Document:

Exhibit
10.4

       

      VOTING
AND STANDSTILL AGREEMENT

       

      VOTING AND
STANDSTILL AGREEMENT, dated as of April 2, 2008 (this “Agreement”), among Patriot
Coal Corporation, a Delaware corporation (“Parent”), the stockholders
whose names appears on the signature page of this Agreement (each, a “Stockholder” and collectively,
the “Stockholders”), and
ArcLight Energy Partners Fund I, L.P. and ArcLight Energy Partners Fund II,
L.P., acting jointly, as stockholder representative (the “Stockholder
Representative”).

       

      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 the Stockholder Representative, entered into an Agreement and Plan of Merger
(the “Merger Agreement”)
dated as of April 2, 2008, pursuant to which, among other things, Merger
Subsidiary will be merged with and into the Company at the Effective Time
(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 Effective Time, each share of the common stock, par value $0.01 per
share, of the Company (the “Company Stock”), held by the
stockholders of the Company immediately prior to the Effective Time will be
converted into the right to receive a number of shares of common stock, par
value $0.01 per share, of Parent (“Parent Stock”), in accordance
with Article 2 of the Merger Agreement.  The stockholders of the
Company (including the Stockholders) whose shares of Company Stock are converted
into the right to receive Parent Stock pursuant to Article 2 of the Merger
Agreement shall be referred to herein as the “Company Holders”, and the
shares of Parent Stock payable as consideration pursuant to Article 2 of the
Merger Agreement (including the Escrow Shares) to such Company Holders shall be
referred to herein as “Parent
Shares”; and

       

      WHEREAS,
the Stockholders, the Stockholder Representative and Parent desire to make
certain agreements relating to (i) the ownership and voting of Parent Shares
held by such Stockholders, (ii) the composition of Parent’s Board of Directors
(the “Board”) and (iii)
certain other matters.

       

      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; Standstill Restrictions

       

      Section
1.01.  Stockholder Nominees to Parent
Board.

       

      (a) Subject to
Section 1.02,
effective as of the Effective Time (or, if the Effective Time shall occur prior
to the date of Parent’s 2008 annual meeting of stockholders (the “2008 Meeting”), promptly after
the 2008 Meeting), the Board shall cause the number of authorized members of the
Board to be expanded by two members and shall appoint to the Board two nominees
designated in writing by the Stockholder Representative, one of whom shall serve
as a Class I director on the Board and one of whom shall serve as a Class II
director on the Board.  Subject to Section 1.02, following such
appointment, at any meeting of the stockholders of Parent at which the Class I
or Class II directors of the Board are to be elected, Parent will include in the
slate of directors recommended for election by the Board to the stockholders of
Parent one nominee selected by the Stockholder Representative to serve as a
Class I director or one nominee selected by the Stockholder Representative to
serve as a Class II director, as applicable.  

       

      (b) Subject to
Section 1.02, in the event of the resignation, death, removal or
disqualification of a director nominated by the Stockholder Representative
pursuant to Section 1.01(a), the Stockholder Representative shall promptly
designate a replacement director.  

       

      (c) Any Board
nominee selected by the Stockholder Representative pursuant to Section 1.01(a)
or Section 1.01(b), and any replacement nominee or director selected by the
Stockholder Representative at any time, shall (i) at the time of initial
nomination and at each time he or she would be nominated for re-election, be
reasonably acceptable to the Nominating and Governance Committee of the Board,
(ii) at all times be, to the reasonable satisfaction of the Nominating and
Governance Committee of the Board, an “independent director” as such term is
defined from time to time in the New York Stock Exchange’s listing standards (or
the listing standards of the principal national securities exchange on which
Parent Stock is then traded), disregarding the failure to satisfy the tests set
forth in Sections 303A.02(b)(ii) or 303A.02(b)(v) of the New York Stock Exchange
Listed Company Manual to the extent such failure results solely from one or more
of the relationships set forth on Section 4.26 of the Company Disclosure
Schedule and (iii) agree to resign in the event his or her term shall end as
provided in Section 1.02(a) or Section 1.02(b).  Assuming the accuracy
of the representation and warranty of the ArcLight Funds in Section 2.06, Parent
acknowledges that (x) Robb E. Turner and John Erhard shall be the nominees
initially designated for appointments in accordance with Section 1.01(a) and
that, as of the date hereof, such individuals satisfy the requirements of
clauses (i) and (ii) of the immediately preceding sentence and (y) for purposes
of this Agreement, any individual who is an associate (as such term is defined
under Rule 12b-2 under the 1934 Act) of ArcLight Energy Partners Fund I, L.P. or

       

       

      
        
          
          

        

        
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      ArcLight
Energy Partners Fund II, L.P. shall be deemed not to fail to satisfy the
requirements of clause (ii) of the immediately preceding sentence solely as a
result of ownership by any Person of Parent Shares or any of the relationships
set forth on Section 4.26 of the Company Disclosure Schedule.

       

      (d) A
decision, act, consent or instruction of the Stockholder Representative
hereunder (including, without limitation, any selection of a nominee to the
Board pursuant to Section 1.01(a) or Section 1.01(b)) shall constitute a
decision, act, consent or instruction of all Stockholders and shall be final,
binding and conclusive upon each of such Stockholders, and Parent may rely upon
any such decision, act, consent or instruction of the Stockholder Representative
as being the decision, act, consent or instruction of each and every such
Stockholder.  Parent shall be relieved from any liability to any
Person for any acts done by them in accordance with such decision, act, consent
or instruction of the Stockholder Representative.

       

      Section
1.02.  Reduction of Stockholder Board Designation
Rights.

       

      (a) At such
time after the Effective Time that (i) the aggregate number of Parent Shares
owned by the Company Holders is less than twenty percent (20%) of the Aggregate
Share Number but greater than or equal to ten percent (10%) of the Aggregate
Share Number or (ii) the aggregate number of Parent Shares owned by the ArcLight
Funds is less than ten percent (10%) of the Aggregate Share Number, the
Stockholder Representative shall be entitled to nominate only one member of the
Board and, unless the Board (without the participation of the nominees of the
Stockholder Representative) shall approve such nominee remaining on the Board,
the Stockholder Representative shall cause one of its nominees on the Board to
resign effective immediately as of such time and the term of such director shall
immediately end.

       

      (b) At such
time after the Effective Time that the aggregate number of Parent Shares owned
by the Company Holders is less than ten percent (10%) of the Aggregate Share
Number, the Stockholder Representative shall not be entitled to nominate any
members of the Board and, unless the Board (without the participation of the
nominee(s) of the Stockholder Representative) shall approve such nominee(s)
remaining on the Board, the Stockholder Representative shall cause all of its
remaining nominee(s) on the Board to resign effective immediately as of such
time and the term of such director(s) shall immediately end.

       

      (c) For the
avoidance of doubt, once the Company Holders have lost the right to nominate one
or both members of the Board, they shall not thereafter regain such rights
regardless of any subsequent acquisitions of Parent Shares by Company Holders or
any change to the outstanding Parent Stock by Parent that in either case results
in Company Holders owning shares in the amounts described in Section 1.02(a) or
Section 1.02(b).

       

       

      
        
          
          

        

        
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      (d) References
in this Section 1.02 to the Aggregate Share Number shall be appropriately
adjusted for any change in the outstanding shares of Parent Stock by reason of
any reclassification, recapitalization, stock split, combination, exchange or
readjustment of shares.

       

      (e) For
purposes of this Section 1.02, (i) no Company Holder shall be deemed to own any
Parent Shares that any Company Holder has Transferred, (ii) any Company Holder
that is a Reduced Standstill Stockholder shall be deemed, at any applicable
time, to have Transferred and no longer own 30% of the Parent Shares held by
such Company Holder at such time, (iii) any Company Holder that is a Limited
Standstill Stockholder shall be deemed, at any applicable time, to have
Transferred and no longer own 70% of the Parent Shares held by such Company
Holder at such time, and (iv) the Stockholder set forth on Schedule 1.02(e)
shall be deemed to have Transferred and no longer own all Parent Shares held by
such Stockholder effective as of the Effective Time.  

       

      (f) Each
Stockholder agrees to promptly notify Parent each time such Stockholder
Transfers any Parent Shares, which notice shall set forth the number of Parent
Shares so Transferred.  On request from time to time (but no more than
once per fiscal quarter), each Stockholder agrees to certify to Parent the
number of Parent Shares owned by such Stockholder and to provide appropriate
evidence of such ownership.

       

      (g) As used in
this Agreement, “Aggregate
Share Number” means the sum of (i) the aggregate number of Parent Shares
issued pursuant to Article 2 of the Merger Agreement and (ii) the number of
shares of Parent Stock outstanding as of the date of the Merger
Agreement.

       

      (h) As used in
this Agreement, (i) “ArcLight
I” means ArcLight Energy Partners Fund I, L.P., (ii) “ArcLight II” means ArcLight
Energy Partners Fund II, L.P. and (iii) “ArcLight Funds” means ArcLight
I and ArcLight II, together.

       

      (i) As used in
this Agreement, with respect to all Stockholders other than Limited Standstill
Stockholders, “Transfer”
shall mean, directly or indirectly, to sell, transfer, assign, lend or similarly
dispose of any Parent Shares (other than a sale, transfer, assignment or
disposition solely between the ArcLight Funds), or to enter into any contract,
option or other arrangement or understanding with respect to any such sale,
transfer, assignment, lending or similar disposition of any Parent Shares, and
shall include (i) a short sale or the entry into of any other hedging or other
derivative transaction that has the effect of materially changing the economic
benefits or risks of ownership of any Parent Shares and (ii) except for purposes
of Section 3.01, any delivery of Escrow Shares to Parent or any other
Indemnified Party pursuant to the indemnification obligations set forth in
Article 11 of the Merger Agreement; provided that a Transfer
shall not include any pledge or hypothecation of, or other similar encumbrance
on, any Parent Shares in connection with any bona fide lending arrangement with
a commercial banking institution; provided, further, that such

       

       

      
        
          
          

        

        
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      transaction
shall be a Transfer subject to the terms of Section 1.02, Section 1.05 and
Section 3.01 if such financial institution shall foreclose on such Parent Shares
pursuant to such arrangement.

       

      (j) As used in
this Agreement, with respect to the Limited Standstill Stockholders, “Transfer” shall mean, directly
or indirectly, to sell, transfer, assign, lend or similarly dispose of any
Parent Shares (other than a sale, transfer, assignment or disposition to an
Affiliate of such Limited Standstill Stockholder subject to such transferee
Affiliate agreeing to (i) be bound by the provisions of this Agreement to the
same extent as the Limited Standstill Stockholder transferor and (ii) transfer
such Parent Shares to the Limited Standstill Stockholder transferor in the event
that such transferee is no longer an Affiliate of such Limited Standstill
Stockholder transferor), or to enter into any contract, option or other
arrangement or understanding with respect to any such sale, transfer,
assignment, lending or similar disposition of any Parent Shares, and shall
include (A) a short sale or the entry into of any other hedging or other
derivative transaction that has the effect of materially changing the economic
benefits or risks of ownership of any Parent Shares and (B) except for purposes
of Section 3.01, any delivery of Escrow Shares to Parent or any other
Indemnified Party pursuant to the indemnification obligations set forth in
Article 11 of the Merger Agreement; provided that a Transfer
shall not include (x) any Permitted Short Sale or (y) any pledge or
hypothecation of, or other similar encumbrance on, any Parent Shares in
connection with any bona fide lending arrangement with a commercial banking
institution; provided,
further, that such transaction referred to in clause (y) shall be a
Transfer subject to the terms of Section 1.02, Section 1.07 and Section 3.01 if
such financial institution shall foreclose on such Parent Shares pursuant to
such arrangement.  As used herein, “Permitted Short Sale”
means a transaction of the kind
described in clause (A) of the preceding sentence that is entered into
by (i) a group or other division of such Limited Standstill
Stockholder (on the one hand) that is separated by an internal information
barrier or similar policy of the Limited Standstill Stockholder (which
barrier or policy has been complied with insofar as it relates to the Parent
Shares) from (ii) the group or division (or groups or divisions)
within the Limited Standstill Stockholder that have either participated in
the negotiation and execution of this Agreement on behalf of the Limited
Standstill Stockholder or are the group that is responsible for the ownership
and disposition of the Parent Shares acquired in the Merger by such Limited
Standstill Stockholder (on the other hand), and has so entered into such a
transaction in the ordinary course of business for a purpose other than hedging
the economic exposure of the Limited Standstill Stockholder in respect of the
Parent Shares acquired in the Merger.

       

      Section
1.03.  Support
of Parent Board Nominees.  Each Stockholder
agrees that so long as the Stockholder Representative is entitled to nominate
any members to the Board pursuant to this Agreement, such Stockholder will vote,
or execute written consents or proxies with respect to, as the case may be, all
of its shares of Parent Stock in favor of the entire slate of directors
recommended for election by the Board to the 

       

       

      
        
          
          

        

        
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      stockholders
of Parent at any meeting of Parent stockholders at which any directors are
elected.

       

      Section
1.04.  Additional Voting
Obligations.  Except as prohibited by Applicable
Law, each Stockholder (other than the Stockholders set forth on Schedule 1.04
hereto) agrees that so long as the Stockholder Representative is entitled to
nominate any members to the Board pursuant to this Agreement, such Stockholder
shall vote, or execute written consents or proxies with respect to, as the case
may be, all of its shares of Parent Stock as recommended by the Board in the
case of (a) any stockholder proposal submitted for a vote at any meeting of
Parent’s stockholders and (b) any proposal submitted by Parent for a vote at any
meeting of Parent’s stockholders relating (i) to the appointment of Parent’s
accountants or (ii) a Parent equity compensation plan and/or any material
revisions thereto.

       

      Section
1.05.  ArcLight Funds Standstill.

       

      (a) Each
ArcLight Fund (each, an “ArcLight Standstill Stockholder”)
agrees that until the termination of the Standstill Period, neither such
ArcLight Standstill Stockholder nor any of its Affiliates will, directly or
indirectly, unless invited to do so (on an unsolicited basis) by the Board
(excluding the vote of any members of the Board appointed by the Stockholder
Representative pursuant to this Agreement) in writing: (i) acquire, offer or
propose to acquire, or agree or seek to acquire, by purchase or otherwise, any
securities or direct or indirect rights or options to acquire any securities of
Parent; (ii) enter into or agree, offer, propose or seek to enter into, or
otherwise be involved in or part of, any acquisition transaction, merger or
other business combination relating to Parent or any acquisition transaction for
all or substantially all of the assets of Parent or any of its businesses; (iii)
make, or in any way participate in, any “solicitation” of “proxies” (as such
terms are defined under Regulation 14A under the 1934 Act) to vote, or seek to
advise or influence any Person with respect to the voting of, any voting
securities of Parent, (iv) except as contemplated by Section 1.03 or Section
1.04, form, join or in any way participate in a “group” (within the meaning of
Section 13(d)(3) of the 1934 Act) with respect to any voting securities of
Parent; (v) except as contemplated by Section 1.01 and except pursuant to its
ability (subject to Section 1.03 and Section 1.04) to vote shares of Parent
Stock held by it, seek, propose or otherwise act alone or in concert with
others, to influence or control the management, Board or policies of Parent;
(vi) enter into any discussions, negotiations, arrangements or understandings
with any other Person with respect to any of the foregoing activities or propose
any of such activities to any other Person; (vii) advise, assist, knowingly
encourage, act as a financing source for or otherwise invest in any other Person
in connection with any of the foregoing activities; or (viii) disclose any
intention, plan or arrangement inconsistent with any of the
foregoing.  Notwithstanding the foregoing, nothing in this Section
1.05 shall prohibit the Transfer of Parent Shares from one ArcLight Fund to the
other ArcLight Fund.  Each ArcLight Standstill Stockholder agrees that
it shall promptly advise Parent of any inquiry or 

       

       

      
        
          
          

        

        
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      proposal
made to such ArcLight Standstill Stockholder with respect to any of the
foregoing.

       

      (b) Each
ArcLight Standstill Stockholder agrees that, during the Standstill Period,
neither it nor any of its Affiliates will, directly or indirectly: (i) request
to Parent or its Representatives to amend or waive any provision of this Section
1.05 (including this sentence); or (ii) take any initiative with respect to
Parent which would reasonably be expected to require Parent to make a public
announcement regarding (A) any of the activities referred to in Section 1.05(a)
or (B) the possibility of such ArcLight Standstill Stockholder or any other
Person acquiring control of Parent, whether by means of a business combination
or otherwise.

       

      (c) For
purposes of Section 1.05 and Section 1.06, “Parent” shall be deemed to include
Parent, any successor to or person in control of Parent, or any division thereof
or of any such successor or controlling person.

       

      (d) Subject to
Section 1.05(e), the restrictions set forth in Sections 1.05(a) and 1.05(b)
shall not prohibit any ArcLight Standstill Stockholder from engaging in one or
more of the types of transactions referred to in Sections 1.05(a) and 1.05(b) in
the event that: (i) Parent has entered into a definitive agreement with a third
party with respect to (A) a tender offer or exchange offer for more than 50% of
the outstanding Parent Stock, (B) any other acquisition transaction, merger or
other business combination in which holders of Parent’s voting stock before the
transaction would not hold a majority of the voting power of Parent’s (or if
Parent is not the surviving entity in such transaction, the surviving entity’s)
voting stock (or of the voting stock of an entity that directly or indirectly
holds a majority of the voting power of Parent’s or such surviving entity’s
voting stock) immediately after such transaction or (C) any acquisition
transaction for more than 50% of the assets of Parent and its Subsidiaries,
taken as a whole (the transactions in clauses (A), (B) and (C), each a “Business Combination
Transaction”); or (ii) a third party commences a tender offer or exchange
offer (which would, if completed in accordance with its terms, result in a
Business Combination Transaction) and, in the case of this clause (ii), either
the Board of Directors of Parent has recommended such offer or not rejected such
offer within ten business days after the announcement
thereof.  

       

      (e) Notwithstanding
anything to the contrary in this Agreement, if (i) a Business Combination
Transaction with respect to which Parent has entered into a definitive agreement
is terminated without the closing thereunder being consummated or (ii) a third
party tender or exchange offer of the type described in clause (ii) of Section
1.05(d) is terminated without being consummated, then the provisions of this
Section 1.05 shall once again thereafter apply in accordance with their terms
and each ArcLight Standstill Stockholder shall once again be subject to such
provisions.

       

       

      
        
          
          

        

        
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      (f) As used in
this Agreement, “Standstill
Period” means the period commencing at the Effective Time and ending upon
the later to occur of (i) the Stockholder Representative no longer being
entitled to nominate any members of the Board pursuant to this Agreement or (ii)
nine months after such time as the ArcLight Standstill Stockholders and their
respective Affiliates, the Reduced Standstill Stockholders and their respective
Affiliates, and the Limited Standstill Stockholders and their respective
Affiliates in the aggregate own less than 7.5% of the Parent Stock outstanding
at such time.

       

      Section
1.06.  Reduced Stockholder
Standstill.

       

      (a) Each
Stockholder identified on Schedule 1.06 hereto (each, a “Reduced Standstill
Stockholder”) agrees that until the termination of the Standstill Period,
neither such Reduced Standstill Stockholder nor any of its controlled Affiliates
will, directly or indirectly, unless invited to do so (on an unsolicited basis)
by the Board (excluding the vote of any members of the Board appointed by the
Stockholder Representative pursuant to this Agreement) in writing: (i) acquire,
offer or propose to acquire, or agree or seek to acquire, by purchase or
otherwise, any securities or direct or indirect rights or options to acquire any
securities of Parent; (ii) enter into or agree, offer, propose or seek to enter
into, or otherwise be involved in or part of, any acquisition transaction,
merger or other business combination relating to Parent or any acquisition
transaction for all or substantially all of the assets of Parent or any of its
businesses; (iii) make, or in any way participate in, any “solicitation” of
“proxies” (as such terms are defined under Regulation 14A under the 1934 Act) to
vote, or seek to advise or influence any Person with respect to the voting of,
any voting securities of Parent, (iv) except as contemplated by Section 1.03 or
Section 1.04, form, join or in any way participate in a “group” (within the
meaning of Section 13(d)(3) of the 1934 Act) with respect to any voting
securities of Parent; (v) except as contemplated by Section 1.01 and except
pursuant to its ability (subject to Section 1.03 and Section 1.04) to vote
shares of Parent Stock held by it, seek, propose or otherwise act alone or in
concert with others, to influence or control the management, Board or policies
of Parent; (vi) enter into any discussions, negotiations, arrangements or
understandings with any other Person with respect to any of the foregoing
activities or propose any of such activities to any other Person; (vii) advise,
assist, knowingly encourage, act as a financing source for or otherwise invest
in any other Person in connection with any of the foregoing activities; or
(viii) disclose any intention, plan or arrangement inconsistent with any of the
foregoing; provided,
that nothing herein shall prohibit a Reduced Standstill Stockholder or any of
its controlled Affiliates from (A) engaging in any of the activities referred to
in clause (i) hereof so long as such activities are in the ordinary course of
such Reduced Standstill Stockholder’s or its controlled Affiliate’s business and
are not conducted for the purpose of obtaining control of or influencing or
controlling the management, Board or policies of Parent or for the purpose of
avoiding the effect of the standstill provisions contained in this Section 1.06
or (B) investing in or providing financing to or otherwise holding an interest
in any 

       

       

      
        
          
          

        

        
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      Person
that engages in any of the activities referred to in clauses (i) through (viii)
hereof, so long as such investment, financing, or interest is made or obtained
in the ordinary course of such Reduced Standstill Stockholder’s or its
controlled Affiliate’s business (and not for the purpose of avoiding the effect
of the standstill provisions contained in this Section 1.06), and such Person is
not controlled by such Reduced Standstill Stockholder. 

       

      (b) Each
Reduced Standstill Stockholder agrees that, during the Standstill Period,
neither it nor any of its controlled Affiliates will, directly or indirectly:
(i) request to Parent or its Representatives to amend or waive any provision of
this Section 1.06 (including this sentence); or (ii) take any initiative with
respect to Parent which would reasonably be expected to require Parent to make a
public announcement regarding (A) any of the activities referred to in Section
1.06(a) or (B) the possibility of such Reduced Standstill Stockholder or any
other Person (except as provided in clause (B) of the proviso to Section
1.06(a)) acquiring control of Parent, whether by means of a business combination
or otherwise.

       

      (c) Subject to
Section 1.06(d), the restrictions set forth in Sections 1.06(a) and 1.06(b)
shall not prohibit any Reduced Standstill Stockholder from engaging in one or
more of the types of transactions referred to in Sections 1.06(a) and 1.06(b) in
the event that: (i) Parent has entered into a definitive agreement with a third
party with respect to a Business Combination Transaction; or (ii) a third party
commences a tender offer or exchange offer (which would, if completed in
accordance with its terms, result in a Business Combination Transaction) and, in
the case of this clause (ii), either the Board of Directors of Parent has
recommended such offer or not rejected such offer within ten business days after
the announcement thereof.

       

      (d) Notwithstanding
anything to the contrary in this Agreement, if (i) a Business Combination
Transaction with respect to which Parent has entered into a definitive agreement
is terminated without the closing thereunder being consummated or (ii) a third
party tender or exchange offer of the type described in clause (ii) of Section
1.06(c) is terminated without being consummated, then the provisions of this
Section 1.06 shall once again thereafter apply in accordance with their terms
and each Reduced Standstill Stockholder shall once again be subject to such
provisions.

       

      Section
1.07.  Limited Stockholder
Standstill.

       

      (a) Each
Stockholder identified on Schedule 1.07 hereto (each, a “Limited Standstill
Stockholder”) agrees that until the termination of the Standstill Period,
neither such Limited Standstill Stockholder nor any of its controlled Affiliates
will, directly or indirectly, unless invited to do so (on an unsolicited basis)
by the Board (excluding the vote of any members of the Board appointed by the
Stockholder Representative pursuant to this Agreement) in writing: (i) acquire,
offer or propose to acquire, or agree or seek to acquire, by purchase or
otherwise, any securities or direct or indirect rights or options to acquire any
securities of Parent; (ii) enter into or agree, offer, propose or seek to enter

       

       

      
        
          
          

        

        
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      into, or
otherwise be involved in or part of, any acquisition transaction, merger or
other business combination relating to Parent or any acquisition transaction for
all or substantially all of the assets of Parent or any of its businesses; (iii)
make, or in any way participate in, any “solicitation” of “proxies” (as such
terms are defined under Regulation 14A under the 1934 Act) to vote, or seek to
advise or influence any Person with respect to the voting of, any voting
securities of Parent, (iv) except as contemplated by Section 1.03 or Section
1.04, form, join or in any way participate in a “group” (within the meaning of
Section 13(d)(3) of the 1934 Act) with respect to any voting securities of
Parent; (v) except as contemplated by Section 1.01 and except pursuant to its
ability (subject to Section 1.03 and Section 1.04) to vote shares of Parent
Stock held by it, seek, propose or otherwise act alone or in concert with
others, to influence or control the management, Board or policies of Parent;
(vi) enter into any discussions, negotiations, arrangements or understandings
with any other Person with respect to any of the foregoing activities or propose
any of such activities to any other Person; (vii) advise, assist, knowingly
encourage, act as a financing source for or otherwise invest in any other Person
in connection with any of the foregoing activities; or (viii) disclose any
intention, plan or arrangement inconsistent with any of the foregoing; provided, that nothing
herein shall prohibit a Limited Standstill Stockholder or any of its controlled
Affiliates from (A) engaging in any of the activities referred to in clauses
(i), (iii), (iv), (vi), (vii) and (viii) (except, in the case of clauses (vi),
(vii) and (viii), to the extent relating to clauses (ii) or (v)) hereof so long
as such activities are in the ordinary course of such Limited Standstill
Stockholder’s or its controlled Affiliate’s business and are not conducted for
the purpose of obtaining control of or influencing or controlling the
management, Board or policies of Parent or for the purpose of avoiding the
effect of the standstill provisions contained in this Section 1.07 or (B)
investing in or providing financing to or otherwise holding an interest in any
Person that engages in any of the activities referred to in clauses (i) through
(viii) hereof, so long as such investment, financing, or interest is made or
obtained in the ordinary course of such Limited Standstill Stockholder’s or its
controlled Affiliate’s business (and not for the purpose of avoiding the effect
of the standstill provisions contained in this Section 1.07), and such Person is
not controlled by such Limited Standstill Stockholder.

       

      (b) Each
Limited Standstill Stockholder agrees that, during the Standstill Period,
neither it nor any of its controlled Affiliates will, directly or indirectly:
(i) request to Parent or its Representatives to amend or waive any provision of
this Section 1.07 (including this sentence); or (ii) take any initiative with
respect to Parent which would reasonably be expected to require Parent to make a
public announcement regarding (A) any of the activities referred to in Section
1.07(a) or (B) the possibility of such Limited Standstill Stockholder or any
other Person (except as provided in clause (B) of the proviso to Section
1.07(a)) acquiring control of Parent, whether by means of a business combination
or otherwise.

       

       

      
        
          
          

        

        
          10

          
            

          

        

        
          
          

        

      

       

       

      (c) Subject to
Section 1.07(d), the restrictions set forth in Sections 1.07(a) and 1.07(b)
shall not prohibit any Limited Standstill Stockholder from engaging in one or
more of the types of transactions referred to in Sections 1.07(a) and 1.07(b) in
the event that: (i) Parent has entered into a definitive agreement with a third
party with respect to a Business Combination Transaction; or (ii) a third party
commences a tender offer or exchange offer (which would, if completed in
accordance with its terms, result in a Business Combination Transaction) and, in
the case of this clause (ii), either the Board of Directors of Parent has
recommended such offer or not rejected such offer within ten business days after
the announcement thereof.

       

      (d) Notwithstanding
anything to the contrary in this Agreement, if (i) a Business Combination
Transaction with respect to which Parent has entered into a definitive agreement
is terminated without the closing thereunder being consummated or (ii) a third
party tender or exchange offer of the type described in clause (ii) of Section
1.07(c) is terminated without being consummated, then the provisions of this
Section 1.07 shall once again thereafter apply in accordance with their terms
and each Limited Standstill Stockholder shall once again be subject to such
provisions.

       

      Section
1.08.  Irrevocable Proxy.  Each Stockholder hereby
revokes any and all previous proxies granted with respect to its shares of
Parent Stock.  By entering into this Agreement, each ArcLight Fund
hereby irrevocably grants a proxy appointing Parent as its attorney-in-fact and
proxy, with full power of substitution, for and in such Stockholder’s name, to
vote, express consent or dissent, or otherwise to utilize such voting power in
the manner contemplated by Section 1.03 and Section 1.04 as
Parent or its proxy or substitute shall, in Parent’s sole discretion, deem
proper with respect to such ArcLight Fund’s shares of Parent
Stock.  Each ArcLight Fund 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 and this 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 no subsequent proxies with respect to the
shares of Parent Stock shall be given (and if given shall not be
effective).  Each Stockholder shall cause all of its shares of Parent
Stock to be represented, in person or by proxy, at all meetings of holders of
Parent Stock of which such Stockholder has notice, so that such shares of Parent
Stock may be counted for the purpose of determining the presence of a quorum at
such meetings.

       

      Section
1.09.  Stockholder
Only.  Notwithstanding anything to the contrary
contained herein, Parent agrees and acknowledges that (i) each 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 such Stockholder, except as specifically provided
herein.  Parent agrees and acknowledges that this Section 1.09 is an
integral part of the transactions contemplated 

       

       

      
        
          
          

        

        
          11

          
            

          

        

        
          
          

        

      

       

       

      hereby and
the Stockholder would not enter into this Agreement without this Section
1.09.

       

       

      ARTICLE
2

      Representations
and Warranties of the Stockholder

       

      Each
Stockholder (or, in the case of Section 2.06, each of the ArcLight Funds) hereby
represents, warrants and covenants to Parent as follows as of the Effective
Time:

       

      Section
2.01.  Organization;
Authorization.  If such Stockholder is not a
natural person, such Stockholder is a Person that has been duly organized, is
validly existing and, to the extent applicable, is in good standing under the
laws of its jurisdiction of organization.  The execution, delivery and
performance by such Stockholder of this Agreement and the consummation by such
Stockholder of the transactions contemplated hereby are within the corporate (or
other entity) or individual powers of such 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 such Stockholder.

       

      Section
2.02.  No
Conflict; Required Filings and
Consents.  (a) The execution and delivery of
this Agreement by such Stockholder does not, and the performance of this
Agreement by such Stockholder will not: (i) conflict with or result in a breach
of any organizational documents of such Stockholder, (ii) conflict with or
violate any law, rule, regulation, order, judgment or decree applicable to such
Stockholder or by which it or any of such 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 such
Stockholder, including (without limitation) the Parent Shares, pursuant to, any
note, bond, mortgage, indenture, contract, agreement, lease, license, permit,
franchise or other instrument or obligation to which such Stockholder is a party
or by which such Stockholder or any of such 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 such Stockholder is a
trustee whose consent is required for either the execution and delivery of this
Agreement or the consummation by such Stockholder of the transactions
contemplated by this Agreement.

       

       

      
        
          
          

        

        
          12

          
            

          

        

        
          
          

        

      

       

       

      (b) The
execution and delivery of this Agreement by such Stockholder does not, and the
performance of this Agreement by such Stockholder will not, require any consent,
approval, authorization or permit of, or filing with or notification to, any
Governmental Authority.  Such Stockholder does not have any other
understanding in effect with respect to the voting or transfer of any Parent
Shares except for the Registration Rights Agreement and the Escrow
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 such Stockholder,
threatened against such Stockholder, any of its properties or, if such
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 expected to have a Stockholder MAE.  As of the
Effective Time, there is no judgment, decree or order against such Stockholder
or, if such 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.  As of the Effective Time, such Stockholder is the
record and beneficial owner of the Parent Shares it is entitled to receive
pursuant to Article 2 of the Merger Agreement in respect of the shares of
Company Stock set forth on Schedule 2.04(a) hereto and the shares of Company
Stock to be issued upon conversion of the Company Convertible Debt Notes set
forth on Schedule 2.04(a) hereto, free and clear of any Lien and free of any
other limitation or restriction that would prevent such Stockholder from
satisfying its obligations pursuant to this Agreement.  With respect
to Stockholders other than the ArcLight Funds, the Parent Shares are the only
shares of Parent Stock owned of record or beneficially by such Stockholder or
its controlled Affiliates as of the Effective Time.  With respect to
the ArcLight Funds, the Parent Shares are the only shares of Parent Stock owned
of record or beneficially by such Stockholder, and any of its Affiliates as of
the Effective Time.  For the avoidance of doubt, the representations
and warranties of Stockholders other than the ArcLight Funds in this Section
2.04 relate solely to the direct ownership of such Stockholder and its
controlled Affiliates and such Stockholder shall not, for the purposes of this
Section 2.04, be deemed the beneficial owner of any shares owned by any of its
Affiliates that are not controlled Affiliates.  The parties hereto
agree that the representations made in this Section 2.04 shall not apply to the
Stockholders with respect to the entities set forth on Schedule
2.04(b).

       

      Section
2.05.  No Community Property
Rights.  If such Stockholder is an individual and has a spouse,
such Stockholder’s spouse is not entitled to any rights under any community
property statute or other Applicable Law or agreement with respect to the

       

       

      
        
          
          

        

        
          13

          
            

          

        

        
          
          

        

      

       

       

      Parent
Shares owned by such Stockholder which would adversely affect the covenants made
by such Stockholder pursuant to this Agreement.

       

      Section
2.06.  Director Nominee
Disclosure. Each ArcLight Fund
represents and warrants that (i) the information supplied by Robb E. Turner and
John Erhard to Parent in the Director and Officer Questionnaire completed by
such individual is accurate and complete, (ii) neither of such individuals, nor
such ArcLight Fund or any of its Affiliates has, or has had at any time in the
past three years, any relationship with Parent, the Company or any of their
respective Subsidiaries except (A) as set forth in Section 4.26 of the Company
Disclosure Schedule and (B) relationships as directors and holders of Company
Stock and Company Convertible Debt Notes and (iii) as of the Effective Time,
neither of such individuals will fail to be “independent” with respect to Parent
under Section 303A.02(b) of the New York Stock Exchange Listed Company Manual
(except to the extent that any such individual fails to satisfy the tests set
forth in Sections 303A.02(b)(ii) or 303A.02(b)(v) of the New York Stock Exchange
Listed Company Manual as a result of the relationships set forth on Section 4.26
of the Company Disclosure Schedule).

       

       

      ARTICLE
3

      Additional
Covenants of the Parties

       

      Section
3.01.  Lock-Up.

       

      (a) From the
Effective Time until the date that is 180 days after the Effective Time (the
“Initial Lock-up Date”),
each Stockholder agrees that it shall not, without Parent’s prior written
consent (which consent shall be determined by the Board in its sole discretion,
excluding the vote of any members of the Board appointed by the Stockholder
Representative pursuant to this Agreement), Transfer any Parent Shares owned by
it to any Person.

       

      (b) From the
Initial Lock-up Date until the date that is 270 days after the Effective Time
(the “Second Lock-up
Date”), each Stockholder agrees that it shall not, without Parent’s prior
written consent (which consent shall be determined by the Board in its sole
discretion, excluding the vote of any members of the Board appointed by the
Stockholder Representative pursuant to this Agreement), Transfer more than 50%
of the Parent Shares owned by it as of the Effective Time to any
Person

       

      (c) From the
Second Lock-up Date until the date that is 360 days after the Effective Time,
each Stockholder agrees that it shall not, without Parent’s prior written
consent (which consent shall be determined by the Board in its sole discretion,
excluding the vote of any members of the Board appointed by the Stockholder
Representative pursuant to this Agreement), Transfer any shares to any Person to
the extent that, when 

       

       

      
        
          
          

        

        
          14

          
            

          

        

        
          
          

        

      

       

       

      aggregated
with any Transfers by such Stockholder permitted by Section 3.01(b), such
Stockholder will have Transferred more than 75% of the Parent Shares owned by it
as of the Effective Time.

       

      (d) Notwithstanding
clauses (a) through (c) of this Section 3.01, in the event that the Board
determines to release any Stockholder from the provisions of this Section 3.01,
each other Stockholder shall automatically be deemed released with respect to
the same percentage of securities as the percentage of securities then held by
the released Stockholder (and otherwise on the same terms and
conditions).

       

      Section
3.02.  Further
Assurances.  Each of the parties hereto 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 and this Article 3.

       

       

      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,

       

      (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

       

       

      
        
          
          

        

        
          15

          
            

          

        

        
          
          

        

      

       

       

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

       

      with a
copy to:

       

      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

      

      and

      

      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

      

      Skadden,
Arps, Slate, Meagher & Flom LLP

      Four Times
Square

      New York,
New York 10022

      Attention:
Sean C. Doyle, Esq.

      Facsimile
No.: (212) 735-2000

       

      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.

       

       

      
        
          
          

        

        
          16

          
            

          

        

        
          
          

        

      

       

       

      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 Parent, the Stockholder Representative and a number of
Stockholders owning at least 66 2/3% of the Parent Shares owned by all
Stockholders at such time, or in the case of a waiver, by the party against whom
the waiver is to be effective; provided that no amendment to
any provision of Section 1.04, Section 1.05, Section 1.06, Section 1.07, Section
3.01, Section 4.03(a) shall be effective against any Stockholder without such
Stockholder’s written consent and no amendment that is adverse to any
Stockholder shall be effective without the consent of such
Stockholder.

       

      (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.  Effectiveness and
Termination.  This Agreement shall become effective on the
Effective Time (it being agreed and understood that if the Merger Agreement is
terminated, this Agreement shall not become effective and shall become void and
of no effect).  After the Effective Time, this Agreement shall
terminate on the earlier of (i) the written agreement of Parent and the
Stockholder Representative and (ii) the date, if any, of the termination of the
Standstill Period; 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 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 

       

       

      
        
          
          

        

        
          17

          
            

          

        

        
          
          

        

      

       

       

      of its
rights, interests or obligations under this Agreement to an Affiliate without
the consent of any 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.

       

       

      
        
          
          

        

        
          18

          
            

          

        

        
          
          

        

      

       

       

      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”).

       

      
 

      
        
          
          

        

        
          19

          
            

          

        

        
          
          

        

      

       

       

       

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

       

      
        	
                PATRIOT
      COAL CORPORATION

                 

              	 
	
                By:

              	
                /s/
      Richard M. Whiting

              	 
	 
      	
                Name:

              	
                Richard
      M. Whiting

              	 
	 
      	
                Title:

              	
                President
      and Chief Executive Officer

              	 

      

       

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      

      

      
        	
                ARCLIGHT
      ENERGY PARTNERS FUND I, L.P. and ARCLIGHT
      ENERGY PARTNERS FUND II, L.P., acting jointly, as
      Stockholder Representative 

                
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

              	 

      

      
 

      
        	
                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

              	 

      

      

      

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

       

       

      
        	
                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

              	 

      

      

      

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      
 

      
        	
                /s/
      Timothy Elliott

              	 
	
                Timothy
      Elliott

              	 

      

      

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

       

      

      
        	
                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

              	 

      

      

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
 

      

      
        	
                CAISSE
      DE DÉPÔT ET PLACEMENT DU QUÉBEC

                 

              	 
	
                By:

              	
                /s/
      Ghislain Gauthier

              	 
	
                Name:
      Ghislain Gauthier

              	 
	
                Title:
      Senior Vice-President

              	 
	 
      	 
	 
      	 
	
                By:

              	
                /s/
      Cyrille Vittecoq

              	 
	
                Name:
      Cyrille Vittecoq

              	 
	
                Title:
      Vice-President, Investments

              	 

      

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
 

      

      
        	
                CASCADE
      INVESTMENT, L.L.C.

                 

              	 
	
                By:

              	
                /s/
      Michael Larsor

              	 
	
                Name:
      Michael Larsor

              	 
	
                Title:
      Business Manager

              	 

      

      

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
 

      

      
        	
                CITIGROUP
      CAPITAL PARTNERS II 2006 CITIGROUP INVESTMENT, L.P.

                 

                By:  Citigroup
      Private Equity LP, its general partner

                 

              	 
	
                By:

              	
                /s/
      Darren Friedman

              	 
	
                Name:
      Darren Friedman

              	 
	
                Title:
      Vice President

              	 

      

      

      
 

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

       

      

      
        	
                CITIGROUP
      CAPITAL PARTNERS II EMPLOYEE MASTER FUND, L.P.

                 

                By:  Citigroup
      Private Equity LP, its general partner

                 

              	 
	
                By:

              	
                /s/
      Darren Friedman

              	 
	
                Name:
      Darren Friedman

              	 
	
                Title:
      Vice President

              	 

      

      

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
 

      

      
        	
                CITIGROUP
      CAPITAL PARTNERS II ONSHORE, L.P.

                 

                By:  Citigroup
      Private Equity LP, its general partner

                 

              	 
	
                By:

              	
                /s/
      Darren Friedman

              	 
	
                Name:
      Darren Friedman

              	 
	
                Title:
      Vice President

              	 

      

      

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
 

      

      
        	
                CITIGROUP
      CAPITAL PARTNERS II CAYMAN HOLDINGS, L.P.

                 

                By:  Citigroup
      Private Equity LP, its general partner

                 

              	 
	
                By:

              	
                /s/
      Darren Friedman

              	 
	
                Name:
      Darren Friedman

              	 
	
                Title:
      Vice President

              	 

      

      

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

       

      

      
        	
                HOWARD
      HUGHES MEDICAL INSTITUTE

                 

              	 
	
                By:

              	
                /s/
      Landis Zimmerman

              	 
	
                Name:
      Landis Zimmerman

              	 
	
                Title:
      Vice President + Chief Investment Officer

              	 

      

      

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
 

      

      
        	
                THE
      NORTHWESTERN MUTUAL LIFE INSURANCE COMPANY

                 

              	 
	
                By:

              	
                /s/
      Howard Stern

              	 
	
                Name:
      Howard Stern

              	 
	
                Title:
      Its Authorized Representative

              	 

      

      

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
 

      

      
        	
                THE
      BOARD OF TRUSTEES OF THE LELAND STANFORD JUNIOR UNIVERSITY

                 

                By:  The
      Stanford Management Company

                 

              	 
	
                By:

              	
                /s/
      Mark H. Hayes

              	 
	
                Name:
      Mark H. Hayes

              	 
	
                Title:
      Manager of Natural Resources Investments

              	 

      

      

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
 

      

      

      
        	
                /s/
      Paul Vining

              	 
	
                Paul
      Vining

              	 

      

      

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
 

      

      
        	
                /s/
      David Turnbull

              	 
	
                David
      Turnbull

              	 

      

      

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
 

      

      
        	
                /s/
      Richard Verheij

              	 
	
                Richard
      Verheij

              	 

      

      

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
 

      

      
        	
                /s/
      Tom McQuade

              	 
	
                Tom
      McQuade

              	 

      

      

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
 

      

      
        	
                /s/
      B. Scott Spears

              	 
	
                B.
      Scott Spears

              	 

      

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      
 

      

      
        	
                /s/
      Keith St. Clair

              	 
	
                Keith
      St. Clair

              	 

      

      

       

      
 

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      
 

      
        	
                /s/
      Robert Bennett

              	 
	
                Robert
      Bennett

              	 

      

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
 

      

      
        	
                /s/
      Dwayne Francisco

              	 
	
                Dwayne
      Francisco

              	 

      

      

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
 

      Schedule
1.02(e)

       

      

       

      The
Northwestern Mutual Life Insurance Company

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      
 

       

      Schedule
1.04

       

      

      
        	
                Stockholder

                 

              
	
                Caisse
      de Dépôt et Placement du Québec

              
	
                Howard
      Hughes Medical Institute

              

      

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
 

      

      Schedule
1.06

       

       

      LIST
OF REDUCED STANDSTILL STOCKHOLDERS

       

      

      
        	
                Stockholder

              
	
                Cascade
      Investment, L.L.C.

              
	
                Citigroup
      Capital Partners II 2006 Citigroup Investment, L.P.

              
	
                Citigroup
      Capital Partners II Employee Master Fund, L.P.

              
	
                Citigroup
      Capital Partners II Onshore, L.P.

              
	
                Citigroup
      Capital Partners II Cayman Holdings, L.P.

              
	
                Howard
      Hughes Medical Institute

              
	
                The
      Board of Trustees of The Leland Stanford Junior
  University

              

      

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      
 

      Schedule
1.07

       

       

      LIST
OF LIMITED STANDSTILL STOCKHOLDERS

       

      

      
        	
                Stockholder

              
	
                Caisse
      de Dépôt et Placement du Québec

              

      

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      

      

      Schedule
2.04(a)

       

       

      STOCKHOLDER
SHARE OWNERSHIP

       

      

      
        	
                Stockholder
      Name

                 

              	
                Shares
      of Company Stock Held by the Stockholder1

              	
                Company
      Convertible Debt Notes Held by the Stockholder

              
	
                ARCLIGHT
      ENERGY PARTNERS FUND I, L.P.

              	
                17,843,448

              	
                $15,000,000.00

              
	
                ARCLIGHT
      ENERGY PARTNERS FUND II, L.P.

              	
                9,300,554

              	
                $48,214,596.00

              
	
                CAISSE
      DE DÉPÔT ET PLACEMENT DU QUÉBEC

              	
                4,946,990

              	
                $9,600,000.00

              
	
                CASCADE
      INVESTMENT, L.L.C.

              	
                4,946,990

              	
                $11,588,720.00

              
	
                CITIGROUP
      CAPITAL PARTNERS II 2006 CITIGROUP INVESTMENT, L.P.

              	
                1,017,068

              	
                $2,382,601.53

              
	
                CITIGROUP
      CAPITAL PARTNERS II EMPLOYEE MASTER FUND, L.P.

              	
                1,142,457

              	
                $2,676,285.57

              
	
                CITIGROUP
      CAPITAL PARTNERS II ONSHORE, L.P.

              	
                515,792

              	
                $1,208,231.36

              
	
                CITIGROUP
      CAPITAL PARTNERS II CAYMAN HOLDINGS, L.P.

              	
                646,263

              	
                $1,513,949.54

              
	
                HOWARD
      HUGHES MEDICAL INSTITUTE

              	
                3,321,580

              	
                $7,585,617.00

              
	
                THE
      NORTHWESTERN MUTUAL LIFE INSURANCE COMPANY

              	
                3,321,580

              	
                $0.00

              
	
                THE
      BOARD OF TRUSTEES OF THE LELAND STANFORD JUNIOR UNIVERSITY

              	
                1,784,315

              	
                $0.00

              
	
                PAUL
      VINING

              	
                549,787

              	
                $154,000.00

              
	
                TIMOTHY
      ELLIOTT

              	
                338,022

              	
                $0.00

              
	
                DAVID
      TURNBULL

              	
                122,870

              	
                $20,000.00

              
	
                RICHARD
      VERHEIJ

              	
                202,974

              	
                $25,000.00

              
	
                TOM
      MCQUADE

              	
                110,169

              	
                $0.00

              
	
                B.
      SCOTT SPEARS

              	
                114,957

              	
                $11,000.00

              
	
                KEITH
      ST. CLAIR

              	
                266,948

              	
                $0.00

              
	
                ROBERT
      BENNETT

              	
                221,733

              	
                $0.00

              
	
                DWAYNE
      FRANCISCO

              	
                335,629

              	
                $0.00

              

      

      

      
__________ 

      
        1 Subject
to adjustment in the case of individuals in the event of net vesting of shares
pursuant to the Stock Plan.

      

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

       

      Schedule
2.04(b)

      

      Mason
Street Advisors LLC (a wholly-owned subsidiary of The Northwestern Mutual Life
Insurance Company)

      

      Frank
Russell Company (a majority-owned subsidiary of The Northwestern Mutual Life
Insurance Company) and its subsidiariesExhibit
10.5

       

      AMENDMENT
NO. 1 TO CREDIT AGREEMENT

       

      AMENDMENT
(this “Amendment”) dated
as of April 2, 2008 to the Credit Agreement (the “Credit Agreement”) dated as of
October 31, 2007, among PATRIOT COAL CORPORATION, a Delaware corporation (the
“Borrower”) and each
lender from time to time party thereto (collectively, the “Lenders” and individually, a
“Lender”).

       

      W
I T N E S S E T H :

       

      WHEREAS,
the parties hereto desire to amend the Credit Agreement to, among other things,
(i) permit the Magnum Acquisition (as defined below), (ii) increase the
rates of interest applicable to Loans thereunder, and (iii) modify certain
covenants and related definitions to allow for changes in permitted
indebtedness, permitted liens, permitted capital expenditures and other changes
in respect of the Borrower and its Subsidiaries in connection with the Magnum
Acquisition.

       

      NOW,
THEREFORE, the parties hereto agree as follows:

       

      SECTION
1.  Defined Terms;
References.  Unless
otherwise specifically defined herein, each term used herein that is defined in
the Credit Agreement has the meaning assigned to such term in the Credit
Agreement.  Each reference to “hereof”, “hereunder”, “herein” and
“hereby” and each other similar reference and each reference to “this Agreement”
and each other similar reference contained in the Credit Agreement shall, after
this Amendment becomes effective, refer to the Credit Agreement as amended
hereby.

       

      SECTION
2. Definition of Amendment No. 1 to
Credit Agreement.  Section 1.01 of the Credit Agreement is
amended to add a new definition in appropriate alphabetical order:

       

      “Amendment No. 1 to Credit
Agreement” means that
certain Amendment No. 1 to Credit Agreement dated as of April 2, 2008 by and
among the Borrower and the Required Lenders.

       

      SECTION
3.  Definition of Applicable
Rate.  The Applicable Rate schedule (the “Existing Rate Schedule”) set
forth in the definition of Applicable Rate in Section 1.01 of the Credit
Agreement is hereby deleted and replaced with the following revised schedule
(the “Amended Applicable Rate
Schedule”):

       

      
        	 
      	
                Applicable
Rate

              
	
                Level

              	
                Consolidated
Leverage
Ratio

              	
                Eurocurrency
Rate
      Loans
and Letters of
Credit

              	
                Base
      Rate
Loans

              	
                Commitment
Fee

              
	
                I

              	
                ≥
      2.50x

              	
                3.500%

              	
                2.500%

              	
                0.625%

              
	
                II

              	
                ≥
      2.00x

              	
                3.125%

              	
                2.125%

              	
                0.500%

              
	
                III

              	
                ≥
      1.50x

              	
                2.875%

              	
                1.875%

              	
                0.500%

              
	
                IV

              	
                ≥
      1.00x

              	
                2.625%

              	
                1.625%

              	
                0.375%

              

      

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

       

       

      
        	
                V

              	
                <
      1.00x

              	
                2.500%

              	
                1.500%

              	
                0.375%

              

      

       

      provided that the
Amended Applicable Rate Schedule shall apply to interest and fees accruing under
the Credit Agreement on and after the Merger Date.  The Existing Rate
Schedule shall continue to apply to interest and fees accruing under the Credit
Agreement prior to the Merger Date.

       

      SECTION
4.  Definition of
Collateral.  The definition of “Collateral” in Section 1.01 of
the Credit Agreement is hereby amended by adding the words “and the
Intercreditor Agreement, if any” after each occurrence of the words “the
Collateral Documents.”

       

      SECTION
5.  Definition of Loan
Documents.  The definition of “Loan Documents” in Section 1.01
of the Credit Agreement is hereby amended by deleting the word “and” at the end
of clause (f) thereof, replacing the “.” with the words “, and” at the end of
clause (g) thereof, and adding the following new clause (h) at the end thereof
to read as follows:

       

      “(h) the
Intercreditor Agreement, if any.”

       

      SECTION
6.  Definition of Intercreditor
Agreement.  Section 1.01 of the Credit Agreement is hereby
amended to add a new definition in appropriate alphabetical order:

       

      “Intercreditor
Agreement” means the Subordination and Intercreditor Agreement dated on
or about the date of the Magnum Acquisition Credit Agreement, among the
Borrower, the Administrative Agent and the Magnum Agent and (i) in respect of
Bridge Debt Terms, on those terms and conditions substantially as set forth in
Annex A, and
(ii) in respect of Permanent Debt Terms, on terms and conditions that are
substantially similar to those terms and conditions set forth in Annex A or which
shall have been approved by the Administrative Agent on behalf of the Required
Lenders, as the same shall be amended, restated, supplemented or modified from
time to time.”

       

      SECTION
7.  Definition of Magnum.  Section
1.01 of the Credit Agreement is amended to add a new definition in appropriate
alphabetical order:

       

      “Magnum” means Magnum
Coal Company, a Delaware corporation.

       

      SECTION
8.  Definition of Magnum
Acquisition.  Section
1.01 of the Credit Agreement is amended to add a new definition in appropriate
alphabetical order:

       

      “Magnum Acquisition”
means, collectively, (a) the consummation of the transactions described in the
Merger Agreement, (b) the repayment in full of all outstanding Indebtedness of
Magnum and its Subsidiaries and the termination of all commitments with respect
thereto, including under Magnum’s existing senior secured credit facility (other
than the Indebtedness set forth on Schedule 7.02(ii)),
(c) the payment of the fees and expenses incurred in connection with the
consummation of the foregoing, (d) on or prior to the Merger Date, the issuance
by Magnum of convertible indebtedness in an aggregate principal amount of not
less than $100,000,000 to be converted on or about the Merger Date into certain
shares in Magnum, which shall be exchanged for certain shares in the Borrower
and to be used to repay all outstanding indebtedness of Magnum and its

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

       

      Subsidiaries
(other than the Indebtedness set forth on Schedule 7.02(ii))
and (e) the issuance of Letters of Credit to replace outstanding letters of
credit issued for the account of Magnum or its Subsidiaries.

       

      SECTION
9.  Definition of Magnum Acquisition
Credit Agreement.  Section 1.01 of the Credit Agreement is
amended to add a new definition in appropriate alphabetical order:

       

      “Magnum Acquisition Credit
Agreement” means any combination of the following so long as the
aggregate principal amount of indebtedness outstanding under the following on
the Merger Date is not less than the amount necessary to repay in full on the
Merger Date the principal amount of indebtedness outstanding under Magnum’s
existing senior secured credit facility after giving effect to the transaction
contemplated under paragraph (d) of the definition of “Magnum Acquisition” less
the amount of unrestricted cash and cash equivalents of Magnum on the Merger
Date (“Magnum Pay-off
Amount”) (i) the Credit Agreement dated on or prior to the Merger Date
among ArcLight or one or more affiliates thereof and the Borrower on terms
substantially similar to those set forth on Annex B-I (the “Bridge Debt Terms”)
and other material terms not otherwise included in the Bridge Debt Terms which
are no more restrictive to the Borrower in any material respect than the
representations, warranties, covenants and events of default contained in this
Agreement or which shall have been approved by the Administrative Agent on
behalf of the Required Lenders, (ii) the documentation with respect to second
lien secured debt (the “Permanent Debt”) of
the Borrower on terms substantially similar to those set forth on Annex B-II (the
“Permanent Debt
Terms”), and other material terms not otherwise included in the Permanent
Debt Terms which are no more restrictive to the Borrower in any material respect
than the representations, warranties, covenants and events of default contained
in this Agreement or which shall have been approved by the Administrative Agent
on behalf of the Required Lenders, or (iii) the documentation with respect to
convertible senior debt or senior subordinated debt (the “Convertible Debt”) of
the Borrower on terms substantially similar to those set forth on Annex B-III (the
“Convertible Debt
Terms”), and other material terms not otherwise included in the
Convertible Debt Terms which are no more restrictive to the Borrower in any
material respect than the representations, warranties, covenants and events of
default contained in this Agreement or which shall have been approved by the
Administrative Agent on behalf of the Required Lenders.

       

      SECTION
10.  Definition of Magnum
Agent.  Section 1.01 of the Credit Agreement is amended to add
a new definition in appropriate alphabetical order:

       

      “Magnum Agent”
means the
administrative agent or any person performing an equivalent role for the lenders
under the Magnum Acquisition Credit Agreement.

       

      SECTION
11.  Definition of Merger
Agreement.  Section 1.01 of the Credit Agreement is amended to
add a new definition in appropriate alphabetical order:

       

      “Merger Agreement”
means the
Agreement and Plan of Merger by and among Magnum, the Borrower, Colt Merger
Corporation, a Delaware corporation and a newly formed wholly-owned subsidiary
of the Borrower (“Merger
Sub”), and ArcLight Energy 

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

       

      Partners
Fund I, L.P., a Delaware limited partnership, and ArcLight Energy Partners Fund
II, L.P., a Delaware limited partnership (collectively, “ArcLight”), acting jointly as
Stockholder Representative as defined therein, as amended or modified from time
to time; provided that such
amendment or modification is not in any manner materially adverse to the
interests of the Lenders, unless consented to by the Administrative Agent on
behalf of the Required Lenders.

       

      SECTION
12.  Definition of Merger
Date.  Section 1.01 of the Credit Agreement is amended to add a
new definition in appropriate alphabetical order:

       

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

       

      SECTION
13.  Definition of Subsidiary
Guarantors.  Section 1.01 of the Credit Agreement is amended by
deleting and replacing the definition of “Subsidiary Guarantors” in its entirety
to read as follows:

       

      “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.”

       

      SECTION
14.  Fronting Fee and Documentary and
Processing Charges Payable to L/C/ Issuer.  Upon
the Merger Date, Section 2.03(j) of the Credit Agreement is hereby amended by
replacing the percentage “0.125%” with “0.25%”.

       

      SECTION
15.  Authorization; No
Contravention.  Section
5.02(b)(ii) of the Credit Agreement is hereby amended by inserting the words “or
the Magnum Acquisition Credit Agreement” after the words “Loan Documents”
therein.

       

      SECTION
16.  Senior Indebtedness.  Article
V of the Credit Agreement is hereby amended by adding the following new Section
5.25 to the end thereof to read as follows:

       

      “5.25 
Senior
Indebtedness.  The Obligations constitute “First Lien
Obligations” of the Borrower under the Intercreditor Agreement, if
any.”

       

      SECTION
17.  Liens.  (a)  Section
7.01(b) of the Credit Agreement is hereby deleted and replaced in its entirety
to read as follows:

       

      “(b) 
(i) Liens on the property of the Borrower or any of its Subsidiaries existing on
the date hereof and listed on Schedule 7.01(i) and
(ii) subject to consummation of the Magnum Acquisition, Liens on the property of
Magnum or any of its Subsidiaries existing on the Merger Date and listed on
Schedule
7.01(ii) (as may be amended or modified from time to time prior to the
Merger Date; provided that such
amendment or modification is not in any manner materially adverse to the
interests of the Lenders, unless consented to by the Administrative Agent on
behalf of the Required Lenders) and, in each case, any refinancing, refunding,
renewal or extension thereof; provided, that (A)
the 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, and (C) any refinancing, refunding, renewal or extension of
the obligations secured or benefited thereby is permitted by Section
7.02(c).”

       

      (b) 
Section 7.01(j) of the Credit Agreement is amended replacing the number
“$15,000,0000” with “$25,000,000.”

       

      (c)  Section 7.01 of the Credit
Agreement is amended by deleting the word “and” at the end of clause (t)
thereof, replacing the “.” with the words “; and” at the end of clause (u)
thereof, and adding the following new clause (v) at the end thereof to read as
follows:

       

      “(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) any refinancing, refunding, renewal
or extension of the obligations secured or benefited thereby is permitted by the
terms of the Intercreditor Agreement, and (C) such Liens are subordinated in
favor of the Lenders under the terms and conditions set forth in the
Intercreditor Agreement.”

       

      SECTION
18.  Indebtedness. 
(a)  Section 7.02(b) of the Credit Agreement is hereby deleted
and replaced in its entirety to read as follows:

       

      “(b)  (i) Indebtedness
outstanding on the date hereof and listed on Schedule 7.02(i) and
(ii) subject to consummation of the Magnum Acquisition, Indebtedness of Magnum
or any of its Subsidiaries outstanding on the Merger Date and listed on Schedule 7.02(ii) (as
may be amended or modified from time to time prior to the Merger Date; provided that such
amendment or modification is not in any manner materially adverse to the
interests of the Lenders, unless consented to by the Administrative Agent on
behalf of the Required Lenders);”

       

      (b) 
Section 7.02(c) of the Credit Agreement is amended by (i) adding the words “and
Section
7.02(n)” after the words “Section 7.02(b)”, and
(ii) adding the words “, 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));
provided that, notwithstanding the foregoing, refinancings, refundings, renewals
or extensions of Indebtedness outstanding under any Magnum Acquisition Credit
Agreement which is subject to an Intercreditor Agreement shall be permitted in
accordance with the terms of the Intercreditor Agreement" after the word
"Borrower" on the last line.

       

      (c)  Section 7.02(m) of the Credit
Agreement is amended by replacing “$200,000,000” with
“$400,000,000”.

       

      (d)  Section 7.02 of the Credit
Agreement is amended by deleting the word “and” at the end of clause (l)
thereof, replacing the “.” with the words “; and” at the end of clause (m)
thereof, and adding the following new clause (n) at the end thereof to read as
follows:

       

      “(n) 
subject to the consummation of the Magnum Acquisition, Indebtedness incurred by
the Borrower under the Magnum Acquisition Credit Agreement, provided that the
maximum aggregate principal amount of Indebtedness thereunder shall not exceed
$150,000,000 (other than with respect to the capitalization of interest, if any)
unless such Indebtedness constitutes Convertible Debt (as defined in the
definition of Magnum Acquisition Credit Agreement) in 

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

       

      which case
the aggregate principal amount shall not exceed $200,000,000 (other than with
respect to the capitalization of interest, if any).”

       

      SECTION
19.  Investments.  Section
7.03 of the Credit Agreement is amended by deleting the word “and” at the end of
clause (l) thereof, replacing the “.” with the words “; and” at the end of
clause (m) thereof, and adding the following new clause (n) at the end thereof
to read as follows:

       

      “(n) 
the Magnum Acquisition.”

       

      SECTION
20.  Capital
Expenditures.  The Capital Expenditures
schedule  (the “Existing CapEx Schedule”) set
forth in Section 7.12 of the Credit Agreement is hereby deleted and replaced
with the following revised schedule:

       

      
        	
                Fiscal
      Year

              	
                Amount

              
	
                2008

              	
                $220,000,000

              
	
                2009

              	
                $235,000,000

              
	
                2010

              	
                $220,000,000

              
	
                2011

              	
                $220,000,000

              

      

       

      provided that such
amended Capital Expenditure schedule shall apply to capital expenditures made on
and after the Merger Date (it being understood that the dollar limits in such
schedule for any year will apply to expenditures in such year made before and
after the Merger Date).  The Existing CapEx Schedule shall continue to
apply to capital expenditures made prior to the Merger Date.

       

      SECTION
21. Magnum Acquisition Credit
Agreement.  Article
VII of the Credit Agreement is hereby amended by adding the following new
Section 7.18 to the end thereof to read as follows:

       

      “7.18 
Magnum Acquisition
Credit Agreement.  The Borrower shall not (i) amend or modify
the Magnum Acquisition Credit Agreement in any manner that is (a) materially
adverse to the interests of the Lenders with respect to any Magnum Acquisition
Credit Agreement relating to Convertible Debt or (b) prohibited by the terms of
the Intercreditor Agreement with respect to any Magnum Acquisition Credit
Agreement for Bridge Debt or Permanent Debt, as the case may be, or (ii) make
any payment or prepayment of principal (whether voluntary or mandatory) or make
any early redemption or repurchase of indebtedness under the Magnum Acquisition
Credit Agreement, or payment of interest or fees (other than scheduled payments
of interest or fees and consent or waiver fees that may be paid on the same
percentage basis as to the Lenders) under the Magnum Acquisition Credit
Agreement; provided, however, if no Event
of Default has occurred and is continuing, the Borrower shall be permitted to
prepay principal, interest or fees under the Magnum Acquisition Credit Agreement
if such prepayments are made solely from the proceeds of (a) an equity offering
of the Borrower, (b) advances made on Bridge Debt Terms, Permanent Debt Terms or
Convertible Debt Terms, as applicable; provided that in
respect of advances made on Bridge Debt Terms or Permanent Debt Terms, each
applicable lender agrees to enter into the Intercreditor Agreement, or (c) a
refinancing of Magnum Acquisition Credit Agreement in accordance with Section
7.02(c).”

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

       

      SECTION
22.  Collateral and Guaranty
Matters.  Section
9.10 of the Credit Agreement is amended by adding the following new paragraph at
the end thereof to read as follows:

       

      “Notwithstanding
the foregoing, any amendment, modification or waiver of any provision of the
Intercreditor Agreement shall be governed by Section 9.3 thereof in which case
the Administrative Agent, as the “First Lien Administrative Agent” under the
Intercreditor Agreement, shall act upon the written consent of the Required
Lenders.”

       

      SECTION
23.  Schedules.  (a)
Schedule 7.01 of the Credit Agreement is amended to read as “Schedule
7.01(i)”.

       

      (b) 
The Credit Agreement is amended by adding a new “Schedule 7.01(ii)”
attached hereto as Exhibit
A.

       

      (c) 
Schedule 7.02 of the Credit Agreement is amended to read as “Schedule
7.02(i)”.

       

      (d) 
The Credit Agreement is amended by adding a new “Schedule 7.02(ii)”
attached hereto as Exhibit
B.

       

      SECTION
24.  Representations of
Borrower.  The
Borrower represents and warrants that (i) both before and after giving effect to
this Amendment, the representations and warranties of the Borrower set forth in
Article V of the Credit Agreement and contained in each other Loan Document, or
which are contained in any document furnished at any time under or in connection
with the Credit Agreement, are true and correct in all material respects on and
as of the Amendment Effective Date, except to the extent that such
representations and warranties specifically refer to an earlier date, in which
case they shall be true and correct in all material respects as of such earlier
date, and (ii) both before and after giving effect to this Amendment, no Default
or Event of Default will have occurred and be continuing.

       

      SECTION
25.  Authority.  The
Borrower has the requisite corporate or other organizational power and authority
to execute and deliver this Amendment and the Mortgage Modifications (as defined
below) to which it is a party and to perform its obligations hereunder and under
the Credit Agreement (as amended hereby) and the Mortgages to which it is a
party, as modified by the Mortgage Modifications.  Each of the
Subsidiary Guarantors has the requisite corporate or other organizational power
and authority to execute and deliver the Consent (as defined below) and any
Mortgage Modification to which it is a party.   The execution,
delivery and performance by the Borrower of this Amendment and the Mortgage
Modifications, as applicable, and by the Subsidiary Guarantors of the Consent
and the Mortgage Modifications, as applicable, and the performance by the
Borrower and each other Loan Party of the Credit Agreement (as amended hereby)
and each other Loan Document to which it is a party as modified by the Mortgage
Modifications in the case of the Mortgages, in each case, have been authorized
by all necessary corporate or other organizational action of such Person, and no
other corporate or other organizational proceedings on the part of each such
Person is necessary to consummate such transactions.

       

      SECTION
26.  Enforceability.  This
Amendment has been duly executed and delivered on behalf of the
Borrower.  The Consent has been duly executed and delivered by each of
the Subsidiary Guarantors.  Each of the Mortgage Modifications has
been duly executed and 

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

       

      delivered
by each Loan Party party thereto.  Each of this Amendment, the
Consent, the Mortgage Modifications and, after giving effect to this Amendment,
the Credit Agreement and the other Loan Documents, (i) is the legal, valid and
binding obligation of each Loan Party party hereto and thereto, enforceable
against such Loan Party in accordance with its terms, except as may be limited
by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the enforcement of creditors’ rights generally and by general
equitable principles (whether enforcement is sought by proceedings in equity or
at law) and (ii) is in full force and effect.  Neither the execution,
delivery or performance of this Amendment or of the Consent or of the Mortgage
Modifications or the performance of the Credit Agreement (as amended hereby),
nor the performance of the transactions contemplated hereby or thereby, will
adversely affect the validity, perfection or priority of the Administrative
Agent’s Lien on any of the Collateral or its ability to realize
thereon.  This Amendment is effective to amend the Credit Agreement as
provided therein.

       

      SECTION
27.  No Conflicts.  Neither
the execution and delivery of this Amendment or the Consent or the Mortgage
Modifications, nor the consummation of the transactions contemplated hereby and
thereby, nor the performance of and compliance with the terms and provisions
hereof or of the Credit Agreement (as amended hereby) or the Mortgages, as
modified by the Mortgage Modifications by any Loan Party will, at the time of
such performance, (i) violate or conflict with any provision of its certificate
of formation or limited liability company agreement or other governing documents
of such Person, (ii) violate, contravene or materially conflict with any
Requirement of Law or Contractual Obligation (including, without limitation,
Regulation U), except for any violation, contravention or conflict which could
not reasonably be expected to have a Material Adverse Effect or (iii) result in
or require the creation of any Lien (other than those permitted by the Loan
Documents) upon or with respect to its properties.  No consent or
authorization of, filing with, notice to or other act by or in respect of, any
Governmental Authority or any other Person is required in connection with the
transactions contemplated hereby.

       

      SECTION
28.  Effect of Amendment.  (a)
Except as specifically amended above or by the Mortgage Modifications in the
case of the Mortgages, the Credit Agreement and the other Loan Documents are and
shall continue to be in full force and effect and are hereby in all respects
ratified and confirmed.  Without limiting the generality of the
foregoing, the Collateral Documents and all of the Collateral described therein
do and shall continue to secure the payment of all Obligations under and as
defined therein.

       

      (b) 
The execution, delivery and effectiveness of this Amendment and the Mortgage
Modifications shall not operate as a waiver of any right, power or remedy of any
Secured Party under any of the Loan Documents, nor, except as expressly provided
herein, constitute a waiver or amendment of any provision of any of the Loan
Documents.  For the avoidance of doubt, the Borrower shall comply with
Section 6.12 of the Credit Agreement with respect to any Person or assets
acquired in connection with the Magnum Acquisition.

       

      SECTION
29.  Governing Law.  This
Amendment shall be governed by and construed in accordance with the laws of the
State of New York.

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

       

      SECTION
30.  Counterparts.  This
Amendment 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.

       

      SECTION
31.  Effectiveness and Consent
Fee.  (a)  This
Amendment shall become effective on the date hereof provided that the following
conditions are met (the “Amendment Effective
Date”):

       

      (i) the
Administrative Agent shall have received from each of the Borrower and the
Required Lenders a counterpart hereof signed by such party or facsimile or other
written confirmation (in form satisfactory to the Administrative Agent) that
such party has signed a counterpart hereof;

       

      (ii) the
Administrative Agent shall have received counterparts of the Consent of
Guarantors attached hereto as Annex I (the “Consent”) executed by
each of the Subsidiary Guarantors as of the date hereof;

       

      (iii) the
Administrative Agent shall have received a certificate from a Responsible
Officer of the Borrower to the effect that since December 31, 2007, until the
date hereof, 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;

       

      (iv) the Merger
Agreement shall have been executed and delivered simultaneously with this
Amendment and the Administrative Agent shall have received an executed copy of
the Merger Agreement certified by a Responsible Officer of the Borrower that
such Merger Agreement is a true and correct copy of the original;
and

       

      (v) the
Administrative Agent shall have received an opinion of Davis Polk &
Wardwell, special New York counsel to the Borrower, and Joseph W. Bean, Esq.,
special Missouri counsel to the Borrower, dated the Amendment Effective Date and
substantially in the form of Exhibits C-1 and
C-2
hereto.

       

      (b) 
No later than the first Business Day after the Amendment Effective Date, the
Borrower shall pay the Administrative Agent, in immediately available funds, (i)
for the account of each consenting Lender that has evidenced its agreement
hereto as provided in Section 31(a) by 5:00 P.M. (New York City time) on the
later of (A) April 2, 2008 and (B) the time at which the Administrative Agent
shall have determined that Required Lender consent to this Amendment has been
obtained (such determination to be binding, absent manifest error, and notified
in writing to the Lenders and the Borrower), a non-refundable consent fee in an
amount equal to 0.75% of such Lender’s Commitment then outstanding as of the
date hereof, and (ii) for the account of each other consenting Lender a
non-refundable consent fee in an amount equal to 0.25% of such Lender’s
Commitment then outstanding as of the date hereof.

       

      SECTION
32.  Conditions Subsequent.  This
Amendment shall become null and void and of no further force or effect if,
without the written consent of the Administrative Agent acting on behalf of the
Required Lenders at such time, any of the following conditions shall have
occurred:

       

      
        (i)  the Merger
Date does not occur by September 30, 2008;

      

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

       

      (ii) on or
prior to the incurrence of Indebtedness under any Magnum Acquisition Credit
Agreement, the Administrative Agent shall not have received duly executed
Mortgage modifications (in proper form for recording and in form and substance
reasonably satisfactory to the Administrative Agent) as requested by the
Administrative Agent (the “Mortgage
Modifications”);

       

      (iii) the Merger
Agreement shall have been amended or modified in any manner that is materially
adverse to the interests of the Lenders;

       

      (iv) any
representation, warranty or covenant contained in the Merger Agreement is
breached, unless a Responsible Officer of the Borrower delivers a certificate to
the Administrative Agent to the effect that, in the good faith opinion of the
Borrower, such breach does not give the Borrower a right not to consummate the
Merger (as defined in the Merger Agreement) (whether or not the Borrower in fact
exercises (or waives) such right)(for purposes of this clause (iv) only, to the
extent relating to the closing condition in the Merger Agreement that certain
representations and warranties be true with such exceptions as would not
reasonably be expected to have a Company Material Adverse Effect (as defined in
the Merger Agreement), the "Merger Agreement" shall mean the Merger Agreement in
effect as of the Amendment Effective Date);

       

      (v) the cash
consideration paid by the Borrower in connection with the Merger Agreement for
the Magnum Acquisition is made other than with the proceeds of the Magnum
Acquisition Credit Agreement and/or the issuance by Magnum of convertible
indebtedness pursuant to clause (d) of the definition of Magnum Acquisition;
provided, however, that the
Borrower shall be permitted to pay with cash on hand or Borrowings any fees or
expenses related to the Magnum Acquisition or issue any Letters of Credit in
connection with the Magnum Acquisition;

       

      (vi) the
Intercreditor Agreement has not been executed and delivered on or prior to the
Merger Date; provided, however, in the event
that the Borrower has issued Convertible Debt on Convertible Debt Terms, no
Intercreditor Agreement shall be required;

       

      (vii) the
Administrative Agent shall not have received a certificate from a Responsible
Officer of the Borrower to the effect that as of the Merger Date, no Default
exists or will exist after giving effect to the Magnum Acquisition;
and

       

      (viii) immediately
prior to and after giving effect to the Magnum Acquisition, the aggregate of
unused and available Commitments plus the amount of
other free and unencumbered cash and Cash Equivalents available to the Borrower
shall be less than $75,000,000.

       

      Notwithstanding
anything contained herein to the contrary, any consent fee paid pursuant to
Section 31(b) of this Amendment shall be deemed fully-earned when paid and shall
not be refunded.

       

      [Signature pages
follow]

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

       

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

       

      
        	
                PATRIOT
      COAL CORPORATION

                 

              	 
	
                By:

              	
                /s/
      Mark N. Schroeder

              	 
	 
      	
                Name:

              	
                Mark
      N. Schroeder

              	 
	 
      	
                Title:

              	
                Senior
      Vice President and Chief Financial Officer

              	 

      

      

      

      
        	
                BNP
      Paribas, as a Lender

                 

              	 
	
                By:

              	
                /s/
      Betsy Jocher

              	 
	 
      	
                Name:

              	
                Betsy
      Jocher

              	 
	 
      	
                Title:

              	
                Director

              	 

      

      

      
        	
                By:

              	
                /s/
      Richard Hawthorne

              	 
	 
      	
                Name:

              	
                Richard
      Hawthorne

              	 
	 
      	
                Title:

              	
                Vice
      President

              	 

      

      

      

      
        	
                United
      Overseas Bank Limited, New York Agency, as a Lender

                 

              	 
	
                By:

              	
                /s/
      George Lim

              	 
	 
      	
                Name:

              	
                George
      Lim

              	 
	 
      	
                Title:

              	
                SVP
      & GM

              	 

      

      

      
        	
                By:

              	
                /s/
      Mario Sheng

              	 
	 
      	
                Name:

              	
                Mario
      Sheng

              	 
	 
      	
                Title:

              	
                AVP

              	 

      

      

      

      
        	
                Southwest
      Bank, an M&I Bank, as a Lender

                 

              	 
	
                By:

              	
                /s/
      John D. Haffenreffer

              	 
	 
      	
                Name:

              	
                John
      D. Haffenreffer

              	 
	 
      	
                Title:

              	
                EVP

              	 

      

      

      
        	
                By:

              	
                /s/
      Susan L. Bentele

              	 
	 
      	
                Name:

              	
                Susan
      L. Bentele

              	 
	 
      	
                Title:

              	
                SVP

              	 

      

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      
 

      
        	
                Sovereign
      Bank, as a Lender

                 

              	 
	
                By:

              	
                /s/
      Robert D. Lanigan

              	 
	 
      	
                Name:

              	
                Robert
      D. Lanigan

              	 
	 
      	
                Title:

              	
                Senior
      Vice President

              	 

      

      

      

      
        	
                Citibank,
      N.A., as a Lender

                 

              	 
	
                By:

              	
                /s/
      Mason McGurrin

              	 
	 
      	
                Name:

              	
                Mason
      McGurrin

              	 
	 
      	
                Title:

              	
                Vice
      President

              	 

      

      

      

      
        	
                Bank
      of Oklahoma, N.A., as a Lender

                 

              	 
	
                By:

              	
                /s/
      Sarah N. Reavis

              	 
	 
      	
                Name:

              	
                Sarah
      N. Reavis

              	 
	 
      	
                Title:

              	
                Vice
      President

              	 

      

      

      

      
        	
                US
      Bank, NA, as a Lender

                 

              	 
	
                By:

              	
                /s/
      Karen Meyer

              	 
	 
      	
                Name:

              	
                Karen
      Meyer

              	 
	 
      	
                Title:

              	
                Vice
      President

              	 

      

      

      

      
        	
                PNC
      Bank, National Association, as a Lender

                 

              	 
	
                By:

              	
                /s/
      Richard C. Munsick

              	 
	 
      	
                Name:

              	
                Richard
      C. Munsick

              	 
	 
      	
                Title:

              	
                Senior
      Vice President

              	 

      

      

      

      
        	
                Lehman
      Brothers Commercial Bank, as a Lender

                 

              	 
	
                By:

              	
                /s/
      Brian McNany

              	 
	 
      	
                Name:

              	
                Brian
      McNany

              	 
	 
      	
                Title:

              	
                Authorized
      Signatory

              	 

      

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      
 

      

      
        	
                FIFTH
      THIRD BANK, as a Lender

                 

              	 
	
                By:

              	
                /s/
      Robert M. Sander

              	 
	 
      	
                Name:

              	
                Robert
      M. Sander

              	 
	 
      	
                Title:

              	
                Vice
      President

              	 

      

      

      

      
        	
                Caterpillar
      Financial Services Corporation, as a Lender

                 

              	 
	
                By:

              	
                /s/
      Christopher Patterson

              	 
	 
      	
                Name:

              	
                Christopher
      Patterson

              	 
	 
      	
                Title:

              	
                Global
      Operations Manager

              	 

      

      
 

      

      
        	
                Acknowledged
      by:

                 

              	 
	
                BANK
      OF AMERICA, N.A., as Administrative Agent

                 

              	 
	
                By:

              	
                /s/
      Todd Mac Neill

              	 
	 
      	
                Name:

              	
                Todd
      Mac Neill

              	 
	 
      	
                Title:

              	
                Vice
      President

              	 

      

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      
 

      Annex 1

      

       

      CONSENT
OF GUARANTORS

      

      

      Each of
the undersigned is a Subsidiary Guarantor of the Obligations of the Borrower
under the Credit Agreement and hereby (a) consents to the foregoing
Amendment, (b) acknowledges that, notwithstanding the execution and
delivery of the foregoing Amendment, the obligations of each of the undersigned
Subsidiary Guarantors are not impaired or affected and all guaranties given to
the holders of Obligations and all Liens granted as security for the Obligations
continue in full force and effect, and (c) confirms and ratifies its
obligations under each of the Loan Documents executed by
it.  Capitalized terms used herein without definition shall have the
meanings given to such terms in the Amendment to which this Consent is attached
or in the Credit Agreement referred to therein, as applicable.

      

      IN WITNESS WHEREOF, each of the
undersigned has executed and delivered this Consent of Guarantors as of the 2nd
day of April 2008.

       

      [Signature pages
follow]

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

       

       

      
        	
                [SUBSIDIARY
      GUARANTORS]

                 

              	 
	
                By:

              	 
      	 
	 
      	
                Name:

              	 
      	 
	 
      	
                Title:

              	 
      	 

      

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

       

       

      Annex
B-II

      

      Permanent Debt
Terms

      

      
        	
                Term

              	
                Detail

              
	
                Maturity:

              	
                Not
      less than one year after the Maturity Date.

              
	
                Interest
      Rate and Interest Periods:

              	
                On
      arm’s length market terms.

              
	
                Payment
      Priority:

              	
                The
      Permanent Debt will rank equal in right of payment with all of the
      Borrower’s existing and future unsecured unsubordinated debt and senior in
      right of payment to all of the Borrower’s existing and future subordinated
      indebtedness.  The Permanent Debt will rank junior in right of
      payment to the Obligations.

              
	
                Principal
      Repayment:

              	
                Principal
      payable on the maturity date.

              
	
                Prepayment/Early
      Redemption

              	
                Prepayment/Early
      Redemption on or after at least six months after the Maturity
      Date.  In addition, upon a change in control in the Borrower,
      the Borrower must offer to repurchase the Permanent Debt (unless
      prohibited by the terms of the Credit Agreement).

              
	
                Security:

              	
                Liens
      and Guarantees securing the Borrower’s obligations under the Permanent
      Debt shall be second in priority to the Liens and Guarantees securing the
      Obligations on terms and conditions set forth in the Intercreditor
      Agreement.

              
	
                Representations
      and warranties

              	
                On
      terms no more restrictive to the Borrower in any material respect than the
      terms of the Credit Agreement with modifications reasonably necessary to
      reflect changes in structures.

              
	
                Covenants

              	
                On
      terms no more restrictive to the Borrower in any material respect than the
      terms of the Credit Agreement with modifications reasonably necessary to
      reflect changes in structures.

              
	
                Events
      of Default

              	
                On
      terms no more restrictive to the Borrower in any material respect than the
      terms of the Credit Agreement with modifications reasonably necessary to
      reflect changes in structures.

              

      

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      
 

      Annex
B-III

      

      Convertible
Terms

      

      
        	
                Term

              	
                Detail

              
	
                Maturity
      Date:

              	
                Not
      less than one year after the Maturity Date.

              
	
                Interest
      Rate and Interest Payment Periods:

              	
                On
      arm’s length market terms.

              
	
                Conversion
      Price:

              	
                On
      arm’s length market terms.

              
	
                Payment
      Priority:

              	
                Pari
      passu with payments under the Patriot Credit Agreement or subordinated on
      arm’s length market terms.

              
	
                Conversion:

              	
                On
      arm’s length market terms.

              
	
                Early
      Redemption or Repurchase

              	
                On
      arm’s length market terms, subject to the terms and conditions of Section
      7.18 of the Patriot Credit Agreement.

              
	
                Security:

              	
                None.

              
	
                Representations
      and Warranties:

              	
                On
      terms no more restrictive to the Borrower in any material respect than the
      terms of the Credit Agreement with modifications reasonably necessary to
      reflect changes in structures.

              
	
                Covenants:

              	
                On
      terms no more restrictive to the Borrower in any material respect than the
      terms of the Credit Agreement with modifications reasonably necessary to
      reflect changes in structures.

              
	
                Events
      of Default:

              	
                On
      terms no more restrictive to the Borrower in any material respect than the
      terms of the Credit Agreement with modifications reasonably necessary to
      reflect changes in structures.

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