceeds.  Use the proceeds of the Credit Extensions for
working capital, capital expenditures and other general corporate
purposes.

      

      6.12. Covenant to Guarantee
Obligations and Give Security.  (a) Upon the formation or
acquisition of any new direct or indirect Guarantor Subsidiary by any Loan
Party, then the Borrower shall, at the Borrower’s expense:

      

      (i) within 30
days after such formation or acquisition, cause such Guarantor Subsidiary, to
duly execute and deliver to the Administrative Agent a counterpart of the
Subsidiary Guaranty, guaranteeing the other Loan Parties’ obligations under the
Loan Documents;

      

      (ii) within 30
days after such formation or acquisition, furnish to the Administrative Agent a
description any Material Owned Real Property and Material Owned Leased Property
of such Guarantor Subsidiary, in detail reasonably satisfactory to the
Administrative Agent;

      

      (iii) (A) cause
such Guarantor Subsidiary to duly execute and deliver to the Administrative
Agent within 90 days after such formation or acquisition, deeds of trust, trust
deeds, deeds to secure debt and/or mortgages covering Material Owned Real
Property of such Guarantor Subsidiary, (B) cause such Guarantor Subsidiary to
duly execute and deliver to the Administrative Agent within 120 days after such
formation or acquisition, leasehold mortgages or leasehold deeds of trust with
respect to all Material Leased Real Property of such Guarantor Subsidiary where
the terms of the lease of such Material Leased Property (or applicable state
law, if such lease is silent on the issue) do not prohibit a mortgage thereof,
(C) cause such Guarantor Subsidiary to use commercially reasonable efforts to
duly execute and deliver to the Administrative Agent within 120 days after such
formation or acquisition, leasehold mortgages or leasehold deeds of trust with
respect to all Material Leased Real Property of such Guarantor Subsidiary where
the terms of the lease of such Material Leased Property (or applicable state
law, if such lease is silent on the issue) prohibit a mortgage thereof;
provided, that the Borrower shall use commercially reasonable efforts to deliver
estoppel and consent agreements executed by the lessors of such Material Leased
Real Property; provided, further, that the Borrower shall (x) deliver the
initial requested form of consent to the lessor within 30 days after such
formation or acquisition and (y) initiate communications with the lessors on the
status of all such consents within 60 days after such formation or acquisition;
provided, however, that if any consent has not been executed and returned to the
Administrative Agent in a form reasonably satisfactory to the Administrative
Agent within 90 days after such formation or acquisition, then the
Administrative 

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

       

      Agent
shall determine in its reasonable discretion whether such Subsidiary Guarantor
has satisfied its obligations hereunder or whether such Subsidiary Guarantor’s
obligations hereunder shall be extended for an additional period of time to be
determined by the Administrative Agent, and (D) cause such Guarantor Subsidiary
to duly execute and deliver to the Administrative Agent within 60 days after
such formation or acquisition, supplements to the Security Agreement,
supplements to the Intellectual Property Security Agreements and other security
and pledge agreements, in all such cases, as specified by and in form and
substance reasonably satisfactory to the Administrative Agent (including
delivery of all Pledged Interests in and of such Guarantor Subsidiary, and other
instruments of the type specified in Section 4.01(a)(iii)), in all such cases to
the same extent that such documents and instruments would have been required to
have been delivered by Persons that were Guarantor Subsidiaries on the Closing
Date, securing payment of all the Obligations of such Guarantor Subsidiary under
the Loan Documents;

      

      (iv) (A) within
60 days after such formation or acquisition in the case of personal property,
(B) within 90 days after such formation or acquisition in the case of Material
Owned Real Property, and (C) within 120 days after such formation or acquisition
in the case of Material Leased Real Property, cause such Guarantor Subsidiary to
take, or, in the case of Material Leased Real Property where the terms of the
lease of such Material Leased Real Property (or applicable state law, if such
lease is silent on the issue) prohibit a mortgage thereof, cause such Guarantor
Subsidiary to use commercially reasonable efforts to take, whatever additional
action (including the recording of mortgages, the filing of Uniform Commercial
Code financing statements, the giving of notices and the endorsement of notices
on title documents) may be necessary in the reasonable opinion of the
Administrative Agent to vest in the Administrative Agent (or in any
representative of the Administrative Agent designated by it) valid and
subsisting Liens on the properties purported to be subject to the deeds of
trust, trust deeds, deeds to secure debt and/or mortgages, leasehold mortgages
or leasehold deeds of trust, supplements to the Security Agreement, supplements
to the Intellectual Property Security Agreements and security and pledge
agreements delivered pursuant to Section 6.12(a)(iii), enforceable against all
third parties, in all such cases to the same extent that such action would have
been required to have been taken by Persons that were Guarantor Subsidiaries on
the Closing Date;

      

      (v) deliver to
the Administrative Agent, upon the request of the Administrative Agent in its
reasonable discretion, a signed copy of an opinion, addressed to the
Administrative Agent and the other Secured Parties, of counsel for the Loan
Parties reasonably acceptable to the Administrative Agent (A) as to the validity
and enforceability of the agreements entered into pursuant to clause (iii)(A)
above, and as to such other related matters as the Administrative Agent may
reasonably request, within 90 days after such formation or acquisition, (B) as
to the validity and enforceability of the agreements entered into pursuant to
clause 

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

       

      (iii)(B)
and, to the extent a mortgage is filed thereon, (iii)(C) above, and as to such
other related matters as the Administrative Agent may reasonably request, within
120 days after such formation or acquisition, and (C) as to the validity and
enforceability of the agreements entered into pursuant to clauses (i) and
(iii)(D) above, and as to such other related matters as the Administrative Agent
may reasonably request, within 60 days after such formation or acquisition;
and

      

      (vi) (A) within
90 days after such formation or acquisition in the case of Material Owned Real
Property and (B) within 120 days after such formation or acquisition in the case
of Material Leased Real Property, cause such Guarantor Subsidiary to provide,
or, in the case of Material Leased Real Property where the terms of the lease of
such Material Leased Real Property (or applicable state law, if such lease is
silent on the issue) prohibit a mortgage thereof, cause such Guarantor
Subsidiary to use commercially reasonable efforts to provide, the Administrative
Agent with a legal description of all Material Owned Real Property and Material
Leased Real Property, as applicable, from which any As-Extracted Collateral (as
defined in the Security Agreement) will be severed or to which As-Extracted
Collateral (as defined in the Security Agreement) otherwise relates, together
with the name of the record owner of such Material Owned Real Property or
Material Leased Real Property, as applicable, the county in which such Material
Owned Real Property or Material Leased Real Property, as applicable, is located
and such other information as may be necessary or desirable to file real
property related financing statements, deeds of trust, trust deeds, deeds to
secure debt, mortgages, leasehold mortgages and/or leasehold deeds of trust
under Section 9-502(b) or 9-502(c) of the UCC or any similar legal
requirements.

      

      (b) Upon the
acquisition of any Material Owned Real Property or Material Leased
Real  Property by any Loan Party other than pursuant to any
acquisition covered by Section 6.12(a), the Borrower shall, at the Borrower’s
expense:

      

      (i) within 30
days after such acquisition, furnish to the Administrative Agent a description
of the property so acquired in detail reasonably satisfactory to the
Administrative Agent;

      

      (ii) (A) with
respect to Material Owned Real Property, cause the applicable Loan Party to duly
execute and deliver to the Administrative Agent within 90 days after such
acquisition, deeds of trust, trust deeds, deeds to secure debt and/or mortgages,
(B) with respect to Material Leased Real Property where the terms of the lease
of such Material Leased Real Property (or applicable state law, if such lease is
silent on the issue) do not prohibit a mortgage thereof, cause the applicable
Loan Party to duly execute and deliver to the Administrative Agent within 120
days after such acquisition, leasehold mortgages or leasehold deeds of trust,
and (C) with respect to Material Leased Real Property where the terms of the
lease of such Material Leased Real Property (or applicable state law, if such
lease is silent on the issue) prohibit a mortgage thereof, cause the applicable
Loan 

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

       

      Party to
use commercially reasonable efforts to duly execute and deliver to the
Administrative Agent within 120 days after such acquisition, leasehold mortgages
or leasehold deeds of trust; provided, that the Borrower shall use commercially
reasonable efforts to deliver estoppel and consent agreements executed by the
lessors of such Material Leased Real Property; provided, further, that the
Borrower shall (x) deliver the initial requested form of consent to the lessor
within 30 days after such acquisition and (y) initiate communications with the
lessors on the status of all such consents within 60 days after such
acquisition; provided, however, that if any consent has not been executed and
returned to the Administrative Agent in a form reasonably satisfactory to the
Administrative agent within 90 days after such acquisition, then the
Administrative Agent shall determine in its reasonable discretion whether such
Subsidiary Guarantor has satisfied its obligations hereunder or whether such
Subsidiary Guarantor’s obligations hereunder shall be extended for an additional
period of time to be determined by the Administrative Agent, in the case of
clauses (A), (B) and (C), in form and substance reasonably satisfactory to the
Administrative Agent, securing payment of all the Obligations of the applicable
Loan Party under the Loan Documents;

      

      (iii) (A) within
90 days after such acquisition in the case of Material Owned Real Property, and
(B) within 120 days after such formation or acquisition in the case of Material
Leased Real Property, cause the applicable Loan Party to take, or, in the case
of Material Leased Real Property where the terms of the lease of such Material
Leased Real Property do not permit a mortgage thereof, cause such Loan Party to
use commercially reasonable efforts to take, whatever additional action
(including the recording of mortgages and the filing of Uniform Commercial Code
financing statements) may be necessary in the reasonable opinion of the
Administrative Agent to vest in the Administrative Agent (or in any
representative of the Administrative Agent designated by it) valid and
subsisting Liens on such property, enforceable against all third
parties;

      

      (iv) deliver to
the Administrative Agent, upon the request of the Administrative Agent in its
reasonable discretion, a signed copy of an opinion, addressed to the
Administrative Agent and the other Secured Parties, of counsel for the Loan
Parties acceptable to the Administrative Agent (A) as to the validity and
enforceability of the Collateral Documents entered into pursuant to clause
(ii)(A) above and as to such other related matters as the Administrative Agent
may reasonably request, within 90 days after such acquisition and (B) as to the
validity and enforceability of the Collateral Documents entered into pursuant to
clause (ii)(B) and, to the extent a mortgage is filed thereon, (ii)(B) above and
as to such other related matters as the Administrative Agent may reasonably
request, within 120 days after such acquisition; and

      

      (v) (A) within
90 days after such acquisition in the case of Material Owned Real Property and
(B) within 120 days after such acquisition in 

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

       

      the case
of Material Leased Real Property, cause such Guarantor Subsidiary to provide,
or, in the case of Material Leased Real Property where the terms of the lease of
such Material Leased Real Property (or applicable state law, if such lease is
silent on the issue) prohibit a mortgage thereof, cause such Guarantor
Subsidiary to use commercially reasonable efforts to provide, the Administrative
Agent with a legal description of all Material Owned Real Property and Material
Leased Real Property, as applicable, from which any As-Extracted Collateral (as
defined in the Security Agreement) will be severed or to which As-Extracted
Collateral (as defined in the Security Agreement) otherwise relates, together
with the name of the record owner of such Material Owned Real Property or
Material Leased Real Property, as applicable, the county in which such Material
Owned Real Property or Material Leased Real Property, as applicable, is located
and such other information as may be necessary or desirable to file real
property related financing statements, deeds of trust, trust deeds, deeds to
secure debt, mortgages, leasehold mortgages and/or leasehold deeds of trust
under Section 9-502(b) or 9-502(c) of the UCC or any similar legal
requirements.

      

      (c) Use
commercially reasonable efforts to not enter into any lease prohibiting the
granting of any mortgage or other security interest thereon (and the exercise of
remedies with respect thereto), in each case to the Administrative Agent for the
benefit of the Secured Parties, with respect to any Material Leased Real
Property acquired after the Closing Date.

      

      The
foregoing requirements of Section 6.12(a) and (b) shall not apply to (i) those
assets over which the granting of security interests in such assets would be
prohibited by contract, applicable law or regulation or, with respect to the
assets of any non-wholly owned subsidiary, the organizational documents of such
non-wholly owned subsidiary, (ii) payroll, tax and other trust accounts, and
(iii) those assets as to which the Administrative Agent and the Borrower
reasonably determine that the cost of obtaining such security interest or
perfection thereof are excessive in relation to the benefit to the Lenders of
the security to be afforded thereby.

      

      6.13. Compliance with
Environmental Laws.  (a) Comply, and use commercially
reasonable efforts to cause all lessees and other Persons operating or occupying
its properties to comply, in all material respects, with all applicable
Environmental Laws and Environmental Permits; obtain and renew all Environmental
Permits necessary for its operations and properties, except where the failure to
so comply, obtain or renew could not reasonably be expected to have Material
Adverse Effect; and (b) undertake and perform any cleanup, removal, remedial or
other action necessary to remove and clean up all Hazardous Materials from any
of its properties, in accordance with the requirements of all Environmental
Laws, except where the failure to so undertake and perform could not reasonably
be expected to have a Material Adverse Effect.

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
 

      6.14. Preparation of Environmental
Reports.  Not more often than once per Property during the term
of this Agreement (or more frequently during the continuance of an Event of
Default), at the reasonable request of the Administrative Agent, the Borrower
shall provide to the Lenders within 60 days after such request, at the expense
of the Borrower, an environmental or mining site assessment or audit report for
any of its Properties described in such request, prepared by an environmental or
mining consulting firm reasonably acceptable to the Administrative Agent and
indicating the presence or absence of Hazardous Materials and the estimated cost
of any compliance or remedial action in connection with such Properties and the
estimated cost of curing any violation or non-compliance of any Environmental
Law.

      

      6.15. Further
Assurances.  Promptly upon request by the Administrative Agent,
or any Lender through the Administrative Agent, (a) correct any material defect
or error that may be discovered in any Loan Document or in the execution,
acknowledgment, filing or recordation thereof, and (b) do, execute, acknowledge,
deliver, record, re-record, file, re-file, register and re-register any and all
such further acts, deeds, certificates, assurances and other instruments as the
Administrative Agent, or any Lender through the Administrative Agent, may
reasonably require from time to time in order to (i) carry out more effectively
the purposes of the Loan Documents, (ii) to the fullest extent permitted by
applicable law, subject the Borrower’s or any of its Subsidiaries’ properties,
assets, rights or interests to the Liens now or hereafter intended to be covered
by any of the Collateral Documents, and (iii) perfect and maintain the validity,
effectiveness and priority of any of the Collateral Documents and any of the
Liens intended to be created thereunder.

      

      6.16. Compliance with Terms of
Leaseholds and Related Documents.  (a)  Make all
payments and otherwise perform all obligations in respect of all leases of real
property to which the Borrower or any of its Subsidiaries is a party, keep such
leases in full force and effect and not allow such leases to lapse or be
terminated or any rights to renew such leases to be forfeited or cancelled,
except, in any case, where the failure to do so, either individually or in the
aggregate, could not be reasonably likely to have a Material Adverse
Effect.

      

      (b) Make all
payments and otherwise perform all obligations in respect of all Related
Documents, keep such Related Documents in full force and effect and not allow
such Related Documents to lapse or be terminated or any rights to renew such
Related Documents to be forfeited or cancelled, except, in any case, where the
failure to do so, either individually or in the aggregate, could not be
reasonably likely to have a Material Adverse Effect.

      

      6.17. [Reserved].

      

      6.18. [Reserved].

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
 

      6.19. Certain Long Term
Liabilities and Environmental Reserves.  To the extent required
by GAAP, maintain adequate reserves for (i) future costs associated with any
lung disease claim alleging pneumoconiosis or silicosis or arising out of
exposure or alleged exposure to coal dust or the coal mining environment, (ii)
future costs associated with retiree and health care benefits, (iii) future
costs associated with Reclamation of disturbed acreage, removal of facilities
and other closing costs in connection with its mining operations and (iv) future
costs associated with other potential Environmental Liabilities.

      

      6.20. Mining Financial
Assurances.  Maintain all material Mining Financial Assurances
to the extent required pursuant to any Environmental Law.

      

      6.21. Post-Closing
Obligations.  Perform the obligations set forth on Schedule
6.21, as and when set forth therein.

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      
 

      Appendix 3
to the Term
Sheet

       

      Negative
Covenants to be Incorporated

      into
the Bridge Facility3

      

      

      
        Below are
the negative covenants set forth in Article
VII  of  that certain Credit Agreement, dated as of
October 31, 2007, among the Company, the lenders party thereto, and Bank of
America, N.A., as administrative agent thereunder, as amended as of the date
hereof (the “Existing Credit
Agreement”). Capitalized terms used and not otherwise defined herein are
used with the meanings attributed thereto in (i) the Commitment Letter dated
April 2, 2008 (the “Commitment
Letter”), from ArcLight to the Company, of which this Appendix 3 forms an
integral part, or (ii) the Existing Credit Agreement, in each case as
appropriate.  All section references set forth below, or any use of
the phrases “herein,” “hereunder,” or similar phrases, shall refer to the
relevant sections of the Existing Credit Agreement.  For the avoidance
of doubt, it is understood that the negative covenants contained in the Bridge
Facility Documentation shall (i) with respect to the matters set forth below, be
in the form set forth below, with such modifications as shall be necessary to
give effect to the terms and conditions set forth in the Term Sheet, the
Commitment Letter, the Fee Letter and, where applicable, to permit and give
effect to the existence of the Existing Credit Agreement, and (ii) in the case
of all other matters, be on Acceptable Bridge Terms.

         

      

      

        
          

        

         

      

      So long as any Lender shall have any
Commitment hereunder, any Loan or other Obligation hereunder shall remain unpaid
or unsatisfied (other than in respect of contingent obligations, indemnities and
costs and expenses related thereto not then payable or in existence as of the
later of the Maturity Date or the Letter of Credit Expiration Date), or any
Letter of Credit shall remain outstanding, the Borrower shall not, nor shall it
permit any Subsidiary to, directly or indirectly:

      

      7.01. Liens.  Create,
incur, assume or suffer to exist any Lien upon, or exception to title to, any of
its property, assets or revenues, whether now owned or hereafter acquired, or
sign or file under the Uniform Commercial Code of any jurisdiction a financing
statement that names the Borrower or any of its Subsidiaries as debtor, or
assign any accounts or other right to receive income, other than the
following:

      

      (a) Liens
pursuant to any Loan Document;

      

      (b) (i) Liens
existing on the date hereof and listed on Schedule 7.01(i) and (ii) Liens
securing Indebtedness assumed by Merger Sub on the Merger Date in connection
with the Magnum Acquisition and listed on Schedule 7.01(ii) and, in each case,
any refinancing, refunding, renewal or extension thereof; provided, that (A) the

       

      
        _____________  
          
             3 To
conform to final amendment to the Existing Credit Agreement upon satisfactory
review of the same by ArcLight and its counsel.

             

             

          

        

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

       

      assets and
other property subject thereto are not expanded from the assets and other
property subject thereto immediately prior to the Merger Date, (B) such Lien
shall secure only those obligations which it secures on the Merger Date and the
principal amount secured or benefited thereby is not increased from the
principal amount so secured or benefited thereby immediately prior to the Merger
Date, and (C) any refinancing, refunding, renewal or extension of the
obligations secured or benefited thereby is permitted by Section
7.02(c);

      

      (c) Liens for
Taxes not yet due or which are being contested in good faith and by appropriate
proceedings, if adequate reserves with respect thereto are maintained on the
books of the applicable Person in accordance with GAAP;

      

      (d) carriers’,
warehousemen’s, mechanics’, materialmen’s, repairmen’s or other like Liens
arising in the ordinary course of business which are not overdue for a period of
more than 60 days or which are being contested in good faith and by appropriate
proceedings, if adequate reserves with respect thereto are maintained on the
books of the applicable Person;

      

      (e) pledges or
deposits in the ordinary course of business in connection with workers’
compensation, unemployment insurance and other social security legislation and
deposits securing liability to insurance carriers under insurance or
self-insurance arrangements;

      

      (f) (i)
deposits to secure the performance of bids, trade contracts and leases (other
than Indebtedness), reclamation bonds, statutory obligations, surety and appeal
bonds, performance bonds and other obligations of a like nature incurred in the
ordinary course of business and (ii) Liens on assets to secure obligations under
surety bonds obtained as required in connection with the entering into of new
federal coal leases;

      

      (g) easements,
covenants, conditions, rights-of-way, zoning restrictions, other restrictions
and other similar encumbrances which, in the aggregate, are not substantial in
amount, and which do not in any case materially detract from the value of the
property subject thereto or materially interfere with the ordinary conduct of
the business of the applicable Person;

      

      (h) Liens
securing attachments or judgments for the payment of money not constituting an
Event of Default under Section 8.01(h) or securing appeal or surety bonds
related to such attachments or judgments;

      

      (i) Liens
securing Indebtedness of the Borrower and its Subsidiaries permitted by Section
7.02(e) incurred to finance the acquisition of fixed or capital assets;
provided, that (i) such Liens shall be created substantially simultaneously with
the acquisition of such fixed or capital assets, (ii) such Liens do not at any
time encumber any property other than the property financed by such Indebtedness
(other than after-

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

       

      acquired
title in or on such property and proceeds of the existing collateral in
accordance with the instrument creating such Lien), (iii) the principal amount
of Indebtedness secured by any such Lien shall at no time exceed 100% of the
original purchase price of such property at the time it was acquired, and (iv)
if the terms of such Indebtedness require any Lien hereunder to be subordinated
to such Liens, then the Lien hereunder shall be subordinated on terms reasonably
acceptable to the Administrative Agent;

      

      (j) Liens on
the property or assets of a Person which becomes a Guarantor Subsidiary after
the date hereof securing Indebtedness permitted by Section 7.02 not to exceed
$25,000,000 at any time outstanding, provided, that (i) such Liens existed at
the time such entity became a Guarantor Subsidiary and were not created in
anticipation thereof, (ii) any such Lien is not expanded to cover any other
property or assets of such Person (other than the proceeds of the property or
assets subject to such Lien) or of the Borrower or any Guarantor Subsidiary,
(iii) the amount of Indebtedness secured thereby is not increased, and (iv) if
the terms of such Indebtedness require any Lien hereunder to be subordinated to
such Liens, then the Lien hereunder shall be subordinated on terms reasonably
acceptable to the Administrative Agent;

      

      (k) Liens on
the property of the Borrower or any of its Subsidiaries, as a tenant under a
lease or sublease entered into in the ordinary course of business by such
Person, in favor of the landlord under such lease or sublease, securing the
tenant’s performance under such lease or sublease, as such Liens are provided to
the landlord under applicable law and not waived by the landlord;

      

      (l) Liens
arising from precautionary Uniform Commercial Code financing statement filings
with respect to operating leases or consignment arrangements entered into by the
Borrower or any of its Subsidiaries in the ordinary course of
business;

      

      (m) Liens
securing Refinancing Indebtedness, to the extent that the Indebtedness being
refinanced was originally secured in accordance with this Section 7.01,
provided, that such Lien does not apply to any additional property or assets of
the Borrower or any of its Subsidiaries (other than the proceeds of the property
or assets subject to such Lien);

      

      (n) Production
Payments, royalties, dedication of reserves under supply agreements or similar
rights or interests granted, taken subject to, or otherwise imposed on
properties consistent with normal practices in the mining industry;

      

      (o) leases,
subleases, licenses and rights-of-use granted to others incurred in the ordinary
course of business and that do not materially and adversely affect the use of
the property encumbered thereby for its intended purpose;

      

      (p) Liens in
favor of a banking institution arising by operation of law or any contract
encumbering deposits (including the right of set-off) held by such 

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

       

      banking
institutions incurred in the ordinary course of business and which are within
the general parameters customary in the banking industry;

      

      (q) Liens on
receivables and rights related to such receivables created pursuant to any
Permitted Securitization Programs (to the extent that any such Disposition of
receivables is deemed to give rise to a Lien);

      

      (r) Liens on
assets of the Borrower and its Subsidiaries that are not Collateral with a value
(determined immediately prior to the incurrence of such Lien) in an aggregate
amount (at actual cost, without adjustment for subsequent increases or decreases
in the value of such asset) not in excess of $12,000,000 in the
aggregate;

      

      (s) Liens in
favor of an escrow agent arising under an escrow arrangement incurred in
connection with the issuance of notes with respect of the proceeds of such notes
and anticipated interest expenses with respect to such notes;

      

      (t) rights of
owners of interests in overlying, underlying or intervening strata and/or
mineral interests not owned by Borrower or on of its Subsidiaries, with respect
to tracts of real property where the Borrower or applicable Subsidiary’s
ownership is only surface or severed mineral or is otherwise subject to mineral
severances in favor of one or more third parties;

      

      (u) other
defects and exceptions to title of real property where such defects or
exceptions could not be reasonably be expected to have a Material Adverse
Effect; and

       

      (v) Liens
securing Indebtedness under the Magnum Acquisition Credit Agreement; provided,
that (A) such Liens do not encumber any property in which the Lenders do not
have a perfected Lien securing the Obligations, (B) the principal amount secured
or benefited thereby is not increased after the Amendment Effective Date (other
than with respect to the capitalization of interest, if any), and (C) any
refinancing, refunding, renewal or extension of the obligations secured or
benefited thereby is permitted by Section 7.02(c).

      

      7.02. Indebtedness.  Create,
incur, assume or suffer to exist any Indebtedness, except:

      

      (a) Indebtedness
under the Loan Documents;

      

      (b) (i)
Indebtedness outstanding on the date hereof and listed on Schedule 7.02(i) and
(ii) Indebtedness assumed by Merger Sub in connection with the Magnum
Acquisition on the Merger Date and listed on Schedule 7.02(ii);

      

      (c) any
refinancings, refundings, renewals or extensions of Indebtedness permitted under
Section 7.02(b) and Section 7.02(n); provided, that (i) the amount of such
Indebtedness (the “Refinancing Indebtedness”) is not increased at the

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

       

      time of
such refinancing, refunding, renewal or extension except by an amount equal to a
reasonable premium or other reasonable amount paid, and fees and expenses
reasonably incurred, in connection with such refinancing and by an amount equal
to any existing commitments unutilized thereunder, (ii) the direct or any
contingent obligor with respect thereto is not changed, as a result of or in
connection with such refinancing, refunding, renewal or extension and (iii) the
terms relating to principal amount, amortization, maturity, collateral (if any)
and subordination (if any), and other material terms taken as a whole, of any
such refinancing, refunding, renewing or extending Indebtedness, and of any
agreement entered into and of any instrument issued in connection therewith, are
no less favorable in any material respect to the Loan Parties or the Lenders
than the terms of any agreement or instrument governing the Indebtedness being
refinanced, refunded, renewed or extended and the interest rate applicable to
any such refinancing, refunding, renewing or extending Indebtedness does not
exceed the then applicable market interest rate (as determined in good faith by
the Board of Directors of the Borrower, or as determined by the Administrative
Agent in the case of any refinancings, refundings, renewals or extensions of
Indebtedness permitted under Section 7.02(n));

      

      (d) Guarantees
of the Borrower or any of its Subsidiaries in respect of Indebtedness otherwise
permitted hereunder of the Borrower or any other Loan Party, other than
Guarantees by Subsidiaries of the Borrower of Indebtedness permitted under
Section 7.02(n);

      

      (e) Indebtedness
in respect of Capital Lease Obligations and purchase money obligations for fixed
or capital assets within the limitations set forth in Section 7.01(i); provided,
however, that the aggregate amount of all such Indebtedness at any one time
outstanding shall not exceed 1.0% of Tangible Assets of the Loan
Parties;

      

      (f) Indebtedness
in respect of Swap Contracts incurred in the ordinary course of business and
consistent with prudent business practice;

      

      (g) Indebtedness
of the Borrower or any other Loan Party to any other Loan Party and of any
non-Loan Party Subsidiary to any Loan Party or any other non-Loan Party;
provided, that such Indebtedness must be subordinated to the Obligations on
customary terms;

      

      (h) Intercompany
current liabilities incurred in the ordinary course of business of the Borrower
and its Subsidiaries;

      

      (i) Indebtedness
incurred in connection with any Permitted Securitization Program in an aggregate
principal amount not to exceed $50,000,000; and

      

      (j) Indebtedness
in respect of netting services, automatic clearinghouse arrangements, overdraft
protections and similar arrangements in each case in connection with deposit
accounts and in the ordinary course of business;

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
 

      (k) Indebtedness
representing deferred or equity compensation to employees of the Borrower or any
of its Subsidiaries incurred in the ordinary course of business;

      

      (l) Indebtedness
in an aggregate principal amount not to exceed 5% of Tangible Assets of the
Borrower and its Subsidiaries at any time outstanding; provided, that (i) the
covenants and events of default of such Indebtedness are, as a whole, no more
restrictive to the obligors or the lenders thereon than the Revolving Credit
Loans and (ii) such Indebtedness shall not be Guaranteed by any Subsidiary of
the Borrower that is not a Subsidiary Guarantor hereunder;

      

      (m) Indebtedness
in the form of bank guaranties, bid, performance, reclamation bonds, statutory
obligations, surety and appeal bonds, performance bonds and other obligations of
a like nature incurred in the ordinary course of business, in an aggregate
amount not to exceed $400,000,000; provided that such Indebtedness described in
this clause (m) is not secured by any Lien other than a Lien on cash described
in Section 7.01(f); and

      

      (n) subject to
the consummation of the Magnum Acquisition, Indebtedness incurred by the
Borrower under the Magnum Acquisition Credit Agreement.

      

      7.03. Investments.  Make
or hold any Investments, except:

      

      (a) Investments
held by the Borrower or any of its Subsidiaries in the form of Cash
Equivalents;

      

      (b) advances
to officers, directors and employees of the Borrower and Subsidiaries in an
aggregate amount not to exceed $500,000 at any time outstanding, for travel,
entertainment, relocation and analogous ordinary business purposes;

      

      (c) Investments
consisting of extensions of credit in the nature of accounts receivable or notes
receivable arising from the grant of trade credit in the ordinary course of
business, and Investments received in satisfaction or partial satisfaction
thereof from financially troubled account debtors to the extent reasonably
necessary in order to prevent or limit loss;

      

      (d) Investments
(including debt obligations and Equity Interests) received in satisfaction of
judgments or in connection with the bankruptcy or reorganization of suppliers
and customers of the Borrower and its Subsidiaries and in settlement of
delinquent obligations of, and other disputes with, such customers and suppliers
arising in the ordinary course of business;

      

      (e) Investments
in the nature of Production Payments, royalties, dedication of reserves under
supply agreements or similar rights or interests granted, 

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

       

      taken
subject to, or otherwise imposed on properties with normal practices in the
mining industry;

      

      (f) Investments
existing on the date hereof and set forth on Schedule 7.03 and extensions,
renewals, modifications, restatements or replacements thereof; provided, that no
such extension, renewal, modification or restatement shall increase the amount
of the original loan, advance or investment, except by an amount equal to any
premium or other reasonable amount paid in respect of the underlying obligations
and fees and expenses incurred in connection with such replacement, renewal or
extension;

      

      (g) promissory
notes and other similar non-cash consideration received by the Borrower and its
Subsidiaries in connection with Dispositions not otherwise prohibited under this
Agreement;

      

      (h) Investments
in any assets constituting a business unit received by the Borrower or its
Subsidiaries by virtue of an asset exchange or swap with a third party or
acquired as a capital expenditure;

      

      (i) Swap
Contracts permitted under Section 7.02(f);

      

      (j) Investments
by the Borrower or its Subsidiaries in any Loan Party or entity that becomes a
Loan Party as a result of such Investment and Investments by any non-Loan Party
in any other non-Loan Party; provided, that if the Investment is in the form of
Indebtedness, such Indebtedness must be permitted pursuant to Section
7.02(g);

      

      (k) Permitted
Acquisitions;

      

      (l) Investments
by the Borrower or its Subsidiaries to acquire the remaining 18.5% of Capital
Stock of KE Ventures, LLC in an aggregate principal amount not to exceed
$34,000,000;

      

      (m) Investments
by the Borrower or any of its Subsidiaries not otherwise permitted under this
Section 7.03 in an aggregate amount not in excess of 2.5% of Tangible Assets of
the Borrower and Subsidiaries; and

      

      (n) the Magnum
Acquisition.

      

      7.04. Fundamental
Changes.  Merge, dissolve, liquidate, consolidate with or into
another Person, or Dispose of (whether in one transaction or in a series of
transactions) all or substantially all of its assets (whether now owned or
hereafter acquired) to or in favor of any Person, except that, so long as no
Default exists or would result therefrom:

      

      (a) any
Subsidiary may merge with (i) the Borrower, provided, that the Borrower shall be
the continuing or surviving Person, or (ii) any one or more other 

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

       

      Subsidiaries,
provided, that when any Subsidiary that is a Loan Party is merging with another
Subsidiary, the Loan Party shall be the continuing or surviving
Person;

      

      (b) any
Subsidiary may Dispose of all or substantially all of its assets (upon voluntary
liquidation or otherwise) to the Borrower or to another Subsidiary; provided,
that if the transferor in such a transaction is a Loan Party, then the
transferee must either be the Borrower or another Loan Party;

      

      (c) the
Borrower and any Subsidiary may merge or consolidate with any other Person in a
transaction in which the Borrower is the surviving or continuing
Person;

      

      (d) the
Borrower and its Subsidiaries may consummate the Spin-Off; and

      

      (e) the
Borrower and its Subsidiaries may consummate any transaction that would be
permitted as an Investment under Section 7.03.

      

      7.05. Dispositions.  Make
any Disposition or enter into any agreement to make any Disposition,
except:

      

      (a) Dispositions
of used, worn out, obsolete or surplus property by the Borrower or any of its
Subsidiaries in the ordinary course of business or the abandonment or allowance
to lapse or expire or other Disposition of Intellectual Property in the ordinary
course of business that is, in the reasonable judgment of the Borrower, no
longer economically practicable to maintain or useful in the conduct of the
Borrower and its Subsidiaries taken as a whole;

      

      (b) Dispositions
of inventory in the ordinary course of business;

      

      (c) Dispositions
of equipment or real property to the extent that (i) such property is exchanged
for credit against the purchase price of similar replacement property or (ii)
the proceeds of such Disposition are reasonably promptly applied to the purchase
price of such replacement property;

      

      (d) Dispositions
of property by any Subsidiary to the Borrower or to a wholly-owned Subsidiary;
provided, that if the transferor of such property is a Loan Party, the
transferee thereof must either be the Borrower or a another Loan
Party;

      

      (e) Dispositions
permitted by Section 7.04;

      

      (f) Dispositions
by the Borrower and its Subsidiaries of property pursuant to sale-leaseback
transactions, provided, that the book value of all property so Disposed of, from
and after the Closing Date, shall not exceed 2.0% of Tangible
Assets;

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
 

      (g) Dispositions
by the Borrower and its Subsidiaries not otherwise permitted under this Section
7.05; provided, that (i) at the time of such Disposition, no Default shall exist
or would result from such Disposition, and (ii) the aggregate book value of all
property Disposed of in reliance on this clause (g) in any fiscal year shall not
exceed 2.5% of Tangible Assets;

      

      (h) so long as
no Default shall occur and be continuing, the grant of any option or other right
to purchase any asset in a transaction that would be permitted under the
provisions of this Section 7.05;

      

      (i) leases,
subleases, assignments, licenses, sublicenses of real or personal property or
Intellectual Property in the ordinary course of business and in accordance with
the applicable Collateral Documents; provided, however, that any license or
sublicense of intellectual property shall be on the non-exclusive
basis;

      

      (j) sales or
discounts (without recourse) of accounts receivable arising in the ordinary
course of business in connection with the compromise of collection
thereof;

      

      (k) sales,
transfers and other dispositions of Investments in joint ventures to the extent
required by, or make pursuant to customary buy/sell arrangement between, the
joint venture parties set forth in joint venture arrangements and similar
binding arrangements;

      

      (l) transfers
of property subject to casualty or condemnation events upon receipt of the Net
Cash Proceeds constituting and Extraordinary Receipt; and

      

      (m)  Permitted
Securitization Programs.

      

      provided, however, that any
Disposition pursuant to Section 7.05(a), (b), (c), (f), (g), (l), and (m) shall
be for fair market value.

      

      7.06. Restricted
Payments.  Declare or make, directly or indirectly, any
Restricted Payment, except that, so long as no Default shall have occurred and
be continuing at the time of any action described below or would result
therefrom:

      

      (a) each
Subsidiary may make Restricted Payments to the Borrower, the Subsidiary
Guarantors and any other Person that owns a direct Equity Interest in such
Subsidiary, ratably according to their respective holdings of the type of Equity
Interest in respect of which such Restricted Payment is being made;

      

      (b) the
Borrower and each Subsidiary may declare and make dividend payments or other
distributions payable solely in the common stock or other Equity Interests of
such Person;

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
 

      (c) the
Borrower and each Subsidiary may purchase, redeem or otherwise acquire Equity
Interests issued by it with the proceeds received from the substantially
concurrent issue of new shares of its common Equity Interests;

      

      (d) the
Borrower may declare or pay cash dividends to its stockholders and purchase,
redeem, or otherwise acquire for cash Equity Interests issued by it solely out
of 25% of consolidated net income of the Borrower and its Subsidiaries arising
after December 31, 2008 and computed on a cumulative consolidated basis with
other such transactions by the Borrower since such date; provided, that at the
time of such declaration (in the case of dividends) or the date of any such
Restricted Payment (in the case of any other Restricted Payment), and after
giving effective thereto, no Default shall have occurred and be continuing and
the Borrower is in compliance with the financial covenants set forth in Section
7.11; and

      

      (e) the
Borrower or any of its Subsidiaries may purchase (i) Equity Interests in any
Loan Party or options with respect thereto held by directors, officers or
employees of the Borrower or any Subsidiary (or their estates or authorized
representatives) in connection with the death, disability or termination of
employment of any such director, officer or employee and (ii) Equity Interests
in any Loan Party for future issuance under any employee stock
plan.

      

      7.07. Change in Nature of
Business.  Engage in any material line of business other than a
Similar Business.

      

      7.08. Transactions with
Affiliates.  Enter into any transaction of any kind with any
Affiliate, including, without limitation, any purchase, sale, lease or exchange
of property or the rendering of any service, unless such transaction is (a) not
prohibited by this Agreement and (b) upon fair and reasonable terms
substantially as favorable to the Borrower or such Subsidiary as would be
obtainable by the Borrower or such Subsidiary at the time in a comparable arm’s
length transaction with a Person other than an Affiliate.  The
foregoing restrictions shall not apply to the following:

      

      (a) transactions
between or among the Borrower and any other Loan Parties or between and among
any Loan Parties;

      

      (b) the
payment of reasonable and customary fees and reimbursement of expenses payable
to directors of the Borrower or any Subsidiary or to any Plan, Plan
administrator or Plan trustee;

      

      (c) loans and
advances to directors, officers and employees to the extent permitted by Section
7.03;

      

      (d) arrangements
with respect to the procurement of services of directors, officers, independent
contractors, consultants or employees in the ordinary course of business and the
payment of customary compensation (including bonuses) and 

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

       

      other
benefits (including retirement, health, stock option and other benefit plans)
and reasonable reimbursement arrangements in connection therewith;

      

      (e) payments
to directors and officers of the Borrower and its Subsidiaries in respect of the
indemnification of such Persons in such respective capacities from and against
any and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements, as the case may be, pursuant
to the Organization Documents or other corporate action of the Borrower or its
Subsidiaries, respectively, or pursuant to applicable law; and

      

      (f) Restricted
Payments permitted by Section 7.06.

      

      7.09. Burdensome
Agreements.  Enter into any Contractual Obligation (other than
this Agreement or any other Loan Document) that (a) limits the ability (i) of
any Subsidiary to make Restricted Payments to the Borrower or any Subsidiary
Guarantor or to otherwise transfer property to or invest in the Borrower or any
Subsidiary Guarantor, unless such Contractual Obligations could not reasonably
be expected to materially hinder the Borrower’s ability to meet its obligations
under this Agreement.

      

      7.10. Use of
Proceeds.  Use the proceeds of any Credit Extension, whether
directly or indirectly, and whether immediately, incidentally or ultimately, to
purchase or carry margin stock (within the meaning of Regulation U of the FRB)
or to extend credit to others for the purpose of purchasing or carrying margin
stock or to refund indebtedness originally incurred for such
purpose.

      

      7.11. Financial
Covenants.  (a)  Consolidated Interest
Coverage Ratio.  Permit the Consolidated Interest Coverage
Ratio as of the end of any fiscal quarter of the Borrower, commencing with the
fiscal quarter ending March 31, 2008, for the period of four consecutive fiscal
quarters of the Borrower ending on such date to be less than 4.00:1.00;
provided, that (i) the Consolidated Interest Coverage Ratio for the fiscal
quarter ending March 31, 2008, shall be measured for such fiscal quarter only,
(ii) the Consolidated Interest Coverage Ratio for the fiscal quarter ending June
30, 2008, shall be measured for a period of two consecutive fiscal quarters of
the Borrower ending on such date, and (iii) the Consolidated Interest Coverage
Ratio for the fiscal quarter ending September 30, 2008, shall be measured for a
period of three consecutive fiscal quarters of the Borrower ending on such
date.

      

      (b) Consolidated Leverage
Ratio.  Permit the Consolidated Leverage Ratio as of the end of
any fiscal quarter of the Borrower, commencing with the fiscal quarter ending
March 31, 2008, for any period of four consecutive fiscal quarters of the
Borrower ending on such date to be greater than 2.75:1.00.

      

      7.12. Capital
Expenditures.  Make or become legally obligated to make any
Capital Expenditure, except for Capital Expenditures in the ordinary course of

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

       

      business
not exceeding, in the aggregate for the Borrower and its Subsidiaries during
each fiscal year set forth below, the amount set forth opposite such fiscal
year:

      

      
        	
                Fiscal
      Year

              	
                Amount

              
	
                2008

              	
                $220,000,000

              
	
                2009

              	
                $235,000,000

              
	
                2010

              	
                $220,000,000

              
	
                2011

              	
                $220,000,000

              

      

      

      provided, however, that so long
as no Default has occurred and is continuing or would result from such
expenditure, any portion of any amount set forth above, if not expended in the
fiscal year for which it is permitted above, may be carried over for expenditure
in the next following fiscal year; and provided, further, if any such amount is
so carried over, it will be deemed used in the applicable subsequent fiscal year
before the amount set forth opposite such fiscal year above

      

      7.13. Amendments of Organization
Documents.  Amend any of its Organization Documents in any
respect materially adverse to the Lenders.

      

      7.14. Accounting
Changes.  Make any change in (a) its accounting policies or
reporting practices, except as required or permitted by GAAP, or (b) its fiscal
year.

      

      7.15. Prepayments, Etc. of
Indebtedness.  If an Event of Default under Sections 8.01(a) or
(b) (only with respect to an Event of Default under Section 7.11) shall have
occurred and be continuing, voluntarily prepay, redeem, purchase, defease or
otherwise satisfy prior to the scheduled maturity thereof in any manner, or make
any payment in violation of any subordination terms of, any Indebtedness, except
(a) the prepayment of the Credit Extensions in accordance with the terms of this
Agreement and (b) regularly scheduled or required repayments or redemptions of
Indebtedness set forth in Schedule 7.02(i) and refinancings and refundings of
such Indebtedness in compliance with Section 7.02(c).

      

      7.16. Amendment, Etc. of Related
Documents and Indebtedness.  (a)  Cancel or terminate
any Related Document or consent to or accept any cancellation or termination
thereof, other than in accordance with its terms (b) amend, modify or change in
any manner any term or condition of any Related Document or give any consent,
waiver or approval thereunder, (c) waive any default under or any breach of any
term or condition of any Related Document, (d) take any other action in
connection with any Related Document, in the case of each of clauses (a) through
(d), that would materially impair the value of the interest or rights of any
Loan Party thereunder or that would materially impair the ability of the Lenders
to be repaid hereunder or (e) if an Event of Default under Sections 8.01(a) or
(b) (only with respect to an Event of Default under Section 7.11) shall have
occurred and be continuing, amend, modify or change in any 

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

       

      manner any
term or condition of any Indebtedness set forth in Schedule 7.02(i), except for
any refinancing, refunding, renewal or extension thereof permitted by Section
7.02(c).

      

      7.17. Limitation on Negative
Pledge Clauses.  Enter into any Contractual Obligation (other
than this Agreement or any other Loan Document) that limits the ability of the
Borrower or any Subsidiary Guarantor to create, incur, assume or suffer to exist
any Lien upon any of its property to secure the Obligations hereunder; provided,
however, that the foregoing clause shall not apply to Contractual Obligations
which:

      

      (a) exist on
the date hereof and (to the extent not otherwise permitted by this Section 7.17)
are listed on Schedule 7.17 hereto;

      

      (b) are
binding on a Subsidiary at the time such Subsidiary first becomes a Subsidiary
of the Borrower, so long as such Contractual Obligations were not entered into
solely in contemplation of such Person becoming a Subsidiary of the
Borrower;

      

      (c) arise in
connection with any Lien permitted by Section 7.01 to the extent such
restrictions relate solely to the assets (and any proceeds in respect thereof)
which are the subject of such Lien;

      

      (d) represent
Indebtedness permitted by Section 7.02 (b), (c), (d), (e), (k) and (l);
provided, that such Indebtedness shall not conflict with (i) any terms of this
Agreement, any other Loan Document or the terms of any other Indebtedness and
(ii) the Borrower’s obligation to grant Liens to the Administrative Agent for
the benefit of the Secured Parties in Collateral acquired after the Closing Date
in accordance with the terms of the Loan Documents;

      

      (e) represent
secured Indebtedness permitted by Section 7.01(j) to the extent that such
restrictions apply only to the Subsidiaries incurring or guaranteeing such
Indebtedness (and the Subsidiaries of such Subsidiaries);

      

      (f) arise in
connection with any Disposition permitted by Section 7.05, with respect to the
assets so Disposed;

      

      (g) are
customary provisions in joint venture agreements and other similar agreements
applicable solely to such joint venture or the Equity Interests
therein;

      

      (h) are
customary restrictions on leases, subleases, licenses or asset sale agreements
otherwise permitted hereby so long as such restrictions relate to the assets
subject thereto;

      

      (i) are
customary provisions restricting subletting or assignment of any lease governing
a leasehold interest of the Borrower or any Subsidiary;

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
 

      (j) are
customary limitations (including financial maintenance covenants) existing under
or by reason of leases entered into in the ordinary course of
business;

      

      (k) are
restrictions on cash or other deposits imposed under contracts entered into in
the ordinary course of business;

      

      (l) are
customary provisions restricting assignment of any agreements;

      

      (m) are
restrictions imposed by any agreement relating to any Permitted Securitization
Program to the extent that such restrictions relate to the assets (and any
proceeds in respect thereof) that are the subject of such Permitted
Securitization Program; or

      

      (n) are set
forth in any agreement evidencing an amendment, modification, restatement,
renewal, increase, supplement, refunding, replacement or refinancing of the
Contractual Obligations referred to in clauses (a) through (l) above; provided,
that such amendment, modification, restatement, renewal, increase, supplement,
refunding, replacement or refinancing is, in the good faith judgment of the
Borrower, not materially less favorable to the Loan Parties and the Lenders with
respect to such limitations than those applicable pursuant to such Contractual
Obligations prior to such amendment, modification, restatement, renewal,
increase, supplement, refunding, replacement or refinancing.

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

       

      Appendix 4
to the Term 
Sheet

       

      Events
of Default to be Incorporated

      into
the Bridge Facility4

      

      

      
        Below are
the Events of Default set forth in Section 8.01
of  that certain Credit Agreement, dated as of October 31, 2007, among
the Company, the lenders party thereto, and Bank of America, N.A., as
administrative agent thereunder, as amended as of the date hereof (the “Existing Credit
Agreement”). Capitalized terms used and not otherwise defined herein are
used with the meanings attributed thereto in (i) the Commitment Letter dated
April 2, 2008 (the “Commitment
Letter”), from ArcLight to the Company, of which this Appendix 4 forms an
integral part, or (ii) the Existing Credit Agreement, in each case as
appropriate.  All section references set forth below, or any use of
the phrases “herein,” “hereunder,” or similar phrases, shall refer to the
relevant sections of the Existing Credit Agreement.  For the avoidance
of doubt, it is understood that the Events of Default contained in the Bridge
Facility Documentation shall (i) with respect to the matters set forth below, be
in the form set forth below, with such modifications as shall be necessary to
give effect to the terms and conditions set forth in the Term Sheet, the
Commitment Letter, the Fee Letter and, where applicable, to permit and give
effect to the existence of the Existing Credit Agreement, and (ii) in the case
of all other matters, be on Acceptable Bridge Terms.

         

      

      

        
          

        

      

      

      8.01. Events of
Default.  Any of the following shall constitute an Event of
Default:

      

      (a) Non-Payment.  The
Borrower or any other Loan Party fails to pay (i) when and as required to be
paid herein, any amount of principal of any Loan or any L/C Obligation or (ii)
within three days after the same becomes due, any interest on any Loan or on any
L/C Obligation, any fee due hereunder, or any other amount payable hereunder or
under any other Loan Document; or

      

      (b) Specific
Covenants.  (i) The Borrower fails to perform or observe any
term, covenant or agreement contained in any of Sections 6.03(a), 6.03(b),
6.03(c), 6.05(a), 6.07, 6.08, 6.10, 6.11, 6.12, 6.15, 6.16, 6.20, 6.21 or
Article VII, (ii) any of the Subsidiary Guarantors fails to perform or observe
any term, covenant or agreement contained in Section IV of the Subsidiary
Guaranty (but only to the extent it relates to a default under one of the
covenants listed in clause (i) above) or (iii) any of the Loan Parties fails to
perform or observe any term, covenant or agreement contained in Section 4 of the
Security Agreement; or

       

      ___________  

      
        
          
             4 To
conform to final amendment to the Existing Credit Agreement upon satisfactory
review of the same by ArcLight and its
counsel.

          

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

         

         

      

      (c) Other
Defaults.  Any Loan Party fails to perform or observe any other
covenant or agreement (not specified in Section 8.01(a) or (b) above) contained
in any Loan Document on its part to be performed or observed and such failure
continues for 30 days; or

      

      (d) Representations and
Warranties.  Any representation, warranty, certification or
statement of fact made or deemed made by or on behalf of the Borrower or any
other Loan Party herein, in any other Loan Document, or in any document
delivered in connection herewith or therewith shall be incorrect or misleading
in any material respect when made or deemed made; or

      

      (e) Cross-Default.  (i)
The Borrower or any Subsidiary (A) fails to make any payment when due (whether
by scheduled maturity, required prepayment, acceleration, demand, or otherwise)
in respect of any Indebtedness or Guarantee (other than Indebtedness hereunder,
Indebtedness under Swap Contracts or Guarantees of the Obligations), in each
case having an aggregate principal amount (including undrawn committed or
available amounts and including amounts owing to all creditors under any
combined or syndicated credit agreement) of more than the Threshold Amount,
beyond the period of grace, if any, provided in the instrument or agreement
under which such Indebtedness or Guarantee was created or (B) fails to observe
or perform any other agreement or condition relating to any such Indebtedness or
Guarantee or contained in any instrument or agreement evidencing, securing or
relating thereto, or any other event occurs, the effect of which default or
other event is to permit the holder or holders of such Indebtedness or the
beneficiary or beneficiaries of such Guarantee (or a trustee or agent on behalf
of such holder or holders or beneficiary or beneficiaries) to cause, with the
giving of notice if required, such Indebtedness to become due prior to its
stated maturity, or such Guarantee to become due or payable; (ii) there occurs
under any Swap Contract an Early Termination Date (as defined under such Swap
Contract) resulting from (A) any event of default under such Swap Contract as to
which a Loan Party or any Subsidiary thereof is the Defaulting Party (as defined
in such Swap Contract) or (B) any Termination Event (as so defined) under such
Swap Contract as to which a Loan Party or any Subsidiary thereof is an Affected
Party (as so defined) and, in either event, the Swap Termination Value owed by
such Loan Party or such Subsidiary as a result thereof is greater than the
Threshold Amount; or (iii) there occurs under any of the Coal Supply Agreements,
the Coal Supply Agreement I, the Coal Supply Agreement II, or any Liability
Assumption Agreement an early termination of such agreement for any reason which
could reasonably be expected to have an adverse effect on any Loan Party or that
would impair the ability of the Lenders to be repaid in full
hereunder.

      

      (f) Insolvency Proceedings,
Etc.  The Borrower or any of its Subsidiaries institutes or
consents to the institution of any proceeding under any Debtor Relief Law, or
makes an assignment for the benefit of creditors; or applies for or consents to
the appointment of any receiver, trustee, custodian, conservator, liquidator,
rehabilitator or similar officer for it or for all or any substantial part of
its property; or any receiver, trustee, custodian, conservator, liquidator,
rehabilitator or similar officer is 

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

       

      appointed
without the application or consent of such Person and the appointment continues
undischarged or unstayed for 60 calendar days; or any proceeding under any
Debtor Relief Law relating to any such Person or to all or any substantial part
of its property is instituted without the consent of such Person and continues
undismissed or unstayed for 60 calendar days, or an order for relief is entered
in any such proceeding; or

      

      (g) Inability to Pay Debts;
Attachment.  (i) The Borrower or any of its Subsidiaries
becomes unable or admits in writing its inability or fails generally to pay its
debts as they become due, or (ii) any writ or warrant of attachment or execution
or similar process is issued or levied against all or any substantial part of
the property of any such Person and is not released, vacated or fully bonded
within 60 days after its issue or levy; or

      

      (h) Judgments.  There
is entered against the Borrower or any of its Subsidiaries one or more final
judgments or orders for the payment of money in an aggregate amount (as to all
such judgments and orders) exceeding the Threshold Amount (to the extent not
covered by independent third-party insurance), and, such judgments or orders
shall not have been vacated, discharged, stayed or bonded pending appeal within
60 days from the entry thereof; or

      

      (i) ERISA.  (i)
The occurrence of any of the following events that, individually or in the
aggregate, could reasonably be expected to result in a Material Adverse Effect:
(i) an ERISA Event occurs with respect to a Pension Plan or Multiemployer Plan
which has resulted or could reasonably be expected to result in an actual
obligation to pay money of the Borrower under Title IV of ERISA to the Pension
Plan, Multiemployer Plan or the PBGC or (ii) the Borrower or any ERISA Affiliate
fails to pay when due, after the expiration of any applicable grace period, any
installment payment with respect to its withdrawal liability under Section 4201
of ERISA under a Multiemployer Plan; or

      

      (j) Invalidity of Loan
Documents.  Any Loan Document, at any time after its execution
and delivery and for any reason other than as expressly permitted hereunder or
satisfaction in full of all the Obligations, ceases to be in full force and
effect; or any Loan Party or any other Person contests in any manner the
validity or enforceability of any Loan Document; or any Loan Party denies that
it has any or further liability or obligation under any Loan Document, or
purports to revoke, terminate or rescind any Loan Document; or

      

      (k) Change of
Control.  There occurs any Change of Control;

      

      (l) Collateral
Documents.  Any Collateral Document after delivery thereof
pursuant to Section 4.01 or 6.12 shall for any reason (other than pursuant to
the terms hereof or thereof, including as a result of a transaction permitted by
Section 7.04 or 7.05) cease to create a valid and perfected Lien, with the
priority required hereby or thereby (subject to Liens permitted by Section
7.01), on the Collateral purported to be 

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

       

      covered
thereby, except to the extent that any such loss of perfection or priority
results from the failure of the Administrative Agent to maintain possession of
certificates actually delivered to it representing securities pledged under the
Collateral Documents or to file UCC continuation statements and except as to
Collateral consisting of real property to the extent that such losses are
covered by a lender’s title insurance policy and such insurer has not denied or
failed to acknowledge coverage; or

      

      (m) Tax
Matters.  (i) The Spin-Off fails to qualify under Section 355
of the Code, (ii) the Capital Stock of Borrower distributed in connection with
the Spin-Off fails to be treated as qualified property pursuant to Section
355(e) of the Code or (iii) the contribution of assets by Peabody to Borrower in
connection with the Spin-Off fails to qualify under Section 368 of the Code or
Peabody recognizes any gain in connection with such contribution.

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
 

      

      Appendix 5
to the Term
Sheet

       

      Definitions
to be Incorporated

      into
the Bridge Facility5

      

      

      Below are certain Definitions set forth
in Section 1.01
of that certain Credit Agreement, dated as of October 31, 2007, among the
Company, the lenders party thereto, and Bank of America, N.A., as administrative
agent thereunder, as amended as of the date hereof (the “Existing Credit
Agreement”).  Capitalized terms used and not otherwise defined
herein are used with the meanings attributed thereto in (i) the Commitment
Letter dated April 2, 2008 (the “Commitment
Letter”), from ArcLight to the Company, of which this Appendix 5 forms an
integral part, or (ii) the Existing Credit Agreement, in each case as
appropriate.  All section references set forth below, or any use of
the phrases “herein,” “hereunder,” or similar phrases, shall refer to the
relevant sections of the Existing Credit Agreement.  For the avoidance
of doubt, it is understood that the Definitions contained in the Bridge Facility
Documentation shall (i) with respect to the matters set forth below, be in the
form set forth below, and (ii) in the case of all other matters, be on
Acceptable Bridge Terms.

      

      

        
          

        

      

      

      “Amendment” means the
Amendment No. 1 to that certain Credit Agreement, dated as of October 31, 2007,
among the Company, the lenders party thereto, and Bank of America, N.A., as
administrative agent thereunder (the “Existing Credit
Agreement”).

      

      “Amendment Effective
Date” means the date that the Amendment shall become
effective.

      

      “Magnum Acquisition”
has the meaning set forth in the Existing Credit Agreement (as amended by the
Amendment).

      

      “Magnum Acquisition Credit
Agreement” has the meaning set forth in the Existing Credit Agreement (as
amended by the Amendment).

      

      “Merger Date” means
the date that the Magnum Acquisition is consummated.

       

      ____________

      5 Note:
Definitions to conform with the Existing Credit Agreement, as amended, and the
Intercreditor Agreement definitions.  Also, additional definitions are
to be imported as required.

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

       

      
        

        “Subsidiary
Guarantors” means, collectively, the subsidiaries of the Borrower listed
on Schedule
1.01(a) and each other Guarantor Subsidiary of the Borrower that
guarantees the Obligations pursuant to Section 6.12 or
otherwise.Exhibit
10.3

       

      SUPPORT
AGREEMENT

       

      SUPPORT
AGREEMENT, dated as of April 2, 2008 (this “Agreement”), among Patriot
Coal Corporation, a Delaware corporation (“Parent”), and the stockholder
whose name appears on the signature page of this Agreement (the “Stockholder”).

       

      W
I T N E S S E T H:

       

      WHEREAS,
Magnum Coal Company, a Delaware corporation (the “Company”), Parent, Colt Merger
Corporation, a Delaware corporation and wholly-owned subsidiary of Parent
(“Merger Subsidiary”)
and ArcLight Energy Partners Fund I, L.P. and ArcLight Energy Partners Fund II,
L.P., acting jointly, as stockholder representative (the “Stockholder Representative”),
have entered into an Agreement and Plan of Merger (the “Merger Agreement”)
concurrently with the execution and delivery of this Agreement, pursuant to
which, among other things, Merger Subsidiary will be merged with and into the
Company (capitalized terms used in this Agreement but not defined herein shall
have the meanings ascribed to them in the Merger Agreement);

       

      WHEREAS,
as of the date hereof, the Stockholder owns beneficially and of record the
number of shares set forth on Exhibit A hereto of the common stock, par value
$0.01 per share, of the Company (the “Company Stock”) (all such
Company Stock and any shares of Company Stock of which ownership of record or
the power to vote is hereafter acquired by the Stockholder prior to the
termination of this Agreement being referred to herein as the “Shares”); and

       

      WHEREAS,
as a condition to the willingness of Parent to enter into the Merger Agreement,
Parent has requested that the Stockholder agree to enter into and perform its
obligations under this Agreement (including executing, upon the terms and
subject to the conditions hereof, a written consent in the form of Exhibit B
hereto (the “Written
Consent”)), and, in order to induce Parent to enter into the Merger
Agreement, the Stockholder has so agreed.

       

      NOW,
THEREFORE, in consideration of the premises and of the mutual agreements and
covenants set forth herein and in the Merger Agreement, and intending to be
legally bound hereby, the parties hereto hereby agree as follows:

       

       

      ARTICLE
1

      Voting
Agreement

       

      Section
1.01.  Agreement to Consent to and
Support the Merger.  (a) The Stockholder, solely in the
Stockholder’s capacity as a stockholder of the Company, hereby agrees (i) to
execute and deliver to Parent, immediately after the execution of the Merger
Agreement, the Written Consent (and agrees not to revoke or otherwise withdraw

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

       

      such
Stockholder’s approval and adoption of the actions described in such Written
Consent); (ii) if requested by Parent, to vote or exercise its right to consent
with respect to all Shares that the Stockholder is entitled to vote at the time
of any vote or action by written consent to approve and adopt the Merger
Agreement, the Merger and all agreements related to the Merger and any actions
related thereto at any meeting of the stockholders of the Company, and at any
adjournment thereof, at which such Merger Agreement and other related
agreements, or such other actions, are submitted for the consideration and vote
of the stockholders of the Company; and (iii) that it will not vote any Shares
in favor of, or consent to, and will vote against and not consent to, the
approval of any (A) Acquisition Proposal (other than the Merger) or any action
or transaction in furtherance thereof or (B) corporate action the consummation
of which would frustrate the purposes, or prevent or delay the consummation, of
the transactions contemplated by the Merger Agreement.

       

      (b) Effective
upon the entry into the Merger Agreement by the parties thereto:

       

      (i) The
Stockholder hereby confirms the appointment, pursuant to Section 11.05 of the
Merger Agreement, of ArcLight Energy Partners Fund I, L.P. and ArcLight Energy
Partners Fund II, L.P., acting jointly, as such Stockholder’s true and lawful
agent and attorney-in-fact as the “Stockholder Representative” under the Merger
Agreement and the Escrow Agreement, and agrees to abide by and be bound by the
terms of Section 11.05 of the Merger Agreement, which is incorporated herein by
this reference.  The Stockholder hereby acknowledges that the
Stockholder Representative may be removed or replaced only in accordance with
the provisions of Section 11.05 of the Merger Agreement.  The
Stockholder hereby agrees that the Stockholder Representative shall not be
liable for any act done or omitted as Stockholder Representative under the
Merger Agreement or the Escrow Agreement, other than in the case of gross
negligence, bad faith or willful misconduct.

       

      (ii) The
Stockholder hereby acknowledges, and agrees to be bound by, the provisions of
the Merger Agreement with respect to (A) the conversion of shares of Company
Stock (including Company Restricted Stock and the shares of Company Stock to be
issued upon conversion of the Company Convertible Debt Notes immediately prior
to the Effective Time) pursuant to the Merger and the payment of the Merger
Consideration (including the delivery of such Stockholder’s Pro Rata Share of
the Escrow Shares to the Escrow Agent to be held in accordance with the Merger
Agreement and the Escrow Agreement) set forth in Article 2 of the Merger
Agreement, (B) the indemnification obligations of the Stockholder (to the extent
such Stockholder is a Designated Stockholder) set forth in Article 11 of the
Merger Agreement (including, without limitation, the related provisions,
procedures and limitations set forth in such Article 11), (C) the
indemnification rights of the Stockholder set forth in Article 11 of the Merger
Agreement (including, without limitation, the related provisions, procedures,
limitations and disclaimers set forth in such Article 11), (D) the disposition
of the 

       

       

      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

       

       

      Escrow
Shares set forth in Article 2 of the Merger Agreement and in the Escrow
Agreement, (E) the limitations with respect to the ability of the Stockholder to
bring claims against Parent set forth in Section 10.02 of the Merger Agreement
and (F) Article 12 of the Merger Agreement to the extent relating to the
foregoing provisions of the Merger Agreement.

       

      (iii) Parent
hereby acknowledges that the Stockholder shall be an express third party
beneficiary of the provisions of the Merger Agreement, as set forth therein,
subject to the limitations and restrictions set forth therein.

       

      Section
1.02.  Irrevocable
Proxy.  The Stockholder hereby revokes any and all previous
proxies granted with respect to the Shares.  By entering into this
Agreement, the Stockholder hereby irrevocably (but subject to termination in
accordance with Section 4.04 hereof) grants a proxy appointing Parent as the
Stockholder’s attorney-in-fact and proxy, with full power of substitution, for
and in the Stockholder’s name, to vote, express consent or dissent, or otherwise
to utilize such voting power, in each case, in the manner contemplated by
Section 1.01 above (but only in such manner) as Parent or its proxy or
substitute shall, in Parent’s sole discretion, deem proper with respect to the
Shares.  The Stockholder hereby acknowledges and agrees that such
proxy is coupled with an interest, constitutes, among other things, an
inducement for Parent to enter into the Merger Agreement, is irrevocable (other
than as provided in Section 4.04) and shall not be terminated by operation of
law or otherwise upon the occurrence of any event (other than as provided in
Section 4.04) and that, so long as this proxy is in effect, no subsequent
proxies with respect to the Shares shall be given (and if given shall not be
effective).

       

      Section
1.03.  Other
Capacities.  If the Stockholder is an officer or director of
the Company, nothing in this Agreement shall be deemed to apply to, or to limit
in any manner, the discretion of the Stockholder with respect to any action to
be taken (or omitted) by such Stockholder in his or her fiduciary capacity as a
director or officer of the Company; provided that it is agreed
and understood by the parties to this Agreement that the obligations, covenants
and agreements of the Stockholder contained in this Agreement are separate and
apart from such Stockholder’s fiduciary duties as a director or officer of the
Company and no fiduciary obligations that the Stockholder may have as a director
or officer of the Company shall countermand the obligations, covenants and
agreements of the Stockholder, in his or her capacity as a stockholder of the
Company, contained in this Agreement.

       

       

      ARTICLE
2

      Representations
and Warranties of the Stockholder

       

      The
Stockholder hereby represents, warrants and covenants to Parent as
follows:

       

      Section
2.01.  Organization;
Authorization.  If the Stockholder is not a natural person, the
Stockholder is a Person that has been duly organized, is validly existing and,

       

       

      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

      

       

       

      to the
extent applicable, is in good standing under the laws of its jurisdiction of
organization.  The execution, delivery and performance by the
Stockholder of this Agreement and the consummation by the Stockholder of the
transactions contemplated hereby are within the corporate (or other entity) or
individual powers of the Stockholder and have been duly authorized by all
necessary corporate (or other entity) action.  If this Agreement is
being executed in a representative or fiduciary capacity, the person signing
this Agreement has full power and authority to enter into and perform this
Agreement.  This Agreement constitutes a valid and binding Agreement
of the Stockholder.

       

      Section
2.02.  No Conflict; Required Filings and
Consents.  (a) The execution and delivery of this
Agreement by the Stockholder does not, and the performance of this Agreement by
the Stockholder will not: (i) conflict with or result in a breach of any
organizational documents of the Stockholder, (ii) conflict with or violate
any law, rule, regulation, order, judgment or decree applicable to the
Stockholder or by which it or any of the Stockholder’s properties or assets is
bound or affected or (iii) require any consent or other action by any
Person under, result in any breach of, constitute a default (or an event that
with notice or lapse of time or both would become a default) under, give to
another party any rights of termination, amendment, acceleration or cancellation
of, or result in the creation of a Lien on any of the property or assets of the
Stockholder, including (without limitation) the Shares, pursuant to, any note,
bond, mortgage, indenture, contract, agreement, lease, license, permit,
franchise or other instrument or obligation to which the Stockholder is a party
or by which the Stockholder or any of the Stockholder’s properties or assets is
bound or affected, with such exceptions, in the case of each of clauses (ii) and
(iii), as would not, individually or in the aggregate, reasonably be expected to
prevent or materially delay or impair the performance by the Stockholder of the
Stockholder’s obligations under this Agreement (a “Stockholder
MAE”).  There is no beneficiary or holder of a voting trust
certificate or other interest of any trust of which the Stockholder is a trustee
whose consent is required for either the execution and delivery of this
Agreement or the consummation by the Stockholder of the transactions
contemplated by this Agreement.

       

      (b) The
execution and delivery of this Agreement by the Stockholder does not, and the
performance of this Agreement by the Stockholder will not, require any consent,
approval, authorization or permit of, or filing with or notification to, any
Governmental Authority.  The Stockholder does not have any other
understanding in effect with respect to the voting or transfer of any Shares
except for the Magnum Coal Company Stockholders Agreement dated as of March 21,
2006 among the Company, the Stockholder and the other parties thereto (the
“Magnum Stockholders
Agreement”).

       

      Section
2.03.  Litigation.  As
of the date hereof, there is no private or governmental action, suit,
proceeding, claim, arbitration or investigation pending before any agency, court
or tribunal (foreign or domestic) or, to the knowledge of the Stockholder,
threatened against the Stockholder, any of its properties or, if the Stockholder
is an entity, any of its officers, directors, employees, partners or trustees in
their capacities as such, that, individually or in the aggregate, would
reasonably be 

       

       

      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

      

       

       

      expected
to have a Stockholder MAE.  As of the date hereof, there is no
judgment, decree or order against the Stockholder or, if the Stockholder is an
entity, any of its officers, directors, employees, partners or trustees in their
capacities as such, that would prevent, enjoin, alter or materially delay any of
the transactions contemplated by this Agreement, or that would reasonably be
expected to have a Stockholder MAE.

       

      Section
2.04.  Title to
Shares.  The Stockholder is the
record and beneficial owner of the Shares, free and clear of any Lien (other
than Liens created by the Magnum Stockholders Agreement) and free of any other
limitation or restriction that would prevent the Stockholder from satisfying its
obligations pursuant to this Agreement.  Immediately prior to the
Effective Time, the Stockholder will have good and valid title to the Shares
free and clear of any Lien (other than Liens created by the Magnum Stockholders
Agreement).  As of the date hereof, the Shares described on Exhibit A
hereto are the only shares of the Company Stock owned of record or beneficially
by the Stockholder on the date of this Agreement.

       

      Section
2.05.  Written Consent; Informed
Consent.  Upon its execution and delivery by the Stockholder
pursuant to Section 1.01, the Written Consent shall constitute valid and
effective approval by the Stockholder of the Merger Agreement and the Merger,
and no other vote, consent or approval by the Stockholder shall be necessary by
the Stockholder in its capacity as a stockholder of the Company in connection
with the consummation of the Merger.  The Stockholder has received and
reviewed a copy of this Agreement and the form of Merger Agreement and the
exhibits thereto and has had an opportunity to obtain the advice of counsel
prior to executing this Agreement.

       

      Section
2.06.  No Community Property
Rights.  If the Stockholder is an individual and has a spouse,
such spouse is not entitled to any rights under any community property statute
or other Applicable Law or agreement with respect to the Shares which would
adversely affect the covenants made by the Stockholder pursuant to this
Agreement or the conversion of such Shares into Merger Consideration pursuant to
the terms of the Merger Agreement.

       

       

      ARTICLE
3

      Covenants
of the Stockholder

       

      Section
3.01.  No Proxies for or Encumbrances on
Shares.  Except as set forth in the last sentence of this
Section 3.01, the Stockholder shall not, without the prior written consent of
Parent, directly or indirectly, (i) except pursuant to the Merger
Agreement, sell, convert, assign, encumber, transfer, pledge or otherwise
dispose of any of the Stockholder’s Shares or enter into any contract, option or
other arrangement or undertaking with respect to the direct or indirect
acquisition or sale, conversion, assignment, transfer, encumbrance or other
disposition of any Shares or (ii) deposit any Shares into a voting trust or
enter into a voting agreement or arrangement or grant any proxy with respect to
any Shares (other than as contemplated hereunder).  

       

       

      
        
          
          

        

        
          5

          
            

          

        

        
          
          

        

      

       

       

      Notwithstanding
the foregoing, the consent of Parent shall not be required in the event that the
Stockholder transfers all or any portion of the Shares to an Affiliate of the
Stockholder, with such transfer conditioned upon such Affiliate entering into an
agreement in the form hereof.

       

      Section
3.02.  Other
Offers.  The Stockholder shall not, and shall cause its
Representatives acting on behalf of the Stockholder or the Company not to, take
any action, directly or indirectly, that is prohibited by Section 6.03(a) of the
Merger Agreement.  The Stockholder shall, and shall cause its
Representatives to, cease immediately and cause to be terminated any and all
existing activities, discussions or negotiations, if any, with any Third Party
or any Third Party’s Representatives conducted prior to the date hereof with
respect to any Acquisition Proposal.

       

      Section
3.03.  Appraisal
Rights.  The Stockholder agrees not to exercise any rights
(including under Section 262 of Delaware Law) to demand appraisal of any Shares
which may arise with respect to the Merger.

       

      Section
3.04.  Release by
Stockholder.

       

      (a) Effective
as of the Effective Time, in consideration of Parent’s performance under the
Merger Agreement and payments to be made thereunder, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged by the Stockholder, the Stockholder, for himself, herself or itself
(as applicable), and each of his, her or its (as applicable) heirs, executors,
Affiliates, successors, and assigns (collectively, the “Stockholder Releasing
Parties”) after taking into account the terms and conditions of the
Merger and the Transaction Documents, and the transactions contemplated thereby,
including the terms of the Company Convertible Debt, the Parent Financing and
the Parent Financing Commitment Letter, among other things, hereby forever fully
and irrevocably releases Parent, Merger Subsidiary, their respective Affiliates,
the Company and its Subsidiaries, and their respective current and former
directors, officers, managers, employees, agents, advisors and other
representatives in their capacities as such (collectively, the “Stockholder Released
Parties”), from any and all claims, demands, and causes of action of
every kind and nature, whether known or unknown, suspected or unsuspected, to
the extent relating to actions, events or circumstances occurring or failing to
occur on or prior to the Effective Time (including any and all claims,
liabilities, demands or causes of action relating to or arising out of federal
or state statutes (including securities laws) or common law, claims for breach
of contract, claims relating to the Company Convertible Debt, breach of
fiduciary duty, misrepresentation, defamation, infliction of emotional distress
or any other tort under the common law of any state or claims for damages,
costs, expenses, and attorneys’, brokers’ and accountants’ fees and expenses)
(collectively, the “Stockholder
Released Claims”); provided that the Stockholder
is not releasing any claim or right arising under (i) the Merger Agreement, (ii)
any indemnification agreement in favor of any Stockholder Releasing Parties
(including any indemnification provisions contained in the Company’s
certification of incorporation or by-laws) set forth on Section 4.05(c) of

       

       

      
        
          
          

        

        
          6

          
            

          

        

        
          
          

        

      

       

       

      the
Company Disclosure Schedule, (iii) any claim under the Company’s directors and
officers insurance policies and the Company’s fiduciary duty liability insurance
policies, (iv) if the Stockholder is also an employee of the Company, any
employment agreement or arrangement (including any employee benefit plan)
applicable to the Stockholder that is set forth on Section 4.16 of the Company
Disclosure Schedule and Applicable Law or (v) any claim, demand or cause of
action such Stockholder Releasing Party may have against Parent or any of its
Affiliates (other than the Company and its Subsidiaries) that is not related to
the transactions contemplated by the Merger Agreement or the Company Convertible
Debt NPA.

       

      (b) The
Stockholder represents and warrants that he, she or it (as applicable) has not
sold, assigned or otherwise transferred, and will not sell, assign or otherwise
transfer, any Stockholder Released Claims.  Effective as of the
Effective Time, the Stockholder, on behalf of himself, herself or itself (as
applicable) and the Stockholder Releasing Parties, hereby irrevocably agrees to
refrain from directly or indirectly asserting any claim or demand or commencing
(or causing to be commenced) any suit, action, or proceeding of any kind, in any
court or before any tribunal, against any Stockholder Released Party based upon
any Stockholder Released Claim.

       

      Section
3.05.  Confidentiality.  From
the date hereof until the second anniversary of Closing, the Stockholder agrees
that the Stockholder and its Representatives acting on its behalf shall hold in
confidence and not disclose to any Person any information (irrespective of the
form of information and including, without limitation, all analyses,
compilations, data, studies, notes, translations, memoranda and other documents
prepared by the Stockholder or its Representatives containing or based in whole
or in part on any such information) concerning the Company or its Subsidiaries
or Parent or its Subsidiaries in possession of the Stockholder or its
Representatives as of the Closing, except (A) as may be compelled in a judicial
or administrative proceeding or as otherwise required by Applicable Law or the
rules of any applicable insurance commission or similar organization, (B) to the
extent the same was publicly known or subsequently becomes publicly known
through no act or omission by the Stockholder or its Representatives, (C) to the
extent relating to information concerning the Company or its Subsidiaries, to
the Stockholder’s officers, employees, directors, [stockholders], members,
limited partners, and trustees,
and, on a “need to know basis” agents, legal, tax and accounting advisers, in
each case, it being understood that such Person to whom such disclosure is made
will be informed of the confidential nature of such information and instructed
to keep such information confidential and the Stockholder shall be responsible
for any breach of confidentiality by any such Person.

       

      
        
          
          

        

        
          7

          
            

          

        

        
          
          

        

      

       

       

      Section
3.06.  Further
Assurances.  The Stockholder agrees to execute and deliver, or
cause to be executed and delivered, all further documents and instruments and to
take, or cause to be taken, all actions and to do, or cause to be done, all
things necessary, proper or advisable under applicable laws and regulations, to
consummate and make effective the transactions contemplated by this Agreement,
including to vest in Parent the power to carry out the provisions of Article
1.

       

      Section
3.07.  Stockholder
Only.  Notwithstanding anything to the contrary contained
herein, Parent agrees and acknowledges that (i) the Stockholder is entering into
this Agreement in its individual capacity and (ii) none of the covenants or
other agreements contained herein or provisions hereof shall in any way bind any
Affiliates of the Stockholder (other than the matters contemplated by Section
3.04 and Section 3.05, and in respect thereof, only as set forth
therein).  Parent agrees and acknowledges that this Section 3.07 is an
integral part of the transactions contemplated hereby and the Stockholder would
not enter into this Agreement without this Section 3.07.

       

      Section
3.08.  Certain
Transactions.  The Stockholder agrees that until the Effective
Time, it shall not directly or indirectly, enter into any contract, option or
other arrangement or understanding with respect to any sale, transfer,
assignment, lending or similar disposition of any shares of Parent Stock payable
to it as Merger Consideration, including pursuant to any short sale or any other
hedging or other derivative transaction that has the effect of materially
changing the economic benefits or risks of ownership of any shares of Parent
Stock.

       

      Section
3.09.  HSR Filing.

       

      (a) [If
compliance by the Stockholder with the applicable requirements of the HSR Act is
required in connection with the issuance of Parent Stock to such Stockholder
pursuant to the transactions contemplated by the Merger Agreement,] The
Stockholder and Parent shall each (and the Stockholder shall cause its ultimate
parent entity (as such term is defined in 16 C.F.R. Section 801.1), if any, to)
use its commercially reasonable efforts to take, or cause to be taken, all
actions and to do, or cause to be done, all things necessary, proper or
advisable under Applicable Law relating to the issuance of Parent Stock to such
Stockholder pursuant to the transactions contemplated by the Merger Agreement,
including (i) preparing and filing as promptly as practicable with any
Governmental Authority all documentation to effect all necessary filings,
notices, petitions, statements, registrations, submissions of information,
applications and other documents, in each case, relating to the application of
the HSR Act to the issuance of Parent Stock to such Stockholder and (ii)
obtaining and maintaining all approvals, consents, registrations, permits,
authorizations and other confirmations required to be 

       

      
        
          
          

        

        
          8

          
            

          

        

        
          
          

        

      

       

       

      obtained
from any Governmental Authority in connection with the HSR Act that are
necessary, proper or advisable in connection with the issuance of Parent Stock
to such Stockholder; provided that the parties
hereto understand and agree that neither the commercially reasonable efforts of
the Stockholder, its ultimate parent entity or Parent nor any other obligation
of the Stockholder, its ultimate parent entity or Parent under this Agreement
shall be deemed to include (i) entering into any settlement, undertaking,
consent decree, stipulation or agreement with any Governmental Authority in
connection with the transactions contemplated hereby or (ii) divesting or
otherwise holding separate (including by establishing a trust or otherwise), or
taking any other action (or otherwise agreeing to do any of the foregoing) with
respect to any of the Stockholder, its ultimate parent entity, Parent or their
respective Affiliates’ businesses, assets or properties.

       

      (b) In
furtherance and not in limitation of the foregoing, each of the Stockholder (or
its ultimate parent entity) and Parent shall [(if compliance with the HSR Act is
required pursuant to Section 3.09(a))] make an appropriate filing of a
Notification and Report Form pursuant to the HSR Act with respect to the
transactions contemplated hereby as promptly as practicable and in any event
within 20 Business Days of the date hereof and each shall use its commercially
reasonable efforts to supply as promptly as practicable any additional
information and documentary material that may be requested pursuant to the HSR
Act.  The Stockholder shall pay the filing fee under the HSR Act with
respect to the acquisition of Parent Stock by the Stockholder.

       

      Section
3.10.  NYSE Cooperation. From the date hereof
until the Effective Time, the Stockholder shall use its commercially reasonable
efforts to cooperate with Parent in connection with any discussions between
Parent and the New York Stock Exchange regarding the independence of any
nominees to Parent’s Board of Directors selected by the Stockholder
Representative pursuant to the Voting Agreement.

       

       

      ARTICLE
4

      General
Provisions

       

      Section
4.01.  Notices.  All
notices, requests and other communications to any party hereunder shall be in
writing (including facsimile transmission but not electronic mail) and shall be
given,

       

      
        
          
          

        

        
          9

          
            

          

        

        
          
          

        

      

       

       

      (a) 
 if to
Parent, to:

       

      Patriot
Coal Corporation

      12312
Olive Boulevard, Suite 400

      St. Louis,
Missouri 63141

      Attention:  Joseph
W. Bean

      Facsimile
No.:  (314) 275-3656

      

      with a
copy to:

       

      Davis Polk
& Wardwell

      450
Lexington Avenue

      New York,
NY  10017

      Attention:  William
L. Taylor

      Facsimile
No.:  (212) 450-4800

       

      (b) 
 if to the
Stockholder, to the Stockholder Representative as follows:

       

      ArcLight
Energy Partners Fund I, L.P.

      ArcLight
Energy Partners Fund II, L.P.

      c/o
ArcLight Capital Partners, LLC

      152 West
57th Street, 53rd Floor

      New York,
NY 10019

      Attention:
Robb E. Turner

                              Senior
Partner

      Facsimile
No.: 212-888-9275

       

      with a
copy to:

       

      ArcLight
Energy Partners Fund I, L.P.

      ArcLight
Energy Partners Fund II, L.P.

      c/o
ArcLight Capital Partners, LLC

      200
Clarendon Street, 55th Floor

      Boston, MA
02117

      Attention:  Christine
M. Miller

                        Associate
General Counsel

      Facsimile
No.: 617.867.4698

       

      and a
further copy to:

       

      Skadden,
Arps, Slate, Meagher & Flom LLP

      Four Times
Square

      New York,
New York 10022

      Attention:
Sean C. Doyle, Esq.

      Facsimile
No.: (212) 735-2000

       

       

      
        
          
          

        

        
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      or to such
other address or facsimile number as such party may hereafter specify for the
purpose by notice to the other parties hereto.  All such notices,
requests and other communications shall be deemed received on the date of
receipt by the recipient thereof if received prior to 5:00 p.m. on a Business
Day in the place of receipt.  Otherwise, any such notice, request or
communication shall be deemed to have been received on the next succeeding
Business Day in the place of receipt.

       

      Section
4.02.  Headings.  The
headings contained in this Agreement are for reference purposes only and shall
not affect in any way the meaning or interpretation of this
Agreement.

       

      Section
4.03.  Amendments and
Waivers.  (a) Any provision of this Agreement (including any
Schedule or Exhibit hereto) may be amended or waived if, but only if, such
amendment or waiver is in writing and is signed, in the case of an amendment, by
each party, or in the case of a waiver, by the party against whom the waiver is
to be effective.

       

      (b) No failure
or delay by any party in exercising any right, power or privilege hereunder
shall operate as a waiver thereof nor shall any single or partial exercise
thereof preclude any other or further exercise thereof or the exercise of any
other right, power or privilege.  The rights and remedies herein
provided shall be cumulative and not exclusive of any rights or remedies
provided by law.

       

      Section
4.04.  Termination.  This
Agreement and all provisions hereof shall terminate on the earlier to occur of
(i) the date, if any, that the Merger Agreement is terminated in accordance with
its terms or (ii) written agreement of Parent and the Stockholder; provided that such
termination shall not relieve any party hereto from any liability for breach of
this Agreement occurring prior to any such termination.  

       

      Section
4.05.  Severability.  If
any term, provision, covenant or restriction of this Agreement is held by a
court of competent jurisdiction or other Governmental Authority to be invalid,
void or unenforceable, the remainder of the terms, provisions, covenants and
restrictions of this Agreement shall remain in full force and effect and shall
in no way be affected, impaired or invalidated so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any manner
materially adverse to any party.  Upon such a determination, the
parties shall negotiate in good faith to modify this Agreement so as to effect
the original intent of the parties as closely as possible in an acceptable
manner in order that the transactions contemplated hereby be consummated as
originally contemplated to the fullest extent possible.

       

      Section
4.06.  Entire
Agreement.  This Agreement supersedes all prior agreements and
undertakings, both written and oral, between the parties, or any of them, with
respect to the subject matter hereof.

       

      Section
4.07.  Assignment.  The
provisions of this Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and 

       

       

      
        
          
          

        

        
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      permitted
assigns, provided that no party may assign, delegate or otherwise transfer any
of its rights, interests or obligations under this Agreement without the prior
written consent of the other parties hereto, except that Parent may assign,
delegate or otherwise transfer any of its rights, interests or obligations under
this Agreement to an Affiliate without the consent of the Stockholder, but any
such transfer or assignment shall not relieve Parent of its obligations
hereunder (and in the event that such Person is no longer an Affiliate of
Parent, any such rights and interests shall be automatically assigned or
transferred to Parent).

       

      Section
4.08.  Fees and
Expenses.  All costs and expenses (including, without
limitation, all fees and disbursements of counsel, accountants, investment
bankers, experts and consultants to a party) incurred in connection with this
Agreement and the transactions contemplated hereby shall be paid by the party
incurring such costs and expenses.

       

      Section
4.09.  Specific
Performance.  The parties hereto agree that irreparable damage
would occur if any provision of this Agreement were not performed in accordance
with the terms hereof and that the parties shall be entitled (without the
requirement to post bond) to an injunction or injunctions to prevent breaches of
this Agreement or to enforce specifically the performance of the terms and
provisions hereof in the courts provided for in Section 4.11, in addition to any
other remedy to which they are entitled at law or in equity.

       

      Section
4.10.  Governing
Law.  This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware, without regard to its
conflicts of law principles.

       

      Section
4.11.  Jurisdiction.  The
parties hereto agree that any suit, action or proceeding seeking to enforce any
provision of, or based on any matter arising out of or in connection with, this
Agreement or the transactions contemplated hereby shall be brought in any
Delaware state court, and each of the parties hereby irrevocably consents to the
jurisdiction of such court (and of the appropriate appellate courts therefrom)
in any such suit, action or proceeding and irrevocably waives, to the fullest
extent permitted by law, any objection that it may now or hereafter have to the
laying of the venue of any such suit, action or proceeding in any such court or
that any such suit, action or proceeding brought in any such court has been
brought in an inconvenient forum.  Process in any such suit, action or
proceeding may be served on any party anywhere in the world, whether within or
without the jurisdiction of any such court.  Without limiting the
foregoing, each party agrees that service of process on such party as provided
in Section 4.01 shall be deemed effective service of process on such
party.

       

      Section
4.12. WAIVER OF JURY
TRIAL.  EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES
ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR
RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

       

       

      
        
          
          

        

        
          12

          
            

          

        

        
          
          

        

      

       

       

      Section
4.13. Counterparts; Third Party
Beneficiaries.  This Agreement may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.  Until
and unless each party has received a counterpart of this Agreement signed by
each of the other parties, this Agreement shall have no effect, and no party
shall have any right or obligation under this Agreement (whether by virtue of
any other oral or written agreement or other communication).  This
Agreement shall become effective when each party shall have received a
counterpart hereof signed by the other parties.  No provision of this
Agreement is intended to confer upon any Person other than the parties hereto
any rights or remedies hereunder.  Any such counterpart may be
delivered by facsimile or other electronic format (including
“.pdf”).

       

      

       

      
        
          
          

        

        
          13

          
            

          

        

        
          
          

        

      

       

       

       

      IN WITNESS
WHEREOF, the parties have executed this Agreement as of the date first written
above.

       

      
        	
                PATRIOT
      COAL CORPORATION

                 

              	 
	
                By:

              	
                 

              	 
	 
      	
                Name:

              	
                 

              	 
	 
      	
                Title:

              	
                 

              	 

      

      

      

      

      
        	
                [STOCKHOLDER]

                 

              	 
	 
      	 
	
                By:

                Address:

                 

              	 
	 	 

      

      
 

      

      [Signature
Page to Support Agreement]

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      
 

      Exhibit
A

       

      LIST
OF SHARES

       

      

      
        	
                Class
      of Shares

                 

              	
                Number
      of Shares Held by the Stockholder

              
	
                Common
      Stock

              	 
      

      

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

       

      

      Exhibit
B

       

      

       

      MAGNUM
COAL COMPANY

      (A
Delaware corporation)

       

      WRITTEN
CONSENT

      

      Dated
as of April 2, 2008

      

       

      WHEREAS:
The undersigned is a holder of the number and class of shares of Magnum Coal
Company, a Delaware corporation (the “Company”), set forth on the
signature page hereto;

       

      NOW,
THEREFORE: Pursuant to Section 228 of the Delaware General Corporation
Law (the “DGCL”) and the
By-laws of the Company, the undersigned stockholder hereby consents in writing
to the following:

       

      The
adoption of the Agreement and Plan of Merger (the “Merger Agreement”) dated as of
April 2, 2008 among the Company, Patriot Coal Corporation, a Delaware
corporation (“Parent”),
Colt Merger Corporation, a Delaware corporation and wholly owned subsidiary of
Parent and ArcLight Energy Partners Fund I, L.P. and ArcLight Energy Partners
Fund II, L.P., acting jointly, as stockholder representative, and the
transactions contemplated by the Merger Agreement.

       

      This
consent shall have the same force and effect as if taken at a meeting of
stockholders of the Company duly called and constituted pursuant to the DGCL and
the By-laws of the Company.

       

      [Signature
Page Follows]

       

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
 

       

      IN WITNESS
WHEREOF, the undersigned stockholder has hereunto executed this written consent
as of the date first written above.

       

      
        

        
          	
                  [NAME
      OF STOCKHOLDER]

                   

                	 

        

        
          
            

            
              	
                      [SIGNATURE
      OF STOCKHOLDER]

                       

                    	 

            

             

          

        

      

      

      

      
        	
                Class
      of Shares

                 

              	
                Number
      of Shares Held by the Stockholder

              
	
                Common
      Stock

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