Document:

exv4w3

Exhibit 4.3

EXECUTION VERSION

 

REGISTRATION RIGHTS AGREEMENT

Dated as of June 13, 2011

By and Among

BASIC ENERGY SERVICES, INC.,

the GUARANTORS named herein

and

MERRILL LYNCH, PIERCE, FENNER & SMITH

INCORPORATED.

GOLDMAN, SACHS & CO.

WELLS FARGO SECURITIES, LLC,

as the Representatives of the Initial Purchasers

73/4% SENIOR NOTES DUE 2019

 

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	 	 	Page
	Section 1. Definitions
	 	 	1	 
	 
	 	 	 	 
	Section 2. Exchange Offer
	 	 	4	 
	 
	 	 	 	 
	Section 3. Shelf Registration
	 	 	7	 
	 
	 	 	 	 
	Section 4. Liquidated Damages
	 	 	8	 
	 
	 	 	 	 
	Section 5. Registration Procedures
	 	 	9	 
	 
	 	 	 	 
	Section 6. Market Making
	 	 	16	 
	 
	 	 	 	 
	Section 7. Registration Expenses
	 	 	20	 
	 
	 	 	 	 
	Section 8. Indemnification
	 	 	21	 
	 
	 	 	 	 
	Section 9. Rules 144 and 144A
	 	 	23	 
	 
	 	 	 	 
	Section 10. Underwritten Registrations
	 	 	24	 
	 
	 	 	 	 
	Section 11. Miscellaneous
	 	 	24	 
	 
	 	 	 	 
	(a) No Inconsistent Agreements
	 	 	24	 
	(b) Adjustments Affecting Registrable Notes
	 	 	24	 
	(c) Amendments and Waivers
	 	 	24	 
	(d) Notices
	 	 	24	 
	(e) Guarantors
	 	 	25	 
	(f) Successors and Assigns
	 	 	25	 
	(g) Counterparts
	 	 	26	 
	(h) Headings
	 	 	26	 
	(i) Governing Law
	 	 	26	 
	(j) Severability
	 	 	26	 
	(k) Securities Held by the Issuers or Their Affiliates
	 	 	26	 
	(l) Third-Party Beneficiaries
	 	 	26	 
	(m) Entire Agreement
	 	 	26	 
	 
	 	 	 	 
	SIGNATURES
	 	 	S-1	 

-i-

 

REGISTRATION RIGHTS AGREEMENT

          This Registration Rights Agreement (this “Agreement”) is dated as of June 13, 2011, by
and among BASIC ENERGY SERVICES, INC., a Delaware corporation (the “Company”), and each of
the GUARANTORS (as defined herein) (the Company and the Guarantors are referred to collectively
herein as the “Issuers”), on the one hand, and MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED, GOLDMAN, SACHS & CO., WELLS FARGO SECURITIES, LLC, CAPITAL ONE SOUTHCOAST, INC., and
COMERICA SECURITIES, INC. (collectively, the “Initial Purchasers”), on the other hand.

          This Agreement is entered into in connection with the Purchase Agreement, dated as of June 8,
2011, by and among the Issuers and the Initial Purchasers (the “Purchase Agreement”),
relating to the offering of $200,000,000 aggregate principal amount of 73/4% Senior Notes due 2019 of
the Company (including the guarantees thereof by the Guarantors, the “Notes”). The Company
previously issued on February 15, 2011, $275,000,000 aggregate principal amount of 73/4% Senior Notes
due 2019 under the Indenture (as defined herein). The Notes and the notes previously issued under
the Indenture on February 15, 2011 will be deemed to be the same series of notes under the
Indenture. The execution and delivery of this Agreement is a condition to the Initial Purchasers’
obligation to purchase the Notes under the Purchase Agreement.

          The parties hereby agree as follows:

     Section 1. Definitions

          As used in this Agreement, the following terms shall have the following meanings:

          “action” shall have the meaning set forth in Section 8(c) hereof.

          “Advice” shall have the meaning set forth in Section 5 hereof.

          “Affiliate” of any specified Person shall mean any other Person that, directly or
indirectly, is in control of, is controlled by, or is under common control with, such specified
Person. For purposes of this definition, control of a Person shall mean the power, direct or
indirect, to direct or cause the direction of the management and policies of such Person whether by
contract or otherwise; and the terms “controlling” and “controlled” shall have meanings correlative
to the foregoing.

          “Agreement” shall have the meaning set forth in the first introductory paragraph
hereto.

          “Applicable Period” shall have the meaning set forth in Section 2(b) hereof.

          “Board of Directors” shall have the meaning set forth in Section 5 hereof.

          “Business Day” shall mean a day that is not a Legal Holiday.

          “Company” shall have the meaning set forth in the introductory paragraph hereto and
shall also include the Company’s permitted successors and assigns.

          “Commission” shall mean the Securities and Exchange Commission.

          “day” shall mean a calendar day.

 

 

          “Delay Period” shall have the meaning set forth in Section 5 hereof.

          “Effectiveness Period” shall have the meaning set forth in Section 3(b) hereof.

          “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended, and the
rules and regulations of the Commission promulgated thereunder.

          “Exchange Notes” shall have the meaning set forth in Section 2(a) hereof.

          “Exchange Offer” shall have the meaning set forth in Section 2(a) hereof.

          “Exchange Offer Registration Statement” shall have the meaning set forth in Section
2(a) hereof.

          “FINRA” shall have the meaning set forth in Section 5(s) hereof.

          “Guarantors” means each subsidiary of the Company listed on the signature page to this
Agreement and each Person who executes and delivers a counterpart of this Agreement after the date
hereof pursuant to Section 11(e) hereof.

          “Holder” shall mean any holder of a Registrable Note or Registrable Notes.

          “Indenture” shall mean the Indenture, dated as of February 15, 2011, by and among the
Issuers and Wells Fargo Bank, N.A., as trustee, pursuant to which the Notes are being issued, as
amended or supplemented from time to time in accordance with the terms thereof.

          “Initial Purchasers” shall have the meaning set forth in the first introductory
paragraph hereof.

          “Inspectors” shall have the meaning set forth in Section 5(n) hereof.

          “Issuers” shall have the meaning set forth in the first introductory paragraph hereto.

          “Legal Holiday” shall mean a Saturday, a Sunday or a day on which banking institutions
in New York, New York are required by law, regulation or executive order to remain closed.

          “Liquidated Damages” shall have the meaning set forth in Section 4(a) hereof.

          “Liquidated Damages Payment Date” shall have the meaning set forth in Section 4(b)
hereof.

          “Losses” shall have the meaning set forth in Section 8(a) hereof.

          “Market Maker” shall have the meaning set forth in Section 6(a) hereof.

          “Market Maker’s Information” shall have the meaning set forth in Section 6(d) hereof.

          “Market Making Registration Statement” shall have the meaning set forth in Section
8(a)(i) hereof.

          “Notes” shall have the meaning set forth in the second introductory paragraph hereto.

2

 

          “Participant” shall have the meaning set forth in Section 8(a) hereof.

          “Participating Broker-Dealer” shall have the meaning set forth in Section 2(b) hereof.

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

          “Private Exchange” shall have the meaning set forth in Section 2(b) hereof.

          “Private Exchange Notes” shall have the meaning set forth in Section 2(b) hereof.

          “Prospectus” shall mean the prospectus included in any Registration Statement
(including, without limitation, any prospectus subject to completion and a prospectus that includes
any information previously omitted from a prospectus filed as part of an effective registration
statement in reliance upon Rule 430A promulgated under the Securities Act), as amended or
supplemented by any prospectus supplement, and all other amendments and supplements to the
Prospectus, including post-effective amendments, and all material incorporated by reference or
deemed to be incorporated by reference in such Prospectus.

          “Purchase Agreement” shall have the meaning set forth in the second introductory
paragraph hereof.

          “Records” shall have the meaning set forth in Section 5(n) hereof.

          “Registrable Notes” shall mean each Note upon its original issuance and at all times
subsequent thereto, each Exchange Note as to which Section 2(c)(iv) hereof is applicable upon
original issuance and at all times subsequent thereto and each Private Exchange Note upon original
issuance thereof and at all times subsequent thereto, in each case until (i) a Registration
Statement (other than, with respect to any Exchange Note as to which Section 2(c)(iv) hereof is
applicable, the Exchange Offer Registration Statement) covering such Note, Exchange Note or Private
Exchange Note has been declared effective by the Commission and such Note, Exchange Note or Private
Exchange Note, as the case may be, has been disposed of in accordance with such effective
Registration Statement, (ii) such Note has been exchanged pursuant to the Exchange Offer for an
Exchange Note or Exchange Notes that may be resold without restriction under state and federal
securities laws, (iii) such Note, Exchange Note or Private Exchange Note, as the case may be,
ceases to be outstanding for purposes of the Indenture or (iv) such Note, Exchange Note or Private
Exchange Note has been sold in compliance with Rule 144 or is salable pursuant to Rule 144 by a
person that is not an “affiliate” (as defined in Rule 144) of the Company without regard to any of
the conditions specified therein (other than the holding period requirement in paragraph (d) of
Rule 144 so long as such holding period requirement is satisfied at such time of determination).

          “Registration Default” shall have the meaning set forth in Section 4(a) hereof.

          “Registration Statement” shall mean any appropriate registration statement of the
Issuers covering any of the Registrable Notes filed with the Commission under the Securities Act,
and all amendments and supplements to any such Registration Statement, including post-effective
amendments, in each case including the Prospectus contained therein, all exhibits thereto and all
material incorporated by reference therein.

3

 

          “Requesting Participating Broker-Dealer” shall have the meaning set forth in Section
2(b) hereof.

          “Rule 144” shall mean Rule 144 promulgated under the Securities Act, as such Rule may
be amended from time to time, or any similar rule (other than Rule 144A) or regulation hereafter
adopted by the Commission providing for offers and sales of securities made in compliance therewith
resulting in offers and sales by subsequent holders that are not Affiliates of an issuer of such
securities being free of the registration and prospectus delivery requirements of the Securities
Act.

          “Rule 144A” shall mean Rule 144A promulgated under the Securities Act, as such Rule
may be amended from time to time, or any similar rule (other than Rule 144) or regulation hereafter
adopted by the Commission.

          “Rule 415” shall mean Rule 415 promulgated under the Securities Act, as such Rule may
be amended from time to time, or any similar rule or regulation hereafter adopted by the
Commission.

          “Securities Act” shall mean the Securities Act of 1933, as amended, and the rules and
regulations of the Commission promulgated thereunder.

          “Shelf Filing Event” shall have the meaning set forth in Section 2(c) hereof.

          “Shelf Registration” shall have the meaning set forth in Section 3(a) hereof.

          “TIA” shall mean the Trust Indenture Act of 1939, as amended.

          “Trustee” shall mean the trustee under the Indenture and the trustee (if any) under
any indenture governing the Exchange Notes and Private Exchange Notes.

          “underwritten registration” or “underwritten offering” shall mean a
registration in which securities of the Issuers are sold to an underwriter for reoffering to the
public.

     Section 2. Exchange Offer

          (a) Unless the Exchange Offer would violate applicable law or interpretation of the staff of
the Commission, the Issuers shall (i) file a Registration Statement (the “Exchange Offer
Registration Statement”) with the Commission on an appropriate registration form with respect
to a registered offer (the “Exchange Offer”) to exchange any and all of the Registrable
Notes for a like aggregate principal amount of notes (including the guarantees with respect
thereto, the “Exchange Notes”) that are identical in all material respects to the Notes
(except that the Exchange Notes shall not contain restrictive legends, terms with respect to
transfer restrictions or Liquidated Damages upon a Registration Default), (ii) use their reasonable
best efforts to cause the Exchange Offer Registration Statement to be declared effective under the
Securities Act and (iii) use their reasonable best efforts to consummate the Exchange Offer within
270 days after February 15, 2011. Upon the Exchange Offer Registration Statement being declared
effective by the Commission, the Issuers will offer the Exchange Notes in exchange for surrender of
the Notes. The Issuers shall keep the Exchange Offer open for not less than 20 Business Days (or
longer if required by applicable law) after the date notice of the Exchange Offer is mailed to
Holders.

          Each Holder that participates in the Exchange Offer will be required to represent to the
Issuers in writing that (i) any Exchange Notes to be received by it will be acquired in the
ordinary course of its business, (ii) it has no arrangement or understanding with any Person to
participate in the

4

 

distribution (within the meaning of the Securities Act) of the Exchange Notes in violation of
the provisions of the Securities Act, (iii) it is not an affiliate of the Company or any Guarantor
as defined by Rule 405 of the Securities Act, or if it is an affiliate, it will comply with the
registration and prospectus delivery requirements of the Securities Act to the extent applicable,
(iv) if such Holder is not a broker-dealer, it is not engaged in, and does not intend to engage in,
a distribution of Exchange Notes and (v) if such Holder is a broker-dealer that will receive
Exchange Notes for its own account in exchange for Notes that were acquired as a result of
market-making or other trading activities, it will deliver a prospectus in connection with any
resale of such Exchange Notes.

          (b) The Issuers and the Initial Purchasers acknowledge that the staff of the Commission has
taken the position that any broker-dealer that elects to exchange Notes that were acquired by such
broker-dealer for its own account as a result of market-making or other trading activities for
Exchange Notes in the Exchange Offer (a “Participating Broker-Dealer”) may be deemed to be
an “underwriter” within the meaning of the Securities Act and must deliver a prospectus meeting the
requirements of the Securities Act in connection with any resale of such Exchange Notes (other than
a resale of an unsold allotment resulting from the original offering of the Notes).

          The Issuers and the Initial Purchasers also acknowledge that the staff of the Commission has
taken the position that if the Prospectus contained in the Exchange Offer Registration Statement
includes a plan of distribution containing a statement to the above effect and the means by which
Participating Broker-Dealers may resell the Exchange Notes, without naming the Participating
Broker-Dealers or specifying the amount of Exchange Notes owned by them, such Prospectus may be
delivered by Participating Broker-Dealers to satisfy their prospectus delivery obligations under
the Securities Act in connection with resales of Exchange Notes for their own accounts, so long as
the Prospectus otherwise meets the requirements of the Securities Act.

          In light of the foregoing, if requested by a Participating Broker-Dealer (a “Requesting
Participating Broker-Dealer”), the Issuers agree to use their reasonable best efforts to keep
the Exchange Offer Registration Statement continuously effective for a period necessary to comply
with applicable law in connection with such resales but in no event more than 180 days after the
date on which the Exchange Registration Statement is declared effective, or such longer period if
extended pursuant to any Delay Period in accordance with the penultimate paragraph of Section 5
hereof (such period, the “Applicable Period”), or such earlier date as each Requesting
Participating Broker-Dealer shall have notified the Company in writing that such Requesting
Participating Broker-Dealer has resold all Exchange Notes acquired by it in the Exchange Offer.
The Issuers shall include a plan of distribution in such Exchange Offer Registration Statement that
meets the requirements set forth in the preceding paragraph.

          If, prior to consummation of the Exchange Offer, any Initial Purchaser or any other Holder
holds any Notes acquired by it that have, or that are reasonably likely to be determined to have,
the status of an unsold allotment in an initial distribution, or if any Holder is not entitled to
participate in the Exchange Offer, the Issuers upon the request of the Initial Purchasers or any
such Holder, as the case may be, shall simultaneously with the delivery of the Exchange Notes in
the Exchange Offer, issue and deliver to the Initial Purchasers or any such Holder, as the case may
be, in exchange (the “Private Exchange”) for such Notes held by such Initial Purchaser or
any such Holder a like principal amount of notes (the “Private Exchange Notes”) of the
Issuers that are identical in all material respects to the Exchange Notes except that the Private
Exchange Notes may be subject to restrictions on transfer and bear a legend to such effect. The
Private Exchange Notes shall be issued pursuant to the same indenture as the Exchange Notes and
bear the same CUSIP number as the Exchange Notes (if permitted by the CUSIP Service Bureau).

5

 

          Upon consummation of the Exchange Offer in accordance with this Section 2, the Issuers shall
have no further registration obligations other than the Issuers’ continuing registration
obligations with respect to (i) Private Exchange Notes, (ii) Exchange Notes held by Participating
Broker-Dealers and (iii) Notes or Exchange Notes as to which clause (c)(iv) of this Section 2
applies.

          In connection with the Exchange Offer, the Issuers shall:

     (1) mail or cause to be mailed to each Holder entitled to participate in the Exchange
Offer a copy of the Prospectus forming part of the Exchange Offer Registration Statement,
together with an appropriate letter of transmittal and related documents;

     (2) utilize the services of a depositary for the Exchange Offer with an address in
the Borough of Manhattan, The City of New York;

     (3) permit Holders to withdraw tendered Notes at any time prior to the close of
business, New York time, on the last Business Day on which the Exchange Offer shall remain
open; and

     (4) otherwise comply in all material respects with all applicable laws, rules and
regulations.

          As soon as practicable after the close of the Exchange Offer and the Private Exchange, if any,
the Issuers shall:

     (1) accept for exchange all Notes validly tendered and not validly withdrawn by the
Holders pursuant to the Exchange Offer and the Private Exchange, if any;

     (2) deliver or cause to be delivered to the Trustee for cancellation all Registrable
Notes so accepted for exchange; and

     (3) cause the Trustee to authenticate and deliver promptly to each such Holder of
Notes, Exchange Notes or Private Exchange Notes, as the case may be, equal in principal
amount to the Registrable Notes of such Holder so accepted for exchange.

          The Exchange Offer and the Private Exchange shall not be subject to any conditions, other than
that (i) the Exchange Offer or Private Exchange, as the case may be, does not violate applicable
law or any applicable interpretation of the staff of the Commission, (ii) no action or proceeding
shall have been instituted or threatened in any court or by any governmental agency which might
materially impair the ability of the Issuers to proceed with the Exchange Offer or the Private
Exchange, and no material adverse development shall have occurred in any existing action or
proceeding with respect to the Issuers and (iii) all governmental approvals shall have been
obtained, which approvals the Company deems necessary for the consummation of the Exchange Offer or
Private Exchange.

          The Exchange Notes and the Private Exchange Notes shall be issued under (i) the Indenture or
(ii) an indenture identical in all material respects to the Indenture (in either case, with such
changes as are necessary to comply with any requirements of the Commission to effect or maintain
the qualification thereof under the TIA) and which, in either case, has been qualified under the
TIA and shall provide that (a) the Exchange Notes shall not be subject to the transfer restrictions
set forth in the Indenture and (b) the Private Exchange Notes shall be subject to the transfer
restrictions set forth in the Indenture. The Indenture or such indenture shall provide that the
Exchange Notes, the Private Exchange Notes and the Notes shall vote and consent together on all
matters as one class and that none of the

6

 

Exchange Notes, the Private Exchange Notes or the Notes will have the right to vote or consent
as a separate class on any matter.

          (c) In the event that (i) the applicable law or interpretations of the staff of the Commission
do not permit the Issuers to effect the Exchange Offer, (ii) for any reason the Exchange Offer is
not consummated within 270 days of February 15, 2011, (iii) any Holder notifies the Company prior
to the 20th Business Day following consummation of the Exchange Offer that it is prohibited by law
or the applicable interpretations of the staff of the Commission from participating in the Exchange
Offer, (iv) in the case of any Holder who participates in the Exchange Offer, such Holder does not
receive Exchange Notes on the date of the exchange that may be sold without restriction under state
and federal securities laws (other than due solely to the status of such Holder as an affiliate of
any Issuer within the meaning of the Securities Act) or (v) any Initial Purchaser so requests with
respect to Notes or Private Exchange Notes that have, or that are reasonably likely to be
determined to have, the status of unsold allotments in an initial distribution (each such event
referred to in clauses (i) through (v) of this sentence, a “Shelf Filing Event”), then the
Issuers shall file a Shelf Registration pursuant to Section 3 hereof.

     Section 3. Shelf Registration

          If at any time a Shelf Filing Event shall occur, then:

          (a) Shelf Registration. The Issuers shall file with the Commission a Registration
Statement for an offering to be made on a continuous basis pursuant to Rule 415 covering all of the
Registrable Notes not exchanged in the Exchange Offer, Private Exchange Notes and Exchange Notes as
to which Section 2(c)(iv) is applicable (the “Shelf Registration”). The Shelf Registration
shall be on Form S-1 or another appropriate form permitting registration of such Registrable Notes
for resale by Holders in the manner or manners designated by them (including, without limitation,
one or more underwritten offerings). The Issuers shall not permit any securities other than the
Registrable Notes to be included in the Shelf Registration.

          (b) The Issuers shall use all their reasonable best efforts (x) to cause the Shelf
Registration to be declared effective under the Securities Act on or prior to the later of (A) the
150th day after February 15, 2011 and (B) the 120th day after the occurrence of the applicable
Shelf Filing Event and (y) to keep the Shelf Registration continuously effective under the
Securities Act for one year (the “Effectiveness Period”) or such shorter period ending when
all Registrable Notes covered by the Shelf Registration have been sold in the manner set forth and
as contemplated in the Shelf Registration; provided, however, that (i) the Effectiveness Period in
respect of the Shelf Registration shall be extended to the extent required to permit dealers to
comply with the applicable prospectus delivery requirements of Rule 174 under the Securities Act
and as otherwise provided herein and (ii) the Company may suspend the effectiveness of the Shelf
Registration by written notice to the Holders solely (A) as a result of the filing of a
post-effective amendment to the Shelf Registration to incorporate annual audited financial
information with respect to the Company where such post-effective amendment is not yet effective
and needs to be declared effective to permit Holders to use the related Prospectus or (B) to the
extent and for so long as permitted by the penultimate paragraph of Section 5.

          (c) Supplements and Amendments. The Issuers agree to supplement or make amendments to
the Shelf Registration as and when required by the rules, regulations or instructions applicable to
the registration form used for such Shelf Registration or by the Securities Act or rules and
regulations thereunder for shelf registration, or if reasonably requested by the Holders of a
majority in aggregate principal amount of the Registrable Notes covered by such Registration
Statement or by any underwriter of such Registrable Notes.

7

 

     Section 4. Liquidated Damages

          (a) The Issuers and the Initial Purchasers agree that the Holders will suffer damages if the
Issuers fail to fulfill their obligations under Section 2 or Section 3 hereof and that it would not
be feasible to ascertain the extent of such damages with precision. Accordingly, the Issuers agree
that if:

     (i) the Exchange Offer is not consummated on or prior to the 270th day following
February 15, 2011, or, if that day is not a Business Day, the next day that is a Business
Day; or

     (ii) the Shelf Registration is required to be filed but is not declared effective
within the time period specified in Section 3(b)(x), or is declared effective by such date
but thereafter ceases to be effective or usable (unless the Shelf Registration ceases to be
effective or usable as specifically permitted by the penultimate paragraph of Section 5
hereof),

(each such event referred to in clauses (i) and (ii) a “Registration Default”), additional
interest in the form of additional cash interest (“Liquidated Damages”) will accrue on the
affected Registrable Notes. The rate of Liquidated Damages will be 0.25% per annum for the first
90-day period immediately following the occurrence of a Registration Default, increasing by an
additional 0.25% per annum with respect to each subsequent 90-day period up to a maximum amount of
Liquidated Damages of 1.00% per annum, from and including the date on which any such Registration
Default shall occur to, but excluding the date on which all Registration Defaults have been cured.
If, after the cure of all Registration Defaults then in effect, there is a subsequent Registration
Default, the rate of Liquidated Damages for such subsequent Registration Default shall initially be
0.25% regardless of the rate in effect with respect to any prior Registration Default at the time
of cure of such Registration Default and shall increase in the manner and be subject to the maximum
Liquidated Damages rate contained in the preceding sentence.

          Notwithstanding the foregoing, (1) the amount of Liquidated Damages payable shall not increase
because more than one Registration Default has occurred and is pending and (2) a Holder of
Registrable Notes that is not entitled to the benefits of the Shelf Registration (e.g.,
such Holder has not elected to include information) shall not be entitled to Liquidated Damages
with respect to a Registration Default that pertains to the Shelf Registration.

          (b) So long as Notes remain outstanding, the Company shall notify the Trustee within five
Business Days after each and every date on which an event occurs in respect of which Liquidated
Damages is required to be paid. Any amounts of Liquidated Damages due pursuant to clauses (a)(i)
or (a)(ii) of this Section 4 will be payable in cash semi-annually on each February 15 and August
15 (each a “Liquidated Damages Payment Date”), commencing with the first such date
occurring after any such Liquidated Damages commences to accrue, to Holders to whom regular
interest is payable on such Liquidated Damages Payment Date with respect to Notes that are
Registrable Notes. The amount of Liquidated Damages for each Registrable Note will be determined
by multiplying the applicable rate of Liquidated Damages by the aggregate principal amount of such
Registrable Note outstanding on the Liquidated Damages Payment Date following such Registration
Default in the case of the first such payment of Liquidated Damages with respect to a Registration
Default (and thereafter at the next succeeding Liquidated Damages Payment Date until the cure of
such Registration Default), and multiplying the product of the foregoing by a fraction, the
numerator of which is the number of days such Liquidated Damages rate was applicable during such
period (determined on the basis of a 360-day year comprised of twelve 30-day months and, in the
case of a partial month, the actual number of days elapsed), and the denominator of which is 360.

8

 

     Section 5. Registration Procedures

          In connection with the filing of any Registration Statement pursuant to Section 2 or 3 hereof,
the Issuers shall effect such registrations to permit the sale of the securities covered thereby in
accordance with the intended method or methods of disposition thereof, and pursuant thereto and in
connection with any Registration Statement filed by the Issuers hereunder, the Issuers shall:

     (a) Prepare and file with the Commission the Registration Statement or Registration
Statements prescribed by Section 2 or 3 hereof, and use their reasonable best efforts to
cause each such Registration Statement to become effective and remain effective as provided
herein; provided, however, that, if (1) such filing is pursuant to Section 3 hereof, or (2)
a Prospectus contained in the Exchange Offer Registration Statement filed pursuant to
Section 2 hereof is required to be delivered under the Securities Act by any Participating
Broker-Dealer who seeks to sell Exchange Notes during the Applicable Period relating
thereto, before filing any Registration Statement or Prospectus or any amendments or
supplements thereto, the Issuers shall furnish to and afford the Holders of the Registrable
Notes covered by such Registration Statement or each such Participating Broker-Dealer, as
the case may be, their counsel (if requested by any such person) and the managing
underwriters, if any, a reasonable opportunity to review copies of all such documents
(including copies of any documents to be incorporated by reference therein and all exhibits
thereto) proposed to be filed (in each case at least five Business Days prior to such
filing). The Issuers shall not file any Registration Statement or Prospectus or any
amendments or supplements thereto if the Holders of a majority in aggregate principal amount
of the Registrable Notes covered by such Registration Statement, or any such Participating
Broker-Dealer, as the case may be, their counsel, or the managing underwriters, if any,
shall reasonably object.

     (b) Prepare and file with the Commission such amendments and post-effective amendments
to each Shelf Registration or Exchange Offer Registration Statement, as the case may be, as
may be necessary to keep such Registration Statement continuously effective for the
Effectiveness Period or the Applicable Period, as the case may be; cause the related
Prospectus to be supplemented by any Prospectus supplement required by applicable law, and
as so supplemented to be filed pursuant to Rule 424 (or any similar provisions then in
force) promulgated under the Securities Act; and comply with the applicable provisions of
the Securities Act and the Exchange Act with respect to the disposition of all securities
covered by such Registration Statement as so amended or in such Prospectus as so
supplemented and with respect to the subsequent resale of any securities being sold by a
Participating Broker-Dealer covered by any such Prospectus, in each case, in accordance with
the intended methods of distribution set forth in such Registration Statement or Prospectus,
as so amended or supplemented.

     (c) If (1) a Shelf Registration is filed pursuant to Section 3 hereof, or (2) a
Prospectus contained in the Exchange Offer Registration Statement filed pursuant to Section
2 hereof is required to be delivered under the Securities Act by any Participating
Broker-Dealer who seeks to sell Exchange Notes during the Applicable Period relating thereto
from whom the Company has received written notice that such Broker-Dealer will be a
Participating Broker-Dealer in the applicable Exchange Offer, notify the selling Holders of
Registrable Notes, or each such Participating Broker-Dealer, as the case may be, their
counsel (if such counsel is known to the Issuers) and the managing underwriters, if any, as
promptly as possible, and, if requested by any such Person, confirm such notice in writing,
(i) when a Prospectus or any Prospectus supplement or post-effective amendment has been
filed, and, with respect to a Registration Statement or any post-effective amendment, when
the same has become effective under the Securities Act (including in such notice a written
statement that any Holder may, upon request, obtain, at the sole expense of the Issuers, one
conformed copy of such Registration Statement or

9

 

post-effective amendment including financial statements and schedules, documents
incorporated or deemed to be incorporated by reference and exhibits), (ii) of the issuance
by the Commission of any stop order suspending the effectiveness of a Registration Statement
or of any order preventing or suspending the use of any preliminary prospectus or the
initiation of any proceedings for that purpose, (iii) if at any time when a Prospectus is
required by the Securities Act to be delivered in connection with sales of the Registrable
Notes or resales of Exchange Notes by Participating Broker-Dealers the representations and
warranties of the Issuers contained in any agreement (including any underwriting agreement)
contemplated by Section 5(m) hereof cease to be true and correct in all material respects,
(iv) of the receipt by any of the Issuers of any notification with respect to the suspension
of the qualification or exemption from qualification of a Registration Statement or any of
the Registrable Notes or the Exchange Notes for offer or sale in any jurisdiction, or the
initiation or threatening of any proceeding for such purpose, (v) of the happening of any
event, the existence of any condition or any information becoming known to any Issuer that
makes any statement made in such Registration Statement or related Prospectus or any
document incorporated or deemed to be incorporated therein by reference untrue in any
material respect or that requires the making of any changes in or amendments or supplements
to such Registration Statement, Prospectus or documents so that, in the case of the
Registration Statement, it will not contain any untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary to make the statements
therein not misleading, and that in the case of the Prospectus, it will not contain any
untrue statement of a material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein, in the light of the circumstances under
which they were made, not misleading, and (vi) of the Company’s determination that a
post-effective amendment to a Registration Statement would be appropriate.

     (d) If (1) a Shelf Registration is filed pursuant to Section 3 hereof, or (2) a
Prospectus contained in the Exchange Offer Registration Statement filed pursuant to Section
2 hereof is required to be delivered under the Securities Act by any Participating
Broker-Dealer who seeks to sell Exchange Notes during the Applicable Period, use their
reasonable best efforts to prevent the issuance of any order suspending the effectiveness of
a Registration Statement or of any order preventing or suspending the use of a Prospectus or
suspending the qualification (or exemption from qualification) of any of the Registrable
Notes or the Exchange Notes, as the case may be, for sale in any jurisdiction, and, if any
such order is issued, to use their reasonable best efforts to obtain the withdrawal of any
such order at the earliest practicable moment.

     (e) If (1) a Shelf Registration is filed pursuant to Section 3 hereof or (2) a
Prospectus contained in the Exchange Offer Registration Statement filed pursuant to Section
2 hereof is required to be delivered under the Securities Act by any Participating
Broker-Dealer who seeks to sell Exchange Notes during the Applicable Period and if requested
by the managing underwriter or underwriters (if any), the Holders of a majority in aggregate
principal amount of the Registrable Notes covered by such Registration Statement or any
Participating Broker-Dealer, as the case may be, (i) promptly incorporate in such
Registration Statement or Prospectus a prospectus supplement or post-effective amendment
such information as the managing underwriter or underwriters (if any), such Holders or any
Participating Broker-Dealer, as the case may be (based upon advice of counsel), determine is
reasonably required to be included therein and (ii) make all required filings of such
prospectus supplement or such post-effective amendment as soon as practicable after the
Company has received notification of the matters to be incorporated in such prospectus
supplement or post-effective amendment; provided, however, that the Issuers shall not be
required to take any action hereunder that would, in the written opinion of counsel to the
Issuers, violate applicable laws.

10

 

     (f) If (1) a Shelf Registration is filed pursuant to Section 3 hereof or (2) a
Prospectus contained in the Exchange Offer Registration Statement filed pursuant to Section
2 hereof is required to be delivered under the Securities Act by any Participating
Broker-Dealer who seeks to sell Exchange Notes during the Applicable Period, furnish to each
selling Holder of Registrable Notes or each such Participating Broker-Dealer, as the case
may be, who so requests, their counsel (if requested by any such person) and each managing
underwriter, if any, at the sole expense of the Issuers, one conformed copy of the
Registration Statement or Registration Statements and each post-effective amendment thereto,
including financial statements and schedules, and, if requested, all documents incorporated
or deemed to be incorporated therein by reference and all exhibits.

     (g) If (1) a Shelf Registration is filed pursuant to Section 3 hereof, or (2) a
Prospectus contained in the Exchange Offer Registration Statement filed pursuant to Section
2 hereof is required to be delivered under the Securities Act by any Participating
Broker-Dealer who seeks to sell Exchange Notes during the Applicable Period, deliver to each
selling Holder of Registrable Notes or each such Participating Broker-Dealer, as the case
may be, their respective counsel (if requested) and the underwriters, if any, at the sole
expense of the Issuers, as many copies of the Prospectus or Prospectuses (including each
form of preliminary prospectus) and each amendment or supplement thereto and any documents
incorporated by reference therein as such Persons may reasonably request; and, subject to
the last paragraph of this Section 5, the Issuers hereby consent to the use of such
Prospectus and each amendment or supplement thereto by each of the selling Holders of
Registrable Notes or each such Participating Broker-Dealer, as the case may be, and the
underwriters or agents, if any, and dealers (if any), in connection with the offering and
sale of the Registrable Notes covered by, or the sale by Participating Broker-Dealers of the
Exchange Notes pursuant to, such Prospectus and any amendment or supplement thereto.

     (h) Prior to any public offering of Registrable Notes or Exchange Notes or any delivery
of a Prospectus contained in the Exchange Offer Registration Statement by any Participating
Broker-Dealer who seeks to sell Exchange Notes during the Applicable Period, use their
reasonable best efforts to register or qualify, and to cooperate with the selling Holders of
Registrable Notes or each such Participating Broker-Dealer, as the case may be, the managing
underwriter or underwriters, if any, and their respective counsel in connection with the
registration or qualification (or exemption from such registration or qualification) of such
Registrable Notes or Exchange Notes, as the case may be, for offer and sale under the
securities or Blue Sky laws of such jurisdictions within the United States as any selling
Holder, Participating Broker-Dealer, or the managing underwriter or underwriters reasonably
request; provided, however, that where Exchange Notes or Registrable Notes are offered other
than through an underwritten offering, the Issuers agree to cause the Issuers’ counsel to
perform Blue Sky investigations and file registrations and qualifications required to be
filed pursuant to this Section 5(h); keep each such registration or qualification (or
exemption therefrom) effective during the period such Registration Statement is required to
be kept effective and do any and all other acts or things reasonably necessary or advisable
to enable the disposition in such jurisdictions of such Exchange Notes or Registrable Notes
covered by the applicable Registration Statement; provided, however, that no Issuer shall be
required to (A) qualify generally to do business in any jurisdiction where it is not then so
qualified, (B) take any action that would subject it to general service of process in any
such jurisdiction where it is not then so subject or (C) subject itself to taxation in
excess of a nominal dollar amount in any such jurisdiction where it is not then so subject.

11

 

     (i) If a Shelf Registration is filed pursuant to Section 3 hereof, cooperate with the
selling Holders of Registrable Notes and the managing underwriter or underwriters, if any,
to facilitate the timely preparation and delivery of certificates representing Registrable
Notes to be sold, which certificates shall not bear any restrictive legends and shall be in
a form eligible for deposit with The Depository Trust Company; and enable such Registrable
Notes to be in such denominations and registered in such names as the managing underwriter
or underwriters, if any, or selling Holders may request at least two Business Days prior to
any sale of such Registrable Notes.

     (j) Use their reasonable best efforts to cause the Registrable Notes or Exchange Notes
covered by any Registration Statement to be registered with or approved by such other
governmental agencies or authorities as may be reasonably necessary to enable the seller or
sellers thereof or the underwriter or underwriters, if any, to consummate the disposition of
such Registrable Notes or Exchange Notes, except as may be required solely as a consequence
of the nature of such selling Holder’s business, in which case the Issuers will cooperate in
all reasonable respects with the filing of such Registration Statement and the granting of
such approvals.

     (k) If (1) a Shelf Registration is filed pursuant to Section 3 hereof, or (2) a
Prospectus contained in the Exchange Offer Registration Statement filed pursuant to Section
2 hereof is required to be delivered under the Securities Act by any Participating
Broker-Dealer who seeks to sell Exchange Notes during the Applicable Period, upon the
occurrence of any event contemplated by Section 5(c)(v) or 5(c)(vi) hereof, as promptly as
practicable prepare and (subject to Section 5(a) and the penultimate paragraph of this
Section 5) file with the Commission, at the sole expense of the Issuers, a supplement or
post-effective amendment to the Registration Statement or a supplement to the related
Prospectus or any document incorporated or deemed to be incorporated therein by reference,
or file any other required document so that, as thereafter delivered to the purchasers of
the Registrable Notes being sold thereunder or to the purchasers of the Exchange Notes to
whom such Prospectus will be delivered by a Participating Broker-Dealer, any such Prospectus
will not contain an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading.

     (l) Prior to the effective date of the first Registration Statement relating to the
Registrable Notes, (i) provide the Trustee with certificates for the Registrable Notes in a
form eligible for deposit with The Depository Trust Company and (ii) provide a CUSIP number
for the Registrable Notes.

     (m) In connection with any underwritten offering of Registrable Notes pursuant to a
Shelf Registration, enter into an underwriting agreement as is customary in underwritten
offerings of debt securities similar to the Notes and take all such other actions as are
reasonably requested by the managing underwriter or underwriters in order to expedite or
facilitate the registration or the disposition of such Registrable Notes and, whether or not
such offering is an underwritten offering, (i) make such representations and warranties to
the underwriter or underwriters (and to any Holder that has advised the Company that such
Holder may have a “due diligence” defense under Section 11 of the Securities Act), and
covenants with, the underwriters with respect to the business of the Issuers and their
subsidiaries (including any acquired business, properties or entity, if applicable), and the
Registration Statement, Prospectus and documents, if any, incorporated or deemed to be
incorporated by reference therein, in each case, as are customarily made by issuers to
underwriters in underwritten offerings of debt securities similar to the Notes, and confirm
the same in writing if and when requested; (ii) use their reasonable best efforts to obtain
the written opinions of counsel to the Issuers and written updates thereof in form, scope

12

 

and substance reasonably satisfactory to the managing underwriter or underwriters,
addressed to the underwriters (and to any Holder that has advised the Company that such
Holder may have a “due diligence” defense under Section 11 of the Securities Act) covering
the matters customarily covered in opinions requested in underwritten offerings and such
other matters as may be reasonably requested by the managing underwriter or underwriters;
(iii) use their reasonable best efforts to obtain “cold comfort” letters and updates thereof
in form, scope and substance reasonably satisfactory to the managing underwriter or
underwriters from the independent certified public accountants of the Issuers (and, if
necessary, any other independent certified public accountants of any subsidiary of the
Company or of any business acquired by the Company for which financial statements and
financial data are, or are required to be, included or incorporated by reference in the
Registration Statement), addressed to each of the underwriters (and to any Holder that has
advised the Company that such Holder may have a “due diligence” defense under Section 11 of
the Securities Act), such letters to be in customary form and covering matters of the type
customarily covered in “cold comfort” letters in connection with underwritten offerings; and
(iv) if an underwriting agreement is entered into, the same shall contain indemnification
provisions and procedures no less favorable than those set forth in Section 8 hereof (or
such other provisions and procedures acceptable to Holders of a majority in aggregate
principal amount of Registrable Notes covered by such Registration Statement and the
managing underwriter or underwriters or agents) with respect to all parties to be
indemnified pursuant to said Section; provided that the Issuers shall not be required to
provide indemnification to any underwriter selected in accordance with the provisions of
Section 10 hereof with respect to information relating to such underwriter furnished in
writing to the Company by or on behalf of such underwriter expressly for inclusion in such
Registration Statement. The above shall be done at each closing under such underwriting
agreement, or as and to the extent required thereunder.

     (n) If (1) a Shelf Registration is filed pursuant to Section 3 hereof or (2) a
Prospectus contained in the Exchange Offer Registration Statement filed pursuant to Section
2 hereof is required to be delivered under the Securities Act by any Participating
Broker-Dealer who seeks to sell Exchange Notes during the Applicable Period, make available
for inspection by any selling Holder of such Registrable Notes being sold or each such
Participating Broker-Dealer, as the case may be, any underwriter participating in any such
disposition of Registrable Notes, if any, and any attorney, accountant or other agent
retained by any such selling Holder or each such Participating Broker-Dealer, as the case
may be, or underwriter (collectively, the “Inspectors”), at the offices where
normally kept, during reasonable business hours, all financial and other records, pertinent
corporate documents and instruments of the Company and its subsidiaries (collectively, the
“Records”) as shall be reasonably necessary to enable them to exercise any
applicable due diligence responsibilities, and cause the officers, directors and employees
of the Company and its subsidiaries to supply all information reasonably requested by any
such Inspector in connection with such Registration Statement and Prospectus. Each
Inspector shall agree in writing that it will keep the Records confidential and that it will
not disclose, or use in connection with any market transactions in violation of any
applicable securities laws, any Records that the Company determines, in good faith, to be
confidential and that it notifies the Inspectors in writing are confidential unless (i) the
disclosure of such Records is necessary to avoid or correct a misstatement or omission in
such Registration Statement or Prospectus, (ii) the release of such Records is ordered
pursuant to a subpoena or other order from a court of competent jurisdiction, (iii)
disclosure of such information is necessary or advisable in the opinion of counsel for an
Inspector in connection with any action, claim, suit or proceeding, directly or indirectly,
involving or potentially involving such Inspector and arising out of, based upon, relating
to, or involving this Agreement or the Purchase Agreement, or any transactions contemplated
hereby or thereby or arising hereunder or thereunder, or (iv) the information in such
Records has been made generally available to the public; provided, however, that (i) each
Inspector shall agree to use

13

 

reasonable best efforts to provide notice to the Company of the potential disclosure of
any information by such Inspector pursuant to clause (i), (ii) or (iii) of this sentence to
permit the Issuers to obtain a protective order (or waive the provisions of this paragraph
(n)) and (ii) each such Inspector shall take such actions as are reasonably necessary to
protect the confidentiality of such information (if practicable) to the extent such action
is otherwise not inconsistent with, an impairment of or in derogation of the rights and
interests of the Holder or any Inspector.

     (o) Provide an indenture trustee for the Registrable Notes or the Exchange Notes, as
the case may be, and cause the Indenture or the trust indenture provided for in Section 2(b)
hereof to be qualified under the TIA not later than the effective date of the Exchange Offer
or the first Registration Statement relating to the Registrable Notes; and in connection
therewith, cooperate with the trustee under any such indenture and the Holders of the
Registrable Notes or Exchange Notes, as applicable, to effect such changes to such indenture
as may be required for such indenture to be so qualified in accordance with the terms of the
TIA; and execute, and use their reasonable best efforts to cause such trustee to execute,
all documents as may be required to effect such changes, and all other forms and documents
required to be filed with the Commission to enable such indenture to be so qualified in a
timely manner.

     (p) Comply with all applicable rules and regulations of the Commission and make
generally available to the Company’s securityholders earnings statements satisfying the
provisions of Section 11(a) of the Securities Act and Rule 158 thereunder (or any similar
rule promulgated under the Securities Act) no later than 45 days after the end of any
12-month period (or 90 days after the end of any 12-month period if such period is a fiscal
year) (i) commencing at the end of any fiscal quarter in which Registrable Notes or Exchange
Notes are sold to underwriters in a firm commitment or best efforts underwritten offering
and (ii) if not sold to underwriters in such an offering, commencing on the first day of the
first fiscal quarter of the Company after the effective date of a Registration Statement,
which statements shall cover said 12-month periods consistent with the requirements of Rule
158.

     (q) Upon the request of a Holder, upon consummation of the Exchange Offer or a Private
Exchange, use their reasonable best efforts to obtain an opinion of counsel to the Issuers,
in a form customary for underwritten transactions, addressed to the Trustee for the benefit
of all Holders of Registrable Notes participating in the Exchange Offer or the Private
Exchange, as the case may be, that the Exchange Notes or Private Exchange Notes, as the case
may be, and the related indenture constitute legal, valid and binding obligations of the
Issuers, enforceable against the Issuers in accordance with its respective terms, subject to
customary exceptions and qualifications.

     (r) If the Exchange Offer or a Private Exchange is to be consummated, upon delivery of
the Registrable Notes by Holders to the Company (or to such other Person as directed by the
Company) in exchange for the Exchange Notes or the Private Exchange Notes, as the case may
be, mark, or cause to be marked, on such Registrable Notes that such Registrable Notes are
being cancelled in exchange for the Exchange Notes or the Private Exchange Notes, as the
case may be; provided that in no event shall such Registrable Notes be marked as paid or
otherwise satisfied.

     (s) Cooperate with each seller of Registrable Notes covered by any Registration
Statement and each underwriter, if any, participating in the disposition of such Registrable
Notes and their respective counsel in connection with any filings required to be made with
the Financial Industry Regulatory Authority, Inc. (“FINRA”).

14

 

     (t) Use their reasonable best efforts to take all other steps reasonably necessary or
advisable to effect the registration of the Exchange Notes and/or Registrable Notes covered
by a Registration Statement contemplated hereby.

          The Company may require each seller of Registrable Notes or Exchange Notes as to which any
registration is being effected to furnish to the Company such information regarding such seller and
the distribution of such Registrable Notes or Exchange Notes as the Company may, from time to time,
reasonably request. The Company may exclude from such registration the Registrable Notes of any
seller so long as such seller fails to furnish such information within a reasonable time after
receiving such request and in the event of such an exclusion, the Issuers shall have no further
obligation under this Agreement (including, without limitation, the obligations under Section 4)
with respect to such seller or any subsequent Holder of such Registrable Notes. Each seller as to
which any Shelf Registration is being effected agrees to furnish promptly to the Company all
information required to be disclosed in order to make any information previously furnished to the
Company by such seller not materially misleading.

          If any such Registration Statement refers to any Holder by name or otherwise as the holder of
any securities of the Company or the Guarantors, then such Holder shall have the right to require
(i) the insertion therein of language, in form and substance reasonably satisfactory to such
Holder, to the effect that the holding by such Holder of such securities is not to be construed as
a recommendation by such Holder of the investment quality of the securities covered thereby and
that such holding does not imply that such Holder will assist in meeting any future financial
requirements of the Company or the Guarantors, or (ii) in the event that such reference to such
Holder by name or otherwise is not required by the Securities Act or any similar federal statute
then in force, the deletion of the reference to such Holder in any amendment or supplement to the
applicable Registration Statement filed or prepared subsequent to the time that such reference
ceases to be required.

          Each Holder of Registrable Notes and each Participating Broker-Dealer agrees by acquisition of
such Registrable Notes or Exchange Notes that, upon the Company providing notice to such Holder or
Participating Broker-Dealer, as the case may be, (x) of the happening of any event of the kind
described in Section 5(c)(ii), 5(c)(iii), 5(c)(iv), or 5(c)(v) hereof, or (y) that the Board of
Directors of the Company (the “Board of Directors”) has resolved that the Company has a
bona fide business purpose for doing so, then, upon providing such notice (which shall refer to the
penultimate paragraph of this Section 5), the Issuers may delay the filing or the effectiveness of
the Exchange Offer Registration Statement or the Shelf Registration (if not then filed or
effective, as applicable) and shall not be required to maintain the effectiveness thereof or amend
or supplement the Exchange Offer Registration Statement or the Shelf Registration, in all cases,
for a period (a “Delay Period”) expiring upon the earlier to occur of (i) in the case of
the immediately preceding clause (x), such Holder’s or Participating Broker-Dealer’s receipt of the
copies of the supplemented or amended Prospectus contemplated by Section 5(k) hereof or until it is
advised in writing (the “Advice”) by the Company that the use of the applicable Prospectus
may be resumed, and has received copies of any amendments or supplements thereto or (ii) in the
case of the immediately preceding clause (y), the date which is the earlier of (A) the date on
which such business purpose ceases to interfere with the Issuers’ obligations to file or maintain
the effectiveness of any such Registration Statement pursuant to this Agreement or (B) 60 days
after the Company notifies the Holders of such good faith determination. There shall not be more
than 90 days of Delay Periods during any 12-month period. The maximum length of the Applicable
Period set forth in Section 2(b) shall be extended by a number of days equal to the number of days
during any Delay Period. Any Delay Period will not alter the obligations of the Issuers to pay
Liquidated Damages under the circumstances set forth in Section 4 hereof.

          Each Holder or Participating Broker-Dealer, by its acceptance of any Registrable Note, agrees
that during any Delay Period, each Holder or Participating Broker-Dealer will discontinue

15

 

disposition of such Notes or Exchange Notes covered by such Registration Statement or
Prospectus or Exchange Notes to be sold by such Holder or Participating Broker-Dealer, as the case
may be.

     Section 6. Market Making.

          (a) At such time and for so long as any of the Notes or Exchange Notes are outstanding and any
of the Initial Purchasers (each in such capacity, the “Market Maker”) or any of their
Affiliates is an Affiliate of the Company, the Guarantors or any of their Affiliates and proposes
to make a market in the Notes or the Exchange Notes as applicable, as part of its business in the
ordinary course, the following provisions shall apply for the sole benefit of the Market Maker:

     (i) The Company and the Guarantors shall (A) on the date that the Exchange Offer
Registration Statement or, if required hereby, the Shelf Registration is filed with the
Commission, file one or more registration statements (the “Market Making Registration
Statements”) (which may be the Exchange Offer Registration Statement or the Shelf
Registration if permitted by the rules and regulations of the Commission) and use their
commercially reasonable best efforts to cause such Market Making Registration Statements to
be declared effective by the Commission on or prior to the consummation of the Exchange
Offer or the effective date of the Shelf Registration, as applicable; (B) periodically amend
such Market Making Registration Statements so that the information contained therein
complies with the requirements of Section 10(a) under the Securities Act; (C) amend the
Market Making Registration Statements or amend or supplement the related Prospectuses when
necessary to reflect any material changes in the information provided therein; and (D) amend
the Market Making Registration Statements when required to do so in order to comply with
Section 10(a)(3) of the Securities Act; provided, however, that (1) prior to filing the
Market Making Registration Statements, any amendment thereto or any supplement to the
related Prospectuses, the Company shall furnish to the Market Maker copies of all such
documents proposed to be filed, which documents will be subject to the review of the Market
Maker and its counsel and (2) the Company and the Guarantors will not file any Market Making
Registration Statement, any amendment thereto or any amendment or supplement to the related
Prospectus to which the Market Maker and its counsel shall reasonably object unless the
Company is advised by counsel that such Market Making Registration Statement, amendment or
supplement is required to be filed under applicable securities laws and the Company will
provide the Market Maker and its counsel with copies of such Market Making Registration
Statement and each amendment and supplement filed. The Company, in its sole discretion, may
determine to include Prospectuses relating to each of the Notes or the Exchange Notes in the
same or different Market Making Registration Statements so long as each such registration
statement complies with this Section 6. The term “Prospectus” in this Section 6 includes
any Prospectus contained in a Market Making Registration Statement relating to any or all of
the Notes or the Exchange Notes, as applicable.

     (ii) The Company shall notify the Market Maker and, if requested by the Market Maker,
confirm such advice in writing, (A) when any Market Making Registration Statement, any
post-effective amendment to any Market Making Registration Statement or any amendment or
supplement to the related Prospectus has been filed, and, with respect to any Market Making
Registration Statement or any post-effective amendment, when the same has become effective;
(B) of any request by the Commission for any post-effective amendment to any Market Making
Registration Statement, any supplement or amendment to the related Prospectus or for
additional information; (C) the issuance by the Commission of any stop order suspending the
effectiveness of any Market Making Registration Statement or the initiation of any
proceedings for that purpose; (D) of the receipt by the Company of any notification with
respect to the suspension of the qualification of the Notes or the Exchange Notes, as
applicable, for sale in any jurisdiction or

16

 

the initiation or threatening of any proceedings for that purpose; and (E) of the
happening of any event that makes any statement made in any Market Making Registration
Statement, the related Prospectus or any amendment or supplement thereto untrue or that
requires that making of any changes in any Market Making Registration Statement, such
Prospectus or any amendment or supplement thereto, in order to make the statements therein
not misleading.

     (iii) If any event contemplated by Section 6(a)(ii)(B) through (E) occurs during the
period for which the Company and the Guarantors are required to maintain an effective Market
Making Registration Statement, the Company and the Guarantors shall promptly prepare and
file with the Commission a post-effective amendment to each Market Making Registration
Statement or an amendment or supplement to the related Prospectus or file any other required
document so that the Prospectus will not include an untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading.

     (iv) In the event of the issuance of any stop order suspending the effectiveness of any
Market Making Registration Statement or of any order suspending the qualification of the
Notes or Exchange Notes for sale in any jurisdiction, the Company and the Guarantors shall
promptly use their reasonable best efforts to obtain its withdrawal.

     (v) The Company shall furnish to the Market Maker, without charge, (A) at least one
conformed copy of any Market Making Registration Statement and any post-effective amendment
thereto and (B) as many copies of the related Prospectus and any amendment or supplement
thereto as the Market Maker may reasonably request.

     (vi) The Company and the Guarantors shall consent to the use of any Prospectus
contained in any Market Making Registration Statement or any amendment or supplement thereto
by the Market Maker in connection with its market-making activities.

     (vii) Notwithstanding the foregoing provisions of this Section 6, the Company and the
Guarantors may for valid business reasons, including without limitation, a potential
material acquisition, divestiture of assets or other material corporate transaction, notify
the Market Maker in writing that a Market Making Registration Statement is no longer
effective or the Prospectus included therein is no longer usable for offers and sales of
Notes or Exchange Notes; provided that the use of a Market Making Registration Statement or
the Prospectus contained therein shall not be suspended for more than 75 days (whether or
not consecutive) in the aggregate in any 12-month period. The Market Maker agrees that upon
receipt of any notice from the Company pursuant to this Section 6(a)(vii), it will
discontinue use of the Prospectus contained in such Market Making Registration Statement
until receipt of copies of the supplemented or amended Prospectus relating thereto or until
advised in writing by the Company that the use of the Prospectus contained in such Market
Making Registration Statement may be resumed.

          (b) In connection with any Market Making Registration Statement, the Company and the
Guarantors shall (i) make reasonably available for inspection by a representative of, and counsel
acting for, the Market Maker all relevant financial and other records, pertinent corporate
documents and properties of the Company, the Guarantors and their respective subsidiaries and (ii)
use their respective reasonable best efforts to have their respective officers, directors,
employees, accountants and counsel supply all relevant information reasonably requested by such
representative or counsel or the Market Maker; provided, however, that any information that is
designated in writing by the Company or the Guarantors, in good faith, as confidential at the time
of delivery of such information shall be kept confidential by the Market Maker or any
representative or counsel, unless such disclosure is made in

17

 

connection with a court proceeding or required by law, or such information becomes available
to the public generally or through a third party without an accompanying obligation of
confidentiality;

          (c) Prior to the effective date of any Market Making Registration Statement, the Company and
the Guarantors shall arrange, if necessary, for the qualification of the Notes or Exchange Notes,
as applicable, for sale under the laws of such jurisdictions as the Market Maker reasonably
requests in writing and will maintain such qualification in effect so long as required to enable
the offer and sale in such jurisdictions of the Notes or Exchange Notes, as applicable, covered by
such Market Making Registration Statement; provided that in no event shall the Company and the
Guarantors be obligated to (i) qualify as a foreign corporation or other entity or as a dealer in
securities in any jurisdiction where it would not otherwise be required to so qualify, (ii) file
any general consent to subject itself to service of process in any such jurisdictions or (iii)
subject itself to taxation in any such jurisdiction if it not so subject.

          (d) The Company and the Guarantors represent and agree that any Market Making Registration
Statement, any post-effective amendments thereto, any amendments or supplements to the related
Prospectus and any documents filed by them under the Exchange Act will, when they become effective
or are filed with the Commission, as the case may be, conform in all respects to the requirements
of the Securities Act and the Exchange Act and the rules and regulations of the Commission
thereunder and will not, as of the effective date of such Market Making Registration Statement or
post-effective amendments and as of the filing date of amendments or supplements to such Prospectus
or filings under the Exchange Act, contain an untrue statement of a material fact or omit to state
a material fact required to be stated therein or necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading; provided that no
representation or warranty is made as to information contained in or omitted from any Market Making
Registration Statement or the related Prospectus in reliance upon and in conformity with written
information furnished to the Company by the Market Maker specifically for inclusion therein, which
information the parties hereto agree will be limited to the statements concerning the market-making
activities of the Market Maker to be set forth on the cover page and in the “Plan of Distribution”
section of the related Prospectus (the “Market Maker’s Information”).

          (e) At the time of effectiveness of any Market Making Registration Statement and concurrently
with each time such Market Making Registration Statement or the related Prospectus shall be amended
or such Prospectus shall be supplemented, the Company shall (if requested by the Market Maker)
furnish the Market Maker and its counsel with a certificate of its Chief Executive Officer and its
Chief Financial Officer to the effect that:

     (i) such Market Making Registration Statement has been declared effective;

     (ii) in the case of an amendment to such Market Making Registration Statement, such
amendment has become effective under the Act as of the date and time specified in such
certificate, if applicable; and in the case of an amendment or supplement to the Prospectus,
such amendment or supplement to the Prospectus was filed with the Commission pursuant to the
subparagraph of Rule 424(b) under the Act specified in such certificate on the date
specified therein;

     (iii) to the knowledge of such officers, no stop order suspending the effectiveness of
such Market Making Registration Statement has been issued and no proceeding for that purpose
is pending or threatened by the Commission; and

18

 

     (iv) such officers have carefully examined such Market Making Registration Statement
and the Prospectus (and, in the case of an amendment or supplement, such amendment or
supplement) and as of the date of such Market Making Registration Statement, amendment or
supplement, as applicable, the Market Making Registration Statement and the Prospectus, as
amended or supplemented, if applicable, did not include any untrue statement of a material
fact and did not omit to state a material fact required to be stated therein or necessary to
make the statements therein not misleading.

          (f) At the time of effectiveness of any Market Making Registration Statement and concurrently
with each time any Market Making Registration Statement or the related Prospectus shall be amended
or such Prospectus shall be supplemented, the Company shall (if requested by the Market Maker)
furnish the Market Maker and its counsel with the written opinion of counsel for the Company
satisfactory to the Market Maker to the effect that:

     (i) such Market Making Registration Statement has been declared effective;

     (ii) in the case of an amendment to such Market Making Registration Statement, such
amendment has become effective under the Securities Act as of the date and time specified in
such opinion, if applicable; and in the case of an amendment or supplement to the
Prospectus, such amendment or supplement to the Prospectus was filed with the Commission
pursuant to the subparagraph of Rule 424(b) under the Act specified in such opinion on the
date specified therein;

     (iii) to the knowledge of such counsel, no stop order suspending the effectiveness of
such Market Making Registration Statement has been issued and no proceeding for that purpose
is pending or threatened by the Commission; and

     (iv) such counsel has reviewed such Market Making Registration Statement and the
Prospectus (and, in the case of an amendment or supplement, such amendment or supplement)
and participated with officers of the Company and independent public accountants for the
Company in the preparation of such Market Making Registration Statement and Prospectus (and,
in the case of an amendment or supplement, such amendment or supplement) and has no reason
to believe that (except for the financial statements and other financial and statistical
data contained therein as to which such counsel need express no belief) as of the date of
such Market Making Registration Statement, amendment or supplement, as applicable, the
Market Making Registration Statement and the Prospectus, as amended or supplemented, if
applicable, contained any untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the statements therein not
misleading.

          (g) At the time of effectiveness of any Market Making Registration Statement and concurrently
with each time such Market Making Registration Statement or the related Prospectus shall be amended
or such Prospectus shall be supplemented to include audited annual financial information, the
Company shall (if requested by the Market Maker) furnish the Market Maker and its counsel with a
letter of KPMG LLP (or other independent public accountants for the Company or the Guarantors of
nationally recognized standing) in form satisfactory to the Market Maker, addressed to the Market
Maker and dated the date of delivery of such letter, (i) confirming that they are independent
public accountants within the meaning of the Securities Act and are in compliance with the
applicable requirements relating to the qualification of accountants under Rule 2-01 of Regulation
S-X of the Commission and (ii) in all other respects, substantially in the form of the letter
delivered to the Initial Purchasers pursuant to the Purchase Agreement, with, in the case of an
amendment or supplement that includes audited financial information, such changes as may be
necessary to reflect the amended or supplemented financial information.

19

 

          (h) The Company and the Guarantors, on the one hand, and the Market Maker, on the other hand,
hereby agree to indemnify each other, and, if applicable, contribute to the other, in accordance
with Section 8 of this Agreement.

          (i) The Company and the Guarantors will comply with the provisions of this Section 6 at their
own expense and will reimburse the Market Maker for its expenses associated with this Section 6
(including reasonable fees of counsel for the Market Maker).

          (j) The agreements contained in this Section 6 and the representations, warranties and
agreements contained in this Agreement shall survive all offers and sales of the Notes and Exchange
Notes and shall remain in full force and effect, regardless of any termination or cancellation of
this Agreement or any investigation made by or on behalf of any indemnified party.

          (k) For purposes of this Section 6, (i) any reference to the terms “amend”, “amendment” or
“supplement” with respect to any Market Making Registration Statement or the Prospectus contained
therein shall be deemed to refer to and include the filing under the Exchange Act of any document
deemed to be incorporated therein by reference and (ii) any reference to the terms “Notes” or
“Exchange Notes” shall be deemed to refer to and include any securities issued in exchange for or
with respect to such Notes or Exchange Notes.

     Section 7. Registration Expenses

          All fees and expenses incident to the performance of or compliance with this Agreement by the
Issuers (other than any underwriting discounts or commissions) shall be borne by the Issuers,
whether or not the Exchange Offer Registration Statement or the Shelf Registration is filed or
becomes effective or the Exchange Offer is consummated, including, without limitation, (i) all
registration and filing fees (including, without limitation, fees and expenses of compliance with
state securities or Blue Sky laws (including, without limitation, fees and disbursements of counsel
in connection with Blue Sky qualifications of the Registrable Notes or Exchange Notes and
determination of the eligibility of the Registrable Notes or Exchange Notes for investment under
the laws of such jurisdictions (x) where the holders of Registrable Notes are located, in the case
of an Exchange Offer, or (y) as provided in Section 5(h) hereof, in the case of a Shelf
Registration or in the case of Exchange Notes to be sold by a Participating Broker-Dealer during
the Applicable Period)), (ii) printing expenses, including, without limitation, expenses of
printing certificates for Registrable Notes or Exchange Notes in a form eligible for deposit with
The Depository Trust Company and of printing prospectuses if the printing of prospectuses is
requested by the managing underwriter or underwriters, if any, or by the Holders of a majority in
aggregate principal amount of the Registrable Notes included in any Registration Statement or in
respect of Exchange Notes to be sold by any Participating Broker-Dealer during the Applicable
Period, as the case may be, (iii) messenger, telephone and delivery expenses, (iv) fees and
disbursements of counsel for the Issuers and the reasonable fees and disbursements of one special
counsel for all of the sellers of Registrable Notes (exclusive of any counsel retained pursuant to
Section 8 hereof) selected by the Holders of a majority in aggregate principal amount of Notes,
Exchange Notes and Private Exchange Notes being registered and reasonably satisfactory to the
Issuers, (v) fees and disbursements of all independent certified public accountants referred to in
Section 5(m)(iii) hereof (including, without limitation, the expenses of any special audit and
“cold comfort” letters required by or incident to such performance), (vi) Securities Act liability
insurance, if the Issuers desire such insurance, (vii) fees and expenses of all other Persons
retained by any of the Issuers, (viii) internal expenses of the Issuers (including, without
limitation, all salaries and expenses of officers and employees of the Company performing legal or
accounting duties), (ix) the expense of any annual audit, (x) the fees and expenses incurred in
connection with the listing of the securities to be registered on any securities exchange, and the
obtaining of a rating of the securities, in each case, if applicable, (xi) any required fees and
expenses incurred in connection

20

 

with any filing required to be made with the FINRA and (xii) the expenses relating to
printing, word processing and distributing all Registration Statements, underwriting agreements,
indentures and any other documents necessary in order to comply with this Agreement.
Notwithstanding the foregoing or anything to the contrary, each Holder shall pay all underwriting
discounts and commissions of any underwriters with respect to any Registrable Notes sold by or on
behalf of it.

     Section 8. Indemnification

          (a) The Issuers, jointly and severally, agree to indemnify and hold harmless each Holder of
Registrable Notes and each Participating Broker-Dealer selling Exchange Notes during the Applicable
Period, each Person, if any, who controls any such Person within the meaning of Section 15 of the
Securities Act or Section 20(a) of the Exchange Act, the agents, employees, officers and directors
of each Holder and each such Participating Broker-Dealer and the agents, partners, members,
employees, officers, managers and directors of any such controlling Person (each, a
“Participant”) from and against any and all losses, liabilities, claims, damages and
expenses whatsoever (including, but not limited to, reasonable attorneys’ fees and any and all
reasonable expenses whatsoever actually incurred in investigating, preparing or defending against
any litigation, commenced or threatened, or any claim whatsoever, and any and all reasonable
amounts paid in settlement of any claim or litigation) (collectively, “Losses”) to which
they or any of them may become subject under the Securities Act, the Exchange Act or otherwise
insofar as such Losses (or actions in respect thereof) arise out of or are based upon any untrue
statement or alleged untrue statement of a material fact contained in any Registration Statement
(or any amendment thereto) or Prospectus (as amended or supplemented if the Company shall have
furnished any amendments or supplements thereto) or any preliminary prospectus, or caused by,
arising out of or based upon any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein, in the case of the
Prospectus, in the light of the circumstances under which they were made, not misleading, provided
that the foregoing indemnity shall not be available to any Participant insofar as such Losses are
caused by any untrue statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with information relating to such Participant furnished to the Company in
writing by or on behalf of such Participant expressly for use therein. This indemnity agreement
will be in addition to any liability that the Issuers may otherwise have, including, but not
limited to, liability under this Agreement.

          (b) Each Participant agrees, severally and not jointly, to indemnify and hold harmless each
Issuer, each Person, if any, who controls any Issuer within the meaning of Section 15 of the
Securities Act or Section 20(a) of the Exchange Act, and each of their respective agents, partners,
members, employees, officers and members of the board of directors from and against any Losses to
which they or any of them may become subject under the Securities Act, the Exchange Act or
otherwise insofar as such Losses (or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of a material fact contained in any Registration
Statement (or any amendment thereto) or Prospectus (as amended or supplemented if the Company shall
have furnished any amendments or supplements thereto) or any preliminary prospectus, or caused by,
arising out of or based upon any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein, in the case of the
Prospectus, in the light of the circumstances under which they were made, not misleading, in each
case to the extent, but only to the extent, that any such Loss arises out of or is based upon any
untrue statement or alleged untrue statement or omission or alleged omission made in reliance upon
and in conformity with information relating to such Participant furnished in writing to the Company
by or on behalf of such Participant expressly for use therein.

          (c) Promptly after receipt by an indemnified party under Section 8(a) or 8(b) above of notice
of the commencement of any action, suit or proceeding (collectively, an “action”), such
indemnified party shall, if a claim in respect thereof is to be made against the indemnifying party
under

21

 

such subsection, notify each party against whom indemnification is to be sought in writing of
the commencement of such action (but the failure so to notify an indemnifying party shall not
relieve such indemnifying party from any liability that it may have under this Section 8 except to
the extent that it has been prejudiced in any material respect by such failure). In case any such
action is brought against any indemnified party, and it notifies an indemnifying party of the
commencement of such action, the indemnifying party will be entitled to participate in such action,
and to the extent it may elect by written notice delivered to the indemnified party promptly after
receiving the aforesaid notice from such indemnified party, to assume the defense of such action
with counsel reasonably satisfactory to such indemnified party. Notwithstanding the foregoing, the
indemnified party or parties shall have the right to employ its or their own counsel in any such
action, but the reasonable fees and expenses of such counsel shall be at the expense of such
indemnified party or parties unless (i) the employment of such counsel shall have been authorized
in writing by the indemnifying parties in connection with the defense of such action, (ii) the
indemnifying parties shall not have employed counsel to take charge of the defense of such action
within a reasonable time after notice of commencement of the action, or (iii) the named parties to
such action (including any impleaded parties) include such indemnified party and the indemnifying
party or parties (or such indemnifying parties have assumed the defense of such action), and such
indemnified party or parties shall have reasonably concluded, after consultation with counsel, that
there may be defenses available to it or them that are different from or additional to those
available to one or all of the indemnifying parties (in which case the indemnifying parties shall
not have the right to direct the defense of such action on behalf of the indemnified party or
parties), in any of which events such reasonable fees and expenses of counsel shall be borne by the
indemnifying parties. In no event shall the indemnifying party be liable for the reasonable fees
and expenses of more than one counsel (together with appropriate local counsel) at any time for all
indemnified parties in connection with any one action or separate but substantially similar or
related actions arising in the same jurisdiction out of the same general allegations or
circumstances. Any such separate firm for the Participants shall be designated in writing by
Participants who sold a majority in interest of Registrable Notes sold by all such Participants and
shall be reasonably acceptable to the Company and any such separate firm for the Issuers, their
Affiliates, officers, directors, representatives, employees and agents and such control Person of
such Issuers shall be designated in writing by such Issuers and shall be reasonably acceptable to
the Holders. An indemnifying party shall not be liable for any settlement of any claim or action
effected without its written consent, which consent may not be unreasonably withheld.
Notwithstanding the foregoing sentence, if at any time an indemnified party shall have requested an
indemnifying party to reimburse the indemnified party for fees and expenses of counsel as
contemplated by paragraph (a) or (b) of this Section 8, then the indemnifying party agrees that it
shall be liable for any settlement of any proceeding effected without its written consent if (i)
such settlement is entered into more than 45 days after receipt by such indemnifying party of the
aforesaid request, (ii) such indemnifying party shall not have reimbursed the indemnified party in
accordance with such request prior to the date of such settlement and (iii) such indemnified party
shall have given the indemnifying party at least 45 days’ prior notice of its intention to settle.
No indemnifying party shall, without the prior written consent of the indemnified party, effect any
settlement of any pending or threatened proceeding in respect of which any indemnified party is or
could have been a party and indemnity could have been sought hereunder by such indemnified party,
unless such settlement (x) includes an unconditional release of such indemnified party from all
liability on claims that are the subject matter of such proceeding and (y) does not include a
statement as to or an admission of fault, culpability or a failure to act by or on behalf of any
indemnified party.

          (d) In order to provide for contribution in circumstances in which the indemnification
provided for in this Section 8 is for any reason held to be unavailable from the indemnifying party
for any Losses referred to therein, or is insufficient to hold harmless a party indemnified under
this Section 8 for any Losses referred to therein, each indemnifying party shall contribute to the
amount paid or payable by such indemnified party as a result of such aggregate Losses (i) in such
proportion as is appropriate to reflect the relative benefits received by each indemnifying party,

22

 

on the one hand, and each indemnified party, on the other hand, from the sale of the Notes to
the Initial Purchasers or the resale of the Registrable Notes by such Holder, as applicable, or
(ii) if such allocation is not permitted by applicable law, in such proportion as is appropriate to
reflect not only the relative benefits referred to in clause (i) above but also the relative fault
of each indemnified party, on the one hand, and each indemnifying party, on the other hand, in
connection with the statements or omissions that resulted in such Losses, as well as any other
relevant equitable considerations. The relative benefits received by the Issuers, on the one hand,
and each Participant, on the other hand, shall be deemed to be in the same proportion as (x) the
total proceeds from the sale of the Notes to the Initial Purchasers (net of discounts and
commissions but before deducting expenses) received by the Issuers are to (y) the total net profit
received by such Participant in connection with the sale of the Registrable Notes. The relative
fault of the parties shall be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged omission to state a material
fact relates to information supplied by the Issuers or such Participant and the parties’ relative
intent, knowledge, access to information and opportunity to correct or prevent such statement or
omission or alleged statement or omission.

          (e) The parties agree that it would not be just and equitable if contribution pursuant to this
Section 8 were determined by pro rata allocation or by any other method of allocation that does not
take into account the equitable considerations referred to above. Notwithstanding the provisions
of this Section 8, (i) in no case shall any Participant be required to contribute any amount in
excess of the amount by which the net profit received by such Participant in connection with the
sale of the Registrable Notes exceeds the amount of any damages that such Participant has otherwise
been required to pay by reason of any untrue or alleged untrue statement or omission or alleged
omission and (ii) no person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty
of such fraudulent misrepresentation. Any party entitled to contribution will, promptly after
receipt of notice of commencement of any action against such party in respect of which a claim for
contribution may be made against another party or parties under this Section 8, notify such party
or parties from whom contribution may be sought, but the omission to so notify such party or
parties shall not relieve the party or parties from whom contribution may be sought from any
obligation it or they may have under this Section 8 or otherwise, except to the extent that it has
been prejudiced in any material respect by such failure; provided, however, that no additional
notice shall be required with respect to any action for which notice has been given under this
Section 8 for purposes of indemnification. Anything in this section to the contrary
notwithstanding, no party shall be liable for contribution with respect to any action or claim
settled without its written consent, provided, however, that such written consent was not
unreasonably withheld.

     Section 9. Rules 144 and 144A

          The Issuers covenant that they will file the reports required, if any, to be filed by them
under the Securities Act and the Exchange Act and the rules and regulations adopted by the
Commission thereunder in a timely manner in accordance with the requirements of the Securities Act
and the Exchange Act and, if at any time the Issuers are not required to file such reports, they
will, upon the request of any Holder or beneficial owner of Registrable Notes, make available such
information necessary to permit sales pursuant to Rule 144A under the Securities Act. The Issuers
further covenant that for so long as any Registrable Notes remain outstanding they will take such
further action as any Holder of Registrable Notes may reasonably request from time to time to
enable such Holder to sell Registrable Notes without registration under the Securities Act within
the limitation of the exemptions provided by (a) Rule 144 and Rule 144A under the Securities Act,
as such Rules may be amended from time to time, or (b) any similar rule or regulation hereafter
adopted by the Commission.

23

 

     Section 10. Underwritten Registrations

          If any of the Registrable Notes covered by any Shelf Registration are to be sold in an
underwritten offering, the investment banker or investment bankers and manager or managers that
will manage the offering will be selected by the Holders of a majority in aggregate principal
amount of such Registrable Notes included in such offering and shall be reasonably acceptable to
the Company.

          No Holder of Registrable Notes may participate in any underwritten registration hereunder if
such Holder does not (a) agree to sell such Holder’s Registrable Notes on the basis provided in any
underwriting arrangements approved by the Persons entitled hereunder to approve such arrangements
and (b) complete and execute all questionnaires, powers of attorney, indemnities, underwriting
agreements and other documents required under the terms of such underwriting arrangements.

     Section 11. Miscellaneous

          (a) No Inconsistent Agreements. The Issuers have not, as of the date hereof, and
shall not, after the date of this Agreement, enter into any agreement with respect to any of their
securities that is inconsistent with the rights granted to the Holders of Registrable Notes in this
Agreement or otherwise conflicts with the provisions hereof. The rights granted to the Holders
hereunder do not conflict with and are not inconsistent with, in any material respect, the rights
granted to the holders of any of the Issuers’ other issued and outstanding securities under any
such agreements. The Issuers have not entered and will not enter into any agreement with respect
to any of their securities which will grant to any Person piggy-back registration rights with
respect to any Registration Statement.

          (b) Adjustments Affecting Registrable Notes. The Issuers shall not, directly or
indirectly, take any action with respect to the Registrable Notes as a class that would adversely
affect the ability of the Holders of Registrable Notes to include such Registrable Notes in a
registration undertaken pursuant to this Agreement.

          (c) Amendments and Waivers. The provisions of this Agreement may not be amended,
modified or supplemented, and waivers or consents to departures from the provisions hereof may not
be given except pursuant to a written agreement duly signed and delivered by (I) the Company (on
behalf of all Issuers) and (II)(A) the Holders of not less than a majority in aggregate principal
amount of the then outstanding Registrable Notes and (B) in circumstances that would adversely
affect the Participating Broker-Dealers, the Participating Broker-Dealers holding not less than a
majority in aggregate principal amount of the Exchange Notes held by all Participating
Broker-Dealers; provided, however, that Section 8 and this Section 11(c) may not be amended,
modified or supplemented except pursuant to a written agreement duly signed and delivered by the
Issuers and each Holder and each Participating Broker-Dealer (including any Person who was a Holder
or Participating Broker-Dealer of Registrable Notes or Exchange Notes, as the case may be, disposed
of pursuant to any Registration Statement) affected by any such amendment, modification, waiver or
supplement. Notwithstanding the foregoing, a waiver or consent to depart from the provisions
hereof with respect to a matter that relates exclusively to the rights of Holders of Registrable
Notes whose securities are being sold pursuant to a Registration Statement and that does not
directly or indirectly affect, impair, limit or compromise the rights of other Holders of
Registrable Notes may be given by Holders of at least a majority in aggregate principal amount of
the Registrable Notes being sold pursuant to such Registration Statement.

          (d) Notices. All notices and other communications (including, without limitation, any
notices or other communications to the Trustee) provided for or permitted hereunder shall be made
in writing by hand-delivery, registered first-class mail, next-day air courier or telecopier:

24

 

     (i) if to a Holder of the Registrable Notes or any Participating Broker-Dealer, at the
most current address of such Holder or Participating Broker-Dealer, as the case may be, set
forth on the records of the registrar under the Indenture.

     (ii) if to any Issuer, to:

c/o Basic Energy Services, Inc.

500 W. Illinois, Suite 100

Midland, TX 79701

Fax: (432) 620-5501

Attention: Alan Krenek, Senior Vice President, Chief Financial Officer,

Treasurer, and Secretary

with a copy to:

	 
	Andrews Kurth LLP

600 Travis, Suite 4200

Houston, TX 77002

Fax: (713) 238-7126

Attention: David C. Buck, Esq.

     (iii) if to the Initial Purchasers, at the address as follows:

c/o Merrill Lynch, Pierce, Fenner & Smith Incorporated

One Bryant Park

New York, New York 10036

Fax: (646) 855-3073

Attention: Syndicate Department

          All such notices and communications shall be deemed to have been duly given: when delivered
by hand, if personally delivered; five Business Days after being deposited in the mail, postage
prepaid, if mailed; when receipt is acknowledged by the recipient’s telecopier machine, if
telecopied; and on the next Business Day, if timely delivered to an air courier guaranteeing
overnight delivery.

          Copies of all such notices, demands or other communications shall be concurrently delivered by
the Person giving the same to the Trustee at the address and in the manner specified in such
Indenture.

          (e) Guarantors. So long as any Registrable Notes remain outstanding, the Issuers
shall cause each Person that becomes a guarantor of the Notes under the Indenture to execute and
deliver a counterpart to this Agreement which subjects such Person to the provisions of this
Agreement as a Guarantor. Each of the Guarantors agrees to join the Issuers in all of their
undertakings hereunder to effect the Exchange Offer for the Exchange Notes and the filing of any
Shelf Registration required hereunder.

          (f) Successors and Assigns. This Agreement shall inure to the benefit of and be
binding upon the successors and assigns of each of the parties hereto, the Holders and the
Participating Broker-Dealers; provided, however, that this Agreement shall not inure to the benefit
of or be binding upon a successor or assign of a Holder unless and to the extent such successor or
assign holds Registrable Notes.

25

 

          (g) Counterparts. This Agreement may be executed in any number of counterparts and by
the parties hereto in separate counterparts, each of which when so executed shall be deemed to be
an original and all of which taken together shall constitute one and the same agreement.

          (h) Headings. The headings in this Agreement are for convenience of reference only
and shall not limit or otherwise affect the meaning hereof.

          (i) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK.

          (j) Severability. If any term, provision, covenant or restriction of this Agreement
is held by a court of competent jurisdiction to be invalid, illegal, void or unenforceable, the
remainder of the terms, provisions, covenants and restrictions set forth herein shall remain in
full force and effect and shall in no way be affected, impaired or invalidated, and the parties
hereto shall use their best efforts to find and employ an alternative means to achieve the same or
substantially the same result as that contemplated by such term, provision, covenant or
restriction. It is hereby stipulated and declared to be the intention of the parties that they
would have executed the remaining terms, provisions, covenants and restrictions without including
any of such that may be hereafter declared invalid, illegal, void or unenforceable.

          (k) Securities Held by the Issuers or Their Affiliates. Whenever the consent or
approval of Holders of a specified percentage of Registrable Notes is required hereunder,
Registrable Notes held by the Issuers or any of their affiliates (as such term is defined in Rule
405 under the Securities Act) shall not be counted in determining whether such consent or approval
was given by the Holders of such required percentage.

          (l) Third-Party Beneficiaries. Holders and beneficial owners of Registrable Notes and
Participating Broker-Dealers are intended third-party beneficiaries of this Agreement, and this
Agreement may be enforced by such Persons. No other Person is intended to be, or shall be
construed as, a third-party beneficiary of this Agreement.

          (m) Entire Agreement. This Agreement, together with the Purchase Agreement and the
Indenture, is intended by the parties as a final and exclusive statement of the agreement and
understanding of the parties hereto in respect of the subject matter contained herein and therein
and any and all prior oral or written agreements, representations, or warranties, contracts,
understandings, correspondence, conversations and memoranda between the Holders on the one hand and
the Issuers on the other, or between or among any agents, representatives, parents, subsidiaries,
Affiliates, predecessors in interest or successors in interest with respect to the subject matter
hereof and thereof are merged herein and replaced hereby.

[Signature pages follow]

26

 

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

	 	 	 	 	 
	 	BASIC ENERGY SERVICES, INC.

 	 
	 	By:  	/s/ Kenneth V. Huseman
 	 
	 	Name:  	Kenneth V. Huseman 	 
	 	Title:  	President and Chief Executive Officer 	 
	 
	 	BASIC ENERGY SERVICES GP, LLC, as a Guarantor

 	 
	 	By:  	/s/ Kenneth V. Huseman
 	 
	 	Name:  	Kenneth V. Huseman 	 
	 	Title:  	President 	 
	 
	 	BASIC ENERGY SERVICES LP, LLC, as a Guarantor

 	 
	 	By:  	/s/ Jerry Tufly
 	 
	 	Name:  	Jerry Tufly 	 
	 	Title:  	President 	 
	 
	 	BASIC ENERGY SERVICES, L.P., as a Guarantor

By:            BASIC ENERGY SERVICES GP, LLC

                 its General Partner

 	 
	 	By:  	/s/ Kenneth V. Huseman
 	 
	 	Name:  	Kenneth V. Huseman 	 
	 	Title:  	President 	 
	 
	 	FIRST ENERGY SERVICES COMPANY, as a Guarantor

 	 
	 	By:  	/s/ Kenneth V. Huseman
 	 
	 	Name:  	Kenneth V. Huseman 	 
	 	Title:  	President 	 
	 

Signature Page to Registration Rights Agreement - 1

 

 

	 	 	 	 	 
	 	BASIC ESA, INC., as a Guarantor

 	 
	 	By:  	/s/ Kenneth V. Huseman
 	 
	 	Name:  	Kenneth V. Huseman 	 
	 	Title:  	President 	 
	 
	 	BASIC MARINE SERVICES, INC., as a Guarantor

 	 
	 	By:  	/s/ Kenneth V. Huseman
 	 
	 	Name:  	Kenneth V. Huseman 	 
	 	Title:  	President 	 
	 
	 	CHAPARRAL SERVICE, INC., as a Guarantor

 	 
	 	By:  	/s/ Kenneth V. Huseman
 	 
	 	Name:  	Kenneth V. Huseman 	 
	 	Title:  	President 	 
	 
	 	HENNESSEY RENTAL TOOLS, INC., as a Guarantor

 	 
	 	By:  	/s/ Kenneth V. Huseman
 	 
	 	Name:  	Kenneth V. Huseman 	 
	 	Title:  	President 	 
	 
	 	OILWELL FRACTURING SERVICES, INC.,

as a Guarantor

 	 
	 	By:  	/s/ Kenneth V. Huseman
 	 
	 	Name:  	Kenneth V. Huseman 	 
	 	Title:  	President 	 
	 
	 	WILDHORSE SERVICES, INC., as a Guarantor

 	 
	 	By:  	/s/ Kenneth V. Huseman
 	 
	 	Name:  	Kenneth V. Huseman 	 
	 	Title:  	President 	 
	 

Signature Page to Registration Rights Agreement - 2

 

 

	 	 	 	 	 
	 	LEBUS OIL FIELD SERVICE CO., as a Guarantor

 	 
	 	By:  	/s/ Kenneth V. Huseman
 	 
	 	Name:  	Kenneth V. Huseman 	 
	 	Title:  	President 	 
	 
	 	GLOBE WELL SERVICE, INC., as a Guarantor

 	 
	 	By:  	/s/ Kenneth V. Huseman
 	 
	 	Name:  	Kenneth V. Huseman 	 
	 	Title:  	President 	 
	 
	 	SCH DISPOSAL, L.L.C., as a Guarantor

 	 
	 	By:  	/s/ Kenneth V. Huseman
 	 
	 	Name:  	Kenneth V. Huseman 	 
	 	Title:  	President 	 
	 
	 	JS ACQUISITION LLC, as a Guarantor

 	 
	 	By:  	/s/ Kenneth V. Huseman
 	 
	 	Name:  	Kenneth V. Huseman 	 
	 	Title:  	President 	 
	 
	 	JETSTAR HOLDINGS, INC., as a Guarantor

 	 
	 	By:  	/s/ Kenneth V. Huseman
 	 
	 	Name:  	Kenneth V. Huseman 	 
	 	Title:  	President 	 
	 
	 	ACID SERVICES, LLC, as a Guarantor

 	 
	 	By:  	/s/ Kenneth V. Huseman
 	 
	 	Name:  	Kenneth V. Huseman 	 
	 	Title:  	President 	 
	 

Signature Page to Registration Rights Agreement - 3

 

 

	 	 	 	 	 
	 	JETSTAR ENERGY SERVICES, INC.,

as a Guarantor

 	 
	 	By:  	/s/ Kenneth V. Huseman
 	 
	 	Name:  	Kenneth V. Huseman 	 
	 	Title:  	President 	 
	 
	 	SLEDGE DRILLING CORP., as a Guarantor

 	 
	 	By:  	        /s/ Kenneth V. Huseman
 	 
	 	Name:  	      Kenneth V. Huseman 	 
	 	Title:  	President 	 
	 
	 	PERMIAN PLAZA, LLC, as a Guarantor

 	 
	 	By:  	      /s/ Kenneth V. Huseman
 	 
	 	Name:  	Kenneth V. Huseman 	 
	 	Title:  	President 	 
	 
	 	XTERRA FISHING & RENTAL TOOLS CO., as a Guarantor

 	 
	 	By:  	        /s/ Kenneth V. Huseman
 	 
	 	Name:  	      Kenneth V. Huseman 	 
	 	Title:  	President 	 
	 
	 	TAYLOR INDUSTRIES, LLC, as a Guarantor

 	 
	 	By:  	/s/ Kenneth V. Huseman
 	 
	 	Name:  	Kenneth V. Huseman 	 
	 	Title:  	Chief Executive Officer 	 
	 

Signature Page to Registration Rights Agreement - 4

 

 

	 	 	 	 	 
	 	PLATINUM PRESSURE SERVICES, INC.,

as a Guarantor

 	 
	 	By:  	/s/ Kenneth V. Huseman
 	 
	 	Name:  	Kenneth V. Huseman 	 
	 	Title:  	President 	 
	 
	 	ADMIRAL WELL SERVICE, INC.,

as a Guarantor

 	 
	 	By:  	/s/ Kenneth V. Huseman
 	 
	 	Name:  	Kenneth V. Huseman 	 
	 	Title:  	President 	 
	 

Signature Page to Registration Rights Agreement - 5

 

 

Confirmed and accepted as of the date first above written

MERRILL LYNCH, PIERCE, FENNER & SMITH

INCORPORATED

Acting on behalf of itself and as a Representative of the several
Initial Purchasers

	 	 	 	 	 
	 	 	 
	 	By:  	     /s/ J. Lex Maultsby
 	 
	 	Name:  	J. Lex Maultsby 	 
	 	Title:  	Managing Director 	 
	 

GOLDMAN, SACHS & CO.

Acting on behalf of itself and as a Representative of the several
Initial Purchasers

	 	 	 	 	 
	 	 	 
	 	By:  	     /s/ Goldman, Sachs & Co.
 	 
	 	Name:  	Goldman, Sachs & Co. 	 
	 	Title:  	 	 
	 

WELLS FARGO SECURITIES LLC

Acting on behalf of itself and as a Representative of the several
Initial Purchasers

	 	 	 	 	 
	 	 	 
	 	By:  	     /s/ Robert H. Johnson, Jr.
 	 
	 	Name:  	Robert H. Johnson, Jr. 	 
	 	Title:  	Managing Director 	 
	 

Signature Page to Registration Rights Agreement - 6exv4w1

Exhibit 4.1

EXECUTION COPY

 

Arch Coal, Inc.

AS ISSUER

Allegheny Land Company

Arch Coal Sales Company, Inc.

Arch Coal Terminal, Inc.

Arch Development, LLC

Arch Energy Resources, LLC

Arch Reclamation Services, Inc.

Ark Land Company

Ark Land KH, Inc.

Ark Land LT, Inc.

Ark Land WR, Inc.

Ashland Terminal, Inc.

Catenary Coal Holdings, Inc.

Coal-Mac, Inc.

Cumberland River Coal Company

Lone Mountain Processing, Inc.

Mingo Logan Coal Company

Mountain Gem Land, Inc.

Mountain Mining, Inc.

Mountaineer Land Company

Otter Creek Coal, LLC

Prairie Holdings, Inc.

Western Energy Resources, Inc.

AS GUARANTORS

AND

UMB Bank National Association,

AS TRUSTEE
 

Indenture

Dated as of June 14, 2011
 

$1,000,000,000

7.000% Senior Notes due 2019

$1,000,000,000

7.250% Senior Notes due 2021

 

 

 

CROSS-REFERENCE TABLE

	 	 	 	 	 	 
	TIA Sections	 	Indenture Sections	 
	310	(a)(1) 	 	 	7.10; 12.01	 
	 	(a)(2) 	 	 	12.01	 
	 	(a)(3) 	 	 	7.12; 12.01	 
	 	(a)(4) 	 	 	12.01	 
	 	(a)(5) 	 	 	7.10; 12.01	 
	 	(b) 	 	 	7.03; 7.10; 12.01	 
	311	(a) 	 	 	7.03; 7.11; 12.01	 
	 	(b) 	 	 	7.03; 7.11; 12.01	 
	 
	312	(a) 	 	 	2.05(a); 12.01	 
	 	(b) 	 	 	12.01; 12.03	 
	 	(c) 	 	 	12.01; 12.03	 
	313	(a) 	 	 	7.06; 12.01	 
	 	(b)(1) 	 	 	7.06; 12.01	 
	 	(b)(2) 	 	 	7.06; 12.01	 
	 	(c) 	 	 	7.05; 7.06; 12.01;	 
	 	 	 	 	12.02(b)	
	 	(d) 	 	 	7.06; 12.01	 
	314	(a)(1)-(3) 	 	 	4.16; 12.01	 
	 	(a)(4) 	 	 	12.01	 
	 	(b) 	 	 	12.01	 
	 	(c)(1) 	 	 	12.01; 12.04(a)	
	 	(c)(2) 	 	 	12.01; 12.04(b)	
	 	(d) 	 	 	12.01	 
	 	(e) 	 	 	12.01; 12.05	 
	 	(f) 	 	 	12.01	 
	315	(a) 	 	 	7.01(b); 12.01	 
	 	(b) 	 	 	7.05; 12.01	 
	 	(c) 	 	 	7.01(a); 12.01	 
	 	(d) 	 	 	7.01(c); 12.01	 
	 	(e) 	 	 	6.11; 12.01	 
	316	(a) (last sentence) 	 	 	2.09; 12.01	 
	 	(a)(1)(A) 	 	 	6.05; 12.01	 
	 	(a)(1)(B) 	 	 	6.04; 12.01	 
	 	(a)(2) 	 	 	12.01	 
	 	(b) 	 	 	6.07; 12.01	 
	 	(c) 	 	 	6.15; 12.01	 
	317	(a)(1) 	 	 	6.08; 12.01	 
	 	(a)(2) 	 	 	6.09;12.01	 
	 	(b) 	 	 	2.04; 12.01	 
	318	(a) 	 	 	12.01	 
	 	(b) 	 	 	12.01	 
	 	(c) 	 	 	12.01	 

 

			
	Note:	 	The Cross-Reference Table shall not for any purpose be deemed to be a part of this
Indenture.

 

 

TABLE OF CONTENTS

	 	 	 	 	 

	Article One
 DEFINITIONS AND INCORPORATION BY REFERENCE
	 
	SECTION 1.01. Definitions
	 	 	2	 
	SECTION 1.02. Other Definitions
	 	 	31	 
	SECTION 1.03. Incorporation by Reference of Trust Indenture Act
	 	 	32	 
	SECTION 1.04. Rules of Construction
	 	 	33	 
	
Article Two
 THE NOTES
	 
	SECTION 2.01. The Notes
	 	 	33	 
	SECTION 2.02. Execution and Authentication
	 	 	36	 
	SECTION 2.03. Registrar, Transfer Agent and Paying Agent
	 	 	36	 
	SECTION 2.04. Paying Agent to Hold Money in Trust
	 	 	37	 
	SECTION 2.05. Holder Lists
	 	 	38	 
	SECTION 2.06. Transfer and Exchange
	 	 	38	 
	SECTION 2.07. Replacement Notes
	 	 	42	 
	SECTION 2.08. Outstanding Notes
	 	 	42	 
	SECTION 2.09. Notes Held by Arch Coal
	 	 	43	 
	SECTION 2.10. Certificated Notes
	 	 	43	 
	SECTION 2.11. Cancellation
	 	 	44	 
	SECTION 2.12. Defaulted Interest
	 	 	44	 
	SECTION 2.13. Computation of Interest
	 	 	45	 
	SECTION 2.14. CUSIP, ISIN and Common Code Numbers
	 	 	45	 
	SECTION 2.15. Issuance of Additional Notes and Exchange Notes
	 	 	45	 
	
Article Three
 REDEMPTION; OFFERS TO PURCHASE
	 
	SECTION 3.01. Optional Redemption
	 	 	46	 
	SECTION 3.02. Notices to Trustee
	 	 	47	 
	SECTION 3.03. Selection of Notes to be Redeemed
	 	 	48	 
	SECTION 3.04. Notice of Redemption
	 	 	48	 
	SECTION 3.05. Effect of Notice of Redemption
	 	 	49	 
	SECTION 3.06. Deposit of Redemption Price
	 	 	49	 
	SECTION 3.07. Payment of Notes Called for Redemption
	 	 	49	 
	SECTION 3.08. Notes Redeemed in Part
	 	 	50	 
	
Article Four
 COVENANTS
	 
	SECTION 4.01. Payment of Notes
	 	 	50	 
	SECTION 4.02. Corporate Existence
	 	 	50	 
	SECTION 4.03. Maintenance of Properties
	 	 	50	 
	SECTION 4.04. Insurance
	 	 	51	 

i

 

	 	 	 	 	 

	SECTION 4.05. Statement as to Compliance
	 	 	51	 
	SECTION 4.06. Limitation on Debt
	 	 	51	 
	SECTION 4.07. Limitation on Liens
	 	 	55	 
	SECTION 4.08. Limitation on Restricted Payments
	 	 	55	 
	SECTION 4.09. Limitation on Asset Sales
	 	 	58	 
	SECTION 4.10. Limitation on Transactions with Affiliates
	 	 	61	 
	SECTION 4.11. Change of Control
	 	 	63	 
	SECTION 4.12. Guarantees by Restricted Subsidiaries
	 	 	64	 
	SECTION 4.13. Limitation on Restrictions on Distributions from Restricted Subsidiaries
	 	 	64	 
	SECTION 4.14. Designation of Restricted and Unrestricted Subsidiaries
	 	 	67	 
	SECTION 4.15. Payment of Taxes and Other Claims
	 	 	68	 
	SECTION 4.16. Reports to Holders
	 	 	68	 
	SECTION 4.17. Waiver of Stay, Extension or Usury Laws
	 	 	69	 
	SECTION 4.18. Further Instruments and Acts
	 	 	69	 
	SECTION 4.19. Covenant Termination
	 	 	69	 
	
Article Five
 CONSOLIDATION, MERGER OR SALE OF ASSETS
	 
	SECTION 5.01. Consolidation, Merger or Sale of Assets
	 	 	69	 
	SECTION 5.02. Successor Substituted
	 	 	72	 
	
Article Six
 DEFAULTS AND REMEDIES
	 
	SECTION 6.01. Events of Default
	 	 	72	 
	SECTION 6.02. Acceleration
	 	 	74	 
	SECTION 6.03. Other Remedies
	 	 	76	 
	SECTION 6.04. Waiver of Past Defaults
	 	 	76	 
	SECTION 6.05. Control by Majority
	 	 	77	 
	SECTION 6.06. Limitation on Suits
	 	 	77	 
	SECTION 6.07. Unconditional Right of Holders to Receive Payment
	 	 	78	 
	SECTION 6.08. Collection Suit by Trustee
	 	 	78	 
	SECTION 6.09. Trustee May File Proofs of Claim
	 	 	78	 
	SECTION 6.10. Application of Money Collected
	 	 	79	 
	SECTION 6.11. Undertaking for Costs
	 	 	79	 
	SECTION 6.12. Restoration of Rights and Remedies
	 	 	79	 
	SECTION 6.13. Rights and Remedies Cumulative
	 	 	79	 
	SECTION 6.14. Delay or Omission Not Waiver
	 	 	80	 
	SECTION 6.15. Record Date
	 	 	80	 
	SECTION 6.16. Waiver of Stay or Extension Laws
	 	 	80	 
	
Article Seven
 TRUSTEE
	 
	SECTION 7.01. Duties of Trustee
	 	 	80	 
	SECTION 7.02. Certain Rights of Trustee
	 	 	81	 

ii

 

	 	 	 	 	 

	SECTION 7.03. Individual Rights of Trustee
	 	 	83	 
	SECTION 7.04. Trustee’s Disclaimer
	 	 	83	 
	SECTION 7.05. Notice of Defaults
	 	 	83	 
	SECTION 7.06. Reports by Trustee to Holders
	 	 	84	 
	SECTION 7.07. Compensation and Indemnity
	 	 	84	 
	SECTION 7.08. Replacement of Trustee
	 	 	85	 
	SECTION 7.09. Successor Trustee by Merger
	 	 	86	 
	SECTION 7.10. Eligibility; Disqualification
	 	 	86	 
	SECTION 7.11. Preferential Collection of Claims Against Arch Coal
	 	 	87	 
	SECTION 7.12. Appointment of Co-Trustee
	 	 	87	 
	
Article Eight
 DEFEASANCE; SATISFACTION AND DISCHARGE
	 
	SECTION 8.01. Arch Coal’s Option to Effect Defeasance or Covenant Defeasance
	 	 	88	 
	SECTION 8.02. Defeasance and Discharge
	 	 	88	 
	SECTION 8.03. Covenant Defeasance
	 	 	89	 
	SECTION 8.04. Conditions to Defeasance
	 	 	89	 
	SECTION 8.05. Satisfaction and Discharge of Indenture
	 	 	90	 
	SECTION 8.06. Survival of Certain Obligations
	 	 	91	 
	SECTION 8.07. Acknowledgment of Discharge by Trustee
	 	 	91	 
	SECTION 8.08. Application of Trust Money
	 	 	91	 
	SECTION 8.09. Repayment to Arch Coal
	 	 	91	 
	SECTION 8.10. Indemnity for Government Securities
	 	 	92	 
	SECTION 8.11. Reinstatement
	 	 	92	 
	
Article Nine
 AMENDMENTS AND WAIVERS
	 
	SECTION 9.01. Without Consent of Holders
	 	 	92	 
	SECTION 9.02. With Consent of Holders
	 	 	93	 
	SECTION 9.03. Compliance with Trust Indenture Act
	 	 	95	 
	SECTION 9.04. Effect of Supplemental Indentures; Revocation and Effect of Consents
	 	 	95	 
	SECTION 9.05. Notation on or Exchange of Notes
	 	 	95	 
	SECTION 9.06. Payment for Consent
	 	 	95	 
	SECTION 9.07. Notice of Amendment or Waiver
	 	 	96	 
	SECTION 9.08. Trustee to Sign Supplemental Indentures
	 	 	96	 
	
Article Ten
 GUARANTEE
	 
	SECTION 10.01. Note Guarantee
	 	 	96	 
	SECTION 10.02. Subrogation
	 	 	97	 
	SECTION 10.03. Release of Guarantors
	 	 	97	 
	SECTION 10.04. Additional Guarantors
	 	 	98	 
	SECTION 10.05. Limitation of Guarantee
	 	 	98	 
	SECTION 10.06. Notation Not Required
	 	 	98	 

iii

 

	 	 	 	 	 

	SECTION 10.07. Successors and Assigns
	 	 	98	 
	SECTION 10.08. No Waiver
	 	 	99	 
	SECTION 10.09. Modification
	 	 	99	 
	
Article Eleven
 HOLDERS’ MEETINGS
	 
	SECTION 11.01. Purposes of Meetings
	 	 	99	 
	SECTION 11.02. Place of Meetings
	 	 	99	 
	SECTION 11.03. Call and Notice of Meetings
	 	 	99	 
	SECTION 11.04. Voting at Meetings
	 	 	100	 
	SECTION 11.05. Voting Rights, Conduct and Adjournment
	 	 	100	 
	SECTION 11.06. Revocation of Consent by Holders at Meetings
	 	 	101	 
	
Article Twelve
 MISCELLANEOUS
	 
	SECTION 12.01. Trust Indenture Act Controls
	 	 	101	 
	SECTION 12.02. Notices
	 	 	101	 
	SECTION 12.03. Communication by Holders with Other Holders
	 	 	102	 
	SECTION 12.04. Certificate and Opinion as to Conditions Precedent
	 	 	103	 
	SECTION 12.05. Statements Required in Certificate or Opinion
	 	 	103	 
	SECTION 12.06. Rules by Trustee, Paying Agent and Registrar
	 	 	103	 
	SECTION 12.07. Legal Holidays
	 	 	103	 
	SECTION 12.08. Governing Law
	 	 	104	 
	SECTION 12.09. No Recourse Against Others
	 	 	104	 
	SECTION 12.10. Successors
	 	 	104	 
	SECTION 12.11. Electronic Means
	 	 	104	 
	SECTION 12.12. Multiple Originals
	 	 	104	 
	SECTION 12.13. Table of Contents, Cross-Reference Sheet and Headings
	 	 	104	 
	SECTION 12.14. Severability
	 	 	104	 

	 	 	 	 	 
	Exhibits	 	 	 	 
	Exhibit A-1

	 	—
	 	Form of 2019 Note
	Exhibit A-2

	 	—
	 	Form of 2021 Note
	Exhibit B-1

	 	—
	 	Form of 2019 Note Transfer Certificate for Transfer from Restricted Global Note to Regulation S Global Note
	Exhibit B-2

	 	—
	 	Form of Transfer 2021 Note Certificate for Transfer from Restricted Global Note to Regulation S Global Note
	Exhibit C-1

	 	—
	 	Form of 2019 Note Transfer Certificate for Transfer from Regulation S Global Note to Restricted Global Note
	Exhibit C-2

	 	—
	 	Form of 2021 Note Transfer Certificate for Transfer from Regulation S Global Note to Restricted Global Note

iv

 

     INDENTURE dated as of June 14, 2011 among Arch Coal, Inc., a Delaware corporation (“Arch
Coal” or the “Company”), Allegheny Land Company, a Delaware corporation, Arch Coal Sales Company,
Inc., a Delaware corporation, Arch Coal Terminal, Inc., a Delaware corporation, Arch Development,
LLC, a Delaware limited liability company, Arch Energy Resources, LLC, a Delaware limited liability
company, Arch Reclamation Services, Inc., a Delaware corporation, Ark Land Company, a Delaware
corporation, Ark Land KH, Inc., a Delaware corporation, Ark Land LT, Inc., a Delaware corporation,
Ark Land WR, Inc., a Delaware corporation, Ashland Terminal, Inc., a Delaware corporation, Catenary
Coal Holdings, Inc., a Delaware corporation, Coal-Mac, Inc., a Kentucky corporation, Cumberland
River Coal Company, a Delaware corporation, Lone Mountain Processing, Inc., a Delaware corporation,
Mingo Logan Coal Company, a Delaware corporation, Mountain Gem Land, Inc., a West Virginia
corporation, Mountain Mining, Inc., a Delaware corporation, Mountaineer Land Company, a Delaware
corporation, Otter Creek Coal, LLC, a Delaware limited liability company, Prairie Holdings, Inc., a
Delaware corporation, Western Energy Resources, Inc., a Delaware corporation (collectively the
“Guarantors”) and UMB Bank National Association, a national banking association organized
and existing under the laws of the United States, as trustee (the “Trustee”).

RECITALS OF ARCH COAL AND THE GUARANTORS

     Arch Coal has duly authorized the execution and delivery of this Indenture to provide for the
issuance of (A)(i) a series of 7.000% Senior Notes due 2019 issued on the date hereof (the
“Original 2019 Notes”), (ii) any additional 2019 Notes (“2019 Additional Notes”)
that may be issued on any other Issue Date (as defined herein) and (iii) any 7.000% Senior Notes
due 2019 that may be issued pursuant to the Registration Rights Agreement (as defined herein) in
exchange for any Original 2019 Notes or 2019 Additional Notes (the “2019 Exchange Notes”)
and (B)(i) a series of 7.250% Senior Notes due 2021 issued on the date hereof (the “Original
2021 Notes” and together with the Original 2019 Notes, the “Original Notes”), (ii) any
additional 2021 Notes (“2021 Additional Notes” and together with the 2019 Additional Notes,
the “Additional Notes”) that may be issued on any other Issue Date and (iii) any 7.250%
Senior Notes due 2019 that may be issued pursuant to the Registration Rights Agreement in exchange
for any Original 2021 Notes or 2021 Additional Notes (the “2021 Exchange Notes” and
together with the 2019 Exchange Notes, the “Exchange Notes,” and together with the Original
2019 Notes, any 2019 Additional Notes, 2019 Exchange Notes, Original 2021 Notes and any 2021
Additional Notes, the “Notes”). The Original 2019 Notes (together with any 2019 Additional
Notes and 2019 Exchange Notes, the “2019 Notes”) and the Original 2021 Notes (together with
any 2021 Additional Notes and 2021 Exchange Notes, the “2021 Notes”) are each referred to
herein as a “series.” Each Guarantor has duly authorized the execution and delivery of this
Indenture to provide for the issuance of its Guarantee of the Notes. Each of Arch Coal and the
Guarantors has received good and valuable consideration for the execution and delivery of this
Indenture and the issuance of the Guarantees, as the case may be. Each Guarantor will derive
substantial direct and indirect benefits from the issuance of its Guarantee of the Notes. All
necessary acts and things have been done to make (i) the Notes, when duly issued and executed by
Arch Coal and authenticated and delivered hereunder, the legal, valid and binding obligations of
Arch Coal, (ii) the Guarantees evidenced by this Indenture, when executed by each Guarantor and
delivered hereunder, the legal, valid and binding obligation of each Guarantor and (iii) this
Indenture a legal, valid and binding agreement of Arch Coal and each of the Guarantors in
accordance with the terms of this Indenture.

1

 

NOW, THEREFORE, THIS INDENTURE WITNESSETH:

     For and in consideration of the premises and the purchase of the Notes by the Holders thereof,
it is mutually covenanted and agreed, for the equal and proportionate benefit of all Holders, as
follows:

ARTICLE ONE

DEFINITIONS AND INCORPORATION BY REFERENCE

	 	 	 	SECTION 1.01. Definitions.

     “2019 Notes Applicable Premium” means with respect to any 2019 Note on any Redemption Date,
the greater of:

     (a) 1.0% of the principal amount of such 2019 Note on such Redemption Date; and

     (b) the excess, if any, of (i) the present value at such Redemption Date of (A) the
redemption price of such 2019 Note at June 15, 2015 (each such redemption price being set
forth in the applicable table in Section 3.01(a) of this Indenture), plus (B) all required
interest payments due on such 2019 Note through June 15, 2015 (excluding accrued but unpaid
interest to the Redemption Date), computed using a discount rate equal to the 2019 Notes
Treasury Rate as of such Redemption Date plus 50 basis points; over (ii) the principal
amount of such 2019 Note.

     “2021 Notes Applicable Premium” means with respect to any 2021 Note on any Redemption Date,
the greater of:

     (a) 1.0% of the principal amount of such 2021 Note on such Redemption Date; and

     (b) the excess, if any, of (i) the present value at such Redemption Date of (A) the
redemption price of such 2021 Note at June 15, 2016 (each such redemption price being set
forth in the applicable table in Section 3.01(b) of this Indenture), plus (B) all required
interest payments due on such 2021 Note through June 15, 2016 (excluding accrued but unpaid
interest to the Redemption Date), computed using a discount rate equal to the 2021 Notes
Treasury Rate as of such Redemption Date plus 50 basis points; over (ii) the principal
amount of such 2021 Note.

     “2019 Notes Treasury Rate” means, as of any Redemption Date for 2019 Notes, the yield to
maturity as of such Redemption Date of United States Treasury securities with a constant maturity
(as compiled and published in the most recent Federal Reserve Statistical Release H.15 (519) that
has become publicly available at least two Business Days prior to the Redemption Date (or, if such
Statistical Release is no longer published, any publicly available source of similar market data))
most nearly equal to the period from the Redemption Date to June 15, 2015; provided, however, that
if the period from the Redemption Date to June 15, 2015 is less than one year, the weekly average
yield on actually traded United States Treasury securities adjusted to a constant maturity of one
year will be used.

2

 

     “2021 Notes Treasury Rate” means, as of any Redemption Date for 2021 Notes, the yield to
maturity as of such Redemption Date of United States Treasury securities with a constant maturity
(as compiled and published in the most recent Federal Reserve Statistical Release H.15 (519) that
has become publicly available at least two Business Days prior to the Redemption Date (or, if such
Statistical Release is no longer published, any publicly available source of similar market data))
most nearly equal to the period from the Redemption Date to June 15, 2016; provided, however, that
if the period from the Redemption Date to June 15, 2016 is less than one year, the weekly average
yield on actually traded United States Treasury securities adjusted to a constant maturity of one
year will be used.

     “Additional Assets” means:

     (a) any Property (other than cash, Cash Equivalents and securities) to be owned by Arch
Coal or any of its Restricted Subsidiaries and used in a Permitted Business; or

     (b) Capital Stock of a Person that becomes a Restricted Subsidiary as a result of the
acquisition of such Capital Stock by Arch Coal or another Restricted Subsidiary from any
Person other than Arch Coal or an Affiliate of Arch Coal; provided, however, that, in the
case of this clause (b), such Restricted Subsidiary is primarily engaged in a Permitted
Business.

     “Affiliate” of any specified Person means:

     (a) any other Person directly or indirectly controlling or controlled by or under
direct or indirect common control with such specified Person; or

     (b) any other Person who is a director or officer of:

     (1) such specified Person;

     (2) any Subsidiary of such specified Person; or

     (3) any Person described in clause (a) above.

For the purposes of this definition, “control,” when used with respect to any Person, means the
power to direct the management and policies of such Person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise; and the terms “controlling” and
“controlled” have meanings correlative to the foregoing.

     “Arch Coal” has the meaning ascribed thereto in the preamble.

     “Amended and Restated Credit Agreement” means that certain Amended and Restated Revolving
Credit Agreement, to be entered into in connection with the Merger, by and among Arch Coal, PNC
Bank, National Association, as Administrative Agent and the other lenders named therein providing
for up to $2.0 billion of revolving credit borrowings, including any related notes, Guarantees,
collateral documents, instruments and agreements executed in connection therewith, and in each case
as amended, restated, modified, renewed, refunded, replaced or refinanced from time to time,
regardless of whether such amendment, restatement,

3

 

modification, renewal, refunding, replacement or refinancing is with the same financial
institutions or otherwise.

     “Arch Coal 83/4% Senior Notes Indenture” means the Indenture dated as of July 31, 2009 by and
among Arch Coal, the subsidiary guarantors named therein and U.S. Bank National Association, as
trustee, pursuant to which Arch Coal’s 83/4% Senior Notes were issued, as amended or supplemented to
the Issue Date.

     “Arch Coal 71/4% Senior Notes Indenture” means the Indenture dated as of August 9, 2010, as
supplemented by a first supplemental indenture dated as of August 9, 2010 by and among Arch Coal,
the subsidiary guarantors named therein and U.S. Bank National Association, as trustee, pursuant to
which Arch Coal’s 71/4 Senior Notes were issued, as amended or supplemented to the Issue Date.

     “Arch Coal Promissory Notes” means all existing and future unsubordinated demand promissory
notes issued by Arch Coal to Arch Western as consideration for loans and advances made by Arch
Western to Arch Coal or any of its Affiliates (other than Arch Western or a Restricted Subsidiary
of Arch Western) required to be issued and pledged for the benefit of the holders of the Arch
Western Notes and any Permitted Refinancing Debt Incurred in respect thereof.

     “Arch Coal Senior Notes” means (i) the $600.0 million aggregate principal amount of 83/4% Senior
Notes due 2016 issued by Arch Coal and (ii) the $500.0 million aggregate principal amount of 7 1/4%
Senior Notes due 2020 issued by Arch Coal.

     “Arch Coal Senior Notes Indentures” means the Arch Coal 7 1/4% Senior Notes Indenture and the
Arch Coal 83/4% Senior Notes Indenture.

     “Arch Western” means Arch Western Resources, LLC and any successor thereto.

     “Arch Western Notes” means the 6 3/4% Senior Notes due 2013 issued by Arch Western Finance, LLC
issued pursuant to the Arch Western Notes Indenture originally issued in the principal aggregate
amount of $950.0 million, until such notes are repaid or otherwise repurchased by Arch Coal or its
Restricted Subsidiaries.

     “Arch Western Notes Indenture” means the Indenture dated as of June 25, 2003 by and among Arch
Western Finance, LLC, Arch Coal, Inc., Arch Western Resources, LLC, Arch of Wyoming, LLC, Mountain
Coal Company L.L.C., Thunder Basin Coal Company L.L.C., and The Bank of New York, as trustee,
pursuant to which the Arch Western Notes were issued, as amended or supplemented to the Issue Date.

     “Asset Sale” means any sale, lease, transfer, issuance or other disposition (or series of
related sales, leases, transfers, issuances or dispositions) by Arch Coal or any of its Restricted
Subsidiaries, including any disposition by means of a merger, consolidation or similar transaction
(each referred to for the purposes of this definition as a “disposition”), of

     (a) any shares of Capital Stock of a Restricted Subsidiary (other than directors’
qualifying shares); or

4

 

     (b) any other Property of Arch Coal or any of its Restricted Subsidiaries outside of
the ordinary course of business of Arch Coal or such Restricted Subsidiary,

     other than, in the case of clause (a) or (b) above,

     (1) any disposition by a Restricted Subsidiary to Arch Coal or by Arch Coal or
its Restricted Subsidiary to a Restricted Subsidiary;

     (2) any disposition that constitutes a Permitted Investment or Restricted
Payment permitted by Section 4.08 of this Indenture;

     (3) any disposition effected in compliance with Section 5.01(a) and (b) of this
Indenture; and

     (4) any disposition in a single transaction or a series of related transactions
of assets for aggregate consideration of less than $100.0 million;

     (5) a disposition of Cash Equivalents;

     (6) a disposition of accounts receivable in connection with the compromise,
settlement or collection thereof in the ordinary course of business or in bankruptcy
or similar proceedings;

     (7) a disposition of any property or equipment that has become damaged, worn
out or obsolete;

     (8) any disposition of accounts receivable and related assets or an interest
therein pursuant to a Receivables Facility;

     (9) the creation or perfection of a Lien not prohibited by this Indenture (but
not the sale or other disposition of any asset subject to such Lien);

     (10) the surrender or waiver of contract rights or the settlement, release or
surrender of contract, tort or other claims of any kind; and

     (11) the sale or other disposition (whether or not in the ordinary course of
business) of coal properties, provided at the time of such sale or other disposition
such properties do not have associated with them any proved reserves.

     “Average Life” means, as of any date of determination, with respect to any Debt or Preferred
Stock, the quotient obtained by dividing:

     (a) the sum of the product of the numbers of years (rounded to the nearest one-twelfth
of one year) from the date of determination to the dates of each successive scheduled
principal payment of such Debt or redemption or similar payment with respect to such
Preferred Stock multiplied by the amount of such payment by

     (b) the sum of all such payments.

5

 

     “Bankruptcy Law” means any law relating to bankruptcy, insolvency, receivership, winding-up,
liquidation, reorganization or relief of debtors or any amendment to, succession to or change in
any such law, including, without limitation, the bankruptcy law of Arch Coal’s jurisdiction and
title 11, United States Bankruptcy Code of 1978, as amended.

     “Board of Directors” means the board of directors of Arch Coal.

     “Business Day” means any day (other than a Saturday or Sunday) which is not a day on which
banking institutions in New York, New York are authorized or obligated by law to close for
business.

     “Capital Lease Obligations” means any obligation under a lease that is required to be
capitalized for financial reporting purposes in accordance with GAAP; and the amount of Debt
represented by such obligation shall be the capitalized amount of such obligations determined in
accordance with GAAP; and the Stated Maturity thereof shall be the date of the last payment of rent
or any other amount due under such lease prior to the first date upon which such lease may be
terminated by the lessee without payment of a penalty. For purposes of Section 4.07 of this
Indenture, a Capital Lease Obligation shall be deemed secured by a Lien on the Property being
leased.

     “Capital Stock” means, with respect to any Person, any shares or other equivalents (however
designated) of any class of corporate stock or partnership or limited liability company interests
or any other participations, rights, warrants, options or other interests in the nature of an
equity interest in such Person, including Preferred Stock, but excluding any debt security
convertible or exchangeable into such equity interest.

     “Capital Stock Sale Proceeds” means the aggregate proceeds, including cash and the Fair Market
Value of Property other than cash, received by Arch Coal from the issuance or sale (other than to a
Subsidiary of Arch Coal or an employee stock ownership plan or trust established by Arch Coal or
any such Subsidiary for the benefit of their employees) by Arch Coal of its Capital Stock (other
than Disqualified Stock) or from a contribution to its common equity capital, in each case after
the Issue Date, and net of attorneys’ fees, accountants’ fees, underwriters’ or placement agents’
fees, discounts or commissions and brokerage, consultant and other fees actually incurred in
connection with such issuance or sale or contribution, as the case may be, and net of taxes paid or
payable as a result thereof.

     “Cash Equivalents” means any of the following:

     (a) Investments in U.S. Government Obligations maturing within 365 days of the date of
acquisition thereof;

     (b) Investments in time deposit accounts, certificates of deposit and money market
deposits maturing within 365 days of the date of acquisition thereof issued by a bank or
trust company organized under the laws of the United States of America or any state thereof
having capital, surplus and undivided profits aggregating in excess of $500.0 million and
whose long-term debt is rated “A-3” or “A-” or higher according to Moody’s or S&P (or such
similar equivalent rating by at least one “nationally recognized statistical rating
organization” (as defined in Section 3(a)(62) of the Exchange Act));

6

 

     (c) repurchase obligations with a term of not more than 30 days for underlying
securities of the types described in clause (a) above entered into with:

     (1) a bank meeting the qualifications described in clause (b) above or

     (2) any primary government securities dealer reporting to the Market Reports
Division of the Federal Reserve Bank of New York;

     (d) Investments in commercial paper, maturing not more than 365 days after the date of
acquisition, issued by a corporation (other than an Affiliate of Arch Coal) organized and in
existence under the laws of the United States of America with a rating at the time as of
which any Investment therein is made of “P-2” (or higher) according to Moody’s or “A-2” (or
higher) according to S&P (or such similar equivalent rating by at least one “nationally
recognized statistical rating organization” (as defined in Section 3(a)(62) of the Exchange
Act));

     (e) direct obligations (or certificates representing an ownership interest in such
obligations) of any state of the United States of America (including any agency or
instrumentality thereof) for the payment of which the full faith and credit of such state is
pledged and which are not callable or redeemable at the issuer’s option; provided that:

     (1) the long-term debt of such state is rated “A-3” or “A-” or higher according
to Moody’s or S&P (or such similar equivalent rating by at least one “nationally
recognized statistical rating organization” (as defined in Section 3(a)(62) of the
Exchange Act)), and

     (2) such obligations mature within 365 days of the date of acquisition thereof;
and

     (f) money market funds at least 95% of the assets of which constitute Cash Equivalents
of the kinds described in clauses (a) through (e) of this definition.

“Change of Control” means the occurrence of any of the following events:

     (a) any “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the
Exchange Act or any successor provisions to either of the foregoing), including any group
acting for the purpose of acquiring, holding, voting or disposing of securities within the
meaning of Rule 13d-5(b)(1) under the Exchange Act, becomes the “beneficial owner” (as
defined in Rule 13d-3 under the Exchange Act, except that a person will be deemed to have
“beneficial ownership” of all shares that any such person has the right to acquire, whether
such right is exercisable immediately or only after the passage of time), directly or
indirectly, of 50% or more of the total voting power of the Voting Stock of Arch Coal (for
purposes of this clause (a), such person or group shall be deemed to beneficially own any
Voting Stock of a corporation held by any other corporation (the “parent
corporation”) so long as such person or group beneficially owns, directly or indirectly,
in the aggregate at least a majority of the total voting power of the Voting Stock of such
parent corporation); or

7

 

     (b) the sale, transfer, assignment, lease, conveyance or other disposition,
directly or indirectly, of all or substantially all the Property of Arch Coal and its
Restricted Subsidiaries, considered as a whole (other than a disposition of such Property as
an entirety or virtually as an entirety to a Wholly Owned Restricted Subsidiary of Arch
Coal), shall have occurred; or

     (c) the adoption of any plan of liquidation or dissolution of Arch Coal.

     “Code” means the Internal Revenue Code of 1986, as amended.

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

     “Commodity Price Protection Agreement” means, in respect of a Person, any forward contract,
commodity swap agreement, commodity option agreement or other similar agreement or arrangement.

     “Consolidated Current Liabilities” means, as of any date of determination, the aggregate
amount of liabilities of Arch Coal and its consolidated Restricted Subsidiaries which may properly
be classified as current liabilities (including taxes accrued as estimated), after eliminating:

     (a) all intercompany items between Arch Coal and any Restricted Subsidiary or between
Restricted Subsidiaries; and

     (b) all current maturities of long-term Debt.

     “Consolidated Interest Coverage Ratio” of a Person means, as of any date of determination, the
ratio of:

     (a) the aggregate amount of EBITDA of such Person for the most recent four consecutive
fiscal quarters for which internal financial statements are available to

     (b) Consolidated Interest Expense of such Person for such four fiscal quarters;

     provided, however, that:

               (1) if

	 	(A)	 	since the beginning of such
period such Person or any Restricted Subsidiary of such Person
has Incurred any Debt that remains outstanding or Repaid any
Debt or
	 
	 	(B)	 	the transaction giving rise to
the need to calculate the Consolidated Interest Coverage Ratio
is an Incurrence or Repayment of Debt,

Consolidated Interest Expense for such period shall be calculated after giving effect on a
pro forma basis to such Incurrence or Repayment as if such Debt was Incurred or Repaid

8

 

on the first day of such period, provided that, in the event of any such Repayment of Debt,
EBITDA for such period shall be calculated as if such Person or such Restricted Subsidiary
of such Person had not earned any interest income actually earned during such period in
respect of the funds used to Repay such Debt, and

               (2) if

	 	(A)	 	since the beginning of such
period such Person or any Restricted Subsidiary of such Person
shall have made any Asset Sale or an Investment (by merger or
otherwise) in any Restricted Subsidiary of such Person (or any
Person which becomes a Restricted Subsidiary of such Person) or
an acquisition of Property which constitutes all or
substantially all of an operating unit of a business;
	 
	 	(B)	 	the transaction giving rise to
the need to calculate the Consolidated Interest Coverage Ratio
is such an Asset Sale, Investment or acquisition; or
	 
	 	(C)	 	since the beginning of such
period any other Person (that subsequently became a Restricted
Subsidiary of such Person or was merged with or into such Person
or any Restricted Subsidiary of such Person since the beginning
of such period) shall have made such an Asset Sale, Investment
or acquisition,

then EBITDA for such period shall be calculated after giving pro forma effect to
such Asset Sale, Investment or acquisition as if such Asset Sale, Investment or
acquisition had occurred on the first day of such period.

     If any Debt bears a floating rate of interest and is being given pro forma effect, the
interest expense on such Debt shall be calculated as if the base interest rate in effect for such
floating rate of interest on the date of determination had been the applicable base interest rate
for the entire period (taking into account any Interest Rate Agreement applicable to such Debt if
such Interest Rate Agreement has a remaining term in excess of 12 months). In the event the
Capital Stock of any Restricted Subsidiary of such Person is sold during the period, such Person
shall be deemed, for purposes of clause (1) above, to have Repaid during such period the Debt of
such Restricted Subsidiary to the extent such Person and its continuing Restricted Subsidiaries are
no longer liable for such Debt after such sale.

     “Consolidated Interest Expense” of a Person means, for any period, the total interest expense
of such Person and its consolidated Restricted Subsidiaries, plus, to the extent not included in
such total interest expense, and to the extent Incurred by such Person or its Restricted
Subsidiaries,

     (a) interest expense attributable to Capital Lease Obligations;

9

 

     (b) amortization of debt discount and debt issuance cost, including commitment fees;

     (c) capitalized interest;

     (d) non-cash interest expense;

     (e) commissions, discounts and other fees and charges owed with respect to letters of
credit and banker’s acceptance financing;

     (f) net costs associated with Interest Rate Agreements (including amortization of
fees);

     (g) Disqualified Stock Dividends;

     (h) Preferred Stock Dividends;

     (i) interest Incurred in connection with Investments in discontinued operations;

     (j) interest accruing on any Debt of any other Person to the extent such Debt is
Guaranteed by such Person or any of its Restricted Subsidiaries; and

     (k) the cash contributions to any employee stock ownership plan or similar trust to the
extent such contributions are used by such plan or trust to pay interest or fees to any
Person (other than such Person) in connection with Debt Incurred by such plan or trust.

     “Consolidated Net Income” of a Person means, for any period, the net income (loss) of such
Person and its consolidated Restricted Subsidiaries; provided, however, that there shall not be
included in such Consolidated Net Income:

     (a) any net income (loss) of any other Person (other than such Person) if such other
Person is not a Restricted Subsidiary, except that:

     (1) subject to the exclusion contained in clause (c) below, equity of such
Person and its consolidated Restricted Subsidiaries in the net income of any such
other Person for such period shall be included in such Consolidated Net Income up to
the aggregate amount of cash distributed by such other Person during such period to
such Person or its Restricted Subsidiary as a dividend or other distribution
(subject, in the case of a dividend or other distribution to a Restricted
Subsidiary, to the limitations contained in clause (b) below); and

     (2) the equity of such Person and its consolidated Restricted Subsidiaries in a
net loss of any other Person for such period shall be included in determining such
Consolidated Net Income to the extent such Person or any Restricted Subsidiary of
such Person has actually contributed, lent or transferred cash to such other Person;

10

 

     (b) any net income (loss) of any Restricted Subsidiary if such Restricted Subsidiary is
subject to restrictions, directly or indirectly, on the payment of dividends or the making
of distributions, directly or indirectly, to such Person, except that:

     (1) subject to the exclusion contained in clause (c) below, the equity of such
Person and its consolidated Restricted Subsidiaries in the net income of any such
Restricted Subsidiary for such period shall be included in such Consolidated Net
Income up to the aggregate amount of cash that is or could be dividended or
distributed or otherwise paid (including through making loans and repaying Debt) by
such Restricted Subsidiary during such period to such Person or another Restricted
Subsidiary as a dividend or other distribution (subject, in the case of a dividend
or other distribution to another Restricted Subsidiary, to the limitation contained
in this clause (b)); and

     (2) the equity of such Person and its consolidated Restricted Subsidiaries in a
net loss of any such Restricted Subsidiary for such period shall be included in
determining such Consolidated Net Income;

          (c) any gain or loss realized upon the sale or other disposition of any Property of
such Person or any of its consolidated Subsidiaries (including pursuant to any Sale and
Leaseback Transaction) that is not sold or otherwise disposed of in the ordinary course of
business;

          (d) any extraordinary gain or loss;

          (e) fees, expenses or charges related to the Transactions;

          (f) the cumulative effect of a change in accounting principles; and

          (g) any non-cash compensation expense realized for grants of performance shares, stock
options or other rights to officers, directors and employees of such Person or any
Restricted Subsidiary, provided that such shares, options or other rights can be redeemed at
the option of the holder only for Capital Stock of such Person (other than Disqualified
Stock).

Notwithstanding the foregoing, for purposes of Section 4.08 of this Indenture only, there shall be
excluded from Consolidated Net Income any dividends, repayments of loans or advances or other
transfers of Property from Unrestricted Subsidiaries to such Person or a Restricted Subsidiary to
the extent such dividends, repayments or transfers increase the amount of Restricted Payments
permitted under such covenant pursuant to clause (c)(4) thereof.

     “Consolidated Net Tangible Assets” means, as of any date of determination, the sum of the
amounts that would appear on a consolidated balance sheet of Arch Coal and its consolidated
Restricted Subsidiaries, less any amounts attributable to non-Wholly Owned Restricted Subsidiaries
that are not consolidated with Arch Coal and plus the portion of the consolidated net tangible
assets of a non-Wholly Owned Restricted Subsidiary that is not consolidated with Arch Coal equal to
the percentage of its outstanding Capital Stock owned by Arch Coal and its Restricted Subsidiaries,
as of the end of the most recent fiscal quarter for which internal financial

11

 

statements are available as the total assets (determined on a pro forma basis to give effect
to any acquisition or disposition of assets made after such balance sheet date and on or prior to
such date of determination), and less accumulated depreciation and amortization, allowances for
doubtful receivables, other applicable reserves and other properly deductible items) of Arch Coal
and its Restricted Subsidiaries, after giving effect to purchase accounting and after deducting
therefrom Consolidated Current Liabilities and, to the extent otherwise included, the amounts of
(without duplication):

     (a) the excess of cost over fair market value of assets or businesses acquired;

     (b) any revaluation or other write-up in book value of assets subsequent to the last
day of the fiscal quarter of Arch Coal immediately preceding the Issue Date as a result of a
change in the method of valuation in accordance with GAAP; and

     (c) unamortized debt discount and expenses and other unamortized deferred charges,
goodwill, patents, trademarks, service marks, trade names, copyrights, licenses,
organization or developmental expenses and other intangible items.

     “Corporate Trust Office” means the office of the Trustee, at which at any particular time its
corporate trust business shall be administered, which office at the date of execution of this
Indenture is located at 2 South Broadway, 6th Floor, St. Louis, Missouri 63102,
Attention: Corporate Trust Department or such other address as the Trustee may designate from time
to time by notice to the Holders and Arch Coal, or the principal corporate trust office of any
successor Trustee (or such other address as such successor Trustee may designate from time to time
by notice to the Holders and to Arch Coal).

     “Credit Facilities” means, one or more debt facilities (including, without limitation, the
Amended and Restated Credit Agreement), or other financing arrangements (including, without
limitation, commercial paper facilities or indentures, in each case with banks, investment banks,
insurance companies, mutual funds, other institutional lenders, a trustee or any of the foregoing)
providing for revolving credit loans, term loans, notes, bonds, indentures, debentures, receivables
financing (including through the sale of receivables to such lenders, other financiers or to
special purpose entities formed to borrow from (or sell such receivables to) such lenders or other
financiers against such receivables), letters of credit, bankers’ acceptances, other borrowings or
issuances of notes, in each case, as amended, restated, modified, renewed, refunded, replaced or
refinanced (in each case, without limitation as to amount) in whole or in part from time to time
and any agreements and related documents governing Debt or obligations incurred to Refinance
amounts then outstanding or permitted to be outstanding.

     “Currency Exchange Protection Agreement” means, in respect of a Person, any foreign exchange
contract, currency swap agreement, currency option or other similar agreement or arrangement.

     “Custodian” means any receiver, trustee, assignee, liquidator, custodian, administrator or
similar official under any Bankruptcy Law.

12

 

     “Debt” means, with respect to any Person on any date of determination (without duplication):

     (a) the principal of and premium (if any) in respect of:

     (1) debt of such Person for money borrowed, and

     (2) debt evidenced by notes, debentures, bonds or other similar instruments for
the payment of which such Person is responsible or liable;

     (b) all Capital Lease Obligations of such Person;

     (c) all obligations of such Person representing the deferred purchase price of
Property, all conditional sale obligations of such Person and all obligations of such Person
under any title retention agreements (but excluding in-kind obligations of such Person
relating to net coal balancing positions or bookouts and trade accounts payable, in either
case arising in the ordinary course of business);

     (d) all obligations of such Person for the reimbursement of any obligor on any letter
of credit, banker’s acceptance or similar credit transaction (other than obligations with
respect to letters of credit securing obligations (other than obligations described in (a)
through (c) above) entered into in the ordinary course of business of such Person to the
extent such letters of credit are not drawn upon or, if and to the extent drawn upon, such
drawing is reimbursed no later than the tenth Business Day following receipt by such Person
of a demand for reimbursement following payment on the letter of credit);

     (e) the amount of all obligations of such Person with respect to the Repayment of any
Disqualified Stock or, with respect to any Subsidiary of such Person, any Preferred Stock
(but excluding, in each case, any accrued dividends);

     (f) all obligations of the type referred to in clauses (a) through (e) above of other
Persons and all dividends of other Persons for the payment of which, in either case, such
Person is responsible or liable, directly or indirectly, as obligor, guarantor or otherwise,
including by means of any Guarantee;

     (g) all obligations of the type referred to in clauses (a) through (f) above of other
Persons secured by any Lien on any Property of such Person (whether or not such obligation
is assumed by such Person), the amount of such obligation being deemed to be the lesser of
the Fair Market Value of such Property and the amount of the obligation so secured; and

     (h) to the extent not otherwise included in this definition, Hedging Obligations of
such Person.

The amount of Debt of any Person at any date shall be the outstanding balance, or the accreted
value of such Debt in the case of Debt issued with original issue discount, at such date of all
unconditional obligations as described above and the maximum liability, upon the occurrence of the
contingency giving rise to the obligation, of any contingent obligations at such date and

13

 

provided that any obligations under or in respect of operating leases shall be deemed not to
constitute Debt. The amount of Debt represented by a Hedging Obligation shall be equal to:

     (1) zero if such Hedging Obligation has been Incurred pursuant to clause (f),
(g) or (h) of the second paragraph of Section 4.06 of this Indenture; or

     (2) the notional amount of such Hedging Obligation if not Incurred pursuant to
such clauses.

     “Default” means any event which is, or after notice or passage of time or both would be, an
Event of Default.

     “Depositary” means DTC until a successor Depositary, if any, shall have become such pursuant
to this Indenture, and thereafter Depositary shall mean or include each Person who is then a
Depositary hereunder.

     “Disqualified Stock” means any Capital Stock of a Person or any of its Restricted Subsidiaries
that by its terms (or by the terms of any security into which it is convertible or for which it is
exchangeable, in either case at the option of the holder thereof) or otherwise:

     (a) matures or is mandatorily redeemable pursuant to a sinking fund obligation or
otherwise;

     (b) is or may become redeemable or repurchaseable at the option of the holder thereof,
in whole or in part; or

     (c) is convertible or exchangeable at the option of the holder thereof for Debt or
Disqualified Stock,

on or prior to, in the case of clause (a), (b) or (c), the first anniversary of the Stated Maturity
of the Notes. Notwithstanding the preceding sentence, any Capital Stock that would constitute
Disqualified Stock solely because the holders thereof have the right to require Arch Coal to
repurchase such Capital Stock upon the occurrence of a Change of Control or an Asset Sale will not
constitute Disqualified Stock if (i) the “Asset Sale” or “Change of Control” provisions applicable
to such Capital Stock are no more favorable to the holders of such Capital Stock than the
provisions contained in Section 4.09 of this Indenture and Section 4.11 of this Indenture and (ii)
such Capital Stock specifically provides that such Person will not repurchase or redeem any such
stock pursuant to such provision prior to Arch Coal’s repurchase of such Notes as are required to
be repurchased pursuant to Section 4.09 of this Indenture and Section 4.11 of this Indenture.

     “Disqualified Stock Dividends” of a Person means all dividends (other than dividends paid in
Capital Stock (except Disqualified Stock) of Arch Coal) with respect to Disqualified Stock of such
Person held by Persons other than a Wholly Owned Restricted Subsidiary of such Person. The amount
of any such dividend shall be equal to the quotient of such dividend divided by the difference
between one and the maximum statutory federal income tax rate (expressed as a decimal number
between 1 and 0) then applicable to such Person.

14

 

     “Domestic Subsidiary” means any Restricted Subsidiary of Arch Coal other than a Foreign
Subsidiary.

     “DTC” means The Depository Trust Company.

     “EBITDA” of a Person means, for any period, an amount equal to, for such Person and its
consolidated Restricted Subsidiaries:

     (a) the sum of Consolidated Net Income for such period, plus the following to the
extent reducing Consolidated Net Income for such period:

     (1) the provision for taxes based on income or profits or utilized in computing
net loss;

     (2) Consolidated Interest Expense;

     (3) depreciation and depletion;

     (4) amortization of intangibles;

     (5) any other non-cash items (other than any such non-cash item to the extent
that it represents an accrual of, or reserve for, cash expenditures in any future
period);

     (6) accruals of Postretirement Medical Liabilities, as defined by GAAP, net of
cash payments for such Postretirement Medical Liabilities;

     (7) accretion of asset retirement obligations in accordance with SFAS No. 143,
Accounting for Asset Retirement Obligations, and any similar accounting in prior
periods, net of cash payments for such asset retirement obligations;

     (8) the amount of any unusual or non-recurring losses or charges (or minus any
unusual or non-recurring gains), including without limitation, restructuring charges
such as retention, severance, systems establishment costs or excess pension, OPEB,
black lung settlement, curtailment or other excess charges and fees, expenses or
charges related to any offering of Capital Stock or Debt of such Person permitted to
be Incurred;

     (9) any net loss (or minus any net gain) attributable to the early
extinguishment of Debt, including, without limitation, any premiums or similar
charges related to any Debt Refinancing; and

     (10) to the extent not included in (1) through (9) above, the portion of any of
the items described in (1) through (9) above of a non-Wholly Owned Restricted
Subsidiary that is not consolidated with such Person equal to the percentage of the
outstanding common Capital Stock of the non-Wholly Owned Restricted Subsidiary owned
by such Person and its Restricted Subsidiaries, minus

15

 

     (b) all non-cash items increasing Consolidated Net Income for such period (other
than any such non-cash item to the extent that it will result in the receipt of cash
payments in any future period).

Notwithstanding the foregoing clause (a), the provision for taxes and the depreciation,
amortization and non-cash items of a Restricted Subsidiary shall be added to Consolidated Net
Income to compute EBITDA only to the extent (and in the same proportion) that the net income of
such Restricted Subsidiary was included in calculating Consolidated Net Income and only if a
corresponding amount would be permitted at the date of determination to be dividended or
distributed or otherwise paid (including through making loans and repaying debt) to such Person by
such Restricted Subsidiary without prior approval (that has not been obtained), pursuant to the
terms of its charter and all agreements, instruments, judgments, decrees, orders, statutes, rules
and governmental regulations applicable to such Restricted Subsidiary or its shareholders or
members.

     “Equity Offering” means a public or private offering of common Capital Stock (other than
Disqualified Stock) of Arch Coal (other than pursuant to a registration statement on Form S-8 or
otherwise relating to equity securities issuable under any employee benefit plan of Arch Coal).

     “Event of Default” has the meaning set forth under Section 6.01 of this Indenture.

     “Exchange Act” means the Securities Exchange Act of 1934, as amended.

     “Exchange Notes” means the notes issued in exchange for Original Notes or any Additional Notes
pursuant to the Registration Rights Agreement or any similar registration rights agreement with
respect to any Additional Notes.

     “Exchange Offer” means the exchange offer by Arch Coal and the Guarantors of the Exchange
Notes for original Notes to be effected pursuant to the Registration Rights Agreement or any
similar registration rights agreement with respect to any Additional Notes.

     “Exchange Offer Registration Statement” means the Exchange Offer Registration Statement as
defined in the Registration Rights Agreement.

     “Fair Market Value” means, with respect to any Property, the price that could be negotiated in
an arm’s-length free market transaction, for cash, between a willing seller and a willing buyer,
neither of whom is under undue pressure or compulsion to complete the transaction. Fair Market
Value shall be determined, except as otherwise provided,

     (a) if such Property has a Fair Market Value equal to or less than $100.0 million, by
Arch Coal’s principal financial officer; or

     (b) if such Property has a Fair Market Value in excess of $100.0 million, by at least a
majority of the disinterested members of the Board of Directors and evidenced by a Board
Resolution, dated within 30 days of the relevant transaction, delivered to the Trustee.

16

 

     “Foreign Subsidiary” means any Subsidiary of Arch Coal that is not organized under the laws of
the United States of America or any state thereof or the District of Columbia.

     “GAAP” means United States generally accepted accounting principles as in effect on the Issue
Date, including those set forth in:

     (a) the opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and the Public Company Accounting Oversight Board;

     (b) the statements and pronouncements of the Financial Accounting Standards Board;

     (c) such other statements by such other entity as approved by a significant segment of
the accounting profession; and

     (d) the rules and regulations of the Commission governing the inclusion of financial
statements (including pro forma financial statements) in periodic reports required to be
filed pursuant to Section 13 of the Exchange Act, including opinions and pronouncements in
staff accounting bulletins and similar written statements from the accounting staff of the
Commission;

provided that GAAP shall not give effect to FASB No. APB 14-1.

     “Guarantee” means any obligation, contingent or otherwise, of any Person directly or
indirectly guaranteeing any Debt of any other Person and any obligation, direct or indirect,
contingent or otherwise, of such Person:

     (a) to purchase or pay (or advance or supply funds for the purchase or payment of) such
Debt of such other Person (whether arising by virtue of partnership arrangements, or by
agreements to keep-well, to purchase assets, goods, securities or services, to take-or-pay
or to maintain financial statement conditions or otherwise); or

     (b) entered into for the purpose of assuring in any other manner the obligee against
loss in respect thereof (in whole or in part);

provided, however, that the term “Guarantee” shall not include:

     (1) endorsements for collection or deposit in the ordinary course of business;
or

     (2) a contractual commitment by one Person to invest in another Person for so
long as such Investment is reasonably expected to constitute a Permitted Investment
under clause (a), (b) or (c) of the definition of “Permitted Investment.”

The term “Guarantee” used as a verb has a corresponding meaning.

17

 

     “Guarantors” means each of the Restricted Subsidiaries of Arch Coal that issue a Note
Guarantee on the Issue Date and any other Restricted Subsidiary of Arch Coal that issues a Note
Guarantee in accordance with the provisions of this Indenture.

     “Hedging Obligation” of any Person means any obligation of such Person pursuant to any
Interest Rate Agreement, Currency Exchange Protection Agreement, Commodity Price Protection
Agreement or any other similar agreement or arrangement.

     “Holder” means a Person in whose name a Note is registered in the Security Register.

     “ICG” means International Coal Group, Inc., a Delaware corporation.

     “Incur” means, with respect to any Debt or other obligation of any Person, to create, issue,
incur (by merger, conversion, exchange or otherwise), extend, assume, Guarantee or become liable in
respect of such Debt or other obligation or the recording, as required pursuant to GAAP or
otherwise, of any such Debt or obligation on the balance sheet of such Person (and “Incurrence” and
“Incurred” shall have meanings correlative to the foregoing); provided, however, that any Debt or
other obligations of a Person existing at the time such Person becomes a Subsidiary (whether by
merger, consolidation, acquisition or otherwise) shall be deemed to be Incurred by such Subsidiary
at the time it becomes a Subsidiary; and provided further, however, that solely for purposes of
determining compliance with Section 4.06 of this Indenture, amortization of debt discount shall not
be deemed to be the Incurrence of Debt, provided that in the case of Debt sold at a discount, the
amount of such Debt Incurred shall at all times be the aggregate principal amount at Stated
Maturity.

     “Indenture” means this instrument as originally executed or as it may from time to time be
supplemented or amended by one or more indentures supplemental hereto entered into pursuant to the
applicable provisions hereof, including, for all purposes of this instrument and any such
supplemental indenture following the effectiveness of a registration statement under the Securities
Act covering the Notes, the provisions of the TIA that are deemed to be a part of and govern this
instrument, and any such supplemental indenture, respectively.

     “Independent Financial Advisor” means an accounting, appraisal, engineering or banking firm of
national standing, provided that such firm or appraiser is not an Affiliate of Arch Coal.

     “Initial Purchasers” means Morgan Stanley & Co. LLC, PNC Capital Markets LLC, Merrill
Lynch, Pierce, Fenner & Smith Incorporated, RBS Securities Inc., Citigroup Global Markets Inc., BMO
Capital Markets Corp., Credit Agricole Securities (USA) Inc., Credit Suisse Securities (USA) LLC,
Wells Fargo Securities, LLC, Mitsubishi UFJ Securities (USA), Inc., Natixis Securities North
America Inc., Santander Investment Securities Inc., U.S. Bancorp Investments, Inc., Banco Bilbao
Vizcaya Argentaria, S.A., FBR Capital Markets & Co., Morgan Keegan & Company, Inc. and RBC Capital
Markets, LLC.

     “Interest Payment Date” means June 15 and December 15 of each year to Stated Maturity.

     “Interest Rate Agreement” means, for any Person, any interest rate swap agreement, interest
rate cap agreement, interest rate collar agreement or other similar agreement.

18

 

     “Investment” by any Person means any direct or indirect loan, advance or other extension of
credit or capital contribution (by means of transfers of cash or other Property to others or
payments for Property or services for the account or use of others, or otherwise) to, or Incurrence
of a Guarantee of any obligation of, or purchase or acquisition of Capital Stock, bonds, notes,
debentures or other securities or evidence of Debt issued by, any other Person. For purposes of
Sections 4.08 and 4.14 of this Indenture and the definition of “Restricted Payment,” the term
“Investment” shall include the portion (proportionate to Arch Coal’s or a Restricted Subsidiary’s
equity interest in such Subsidiary) of the Fair Market Value of the net assets of any Subsidiary of
Arch Coal at the time that such Subsidiary is designated an Unrestricted Subsidiary; provided,
however, that upon a redesignation of such Subsidiary as a Restricted Subsidiary, Arch Coal shall
be deemed to continue to have a permanent “Investment” in an Unrestricted Subsidiary of an amount
(if positive) equal to:

     (a) Arch Coal’s “Investment” in such Subsidiary at the time of such redesignation, less

     (b) the portion (proportionate to Arch Coal’s or a Restricted Subsidiary’s equity
interest in such Subsidiary) of the Fair Market Value of the net assets of such Subsidiary
at the time of such redesignation.

     If Arch Coal or any Restricted Subsidiary sells or otherwise disposes of any Capital Stock of
any Restricted Subsidiary, or any Restricted Subsidiary issues any Capital Stock, in either case,
such that, after giving effect to any such sale or disposition, such Person is no longer a
Subsidiary of Arch Coal, Arch Coal shall be deemed to have made an Investment on the date of any
such sale or other disposition equal to the Fair Market Value of the Capital Stock of and all other
Investments in such Restricted Subsidiary retained.

     In determining the amount of any Investment made by transfer of any Property other than cash,
such Property shall be valued at its Fair Market Value at the time of such Investment.

     “Investment Grade Rating” means a rating equal to or higher than Baa3 (or the equivalent) by
Moody’s and BBB- (or the equivalent) by S&P.

     “Issue Date” means the date on which the Notes are initially issued.

     “Issuer Order” means a written order signed in the name of Arch Coal by any Person authorized
by a resolution of the directors, Officers or shareholders of Arch Coal or such other similar
governing body or Person of Arch Coal.

     “Lien” means, with respect to any Property of any Person, any mortgage or deed of trust,
pledge, hypothecation, assignment, deposit arrangement, security interest, lien, charge, easement
(other than any easement not materially impairing usefulness or marketability), encumbrance,
preference, priority or other security agreement or preferential arrangement of any kind or nature
whatsoever on or with respect to such Property (including any Capital Lease Obligation, conditional
sale or other title retention agreement having substantially the same economic effect as any of the
foregoing or any Sale and Leaseback Transaction).

19

 

     “LLC Agreement” means the Limited Liability Company Agreement of Arch Western Resources, LLC,
dated as of June 1, 1998 between Arch Western Acquisition Corporation and Delta Housing, Inc.

     “Maturity” means, with respect to any indebtedness, the date on which any principal of such
indebtedness becomes due and payable as therein or herein provided, whether at the Stated Maturity
with respect to such principal or by declaration of acceleration, call for redemption or purchase
or otherwise.

     “Merger” means the merger of Atlas Acquisition Corp., a Wholly Owned Subsidiary of Arch Coal,
with and into ICG, with ICG surviving as a Wholly Owned Subsidiary of Arch.

     Merger Agreement” means the Agreement and Plan of Merger, dated May 2, 2011, among Arch Coal,
Atlas Acquisition Corp. and ICG, as amended.

     “Moody’s” means Moody’s Investors Service, Inc. or any successor to the rating agency business
thereof.

     “Net Available Cash” from any Asset Sale means cash payments received therefrom (including any
cash payments received by way of deferred payment of principal pursuant to a note or installment
receivable or otherwise, but only as and when received, but excluding any other consideration
received in the form of assumption by the acquiring Person of Debt or other obligations relating to
the Property that is the subject of such Asset Sale or received in any other non-cash form), in
each case net of:

     (a) all legal, title and recording tax expenses, accounting, investment banking fees
and brokerage and sales commissions and other fees and expenses incurred, and all Federal,
state, provincial, foreign and local taxes required to be accrued as a liability under GAAP,
as a consequence of such Asset Sale;

     (b) all payments made on or in respect of any Debt that is secured by any Property
subject to such Asset Sale, in accordance with the terms of any Lien upon such Property, or
which must by its terms, or in order to obtain a necessary consent to such Asset Sale, or by
applicable law, be repaid out of the proceeds from such Asset Sale;

     (c) all distributions and other payments required to be made to minority interest
holders in Subsidiaries or joint ventures as a result of such Asset Sale; and

     (d) the deduction of appropriate amounts provided by the seller as a reserve, in
accordance with GAAP, against any liabilities associated with the Property disposed of in
such Asset Sale and retained by Arch Coal or any Restricted Subsidiary after such Asset
Sale.

     “Note Guarantees” means a Guarantee by a Guarantor of all of Arch Coal’s obligations with
respect to the Notes.

     “Officer” means the Chief Executive Officer, the President, the Chief Financial Officer or any
Senior Vice President of Arch Coal.

20

 

     “Officers’ Certificate” means a certificate signed by two Officers, at least one of whom shall
be the principal executive officer or principal financial officer, and delivered to the Trustee.

     “Opinion of Counsel” means a written opinion from legal counsel who is acceptable to the
Trustee. The counsel may be an employee of or counsel to Arch Coal or the Trustee.

     “Permitted Business” means the business conducted by Arch Coal on the Issue Date, any business
that is related, ancillary or complementary or a reasonable extension to the businesses of Arch
Coal and its Restricted Subsidiaries on the Issue Date and any business of a nature that is or
shall have become (i) related to the extraction, processing, storage, distribution or use of fuels
or minerals, including, without limitation, coal gasification, coal liquefaction, natural gas,
liquefied natural gas, coalbed or coal mine methane gas and bitumen from tar sands, as well as the
production of electricity or other sources of power, such as coal- or natural gas-fueled power
generation facilities, wind, solar or hydroelectric power generation facilities or similar
activities or (ii) customary in the coal production industry.

     “Permitted Investment” means any Investment by Arch Coal or any Restricted Subsidiary in:

     (a) Arch Coal or any Restricted Subsidiary;

     (b) any Person that will, upon the making of such Investment, become a Restricted
Subsidiary;

     (c) any Person if as a result of such Investment such Person is merged or consolidated
with or into, or transfers or conveys all or substantially all its Property to, Arch Coal or
its Restricted Subsidiary, provided that such Person’s primary business is a Permitted
Business;

     (d) Cash Equivalents;

     (e) receivables owing to Arch Coal or its Restricted Subsidiary, if created or acquired
in the ordinary course of business and payable or dischargeable in accordance with customary
trade terms; provided, however, that such trade terms may include such concessionary trade
terms as Arch Coal or such Restricted Subsidiary deems reasonable under the circumstances;

     (f) payroll, travel and similar advances to cover matters that are expected at the time
of such advances ultimately to be treated as expenses for accounting purposes and that are
made in the ordinary course of business;

     (g) loans and advances to employees made in the ordinary course of business permitted
by law of Arch Coal or such Restricted Subsidiary, as the case may be; provided that such
loans and advances do not exceed $5.0 million in the aggregate at any one time outstanding;

21

 

     (h) stock, obligations or other securities received in settlement of debts created in
the ordinary course of business and owing to Arch Coal or a Restricted Subsidiary or in
satisfaction of judgments;

     (i) any Person to the extent such Investment represents the non-cash portion of the
consideration received in connection with an Asset Sale consummated in compliance with
Section 4.09 of this Indenture, or any non-cash consideration received in connection with a
disposition of Property excluded from the definition of Asset Sale;

     (j) Investments in an aggregate amount, together with all other Investments made
pursuant to this clause (j), not to exceed 5.0% of Consolidated Net Tangible Assets (with
the Fair Market Value being measured at the time made and without giving effect to
subsequent changes in value and net of, with respect to the Investment in any particular
Person made pursuant to this clause (j), the cash return thereon received after the Issue
Date as a result of any sale for cash, repayment, return, redemption, liquidating
distribution or other cash realization (not included in Consolidated Net Income) not to
exceed the amount of such Investments in such Person made after the Issue Date in reliance
on this clause (j));

     (k) other Investments made for Fair Market Value that do not exceed $500.0 million in
the aggregate outstanding at any one time (with the Fair Market Value being measured at the
time made and without giving effect to subsequent changes in value);

     (1) Hedging Obligations that constitute Permitted Debt;

     (m) Investments in connection with a Receivables Facility;

     (n) Investments in Permitted Joint Ventures in an aggregate amount, together with all
other Investments made pursuant to this clause (n) not to exceed the greater of (x) $750.0
million and (y) 7.5% of Consolidated Net Tangible Assets (with the Fair Market Value being
measured at the time made and without giving effect to subsequent changes in value and net
of, with respect to the Investment in any particular Person made pursuant to this clause
(n), the cash return thereon received after the Issue Date as a result of any sale for cash,
repayment, return, redemption, liquidating distribution or other cash realization (not
included in Consolidated Net Income) not to exceed the amount of such Investments in such
Person made after the Issue Date in reliance on this clause (n)); and

     (o) Investments in Permitted Joint Ventures and other entities (whether or not a
Subsidiary) that are not domiciled or incorporated in the United States, taken together with
all other Investments made pursuant to this clause (o) that are at the time outstanding, not
to exceed the greater of (x) $500.0 million and (y) 5.0% of Consolidated Net Tangible Assets
(with the Fair Market Value being measured at the time made and without giving effect to
subsequent changes in value and net of, with respect to the Investment in any particular
Person made pursuant to this clause (o), the cash return thereon received after the Issue
Date as a result of any sale for cash, repayment, return, redemption, liquidating
distribution or other cash realization (not included in

22

 

Consolidated Net Income) not to
exceed the amount of such Investments in such Person made after the Issue Date in reliance
on this clause (o)).

     “Permitted Joint Ventures” means any agreement, contract or other arrangement between Arch
Coal or any Restricted Subsidiary and any Person engaged principally in a Permitted Business that
permits one party to share risks or costs, comply with regulatory requirements or satisfy other
business objectives customarily achieved through the conduct of such Permitted Business jointly
with third parties.

     “Permitted Liens” means:

     (a) Liens to secure Debt under Credit Facilities (including Guarantees thereof) in an
aggregate amount at any one time outstanding not to exceed the amount of Debt permitted to
be Incurred under clause (a) of the second paragraph of Section 4.06 of this Indenture;

     (b) Liens to secure Debt permitted to be Incurred under clause (d) of the second
paragraph of Section 4.06 of this Indenture and other purchase money Liens to finance
Property of Arch Coal or any of its Restricted Subsidiaries; provided that any such Lien may
not extend to any Property of Arch Coal or any Restricted Subsidiary, other than the
Property acquired, constructed or leased and any improvements or accessions to such Property
(including, in the case of the acquisition of Capital Stock of a Person that becomes a
Restricted Subsidiary, Liens on the Property of the Person whose Capital Stock was
acquired);

     (c) Liens for taxes, assessments or governmental charges or levies on the Property of
Arch Coal or any Restricted Subsidiary if the same shall not at the time be delinquent or
thereafter can be paid without penalty, or are being contested in good faith and by
appropriate proceedings promptly instituted and diligently concluded, provided that any
reserve or other appropriate provision that shall be required in conformity with GAAP shall
have been made therefor;

     (d) Liens imposed by law, such as carriers’, warehousemen’s and mechanics’ Liens and
other similar Liens, on the Property of Arch Coal or any Restricted Subsidiary arising in
the ordinary course of business and securing payment of obligations that are not more than
60 days past due or are being contested in good faith and by appropriate proceedings;

     (e) Liens on the Property of Arch Coal or any Restricted Subsidiary Incurred in the
ordinary course of business to secure performance of obligations with respect to statutory
or regulatory requirements, performance or return-of-money bonds, surety bonds or other
obligations of a like nature and Incurred in a manner consistent with industry practice, in
each case which are not Incurred in connection with the borrowing of money, the obtaining of
advances or credit or the payment of the deferred purchase price of Property and which do
not in the aggregate impair in any material respect the use of Property in the operation of
the business of Arch Coal and the Restricted Subsidiaries taken as a whole;

23

 

     (f) Liens on Property at the time Arch Coal or any Restricted Subsidiary acquired such
Property, including any acquisition by means of a merger or consolidation with or into Arch
Coal or any Restricted Subsidiary; provided, however, that any such Lien may not extend to
any other Property of Arch Coal or any Restricted Subsidiary; provided further, however,
that such Liens shall not have been Incurred in anticipation of or in connection with the
transaction or series of transactions pursuant to which such Property was acquired by Arch
Coal or any Restricted Subsidiary;

     (g) Liens on the Property of a Person at the time such Person becomes a Restricted
Subsidiary; provided, however, that any such Lien may not extend to any other Property of
Arch Coal or any other Restricted Subsidiary that is not a direct Subsidiary of such Person;
provided further, however, that any such Lien was not Incurred in anticipation of or in
connection with the transaction or series of transactions pursuant to which such Person
became a Restricted Subsidiary;

     (h) pledges or deposits by Arch Coal or any Restricted Subsidiary under workers’
compensation laws, unemployment insurance laws, old-age pensions or similar legislation, or
good faith deposits in connection with bids, tenders, contracts (other than for the payment
of Debt) or leases to which Arch Coal or any Restricted Subsidiary is party, or deposits to
secure public or statutory obligations of Arch Coal, or deposits for the payment of rent, in
each case Incurred in the ordinary course of business;

     (i) utility easements, building restrictions and such other encumbrances or charges
against real Property as are of a nature generally existing with respect to properties of a
similar character;

     (j) Liens existing on the Issue Date not otherwise described in clauses (a) through (i)
above or (k) through (t) below;

     (k) Liens on the Property of Arch Coal or any Restricted Subsidiary to secure any
Refinancing, in whole or in part, of any Debt secured by Liens referred to in clause (b),
(f), (g) or (j) above; provided, however, that any such Lien shall be limited to all or part
of the same Property that secured the original Lien (together with improvements and
accessions to such Property), and the aggregate principal amount of Debt that is secured by
such Lien shall not be increased to an amount greater than the sum of:

     (1) the outstanding principal amount, or, if greater, the committed amount, of
the Debt secured by Liens described under clause (b), (f), (g) or (j) above, as the
case may be, at the time the original Lien became a Permitted Lien under this
Indenture, and

     (2) an amount necessary to pay any fees and expenses, including premiums and
defeasance costs, incurred by Arch Coal or such Restricted Subsidiary in connection
with such Refinancing;

     (l) Liens on the Arch Coal Promissory Notes to secure the Arch Western Notes and any
Permitted Refinancing Debt Incurred in respect thereof;

24

 

     (m) Liens on Property used to defease or to satisfy and discharge Debt; provided that
(a) the Incurrence of such Debt was not prohibited by this Indenture and (b) such defeasance
or satisfaction and discharge is not prohibited by this Indenture;

     (n) Liens in favor of Arch Coal or any Restricted Subsidiary;

     (o) judgment Liens not giving rise to an Event of Default, that are being contested in
good faith by appropriate legal proceedings and for which adequate reserves have been made;

     (p) Liens on accounts receivable and related assets in connection with a Receivables
Facility;

     (q) rights of banks to set off deposits against debts owed to said bank;

     (r) contract mining agreements and leases or subleases granted to others that do not
materially interfere with the ordinary conduct of business of Arch Coal or any of its
Restricted Subsidiaries;

     (s) Liens on Capital Stock of an Unrestricted Subsidiary that secure Debt or other
obligations of such Unrestricted Subsidiary;

     (t) Liens on the assets of Foreign Subsidiaries securing Debt of Foreign Subsidiaries;

     (u) Liens in favor of customs and revenue authorities arising as a matter of law to
secure payment of customs duties in connection with the importation of goods;

     (v) Liens securing reimbursement obligations with respect to commercial letters of
credit which encumber documents and other assets relating to such letters of credit and
products and proceeds thereof; and

     (w) Liens not otherwise permitted by clauses (a) through (v) above securing Debt or
other obligations in an aggregate principal amount not to exceed 10.0% of Consolidated Net
Tangible Assets at the time such Debt is Incurred.

     “Permitted Refinancing Debt” means any Debt that Refinances any other Debt, including any
successive Refinancings, so long as:

     (a) such Debt is in an aggregate principal amount (or if Incurred with original issue
discount, an aggregate issue price) not in excess of the sum of:

     (1) the aggregate principal amount (or if Incurred with original issue
discount, the aggregate accreted value) then outstanding of the Debt being
Refinanced and all accrued and unpaid interest thereon; and

     (2) an amount necessary to pay any fees and expenses, including premiums and
defeasance costs, related to such Refinancing;

25

 

     (b) the Average Life of such Debt is equal to or greater than the Average Life of the
Debt being Refinanced; and

     (c) the new Debt shall not be senior in right of payment to the Debt that is being
Refinanced;

provided, however, that Permitted Refinancing Debt shall not include:

     (x) Debt of a Subsidiary of Arch Coal that is not a Guarantor that Refinances
Debt of Arch Coal or a Guarantor, or

     (y) Debt of Arch Coal or a Restricted Subsidiary that Refinances Debt of an
Unrestricted Subsidiary.

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

     “Preferred Stock” means any Capital Stock of a Person, however designated, which entitles the
holder thereof to a preference with respect to the payment of dividends, or as to the distribution
of assets upon any voluntary or involuntary liquidation or dissolution of such Person, over shares
of any other class of Capital Stock issued by such Person.

     “Preferred Stock Dividends” of a Person means all dividends with respect to Preferred Stock of
Restricted Subsidiaries of such Person (other than dividends paid in Capital Stock (except
Disqualified Stock) of Arch Coal) held by Persons other than such Person or a Wholly Owned
Restricted Subsidiary of such Person. The amount of any such dividend shall be equal to the
quotient of such dividend divided by the difference between one and the maximum statutory federal
income rate (expressed as a decimal number between 1 and 0) then applicable to the issuer of such
Preferred Stock.

     “pro forma” means, with respect to any calculation made or required to be made pursuant to the
terms hereof, a calculation, as interpreted in good faith by Arch Coal’s principal financial
officer or principal accounting officer, or otherwise a calculation made in good faith by the Board
of Directors after consultation with the independent certified public accountants of Arch Coal, as
the case may be.

     “Property” means, with respect to any Person, any interest of such Person in any kind of
property or asset, whether real, personal or mixed, or tangible or intangible, including Capital
Stock in, and other securities of, any other Person. For purposes of any calculation required
pursuant to this Indenture, the value of any Property shall be its Fair Market Value.

     “Purchase Money Debt” means Debt:

     (a) consisting of the deferred purchase price of Property, conditional sale
obligations, obligations under any title retention agreement, other purchase money
obligations and obligations in respect of industrial revenue bonds, in each case where the

26

 

maturity of such Debt does not exceed the anticipated useful life of the Property being
financed; and

     (b) Incurred to finance the acquisition, construction or lease by Arch Coal or a
Restricted Subsidiary of such Property, including additions and improvements thereto;

provided, however, that such Debt is Incurred within 365 days after the acquisition, construction
or lease of such Property by Arch Coal or such Restricted Subsidiary.

     “QIB” means a “Qualified Institutional Buyer” as defined under Rule 144A.

     “Rating Agencies” means Moody’s and S&P or if Moody’s and S&P or both shall not make a rating
on the Notes publicly available, a nationally recognized statistical rating agency or agencies, as
the case may be, selected by Arch Coal which shall be substituted for Moody’s or S&P or both, as
the case may be.

     “Receivables Facility” means one or more receivables financing facilities or arrangements, as
amended or modified from time to time, pursuant to which Arch Coal or any Subsidiary sells
(including a sale in exchange for a promissory note or Capital Stock of a Receivables Subsidiary)
its accounts receivable to a Receivables Subsidiary or a Receivables Subsidiary sells accounts
receivables to any other Person; provided such transaction is on market terms at the time Arch Coal
or such Subsidiary enters into such transaction.

     “Receivables Subsidiary” means a Subsidiary of Arch Coal which engages in no activities other
than those reasonably related to or in connection with the entering into of receivables
securitization transactions and which is designated by the Board of Directors (as provided below)
as a Receivables Subsidiary and

     (1) no portion of the Debt or any other obligations (contingent or otherwise)
of which:

	 	(A)	 	is guaranteed by Arch Coal or
any Restricted Subsidiary (excluding Guarantees (other than the
principal of, and interest on, Debt) pursuant to Standard
Securitization Undertakings);

	 	(B)	 	is recourse to or obligates
Arch Coal or any Restricted Subsidiary in any way other than
pursuant to Standard Securitization Undertakings; or

	 	(C)	 	subjects any Property of Arch
Coal or any Restricted Subsidiary, directly or indirectly,
contingently or otherwise, to the satisfaction thereof, other
than pursuant to Standard Securitization Undertakings;

     (2) with which neither Arch Coal nor any Restricted Subsidiary has any material
contract, agreement, arrangement or understanding other than on terms no less
favorable to Arch Coal or such Restricted Subsidiary than those that might

27

 

be obtained at the time from Persons that are not Affiliates of Arch Coal, other than
fees payable in the ordinary course of business in connection with servicing
accounts receivable of such entity; and

     (3) to which neither Arch Coal nor any Restricted Subsidiary has any obligation
to maintain or preserve such entity’s financial condition or cause such entity to
achieve certain levels of operating results other than pursuant to Standard
Securitization Undertakings.

Any designation of a Subsidiary as a Receivable Subsidiary shall be evidenced to the Trustee by
filing with the Trustee a certified copy of the resolution of the Board of Directors giving effect
to the designation and an Officers’ Certificate certifying that the designation complied with the
preceding conditions and was permitted by this Indenture.

     “Record Date” for the interest payable on any Interest Payment Date means June 1 or December 1
(whether or not a Business Day), as the case may be, next preceding such Interest Payment Date.

     “Redemption Date,” when used with respect to any Note to be redeemed, in whole or in part,
means the date fixed for such redemption by or pursuant to this Indenture.

     “Redemption Price,” when used with respect to any Note to be redeemed, means the price at
which it is to be redeemed pursuant to this Indenture.

     “Refinance” means, in respect of any Debt, to refinance, extend, renew, refund or Repay, or to
issue other Debt, in exchange or replacement for, such Debt. “Refinanced” and “Refinancing” shall
have correlative meanings.

     “Registration Rights Agreement” means the Registration Rights Agreement relating to the Notes
dated June 14, 2011, among Arch Coal, the Guarantors and the Initial Purchasers.

     “Regulation S” means Regulation S under the Securities Act (including any successor regulation
thereto), as it may be amended from time to time.

     “Repay” means, in respect of any Debt, to repay, prepay, repurchase, redeem, legally defease
or otherwise retire such Debt. “Repayment” and “Repaid” shall have correlative meanings. For
purposes of Section 4.09 of this Indenture and the definition of “Consolidated Interest Coverage
Ratio,” Debt shall be considered to have been Repaid only to the extent the related loan
commitment, if any, shall have been permanently reduced in connection therewith.

     “Restricted Payment” means:

     (a) any dividend or distribution (whether made in cash, securities or other Property)
declared or paid, on or with respect to any shares of Capital Stock of Arch Coal or any
Restricted Subsidiary (including any payment in connection with any merger or consolidation
with or into Arch Coal or any Restricted Subsidiary), except for any dividend or
distribution that is (i) made solely to Arch Coal or a Restricted Subsidiary (and, if such
Restricted Subsidiary is not a Wholly Owned Restricted Subsidiary, to the

28

 

other shareholders
or members of such Restricted Subsidiary on a pro rata basis or on a basis that results in
the receipt by Arch Coal or a Restricted Subsidiary of dividends or distributions equal to
or greater in value than it would receive on a pro rata basis); or (ii) payable solely in
shares of Capital Stock (other than Disqualified Stock) of Arch Coal;

     (b) the purchase, repurchase, redemption, acquisition or retirement for value of any
Capital Stock of Arch Coal (other than from Arch Coal or a Restricted Subsidiary);

     (c) the purchase, repurchase, redemption, acquisition or retirement for value, prior to
the date for any scheduled maturity, sinking fund or amortization or other installment
payment, of any Subordinated Obligation (other than (i) Debt permitted under clause (e) of
the second paragraph of Section 4.06 of this Indenture or (ii) the purchase, repurchase or
other acquisition of any Subordinated Obligation purchased in anticipation of satisfying a
scheduled maturity, sinking fund or amortization or other installment obligation, in each
case due within one year of the date of acquisition); or

     (d) any Investment (other than Permitted Investments) in any Person.

     “Restricted Subsidiary” means any Subsidiary of Arch Coal other than an Unrestricted
Subsidiary.

     “Rule 144” means Rule 144 under the Securities Act (including any successor regulation
thereto), as it may be amended from time to time.

     “Rule 144A” means Rule 144A under the Securities Act (including any successor regulation
thereto), as it may be amended from time to time.

     “S&P” means Standard & Poor’s Ratings Services or any successor to the rating agency business
thereof.

     “Sale and Leaseback Transaction” means any direct or indirect arrangement relating to Property
now owned or hereafter acquired whereby Arch Coal or a Restricted Subsidiary transfers such
Property to another Person and Arch Coal or a Restricted Subsidiary leases it from such Person.

     “Securities Act” means the Securities Act of 1933, as amended.

     “Shelf Registration Statement” means the Shelf Registration Statement as defined in the
Registration Rights Agreement.

     “Significant Subsidiary” means any Subsidiary that would be a “significant subsidiary” of Arch
Coal within the meaning of Rule 1-02 under Regulation S-X promulgated by the Commission.

     “Special Interest” has the meaning set forth in Exhibit A-1 (in the case of the Original 2019
Notes and, if applicable, Additional 2019 Notes) and Exhibit A-2 (in the case of the Original 2021
Notes and, if applicable, Additional 2021 Notes).

29

 

     “Standard Securitization Undertakings” means representations, warranties, covenants and
indemnities entered into by Arch Coal or any Restricted Subsidiary that are reasonably customary in
receivables financing facilities, including, without limitation, servicing of the obligations
thereunder.

     “Stated Maturity” means, with respect to any security, the date specified in such security as
the fixed date on which the payment of principal of such security is due and payable, including
pursuant to any mandatory redemption provision (but excluding any provision providing for the
repurchase of such security at the option of the holder thereof upon the happening of any
contingency beyond the control of the issuer unless such contingency has occurred).

     “Subordinated Obligation” means any Debt of Arch Coal or a Guarantor (whether outstanding on
the Issue Date or thereafter Incurred) that is subordinate or junior in right of payment to the
Notes or the Note Guarantees pursuant to a written agreement to that effect.

     “Subsidiary” means, in respect of any Person, any corporation, company (including any limited
liability company), association, partnership, joint venture or other business entity of which at
least a majority of the total voting power of the Voting Stock is at the time owned or controlled,
directly or indirectly, by:

     (a) such Person;

     (b) such Person and one or more Subsidiaries of such Person; or

     (c) one or more Subsidiaries of such Person.

     “Surviving Person” means the surviving Person formed by a merger, consolidation or
amalgamation and, for purposes of Section 5.01 of this Indenture, a Person to whom all or
substantially all of the Property of Arch Coal or a Guarantor is sold, transferred, assigned,
leased, conveyed or otherwise disposed.

     “Tax Amount” means the portion of the Hypothetical Income Tax Amount (as defined in the LLC
Agreement as in effect on the Issue Date) allocated to the members of Arch Western, other than Arch
Coal or any of its Affiliates.

     “TIA” means the United States Trust Indenture Act of 1939 as in effect on the date hereof;
provided, however, that in the event the Trust Indenture Act of 1939 is amended after such date,
“TIA” means, to the extent required by any such amendment, the Trust Indenture Act of 1939, as so
amended.

     “Transactions” means collectively, the transactions contemplated by the Merger Agreement, the
Amended and Restated Credit Agreement, this Indenture (including the offering and issuance of the
Original Notes) and the redemption of, payment of cash in connection with conversion of, or other
retirement of outstanding ICG indebtedness, including without limitation (1) ICG’s 9.125% senior
secured second-priority notes due 2018, (2) ICG’s 4.00% convertible senior notes due 2017, (3)
ICG’s 9.00% convertible senior notes due 2012, and (4) other ICG indebtedness, including equipment
notes and capital leases.

30

 

     “Trustee” means the party named as such in this Indenture until a successor replaces it in
accordance with the provisions of this Indenture and, thereafter, means the successor.

     “Trust Officer” means, when used with respect to the Trustee, any vice president, assistant
vice president, assistant treasurer or trust officer within the Corporate Trust Department of the
Trustee (or any successor unit, department or division of the Trustee) located at the Corporate
Trust Office of the Trustee who has direct responsibility for the administration of this Indenture
and, for the purposes of Sections 7.01(c)(2) and the second sentence of Section 6.01(b) shall also
include any other officer of the Trustee to whom any corporate trust matter is referred because of
his or her knowledge of and familiarity with the particular subject.

     “Unrestricted Subsidiary” means:

     (a) any Subsidiary of Arch Coal that is designated after the Issue Date as an
Unrestricted Subsidiary as permitted or required pursuant to Section 4.14 of this Indenture
and is not thereafter redesignated as a Restricted Subsidiary as permitted pursuant thereto;

     (b) any Subsidiary of an Unrestricted Subsidiary; and

     (c) as of the date of this Indenture, Jacobs Ranch Holdings I LLC, a Delaware limited
liability company, Jacobs Ranch Holdings II LLC, a Delaware limited liability company, and
Jacobs Ranch Coal LLC, a Delaware limited liability company.

After the termination of the covenants upon the Notes obtaining Investment Grade Ratings, pursuant
to Section 4.19 of this Indenture, all Unrestricted Subsidiaries shall be Restricted Subsidiaries.

     “U.S. Government Obligations” means direct obligations (or certificates representing an
ownership interest in such obligations) of the United States of America (including any agency or
instrumentality thereof) for the payment of which the full faith and credit of the United States of
America is pledged and which are not callable or redeemable at the issuer’s option.

     “Voting Stock” of any Person means all classes of Capital Stock or other interests (including
partnership interests) of such Person then outstanding and normally entitled (without regard to the
occurrence of any contingency) to vote in the election of directors, managers or trustees thereof.

     “Wholly Owned Restricted Subsidiary” of a Person means, at any time, a Restricted Subsidiary
all the Voting Stock of which (except directors’ qualifying shares) is at such time owned, directly
or indirectly, by such Person and its other Wholly Owned Subsidiaries.

          SECTION 1.02. Other Definitions.

	 	 	 	 	 
	Term	 	Defined in Section	 
	“2019 Additional Notes”
	 	Recitals
	“2021 Additional Notes”
	 	Recitals

31

 

	 	 	 	 	 
	Term	 	Defined in Section
	“2019 Exchange Notes”
	 	Recitals
	“2021 Exchange Notes”
	 	Recitals
	“2019 Notes”
	 	Recitals
	“2021 Notes”
	 	Recitals
	“Additional Notes”
	 	Recitals
	“Affiliate Transaction”
	 	 	4.10
	“Allocable Excess Proceeds”
	 	 	4.09
	“Change of Control Offer”
	 	 	4.11
	“Change of Control Purchase Price”
	 	 	4.11
	“Defaulted Interest”
	 	 	2.12
	“Event of Default”
	 	 	6.01
	“Excess Proceeds”
	 	 	4.09
	“Exchange Global Note”
	 	 	2.01	(b)
	“Global Notes”
	 	 	2.01	(d)
	“incorporated provision”
	 	 	12.01
	“Notes”
	 	Recitals
	“Notice of Default”
	 	6.01(a)(iv)
	“Obligations”
	 	 	10.01	(a)
	“Original Notes”
	 	Recitals
	“Original 2019 Notes”
	 	Recitals
	“Original 2021 Notes”
	 	Recitals
	“Participants”
	 	 	2.01	(d)
	“Paying Agent”
	 	 	2.03
	“Permitted Debt”
	 	 	4.06
	“Prepayment Offer”
	 	 	4.09
	“Registrar”
	 	 	2.03
	“Regulation S Global Note”
	 	 	2.01	(b)
	“Restricted Global Note”
	 	 	2.01	(b)
	“Security Register”
	 	 	2.03
	“Transfer Agent”
	 	 	2.03

          SECTION 1.03. Incorporation by Reference of Trust Indenture Act. The mandatory
provisions of the TIA that are required to be a part of and govern indentures qualified under the
TIA are incorporated by reference in and are a part of this Indenture, whether or not this
Indenture is so qualified. The following TIA terms have the following meanings as used in this
Indenture:

     “indenture securities” means the Notes.

     “indenture securities holder” means a Holder.

     “indenture to be qualified” means this Indenture.

     “indenture trustee” or “institutional trustee” means the Trustee.

     “obligor” on the “indenture securities” means Arch Coal and the Guarantors.

32

 

     All other TIA terms used in this Indenture that are defined by the TIA, defined by TIA
reference to another statute or defined by the Commission rule under the TIA have the meanings
assigned to them by such definitions.

          SECTION 1.04. Rules of Construction. (a) Unless the context otherwise requires:

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

     (ii) an accounting term not otherwise defined has the meaning assigned to it in
accordance with GAAP;

     (iii) “or” is not exclusive;

     (iv) “including” or “include” means including or include without limitation;

     (v) words in the singular include the plural and words in the plural include the
singular;

     (vi) “interest” shall include Special Interest, if any;

     (vii) the words “herein,” “hereof’ and “hereunder” and other words of similar
import refer to this Indenture as a whole and not to any particular Article, Section,
clause or other subdivision;

     (viii) unless otherwise specified herein, all accounting terms used herein shall be
interpreted, all accounting determinations hereunder shall be made, and all financial
statements required to be delivered hereunder shall be prepared in accordance with GAAP as
in effect on the Issue Date;

     (ix) “$,” “U.S. Dollars” and “United States Dollars” each refer to United States
dollars, or such other money of the United States that at the time of payment is legal
tender for payment of public and private debts; and

     (x) whenever in this Indenture there is mentioned, in any context, principal,
interest or any other amount payable under or with respect to any Note, such mention shall
be deemed to include mention of the payment of Special Interest to the extent that, in such
context, Special Interest is, was or would be payable in respect thereof.

ARTICLE TWO

THE NOTES

          SECTION 2.01. The Notes. (a) The Trustee shall initially authenticate (i) 2019
Notes for original issue on the Issue Date in an aggregate principal amount of $1,000,000,000 and
(ii) 2021 Notes for original issue on the Issue Date in an aggregate principal amount of
$1,000,000,000, in each case upon a written order of Arch Coal in the form of an Officers’
Certificate of the Company (other than as provided in Section 2.07). The Company may, as long as
permitted under this Indenture, issue and the Trustee shall authenticate (1) the Exchange

33

 

Notes of each series and (2) Additional Notes of each series after the Issue Date in unlimited amount for
original issue upon a written order of the Company in the form of an Officers’ Certificate in
aggregate principal amount as specified in such order. Each such written order shall specify the
amount of Notes of the applicable series to be authenticated and the date on which such Notes are
to be authenticated.

     (b) Form and Dating. The Notes and the Trustee’s certificate of authentication
shall be substantially in the form of Exhibit A-1 (in the case of the 2019 Notes) or
Exhibit A-2 (in the case of the 2021 Notes) hereto with such appropriate insertions,
omissions, substitutions and other variations as are required or permitted by this
Indenture. The Notes may have notations, legends or endorsements required by law, the rules
of any securities exchange or usage. Arch Coal shall approve the form of the Notes. Each
Note shall be dated the date of its authentication. The terms and provisions contained in
the form of the Notes shall constitute and are hereby expressly made a part of this
Indenture. The Notes shall be issued only in registered form without coupons and only in
minimum denominations of $2,000 in principal amount and any integral multiples of $1,000 in
excess thereof.

     (c) Global Notes. Notes offered and sold to QIBs in reliance on Rule 144A as
provided in the Purchase Agreement shall be issued initially in the form of one or more
Global Notes substantially in the form of Exhibit A-1 (in the case of the 2019 Notes) or
Exhibit A-2 (in the case of the 2021 Notes) hereto, with such applicable legends as are
provided in Exhibit A-1 (in the case of the 2019 Notes) or Exhibit A-2 (in the case of the
2021 Notes) hereto, except as otherwise permitted herein (in each case, a “Restricted
Global Note”), which shall be deposited on behalf of the purchasers of the Notes
represented thereby with the Depositary, and registered in the name of the Depositary or its
nominee, as the case may be, duly executed by Arch Coal and authenticated by the Trustee (or
its agent in accordance with Section 2.02) as hereinafter provided. The aggregate principal
amount of a Restricted Global Note may from time to time be increased or decreased by
adjustments made by the Registrar on Schedule A to Exhibit A-1 (in the case of the 2019
Notes) or Exhibit A-2 (in the case of the 2021 Notes) to the applicable Restricted Global
Note and recorded in the Security Register, as hereinafter provided. Notes offered and sold
in reliance on Regulation S shall be issued initially in the form of one or more Global
Notes substantially in the form of Exhibit A-1 (in the case of the 2019 Notes) or
Exhibit A-2 (in the case of the 2021 Notes) hereto, with such applicable legends as are
provided in Exhibit A-1 (in the case of the 2019 Notes) or Exhibit A-2 (in the case of the
2021 Notes) hereto, except as otherwise permitted herein (in each case, “Regulation S
Global Note”), which shall be deposited on behalf of the purchasers of the Notes
represented thereby with the Depositary, and registered in the name of the Depositary or its
nominee, as the case may be, duly executed by Arch Coal and authenticated by the Trustee (or
an authenticating agent appointed by the Trustee in accordance with Section 2.02) as
hereinafter provided. The aggregate principal amount of a Regulation S Global Note may from
time to time be increased or decreased by adjustments made by the Registrar on Schedule A,
to each of Exhibit A-1 (in the case of the 2019 Notes) or Exhibit A-2 (in the case of the
2021 Notes) hereto, to a Regulation S Global Note and recorded in the Security Register, as
hereinafter provided.

34

 

     If and when issued, Exchange Notes offered to Holders, as provided in the Registration Rights
Agreement, shall be issued initially in the form of one or more Global Notes substantially in the
form of Exhibit A-1 (in the case of the 2019 Notes) or Exhibit A-2 (in the case of the 2021 Notes)
hereto, with such applicable omissions and legends as are provided in Exhibit A-1 (in the case of
the 2019 Notes) or Exhibit A-2 (in the case of the 2021 Notes) hereto, except as otherwise
permitted herein (in each case, an “Exchange Global Note”), which shall be deposited on
behalf of the Holders of the Exchange Notes represented thereby with the Depositary, and registered
in the name of the Depositary or its nominee, as the case may be, duly executed by Arch Coal and
authenticated by the Trustee (or an authenticating agent appointed by the Trustee in accordance
with Section 2.02) as hereinafter provided. The aggregate principal amount of an Exchange Global
Note may from time to time be increased or decreased by adjustments made by the Registrar on
Schedule A to the applicable Exchange Global Note and recorded in the Security Register, as
hereinafter provided.

     Upon the transfer, exchange or replacement of any Original Note remaining outstanding after
the consummation of an Exchange Offer, the Registrar shall deliver such new Original Note only in
global form, subject to Section 2.10, and such new Original Note shall continue to bear the
applicable legends set forth in Exhibit A-1 (in the case of the 2019 Notes) or Exhibit A-2 (in the
case of the 2021 Notes) hereto. In the case of a Restricted Global Note, such legends shall
include the private placement legend unless (x) the appropriate period referred to in Rule 144
under the Securities Act has elapsed or (y) there is delivered to the Registrar an opinion of
counsel reasonably satisfactory to Arch Coal and the Trustee to the effect that neither such legend
nor the related restrictions on transfer are required in order to maintain compliance with the
Securities Act.

     Upon the transfer, exchange or replacement of any Note pursuant to a Shelf Registration
Statement, the Registrar shall deliver such new Note only in global form, subject to Section 2.10,
and such new Note shall continue to bear the applicable legends set forth in Exhibit A-1 (in the
case of the 2019 Notes) or Exhibit A-2 (in the case of the 2021 Notes) hereto; provided, however,
that such new Note shall not be required to bear the private placement legend set forth in
Exhibit A-1 (in the case of the 2019 Notes) or Exhibit A-2 (in the case of the 2021 Notes) hereto.
Beneficial interests in any such new Note shall be reflected in the Exchange Global Note.

     (d) Book-Entry Provisions. This Section 2.01(d) shall apply to each Restricted
Global Note, each Regulation S Global Note, and, if and when issued, each Exchange Global
Note (collectively, the “Global Notes”) deposited with or on behalf of the
Depositary.

     Members of, or participants and account holders in, DTC (“Participants”) shall have no
rights under this Indenture with respect to any Global Note held on their behalf by the Depositary,
or by the Trustee or any custodian of the Depositary or under such Global Note, and the Depositary
or its nominee may be treated by Arch Coal, a Guarantor, the Trustee and any agent of Arch Coal, a
Guarantor or the Trustee as the sole owner of such Global Note for all purposes whatsoever.
Notwithstanding the foregoing, nothing herein shall prevent Arch Coal, a Guarantor, the Trustee or
any agent of Arch Coal, a Guarantor or the Trustee from giving effect to any written certification,
proxy or other authorization furnished by the Depositary or impair,

35

 

as between the Depositary and
their Participants, the operation of customary practices of such persons governing the exercise of
the rights of a Holder of a beneficial interest in any Global Note.

     Subject to the provisions of Section 2.10(b), the registered Holder of a Global Note may grant
proxies and otherwise authorize any Person, including Participants and Persons that may hold
interests through Participants, to take any action that a Holder is entitled to take under this
Indenture or the Notes.

     Except as provided in Section 2.10, owners of a beneficial interest in Global Notes will not
be entitled to receive physical delivery of certificated Notes.

          SECTION 2.02. Execution and Authentication. An authorized officer shall sign the
Notes for Arch Coal by manual or facsimile signature.

     If an authorized officer whose signature is on a Note no longer holds that office at the time
the Trustee authenticates the Note, the Note shall be valid nevertheless.

     A Note shall not be valid or obligatory for any purpose until an authorized signatory of the
Trustee manually signs the certificate of authentication on the Note. The signature shall be
conclusive evidence that the Note has been authenticated under this Indenture.

     Pursuant to an Issuer Order, Arch Coal shall execute and the Trustee shall authenticate
(a) (i) 2019 Notes for original issue up to an aggregate principal amount of $1,000,000,000 and
(ii) 2021 Notes for original issue up to an aggregate principal amount of $1,000,000,000, and
(b) Additional Notes of each series subject to compliance at the time of issuance of such
Additional Notes with the provisions of this Indenture in an unlimited amount and Exchange Notes of
each series for issue only in an Exchange Offer, pursuant to the Registration Rights Agreement, for
Notes up to an aggregate principal amount of Original Notes and Additional Notes of each series
exchanged in such Exchange Offer.

     The Trustee may appoint an authenticating agent reasonably acceptable to Arch Coal to
authenticate the Notes. Unless limited by the terms of such appointment, any such authenticating
agent may authenticate Notes whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by any such agent. An authenticating agent
has the same rights as any Registrar, co-Registrar, Transfer Agent or Paying Agent to deal with
Arch Coal or an Affiliate of Arch Coal.

     The Trustee shall have the right to decline to authenticate and deliver any Notes under this
Section 2.02 if the Trustee, being advised by counsel, determines that such action may not lawfully
be taken or if the Trustee in good faith shall determine that such action would expose the Trustee
to personal liability to existing Holders.

          SECTION 2.03. Registrar, Transfer Agent and Paying Agent. Arch Coal shall
maintain an office or agency where the Notes may be presented or surrendered for registration,
transfer or exchange (the “Registrar”), an office or agency where Notes may be transferred
or exchanged (the “Transfer Agent”), an office or agency where the Notes may be presented
or surrendered for payment (the “Paying Agent”) and an office or agency where notices or
demands

36

 

to or upon Arch Coal in respect of the Notes may be served. Arch Coal may appoint one or
more Transfer Agents, one or more co-Registrars and one or more additional Paying Agents.

     Arch Coal or any of its Affiliates may act as Transfer Agent, Registrar, co-Registrar, Paying
Agent and agent for service of notices and demands in connection with the Notes; provided, however,
that neither Arch Coal nor any of its Affiliates shall act as Paying Agent for the purposes of
Articles Three and Eight and Sections 4.09 and 4.11.

     Arch Coal hereby initially appoints the Trustee, at the address set forth in Section 12.02(a)
as Registrar and as Transfer Agent and Paying Agent.

     Subject to any applicable laws and regulations, Arch Coal shall cause the Registrar to keep a
register (the “Security Register”) at its corporate trust office in which, subject to such
reasonable regulations it may prescribe, Arch Coal shall provide for the registration of ownership,
exchange, and transfer of the Notes. Such registration in the Security Register shall be
conclusive evidence of the ownership of Notes. Included in the books and records for the Notes
shall be notations as to whether such Notes have been paid, exchanged or transferred, canceled,
lost, stolen, mutilated or destroyed and whether such Notes have been replaced. In the case of the
replacement of any of the Notes, the Registrar shall keep a record of the Note so replaced and the
Note issued in replacement thereof. In the case of the cancellation of any of the Notes, the
Registrar shall keep a record of the Note so canceled and the date on which such Note was canceled.

     Arch Coal shall enter into an appropriate agency agreement with any Paying Agent or
co-Registrar not a party to this Indenture, which, following the effectiveness of a Registration
Statement pursuant to the Registration Rights Agreement, shall incorporate the terms of the TIA.
The agreement shall implement the provisions of this Indenture that relate to such agent. Arch
Coal shall notify the Trustee of the name and address of any such agent. If Arch Coal fails to
maintain a Registrar or Paying Agent, the Trustee shall act as such and shall be entitled to
appropriate compensation therefor pursuant to Section 7.07 of this Indenture.

          SECTION 2.04. Paying Agent to Hold Money in Trust. Not later than 10:00 am
(Central time) on each due date of the principal, premium, if any, and interest on any Notes, Arch
Coal shall deposit with the Paying Agent money in immediately available funds sufficient to pay
such principal, premium, if any, and interest so becoming due on the due date for payment under the
Notes. Arch Coal shall require each Paying Agent other than the Trustee to agree in writing that
such Paying Agent shall hold in trust for the benefit of the Holders or the Trustee all money held
by the Paying Agent for the payment of principal of, premium, if any, and interest on the Notes
(whether such money has been paid to it by Arch Coal or any other obligor on the Notes), and such
Paying Agent shall promptly notify the Trustee of any default by Arch Coal (or any other obligor on
the Notes) in making any such payment. Arch Coal at any time may require a Paying Agent to pay all
money held by it to the Trustee and account for any funds disbursed, and the Trustee may at any
time during the continuance of any payment default, upon written request to a Paying Agent, require
such Paying Agent to pay all money held by it to the Trustee and to account for any funds
disbursed. Upon doing so, the Paying Agent shall have no further liability for the money so paid
over to the Trustee. If Arch Coal or any Affiliate of Arch Coal acts as Paying Agent, it will, on
or before each due date of any principal, premium, if any, or

37

 

interest on the Notes, segregate and
hold in a separate trust fund for the benefit of the Holders a sum of money sufficient to pay such
principal, premium, if any, or interest so becoming due until such sum of money shall be paid to
such Holders or otherwise disposed of as provided in this Indenture, and will promptly notify the
Trustee of its action or failure to act.

          SECTION 2.05. Holder Lists. The Registrar shall preserve in as current a form as
is reasonably practicable the most recent list available to it of the names and addresses of
Holders and shall otherwise comply with TIA Section 312(a). If the Trustee is not the Registrar,
Arch Coal shall furnish to the Trustee, in writing no later than the Record Date for each Interest
Payment Date and at such other times as the Trustee may request in writing, a list in such form and
as of such Record Date as the Trustee may reasonably require of the names and addresses of Holders,
including the aggregate principal amount of Notes held by each Holder.

          SECTION 2.06. Transfer and Exchange. (a) Where Notes are presented to the
Registrar or a co-Registrar with a request to register a transfer or to exchange them for an equal
principal amount of Notes of other denominations, the Registrar shall register the transfer or make
the exchange in accordance with the requirements of this Section 2.06. To permit registrations of
transfers and exchanges, Arch Coal shall execute and the Trustee shall authenticate and deliver, in
the name of the designated transferee or transferees, one or more new Notes, of any authorized
denominations and of a like aggregate principal amount, at the Registrar’s request. No service
charge shall be made for any registration of transfer or exchange of Notes to the Holder or
transferee thereof (except as otherwise expressly permitted herein), but Arch Coal may require
payment of a sum sufficient to cover any agency fee or similar charge payable in connection with
any such registration of transfer or exchange of Notes (other than any agency fee or similar charge
payable upon exchanges pursuant to Sections 2.10, 3.08 or 9.05) or in accordance with a Prepayment
Offer pursuant to Section 4.09 or Change of Control Offer pursuant to Section 4.11, not involving a
transfer.

     Upon presentation for exchange or transfer of any Note as permitted by the terms of this
Indenture and by any legend appearing on such Note, such Note shall be exchanged or transferred
upon the Security Register and one or more new Notes shall be authenticated and issued in the name
of the Holder (in the case of exchanges only) or the transferee, as the case may be. No exchange
or transfer of a Note shall be effective under this Indenture unless and until such Note has been
registered in the name of such Person in the Security Register. Furthermore, the exchange or
transfer of any Note shall not be effective under this Indenture unless the request for such
exchange or transfer is made by the Holder or by a duly authorized attorney-in-fact at the office
of the Registrar.

     Every Note presented or surrendered for registration of transfer or for exchange shall (if so
required by Arch Coal or the Registrar) be duly endorsed, or be accompanied by a written instrument
or transfer, in form satisfactory to Arch Coal and the Registrar, duly executed by the Holder
thereof or his attorney duly authorized in writing.

     All Notes issued upon any registration of transfer or exchange of Notes shall be the valid
obligations of Arch Coal evidencing the same indebtedness, and entitled to the same benefits under
this Indenture, as the Notes surrendered upon such registration of transfer or exchange.

38

 

     In the event that a registration statement under the Securities Act with respect to the
Exchange Offer, or a Shelf Registration Statement, as the case may be, has been declared effective
by the Commission, and that Arch Coal has offered Exchange Notes to the Holders in accordance with
the Exchange Offer or that Notes have been offered pursuant to such Shelf Registration Statement,
the Trustee shall exchange or issue upon transfer, as the case may be, upon request of any Holder,
such Holder’s Notes for (i) in the case of an Exchange Offer, Exchange Notes upon the terms set
forth in the Exchange Offer or (ii) in the case of a transfer pursuant to a Shelf Registration
Statement, Notes that comply with the requirements applicable following such a transfer as set
forth in Section 2.01(c).

     Arch Coal shall not be required (i) to issue, register the transfer of, or exchange any Note
during a period beginning at the opening of 15 Business Days before the day of the mailing of a
notice of redemption of Notes selected for redemption under Section 3.03 and ending at the close of
business on the day of such mailing, or (ii) to register the transfer of or exchange any Note so
selected for redemption in whole or in part, except the unredeemed portion of any Note being
redeemed in part.

     (b) Notwithstanding any provision to the contrary herein, so long as a Global Note
remains outstanding and is held by or on behalf of the Depositary, transfers of a Global
Note, in whole or in part, or of any beneficial interest therein, shall only be made in
accordance with Section 2.01(d), Section 2.06(a) and this Section 2.06(b); provided,
however, that a beneficial interest in a Global Note may be transferred to Persons who take
delivery thereof in the form of a beneficial interest in the same Global Note in accordance
with the transfer restrictions set forth in the restricted Note legend on the Note, if any.

     (i) Except for transfers or exchanges made in accordance with any of clauses (ii),
(iii), (iv) or (v) of this Section 2.06(b), transfers of a Global Note shall be limited to
transfers of such Global Note in whole, but not in part, to nominees of the Depositary or to
a successor of the Depositary or such successor’s nominee.

     (ii) Restricted Global Note to Regulation S Global Note. If the Holder of
a beneficial interest in a Restricted Global Note at any time wishes to exchange its
interest in such Restricted Global Note for an interest in a Regulation S Global Note, or to
transfer its interest in such Restricted Global Note to a Person who wishes to take delivery
thereof in the form of a beneficial interest in a Regulation S Global Note, such transfer or
exchange may be effected, only in accordance with this clause (ii) and the rules and
procedures of the Depositary. Upon receipt by the Registrar from the Transfer Agent of
(A) instructions directing the Registrar to credit or cause to be credited an interest in
the applicable Regulation S Global Note in a specified principal amount and to cause to be
debited an interest in the applicable Restricted Global Note in such specified principal
amount, and (B) a certificate in the form of Exhibit B-1 (in the case of the 2019 Notes) or
Exhibit B-2 (in the case of the 2021 Notes) hereto, given by the Holder of such beneficial
interest stating that the transfer of such interest has been made in compliance with the
transfer restrictions applicable to the Global Notes and (x) pursuant to and in accordance
with Regulation S or (y) that the Note being transferred is being transferred in a
transaction permitted by Rule 144, then the Registrar shall instruct the Depositary to

39

 

reduce or cause to be reduced the principal amount of the applicable Restricted Global Note
and to increase or cause to be increased the principal amount of the applicable Regulation S
Global Note by the aggregate principal amount of the interest in the applicable Restricted
Global Note to be exchanged.

     (iii) Regulation S Global Note to Restricted Global Note. If the Holder of
a beneficial interest in a Regulation S Global Note at any time wishes to transfer such
interest to a Person who wishes to take delivery thereof in the form of a beneficial
interest in a Restricted Global Note, such transfer may be effected only in accordance with
this clause (iii) and the rules and procedures of the Depositary. Upon receipt by the
Registrar from the Transfer Agent of (A) instructions directing the Registrar to credit or
cause to be credited an interest in the applicable Restricted Global Note in a specified
principal amount and to cause to be debited an interest in the applicable Regulation S
Global Note in such specified principal amount, and (B) a certificate in the form of
Exhibit C-1 (in the case of the 2019 Notes) or Exhibit C-2 (in the case of the 2021 Notes)
given by the Holder of such beneficial interest stating that the transfer of such interest
has been made in compliance with the transfer restrictions applicable to the Global Notes
and stating that (x) the Person transferring such Interest reasonably believes that the
Person acquiring such interest is a QIB and is obtaining such interest in a transaction
meeting the requirements of Rule 144A and any applicable securities laws of any state of the
United States or (y) that the Person transferring such interest is relying on an exemption
other than Rule 144A from the registration requirements of the Securities Act and, in such
circumstances, such opinion of counsel as Arch Coal or the Trustee may reasonably request to
ensure that the requested transfer or exchange is being made pursuant to an exemption from,
or in a transaction not subject to, the registration requirements of the Securities Act,
then the Registrar shall instruct the Depositary to reduce or cause to be reduced the
principal amount of the applicable Regulation S Global Note and to increase or cause to be
increased the principal amount of the applicable Restricted Global Note by the aggregate
principal amount of the interest in the Regulation S Global Note to be exchanged or
transferred.

     (iv) Restricted Global Note to Exchange Global Note. Following the earlier
of the consummation of the Exchange Offer or the transfer of a Note pursuant to a Shelf
Registration Statement that results in beneficial interests in such Note being reflected in
an Exchange Global Note, if the Holder of a beneficial interest in a Restricted Global Note
at any time wishes to exchange its interest in such Restricted Global Note for an interest
in an Exchange Global Note, or to transfer its interest in such Restricted Global Note to a
Person who wishes to take delivery thereof in the form of a beneficial interest in a
Regulation S Global Note, such transfer or exchange, if not effected pursuant to
Section 2.06(a) may be effected only in accordance with this clause (iv) and the rules and
procedures of the Depositary. Upon receipt by the Registrar from the Transfer Agent of
(A) instructions directing the Registrar to credit or cause to be credited an interest in
the applicable Exchange Global Note in a specified principal amount and to cause to be
debited an interest in the applicable Restricted Global Note in such specified principal
amount, and (B) a certificate in the form of Exhibit B-1 (in the case of the 2019 Notes) or
Exhibit B-2 (in the case of the 2021 Notes) given by the Holder of such beneficial interest
stating that the transfer of such interest has been made in compliance with the transfer

40

 

restrictions applicable to the Global Notes and (x) pursuant to and in accordance with
Regulation S or (y) that the Note being transferred is being transferred in a transaction
permitted by Rule 144, then the Registrar shall instruct the Depositary to reduce or cause
to be reduced the principal amount of the applicable Restricted Global Note and to increase
or cause to be increased the principal amount of the applicable Regulation S Global Note by
the aggregate principal amount of the interest in the Restricted Global Note to be exchanged
or transferred.

     (v) Regulation S Global Note to Exchange Global Note. Following the
earlier of the consummation of the Exchange Offer or the transfer of a Note pursuant to a
Shelf Registration Statement that results in beneficial interests in such Note being
reflected in an Exchange Global Note, if the Holder of a beneficial interest in a
Regulation S Global Note at any time wishes to exchange its interest in such Regulation S
Global Note for an interest in an Exchange Global Note, or to transfer its interest in such
Regulation S Global Note to a Person who wishes to take delivery thereof in the form of a
beneficial interest in an Exchange Global Note, such transfer or exchange, if not effected
pursuant to an Exchange Offer or a Shelf Registration Statement in accordance with
Section 2.06(a) may be effected only in accordance with this clause (v) and the rules and
procedures of the Depositary. Upon receipt by the Registrar from the Transfer Agent of
instructions directing the Registrar to credit or cause to be credited an interest in the
applicable Exchange Global Note in a specified principal amount and to cause to be debited
an interest in the applicable Regulation S Global Note in such specified principal amount,
then the Registrar shall instruct the Depositary to reduce or cause to be reduced the
principal amount of the applicable Regulation S Global Note and to increase or cause to be
increased the principal amount of the applicable Exchange Global Note by the aggregate
principal amount of the interest in the Regulation S Global Note to be exchanged or
transferred.

     (vi) Global Notes to Certificated Notes. In the event that a Global Note is
exchanged for Notes in certificated, registered form pursuant to Section 2.10, the
effectiveness of a Shelf Registration Statement with respect to such Notes, such Notes may
be exchanged only in accordance with Section 2.10 and such procedures as are substantially
consistent with the provisions of clauses (ii) and (iii) above (including the certification
requirements intended to ensure that such transfers comply with Rule 144A or Regulation S
under the Securities Act, as the case may be) and such other procedures as may from time to
time be adopted by Arch Coal and the Trustee.

     (c) Except in connection with an Exchange Offer or a Shelf Registration Statement
contemplated by and in accordance with the terms of the Registration Rights Agreement, if
Notes are issued upon the transfer, exchange or replacement of Notes bearing the restricted
Notes legends set forth in Exhibit A-1 (in the case of the 2019 Notes) or Exhibit A-2 (in
the case of the 2021 Notes) hereto, the Notes so issued shall bear the restricted Notes
legends, and a request to remove such restricted Notes legends from Notes will not be
honored unless there is delivered to Arch Coal such satisfactory evidence, which may include
an opinion of counsel licensed to practice law in the State of New York, as may be
reasonably required by Arch Coal, that neither the legend nor the restrictions on transfer
set forth therein are required to ensure that transfers thereof

41

 

comply with the provisions
of Rule 144A or Rule 144 under the Securities Act. Upon provision of such satisfactory
evidence, the Trustee, at the direction of Arch Coal, shall authenticate and deliver Notes
that do not bear the legend.

     (d) The Trustee shall have no responsibility for any actions taken or not taken by the
Depositary, for any Depositary records or beneficial ownership interests or for any
transactions between the Depositary and any Agent Member or between or among the Depositary,
a participant and/or any holder or owner of a beneficial interest in a Global Note.

     (e) The Trustee shall have no obligation or duty to monitor, determine or inquire as to
compliance with any restrictions on transfer imposed under this Indenture or under
applicable law with respect to any transfer of any interest in any Notes (including any
transfers between or among the Depositary’s participants or beneficial owners of interests
in any Global Note) other than to require delivery of such certificates and other
documentation, including delivery of Opinions of Counsel, as is expressly required by, and
to do so if and when expressly required by, the terms of this Indenture and to examine the
same to determine substantial compliance as to form with the express requirements hereof.

          SECTION 2.07. Replacement Notes. If a mutilated certificated Note is surrendered
to the Registrar or if the Holder claims that the Note has been lost, destroyed or wrongfully
taken, Arch Coal shall issue and the Trustee shall authenticate a replacement Note in such form as
the Note mutilated, lost, destroyed or wrongfully taken if the Holder satisfies any other
reasonable requirements of the Trustee or Arch Coal. If required by the Trustee or Arch Coal, such
Holder shall furnish an indemnity or indemnity bond sufficient in the judgment of Arch Coal and the
Trustee to protect Arch Coal, the Trustee, the Paying Agent, the Transfer Agent, the Registrar and
any co-Registrar, and any authenticating agent from any loss that any of them may suffer if a Note
is replaced. Arch Coal and the Trustee may charge the Holder for their expenses in replacing a
Note.

     In case any such mutilated, lost, destroyed or wrongfully taken Note has become or is about to
become due and payable, Arch Coal in its discretion may within 30 days of the applicable Redemption
Date or Maturity Date of such Note, instead of issuing a new Note, pay such Note, including any
accred and unpaid interest.

     The provisions of this Section 2.07 are exclusive and shall preclude (to the extent lawful)
all other rights and remedies with respect to the replacement or payment of mutilated, lost,
destroyed or wrongfully taken Notes.

     Every replacement Note shall be an additional obligation of Arch Coal.

          SECTION 2.08. Outstanding Notes. Notes outstanding at any time are all Notes
authenticated by the Trustee except for those cancelled by it, those delivered to it for
cancellation and those described in this Section 2.08 as not outstanding. Subject to Section 2.09,
a Note does not cease to be outstanding because Arch Coal or an Affiliate of Arch Coal holds the
Note.

42

 

     If a Note is replaced or paid pursuant to Section 2.07 (other than a mutilated Note
surrendered for replacement), it ceases to be outstanding unless the Trustee and Arch Coal receive
proof satisfactory to them that the Note which has been replaced or paid, is held by a bona fide
purchaser. A mutilated Note ceases to be outstanding upon surrender of such Note and replacement
or payment thereof pursuant to Section 2.07.

     If the Paying Agent segregates and holds in trust, in accordance with this Indenture, on a
Redemption Date or maturity date money sufficient to pay all principal, premium, if any, and
interest payable on that date with respect to the Notes (or portions thereof) to be redeemed or
maturing, as the case may be, and the Paying Agent is not prohibited from paying such money to the
Holders on that date pursuant to the terms of this Indenture, then on and after that date such
Notes (or portions thereof) cease to be outstanding and interest on them ceases to accrue.

          SECTION 2.09. Notes Held by Arch Coal. In determining whether the Holders of the
required principal amount of Notes have concurred in any direction, waiver or consent or any
amendment, modification or other change to this Indenture, Notes owned by Arch Coal or by an
Affiliate of Arch Coal shall be disregarded and treated as if they were not outstanding, except
that for the purposes of determining whether the Trustee shall be protected in relying on any such
direction, waiver or consent or any amendment, modification or other change to this Indenture, only
Notes which a Trust Officer of the Trustee actually knows are so owned shall be so disregarded.
Notes so owned which have been pledged in good faith shall not be disregarded if the pledgee
establishes to the satisfaction of the Trustee the pledgee’s right so to act with respect to the
Notes and that the pledgee is not Arch Coal or an Affiliate of Arch Coal.

          SECTION 2.10. Certificated Notes. (a) A Global Note deposited with the
Depositary or other custodian for the Depositary pursuant to Section 2.01 shall be transferred to
the beneficial owners thereof in the form of certificated Notes only if such transfer complies with
Section 2.06 and (i) the Depositary notifies Arch Coal that it is unwilling or unable to continue
as the Depositary for such Global Note, or if at any time the Depositary ceases to be a “clearing
agency” registered under the Exchange Act and a successor depositary is not appointed by Arch Coal
within 90 days of such notice or becoming aware of such cessation, or (ii) Arch Coal, at its
option, executes and delivers to the Trustee a notice that such Global Note be so transferable,
registrable and exchangeable, or (iii) an Event of Default, or an event which after notice or lapse
of time or both would be an Event of Default, has occurred and is continuing with respect to the
Notes and the Registrar has received a request for such transfer from either the Depositary or
(through the Depositary) a Person with a beneficial interest in such Notes or (iv) the issuance of
such certificated Notes is necessary in order for a Holder or beneficial owner to present its Note
or Notes to a Paying Agent in order to avoid any tax that is imposed on or with respect to a
payment made to such Holder or beneficial owner and the Holder or beneficial owner (through the
Depositary) so certifies to Arch Coal and the Trustee. Notice of any such transfer shall be given
by Arch Coal in accordance with the provisions of Section 12.02(a).

     (b) Any Global Note that is transferable to the beneficial owners thereof in the form
of certificated Notes pursuant to this Section 2.10 shall be surrendered by the Depositary
to the Transfer Agent, to be so transferred, in whole or from time to time in part, without
charge, and the Trustee shall authenticate and deliver, upon such transfer of each portion
of such Global Note, an equal aggregate principal amount of Notes of

43

 

authorized
denominations in the form of certificated Notes. Any portion of a Global Note transferred
or exchanged pursuant to this Section 2.10 shall be executed, authenticated and delivered
only in registered form in denominations of $2,000 and any integral multiples of $1,000 in
excess thereof and registered in such names as the Depositary shall direct. Subject to the
foregoing, a Global Note is not exchangeable except for a Global Note of like denomination
to be registered in the name of the Depositary or its nominee. In the event that a Global
Note becomes exchangeable for certificated Notes, payment of principal, premium, if any, and
interest on the certificated Notes will be payable, and the transfer of the certificated
Notes will be registrable, at the office or agency of Arch Coal maintained for such purposes
in accordance with Section 2.03. Such certificated Notes shall bear the applicable legends
set forth in Exhibit A-1 (in the case of the 2019 Notes) or Exhibit A-2 (in the case of the
2021 Notes) hereto.

     (c) In the event of the occurrence of any of the events specified in this Section 2.10,
Arch Coal will promptly make available to the Trustee a reasonable supply of certificated
Notes in definitive, fully registered form without interest coupons.

          SECTION 2.11. Cancellation. Arch Coal at any time may deliver Notes to the
Trustee for cancellation. The Registrar and the Paying Agent shall forward to the Trustee any
Notes surrendered to them for registration of transfer, exchange or payment. The Trustee, in
accordance with its customary procedures, and no one else shall cancel (subject to the record
retention requirements of the Exchange Act and the Trustee’s retention policy) all Notes
surrendered for registration of transfer, exchange, payment or cancellation and dispose of such
cancelled Notes in its customary manner. Except as otherwise provided in this Indenture, Arch Coal
may not issue new Notes to replace Notes it has redeemed, paid or delivered to the Trustee for
cancellation. The Trustee shall provide Arch Coal a list of all Notes that have been cancelled
from time to time as requested by Arch Coal.

          SECTION 2.12. Defaulted Interest. Any interest on any Note that is payable, but
is not punctually paid or duly provided for, on the dates and in the manner provided in the Notes
and this Indenture (all such interest herein called “Defaulted Interest”) shall forthwith
cease to be payable to the Holder on the relevant Record Date by virtue of having been such Holder,
and such Defaulted Interest may be paid by Arch Coal, at its election in each case, as provided in
clause (a) or (b) below:

     (a) Arch Coal may elect to make payment of any Defaulted Interest to the Persons in
whose names the Notes are registered at the close of business on a special record date for
the payment of such Defaulted Interest, which shall be fixed in the following manner. Arch
Coal shall notify the Trustee in writing of the amount of Defaulted Interest proposed to be
paid on each Note and the date of the proposed payment, and at the same time Arch Coal may
deposit with the Trustee an amount of money equal to the aggregate amount proposed to be
paid in respect of such Defaulted Interest; or shall make arrangements satisfactory to the
Trustee for such deposit prior to the date of the proposed payment, such money when
deposited to be held in trust for the benefit of the Persons entitled to such Defaulted
Interest as in this clause provided. In addition, Arch Coal shall fix a special record date
for the payment of such Defaulted Interest, such date to be not

44

 

more than 15 days and not
less than 10 days prior to the proposed payment date and not less than 15 days after the
receipt by the Trustee of the notice of the proposed payment date. Arch Coal shall promptly
but, in any event, not less than 15 days prior to the special record date, notify the
Trustee of such special record date and, in the name and at the expense of Arch Coal, the
Trustee shall cause notice of the proposed payment date of such Defaulted Interest and the
special record date therefor to be mailed first-class, postage prepaid to each Holder as
such Holder’s address appears in the Security Register, not less than 10 days prior to such
special record date. Notice of the proposed payment date of such Defaulted Interest and the
special record date therefor having been so mailed, such Defaulted Interest shall be paid to
the Persons in whose names the Notes are registered at the close of business on such special
record date and shall no longer be payable pursuant to clause (b) below.

     (b) Arch Coal may make payment of any Defaulted Interest on the Notes in any other
lawful manner not inconsistent with the requirements of any securities exchange on which the
Notes may be listed, and upon such notice as may be required by such exchange, if, after
notice given by Arch Coal to the Trustee of the proposed payment date pursuant to this
clause, such manner of payment shall be deemed reasonably practicable.

     Subject to the foregoing provisions of this Section 2.12, each Note delivered under this
Indenture upon registration of transfer of or in exchange for or in lieu of any other Note shall
carry the rights to interest accrued and unpaid, and to accrue, which were carried by such other
Note.

          SECTION 2.13. Computation of Interest. Interest on the Notes shall be computed on
the basis of a 360-day year comprised of twelve 30-day months.

          SECTION 2.14. CUSIP, ISIN and Common Code Numbers. Arch Coal in issuing the Notes
may use CUSIP, ISIN and Common Code numbers (if then generally in use), and, if so, the Trustee
shall use CUSIP, ISIN and Common Code numbers, as appropriate, in notices of redemption as a
convenience to Holders; provided, however, that any such notice may state that no representation is
made as to the correctness of such numbers or codes either as printed on the Notes or as contained
in any notice of a redemption and that reliance may be placed only on the other identification
numbers printed on the Notes, and any such redemption shall not be affected by any defect in or
omission of such numbers. Arch Coal will promptly notify the Trustee of any change in the CUSIP,
ISIN or Common Code numbers.

          SECTION 2.15. Issuance of Additional Notes and Exchange Notes. Arch Coal may,
subject to Section 4.06 of this Indenture, issue Additional Notes of each series under this
Indenture in accordance with the procedures of Section 2.02. The Original Notes of the applicable
series issued on the date of this Indenture and any Additional Notes of the applicable series
subsequently issued shall be treated as a single class for all purposes under this Indenture.

45

 

ARTICLE THREE

REDEMPTION; OFFERS TO PURCHASE

          SECTION 3.01. Optional Redemption. (a) Except as set forth in this Section
3.01(a), the 2019 Notes will not be redeemable at the option of Arch Coal prior to June 15, 2015.
Starting on that date, Arch Coal may redeem all or any portion of the 2019 Notes, at once or over
time, after giving notice specified in Sections 3.02 and 3.04. The 2019 Notes may be redeemed at
the Redemption Prices set forth below, plus accrued and unpaid interest to the Redemption Date
(subject to the right of Holders of record on the relevant Record Date to receive interest, if any,
due on the relevant Interest Payment Date as provided in Section 3.07). The following Redemption
Prices are for 2019 Notes redeemed during the 12-month period commencing on June 15 of the years
set forth below, and are expressed as percentages of principal amount:

	 	 	 	 	 
	 	 	Redemption	 
	Year	 	Price	 
	2015
	 	 	103.500	%
	2016
	 	 	101.750	%
	2017 and thereafter
	 	 	100.000	%

     In addition, at any time and from time to time, prior to June 15, 2014, on one or more
occasions, Arch Coal may redeem an aggregate principal amount of 2019 Notes not to exceed 35% of
the aggregate principal amount of the 2019 Notes (calculated giving effect to any issuance of
Additional Notes of the 2019 Notes) with the proceeds of one or more Equity Offerings, at a
redemption price equal to 107.000% of the principal amount thereof, plus accrued and unpaid
interest to the Redemption Date (subject to the right of Holders of record on the relevant Record
Date to receive interest due on the relevant Interest Payment Date as provided in Section 3.07);
provided, however, that after giving effect to any such redemption, at least 65% of the aggregate
principal amount of the 2019 Notes (calculated giving effect to any issuance of Additional Notes of
the 2019 Notes) remains outstanding immediately after the occurrence of such redemption (excluding
any 2019 Notes held by Arch Coal or any of its Subsidiaries). Any such redemption shall be made
within 90 days after the date of the closing of such Equity Offering upon not less than 30 nor more
than 60 days’ prior notice.

     At any time prior to June 15, 2015, Arch Coal may, at its option, on one or more occasions
redeem all or a part of the 2019 Notes, upon not less than 30 nor more than 60 days’ prior notice,
at a redemption price equal to 100% of the principal amount of the 2019 Notes redeemed plus the
2019 Notes Applicable Premium as of the date of redemption, and, without duplication, accrued and
unpaid interest, if any, to the Redemption Date (subject to the rights of Holders of record on the
relevant record date to receive interest due on the relevant Interest Payment Date).

     Any redemption pursuant to this Section 3.01(a) shall be made pursuant to the provisions of
this Article Three.

          (b) Except as set forth in this Section 3.01(b), the 2021 Notes will not be redeemable at the
option of Arch Coal prior to June 15, 2016. Starting on that date, Arch Coal may redeem all or any
portion of the 2021 Notes, at once or over time, after notice specified in

46

 

Sections 3.02 and 3.04.
The 2021 Notes may be redeemed at the Redemption Prices set forth below, plus accrued and unpaid
interest to the Redemption Date (subject to the right of Holders of record on the relevant Record
Date to receive interest, if any, due on the relevant Interest Payment Date as provided in Section
3.07). The following Redemption Prices are for 2021 Notes redeemed during the 12-month period
commencing on June 15 of the years set forth below, and are expressed as percentages of principal
amount:

	 	 	 	 	 
	 	 	Redemption	 
	Year	 	Price	 
	2016
	 	 	103.625	%
	2017
	 	 	102.417	%
	2018
	 	 	101.208	%
	2019 and thereafter
	 	 	100.000	%

     In addition, at any time and from time to time, prior to June 15, 2014, on one or more
occasions, Arch Coal may redeem an aggregate principal amount of 2021 Notes not to exceed 35% of
the aggregate principal amount of the 2021 Notes (calculated giving effect to any issuance of
Additional Notes of the 2021 Notes) with the proceeds of one or more Equity Offerings, at a
redemption price equal to 107.250% of the principal amount thereof, plus accrued and unpaid
interest to the Redemption Date (subject to the right of Holders of record on the relevant Record
Date to receive interest due on the relevant Interest Payment Date as provided in Section 3.07);
provided, however, that after giving effect to any such redemption, at least 65% of the aggregate
principal amount of the 2021 Notes (calculated giving effect to any issuance of Additional Notes of
the 2021 Notes) remains outstanding immediately after the occurrence of such redemption (excluding
any 2021 Notes held by Arch Coal or any of its Subsidiaries). Any such redemption shall be made
within 90 days after the date of the closing of such Equity Offering upon not less than 30 nor more
than 60 days’ prior notice.

     At any time prior to June 15, 2016, Arch Coal may, at its option, on one or more occasions
redeem all or a part of the 2021 Notes, upon not less than 30 nor more than 60 days’ prior notice,
at a redemption price equal to 100% of the principal amount of the 2021 Notes redeemed plus the
2021 Notes Applicable Premium as of the date of redemption, and, without duplication, accrued and
unpaid interest, if any, to the Redemption Date (subject to the rights of Holders of record on the
relevant record date to receive interest due on the relevant Interest Payment Date).

     Any redemption pursuant to this Section 3.01(b) shall be made pursuant to the provisions of
this Article Three.

          SECTION 3.02. Notices to Trustee. If Arch Coal elects to redeem 2019 Notes
pursuant to Section 3.01(a) or 2021 Notes pursuant to Section 3.01(b), it shall notify the Trustee
in writing of the Redemption Date, the principal amount of 2019 Notes or 2021 Notes, as applicable,
to be redeemed and the paragraph of the Notes of the applicable series pursuant to which the
redemption will occur.

     Arch Coal shall give each notice to the Trustee provided for in this Section 3.02 in writing
at least 45 days before the date notice is mailed to the Holders pursuant to Section 3.04

47

 

unless
the Trustee consents to a shorter period. Such notice shall be accompanied by an Officers’
Certificate from Arch Coal to the effect that such redemption will comply with the conditions
herein. If fewer than all the Notes of the applicable series are to be redeemed, the Record Date
relating to such redemption shall be selected by Arch Coal and given to the Trustee, which Record
Date shall be not less than 15 days after the date of notice to the Trustee.

     Except as otherwise provided herein, no notice or communication to the Trustee pursuant to
this Section 3.02 shall be deemed effectively given unless it is actually received by a Trust
Officer at its Corporate Trust Office.

          SECTION 3.03. Selection of Notes to be Redeemed. If less than all of the Notes of
a series are to be redeemed, the Trustee shall select the Notes of such series to be redeemed in
compliance with the requirements, as certified to it by Arch Coal, of the principal national
securities exchange or automated quotation system, if any, on which the Notes are listed or, if the
Notes are not listed on a national securities exchange or automated quotation system, by lot or by
such other method as the Trustee in its sole discretion shall deem fair and appropriate; provided,
however, that no such partial redemption shall reduce the portion of the principal amount of a Note
not redeemed to less than $2,000.

     The Trustee shall make the selection from the Notes outstanding and not previously called for
redemption. The Trustee may select for redemption portions equal to $2,000 in principal amount or
any integral multiple of $1,000 in excess thereof. Provisions of this Indenture that apply to
Notes called for redemption also apply to portions of Notes called for redemption. The Trustee
shall notify Arch Coal and the Registrar promptly in writing of the Notes or portions of Notes to
be called for redemption.

          SECTION 3.04. Notice of Redemption. (a) At least 30 days but not more than 60
days before a date for redemption of Notes of a series, Arch Coal shall deliver a notice of
redemption to each Holder to be redeemed and shall comply with the provisions of Section 12.02(b).

     (b) The notice shall identify the Notes to be redeemed (including CUSIP, ISIN and
Common Code numbers) and shall state:

     (i) the Redemption Date;

     (ii) the Redemption Price and the amount of accrued interest, if any to be paid;

     (iii) the name and address of the Paying Agent;

     (iv) that Notes called for redemption must be surrendered to the Paying Agent to
collect the Redemption Price plus accrued interest, if any;

     (v) that, if any Note is being redeemed in part, the portion of the principal
amount (equal to $1,000 in principal amount or any integral multiple thereof) of such Note
to be redeemed and that, on and after the Redemption Date, upon surrender and cancellation
of such Note, a new Note or Notes in principal amount equal to the unredeemed portion
thereof shall be issued in the name of the Holder thereof;

48

 

     (vi) that, if any Note contains a CUSIP, ISIN or Common Code number, no
representation is being made as to the correctness of such CUSIP, ISIN or Common Code number
either as printed on the Notes or as contained in the notice of redemption and that reliance
may be placed only on the other identification numbers printed on the Notes;

     (vii) that, unless Arch Coal defaults in making such redemption payment, interest
on the Notes (or portion thereof) called for redemption shall cease to accrue on and after
the Redemption Date; and

     (viii) the section of this Indenture or the paragraph of the Notes pursuant to
which the Notes called for redemption are being redeemed.

     At Arch Coal’s written request, the Trustee shall give a notice of redemption in Arch Coal’s
name and at Arch Coal’s expense. In such event, Arch Coal shall provide the Trustee with the
notice and the other information required by this Section 3.04.

          SECTION 3.05. Effect of Notice of Redemption. Once a notice of redemption is
mailed, Notes called for redemption become due and payable on the Redemption Date and at the
Redemption Price stated in the notice. Upon surrender of any Notes to the Paying Agent, such Notes
shall be paid at the Redemption Price stated in the notice, plus accrued interest, if any, to the
Redemption Date. In any event, failure to give such notice, or any defect therein, shall not
effect the validity of the proceedings for the redemption of Notes held by Holders to whom such
notice was properly given.

     Notice of redemption shall be deemed to be given when mailed, whether or not the Holder
receives the notice. In any event, failure to give such notice, or any defect therein, shall not
affect the validity of the proceedings for the redemption of Notes held by Holders to whom such
notice was properly given.

          SECTION 3.06. Deposit of Redemption Price. On or prior to any Redemption Date,
Arch Coal shall deposit or cause to be deposited with the Paying Agent a sum in same day funds
sufficient to pay the Redemption Price of and accrued interest on all Notes to be redeemed on that
date other than Notes or portions of Notes called for redemption that have previously been
delivered by Arch Coal to the Trustee for cancellation. The Paying Agent shall return to Arch Coal
any money so deposited that is not required for that purpose.

          SECTION 3.07. Payment of Notes Called for Redemption. If notice of redemption has
been given in the manner provided above, the Notes or portion of Notes specified in such notice to
be redeemed shall become due and payable on the Redemption Date at the Redemption Price stated
therein, together with accrued interest to such Redemption Date, and on and after such date (unless
Arch Coal shall default in the payment of such Notes at the Redemption Price and accrued interest
to the Redemption Date, in which case the principal, until paid, shall bear interest from the
Redemption Date at the rate prescribed in the Notes), such Notes shall cease to accrue interest.
Upon surrender of any Note for redemption in accordance with a notice of redemption, such Note
shall be paid and redeemed by Arch Coal at the Redemption Price, together with accrued interest, if
any, to the Redemption Date; provided, however, that if an Interest Payment Date is on or prior to
the Redemption Date, the accrued

49

 

interest payable on such Interest Payment Date shall be paid on such
Interest Payment Date to the Person in whose name the Notes are registered as such at the
close of business on the relevant Record Date.

          SECTION 3.08. Notes Redeemed in Part. (a) Upon surrender of a Global Note that
is redeemed in part, the Paying Agent shall forward such Global Note to the Trustee who shall make
a notation on the Security Register to reduce the principal amount of such Global Note to an amount
equal to the unredeemed portion of the Global Note surrendered; provided, however, that each such
Global Note shall be in a principal amount of $2,000 and any integral multiple of $1,000 in excess
thereof.

     (b) Upon surrender and cancellation of a certificated Note that is redeemed in part,
Arch Coal shall execute and the Trustee shall authenticate for the Holder (at Arch Coal’s
expense) a new Note equal in principal amount to the unredeemed portion of the Note
surrendered and canceled; provided, however, that each such certificated Note shall be in a
principal amount of $2,000 and any integral multiple of $1,000 in excess thereof.

ARTICLE FOUR

COVENANTS

          SECTION 4.01. Payment of Notes. Arch Coal covenants and agrees for the benefit of
the Holders that it shall duly and punctually pay the principal of, premium, if any, and interest
on the Notes on the dates and in the manner provided in the Notes and in this Indenture.
Principal, premium, if any, and interest shall be considered paid on the date due if on such date
the Trustee or the Paying Agent (other than Arch Coal or any of its Affiliates) holds, in
accordance with this Indenture, money sufficient to pay all principal, premium, if any, and
interest then due. If Arch Coal or any of its Affiliates acts as Paying Agent, principal, premium,
if any, and interest shall be considered paid on the due date if the entity acting as Paying Agent
complies with Section 2.04.

     Arch Coal shall pay interest on overdue principal (and premium, if any) at the rate specified
therefor in the Notes. Arch Coal shall pay interest on overdue installments of interest at the same
rate to the extent lawful.

          SECTION 4.02. Corporate Existence. Subject to Article Five, Arch Coal and each
Restricted Subsidiary shall do or cause to be done all things necessary to preserve and keep in
full force and effect their corporate, partnership, limited liability company or other existence
and the rights (charter and statutory), licenses and franchises of Arch Coal and each Restricted
Subsidiary; provided, however, that Arch Coal shall not be required to preserve any such right,
license or franchise if the Board of Directors of Arch Coal shall determine that the preservation
thereof is no longer desirable in the conduct of the business of Arch Coal and the Restricted
Subsidiaries as a whole and that the loss thereof would not be disadvantageous in any material
respect to the Holders.

          SECTION 4.03. Maintenance of Properties. Arch Coal shall cause all properties
owned by it or any of its Subsidiaries or used or held for use in the conduct of its business or
the business of Arch Coal or any of its Subsidiaries to be maintained and kept in

50

 

good condition,
repair and working order and supplied with all necessary equipment and shall cause to be made all
necessary repairs, renewals, replacements, betterments and improvements thereof, all as, in the
judgment of Arch Coal, may be necessary so that the business carried on in connection therewith may
be properly and advantageously conducted at all times; provided, however, that nothing in this
Section 4.03 shall prevent Arch Coal from discontinuing the maintenance of any such properties if
such discontinuance is, in the judgment of Arch Coal, desirable in the conduct of the business of
Arch Coal and its Subsidiaries as a whole and not disadvantageous in any material respect to the
Holders.

          SECTION 4.04. Insurance. Arch Coal shall maintain, and shall cause its
Subsidiaries to maintain, insurance with carriers believed by Arch Coal to be responsible, against
such risks and in such amounts, and with such deductibles, retentions, self-insured amounts and
coinsurance provisions, as Arch Coal believes are customarily carried by businesses similarly
situated and owning like properties, including as appropriate general liability, property and
casualty loss and interruption of business insurance.

          SECTION 4.05. Statement as to Compliance. (a) Arch Coal shall deliver to the
Trustee, within 90 days after the end of each fiscal year, an Officers’ Certificate stating that in
the course of the performance by the signer of its duties as an officer of Arch Coal he or she
would normally have knowledge of any Default and whether or not the signer knows of any Default
that occurred during such period and if any specifying such Default, its status and what action
Arch Coal is taking or proposed to take with respect thereto. For purposes of this
Section 4.05(a), such compliance shall be determined without regard to any period of grace or
requirement of notice under this Indenture.

     Arch Coal shall comply with TIA Section 314(a)(4). Arch Coal’s delivery to the Trustee of the
reports, information and documents required by said Section 314(a)(4) is for informational purposes
only and the Trustee’s receipt of such shall not constitute constructive notice of any information
contained therein or determinable from information contained therein, including Arch Coal’s
compliance with any of its covenants hereunder (as to which the Trustee is entitled to rely
exclusively on Officers’ Certificates).

     (b) When any Default has occurred and is continuing under this Indenture, or if the
trustee of, or the holder of, any other evidence of Debt of Arch Coal or any Subsidiary
outstanding in a principal amount of $100.0 million or more gives any notice stating that it
is a Notice of Default or takes any other action to accelerate such Debt or enforce any Note
therefor, Arch Coal shall deliver to the Trustee within five Business Days by registered or
certified mail or facsimile transmission an Officers’ Certificate specifying such event,
notice or other action, its status and what action Arch Coal is taking or proposes to take
with respect thereto.

          SECTION 4.06. Limitation on Debt. Arch Coal shall not, and shall not permit any
Restricted Subsidiary to, Incur, directly or indirectly, any Debt unless, after giving effect to
the application of the proceeds thereof, no Default or Event of Default would occur as a
consequence of such Incurrence or be continuing following such Incurrence and either:

51

 

     (1) such Debt is Debt of Arch Coal or a Guarantor, and, after giving effect to
the Incurrence of such Debt and the application of the proceeds thereof,
Consolidated Interest Coverage Ratio of Arch Coal would be at least 2.0 to 1.0, or

     (2) such Debt is Permitted Debt.

     The term “Permitted Debt” is defined to include the following:

     (a) Debt under Credit Facilities (including, without limitation, the Incurrence of
Guarantees thereof) in an aggregate principal amount at any one time outstanding pursuant to
this clause (a) not to exceed the greater of (i) $3,000.0 million, less the aggregate amount
of all Net Available Cash from Asset Sales applied by Arch Coal or any Restricted Subsidiary
to Repay any such Debt pursuant to Section 4.09 of this Indenture and (ii) an amount equal
to 3.0 times Arch Coal’s EBITDA with respect to Arch Coal’s most recent four full fiscal
quarters for which internal financial statements of Arch Coal are available, calculated on a
pro forma basis consistent with the definition of Consolidated Interest Coverage Ratio;

     (b) Debt of Arch Coal and any Restricted Subsidiary evidenced by the Notes issued on
the Issue Date and the Note Guarantees thereof and any Exchange Notes in respect of such
Notes and the related Note Guarantees thereof;

     (c) Debt of Arch Western evidenced by the Arch Western Notes which are outstanding on
the Issue Date and the Guarantees thereof by Arch Western and its Subsidiaries;

     (d) Debt of Arch Coal or a Restricted Subsidiary in respect of Capital Lease
Obligations and Purchase Money Debt; provided that the aggregate principal amount of all
Debt Incurred and then outstanding pursuant to this clause (d) (together with all Permitted
Refinancing Debt Incurred and then outstanding in respect of Debt previously Incurred
pursuant to this clause (d)) does not exceed, at any one time outstanding, the greater of
(x) $750.0 million and (y) 7.5% of Consolidated Net Tangible Assets;

     (e) Debt of Arch Coal owing to and held by any Restricted Subsidiary and Debt of a
Restricted Subsidiary owing to and held by Arch Coal or any Restricted Subsidiary; provided,
however, that any subsequent issue or transfer of Capital Stock that results in any such
Restricted Subsidiary ceasing to be a Restricted Subsidiary or any subsequent transfer of
any such Debt (except the Arch Coal Promissory Notes, to Arch Coal or a Restricted
Subsidiary or any pledge of such Debt constituting a Permitted Lien) shall be deemed, in
each case, to constitute the Incurrence of such Debt by the issuer thereof;

     (f) Debt under Interest Rate Agreements entered into by Arch Coal or a Restricted
Subsidiary in the ordinary course of business;

     (g) Debt under Currency Exchange Protection Agreements entered into by Arch Coal or a
Restricted Subsidiary in the ordinary course of business;

52

 

     (h) Debt under Commodity Price Protection Agreements entered into by Arch Coal or a
Restricted Subsidiary in the ordinary course of business;

     (i) Debt in connection with one or more standby letters of credit, performance bonds,
bid bonds, appeal bonds, bankers acceptances, insurance obligations, surety bonds,
completion guarantees or other similar bonds and obligations, including self-bonding
arrangements, issued by Arch Coal or a Restricted Subsidiary in the ordinary course of
business or pursuant to self-insurance obligations and not in connection with the borrowing
of money or the obtaining of advances;

     (j) Debt of Arch Coal or any Restricted Subsidiary under one or more unsecured
commercial paper facilities in an aggregate amount pursuant to this clause (j) (including
all Permitted Refinancing Debt Incurred and then outstanding in respect of Debt previously
Incurred pursuant to this clause (j)) not to exceed $150.0 million at any one time
outstanding;

     (k) Debt of Arch Coal or a Restricted Subsidiary outstanding on the Issue Date not
otherwise described in clauses (a) through (j) above or (l) through (s) below, including the
Arch Coal Senior Notes and the related Guarantees thereof;

     (l) other Debt of Arch Coal or any Restricted Subsidiary in an aggregate principal
amount outstanding at any one time not to exceed the greater of (x) $500.0 million and (y)
5.0% of Consolidated Net Tangible Assets;

     (m) Permitted Refinancing Debt Incurred in respect of Debt Incurred pursuant to
clause (1) of the first paragraph of this Section 4.06 and clauses (b), (c), (d), (j), (k),
and this clause (m);

     (n) Debt consisting of installment payment obligations owed to any governmental agency
in connection with the acquisition of coal leases or oil, gas or other real property
interests in the ordinary course of business;

     (o) Debt Incurred by Arch Coal or any of its Restricted Subsidiaries arising from
agreements providing for indemnification, adjustment of purchase price or similar
obligations, or guarantees or letters of credit, surety bonds or performance bonds securing
any obligations of Arch Coal or any of its Restricted Subsidiaries pursuant to such
agreements, in any case Incurred in connection with the disposition of any business, assets
or Capital Stock of a Restricted Subsidiary (other than Guarantees of Debt Incurred by any
Person acquiring all or any portion of such business, assets or Capital Stock of a
Restricted Subsidiary for the purpose of financing such acquisition), so long as the amount
does not exceed the gross proceeds actually received by Arch Coal or any Restricted
Subsidiary thereof in connection with such disposition;

     (p) Debt Incurred by Arch Coal or any of its Restricted Subsidiaries arising from the
honoring by a bank or other financial institution of a check, draft or similar instrument
drawn against insufficient funds in the ordinary course of business, provided, however, that
such Debt is extinguished within five Business Days of its Incurrence;

53

 

     (q) Debt Incurred by Arch Coal to the extent that the net proceeds thereof are promptly
deposited to defease or to satisfy and discharge the Notes;

     (r) Debt of a Receivables Subsidiary in respect of a Receivables Facility, which is
non-recourse to Arch Coal or any other Restricted Subsidiary in any way other than Standard
Securitization Undertakings;

     (s) Debt of Persons that are acquired by Arch Coal or any of its Restricted
Subsidiaries or merged into a Restricted Subsidiary in accordance with the terms of this
Indenture; provided, however, that such Debt is not Incurred in contemplation of such
acquisition or merger or to provide all or a portion of the funds or credit support required
to consummate such acquisition or merger; provided further, that, after giving effect to
such acquisition and the Incurrence of such Debt, (x) Arch Coal would be permitted to Incur
at least $1.00 of additional Debt pursuant to clause (1) of the first paragraph of this
Section 4.06 or (y) the Consolidated Interest Coverage Ratio of Arch Coal and its Restricted
Subsidiaries would be equal to or greater than immediately prior to such acquisition or
merger; or

     (t) Debt of Foreign Subsidiaries of Arch Coal in an aggregate principal amount
outstanding at any one time not to exceed the greater of (x) $500.0 million and (y) 5.0% of
Consolidated Net Tangible Assets

     Notwithstanding anything to the contrary contained in this Section 4.06, accrual of interest,
accretion or amortization of original issue discount and the payment of interest or dividends in
the form of additional Debt, will be deemed not to be an Incurrence of Debt for purposes of this
Section 4.06.

     For purposes of determining compliance with any U.S. dollar-denominated restriction on the
Incurrence of Debt, the U.S. dollar-equivalent principal amount of Debt denominated in a foreign
currency shall be calculated based on the relevant currency exchange rate in effect on the date
such Debt was Incurred, in the case of term debt, or first committed, in the case of revolving
credit debt; provided that if such Debt is Incurred to refinance other Debt denominated in a
foreign currency, and such refinancing would cause the applicable U.S. dollar denominated
restriction to be exceeded if calculated at the relevant currency exchange rate in effect on the
date of such refinancing, such U.S. dollar-denominated restriction shall be deemed not to have been
exceeded so long as the principal amount of such refinancing Debt does not exceed the principal
amount of such Debt being refinanced, plus the amount of any reasonable premium (including
reasonable tender premiums), defeasance costs and any reasonable fees and expenses incurred in
connection with the issuance of such new Debt.

     The principal amount of any Debt Incurred to refinance other Debt, if Incurred in a different
currency from the Debt being refinanced, shall be calculated based on the currency exchange rate
applicable to the currencies in which such respective Debt is denominated that is in effect on the
date of such refinancing.

     For purposes of determining compliance with this Section 4.06 in the event that an item of
Debt meets the criteria of more than one of the categories of Permitted Debt described in

54

 

clauses (a) through (t) above or is entitled to be incurred pursuant to clause (1) of the first
paragraph of this Section 4.06, Arch Coal shall, in its sole discretion classify, and may later
reclassify, such item of Debt in any manner that complies with this Section 4.06. Notwithstanding
the foregoing, Debt under the Amended and Restated Credit Agreement outstanding on the Issue Date
will be deemed to have been Incurred on such date in reliance on the exception provided by
clause (a) of the definition of Permitted Debt and Debt under Arch Western’s existing commercial
paper facility outstanding on the Closing Date will be deemed to have been Incurred on such date in
reliance on the exception provided by clause (j) of the definition of Permitted Debt.

          SECTION 4.07. Limitation on Liens. Arch Coal shall not, and shall not permit any
Restricted Subsidiary to, directly or indirectly, Incur or suffer to exist, any Lien (other than
Permitted Liens) upon any of its Property (including Capital Stock of a Restricted Subsidiary),
whether owned at the Issue Date or thereafter acquired, or any interest therein or any income or
profits therefrom, unless it has made or will make effective provision whereby the Notes or any
Note Guarantee will be secured by such Lien equally and ratably with all other Debt of Arch Coal or
any Restricted Subsidiary secured by such Lien for so long as such other Debt is secured by such
Lien; provided, however, that if such Debt is expressly subordinated to the Notes or any Note
Guarantee, the Lien securing such Debt will be subordinated and junior to the Lien securing the
Notes or such Note Guarantee, as the case may be, with the same relative priority as such Debt has
with respect to the Notes or such Note Guarantee.

          SECTION 4.08. Limitation on Restricted Payments. Arch Coal shall not make, and
shall not permit any Restricted Subsidiary to make, directly or indirectly, any Restricted Payment
if at the time of, and after giving effect to, such proposed Restricted Payment,

     (a) a Default or Event of Default shall have occurred and be continuing;

     (b) Arch Coal could not Incur at least $1.00 of additional Debt pursuant to clause (1)
of the first paragraph of Section 4.06 of this Indenture; or

     (c) the aggregate amount of such Restricted Payment and all other Restricted Payments
declared or made since the Issue Date (the amount of any Restricted Payment, if made other
than in cash, to be based upon Fair Market Value at the time of such Restricted Payment)
would exceed an amount equal to the sum of:

     (1) 50% of the aggregate amount of Consolidated Net Income of Arch Coal accrued
during the period (treated as one accounting period) from July 1, 2010 to the end of
the most recent fiscal quarter for which internal financial statements are available
at the time of such Restricted Payment (or if the aggregate amount of Consolidated
Net Income of Arch Coal for such period shall be a deficit, minus 100% of such
deficit), plus

     (2) 100% of the Capital Stock Sale Proceeds, plus

     (3) the sum of:

55

 

	 	(A)	 	the aggregate net cash
proceeds received by Arch Coal or any Restricted Subsidiary from
the issuance or sale after the Issue Date of convertible or
exchangeable Debt that has been converted into or exchanged for
Capital Stock (other than Disqualified Stock) of Arch Coal, and

	 	(B)	 	the aggregate net cash
proceeds received by Arch Coal from the issuance and sale after
the Issue Date of Debt of Arch Coal or any Restricted Subsidiary
that has been converted or exchanged for Capital Stock (other
than Disqualified Stock) of Arch Coal,

excluding, in the case of clause (A) or (B) above:

     (x) any such Debt issued or sold to Arch Coal or a Subsidiary of Arch Coal
or an employee stock ownership plan or trust established by Arch Coal or any such
Subsidiary for the benefit of their employees, and

     (y) the aggregate amount of any cash or other Property distributed by Arch
Coal or any Restricted Subsidiary upon any such conversion or exchange,

plus

     (4) an amount equal to the sum of:

	 	(A)	 	the net reduction in
Investments in any Person other than Arch Coal or a Restricted
Subsidiary resulting from dividends, repayments of loans or
advances or other transfers of Property, in each case to Arch
Coal or any Restricted Subsidiary from such Person, and

	 	(B)	 	the portion (proportionate to
Arch Coal’s equity interest in such Unrestricted Subsidiary) of
the Fair Market Value of the net assets of an Unrestricted
Subsidiary of Arch Coal at the time such Unrestricted Subsidiary
is designated a Restricted Subsidiary;

provided, however, that the foregoing sum shall not exceed, in the case of any Person, the
amount of Investments previously made (and treated as a Restricted Payment) by Arch Coal or
any Restricted Subsidiary in such Person.

     Notwithstanding the foregoing limitation, Arch Coal may:

     (a) pay dividends on its Capital Stock within 60 days of the declaration thereof if, on
the declaration date, such dividends could have been paid in compliance with this Indenture;
provided, however, that such dividend shall be included in the calculation of the amount of
Restricted Payments;

56

 

     (b) make Restricted Payments in exchange for, or out of the proceeds of the
substantially concurrent sale of, Capital Stock of Arch Coal (other than Disqualified Stock
and other than Capital Stock issued or sold to a Subsidiary of Arch Coal or an employee
stock ownership plan or trust established by Arch Coal or any such Subsidiary for the
benefit of their employees); provided, however; that

     (1) such purchase, repurchase, redemption, legal defeasance, acquisition or
retirement shall be excluded in the calculation of the amount of Restricted
Payments, and

     (2) the Capital Stock Sale Proceeds from such exchange or sale shall be
excluded from the calculation pursuant to clause (c)(2) above;

     (c) purchase, repurchase, redeem, legally defease, acquire or retire for value any
Subordinated Obligations in exchange for, or out of the proceeds of the substantially
concurrent sale of, Permitted Refinancing Debt; provided, however, that such purchase,
repurchase, redemption, legal defeasance, acquisition or retirement shall be excluded in the
calculation of the amount of Restricted Payments;

     (d) repurchase shares of, or options to purchase shares of, common stock of Arch Coal
or any of its Subsidiaries from current or former officers, directors or employees of Arch
Coal or any of its Subsidiaries (or permitted transferees of such current or former
officers, directors or employees), pursuant to the terms of agreements (including employment
agreements) or plans (or amendments thereto) approved by the Board of Directors under which
such individuals purchase or sell, or are granted the option to purchase or sell, shares of
such common stock; provided, however, that: (1) the aggregate amount of such repurchases
shall not exceed $10.0 million in any calendar year (with unused amounts in any calendar
year being carried over to succeeding years subject to a maximum of $20.0 million in any
calendar year) and (2) at the time of such repurchase, no other Default or Event of Default
shall have occurred and be continuing (or result therefrom); provided further, however, that
such repurchases shall be included in the calculation of the amount of Restricted Payments;

     (e) so long as no Default or Event of Default has occurred and is continuing and Arch
Western is a limited liability company, make distributions to the ARCO Member (as defined in
the LLC Agreement), with respect to any period after March 31, 2011, not to exceed the Tax
Amount allocated to such member under the LLC Agreement for such period; provided, however,
that such distributions shall be excluded in the calculation of the amount of Restricted
Payments;

     (f) so long as no Default or Event of Default has occurred and is continuing, make
distributions of the Preferred Return (as defined in the LLC Agreement) to the ARCO Member
(as defined in the LLC Agreement) pursuant to the LLC Agreement in effect on the Issue Date;
provided, however, that such distribution pursuant to this clause (f) shall not exceed
$100,000 per year and shall be excluded in the calculation of the amount of Restricted
Payments;

57

 

     (g) pay cash in lieu of fractional Capital Stock pursuant to the exchange or conversion
of any exchangeable or convertible securities; provided, however, that such payment shall
not be for the purpose of evading the limitation of Section 4.08 (as determined by the Board
of Directors in good faith); provided further, however, that such payments will be excluded
in the calculation of the amount of Restricted Payments;

     (h) repurchase of Capital Stock deemed to occur upon the exercise of options, warrants
or other securities convertible into or exchangeable for Capital Stock of Arch Coal to the
extent that such Capital Stock represents all or a portion of the exercise price thereof;
provided, however, that such repurchase will be excluded in the calculation of the amount of
Restricted Payments;

     (i) declare and pay dividends to holders of any class or series of Disqualified Stock
of Arch Coal or any Restricted Subsidiary, or Preferred Stock of a Restricted Subsidiary, in
each case issued in accordance with Section 4.06 of this Indenture; provided, however, that
50% of such dividends shall be included in the calculation of the amount of Restricted
Payments;

     (j) declare and pay dividends on Arch Coal’s common stock not to exceed the greater of
(1) an annual rate of $0.60 per share (such amount to be appropriately adjusted to reflect
any stock split, reverse stock split, stock dividend or similar transaction occurring after
the Issue Date so that the aggregate amount of dividends permitted after such transaction is
the same as the amount permitted immediately prior to such transaction), and (2) $150.0
million per full calendar year (in each case of clause (1) and (2) pro rated for 2011 from
the Issue Date); provided however that any unused amounts in any calendar year may be
carried over for the next succeeding calendar; provided further, that such dividends shall
be excluded in the calculation of the amount of Restricted Payments; and

     (k) so long as no Default or Event of Default has occurred and is continuing, other
Restricted Payments in an aggregate amount not to exceed $400.0 million; provided, however,
that such Restricted Payments shall be excluded in the calculation of the amount of
Restricted Payments.

     For purposes of determining compliance with this Section 4.08, if a Restricted Payment meets
the criteria of more than one of the types of Restricted Payments described in clauses (a) through
(k) above, Arch Coal may, in its sole discretion, classify such Restricted Payment in any manner
that complies with this Section 4.08.

          SECTION 4.09. Limitation on Asset Sales. Arch Coal shall not, and shall not
permit any Restricted Subsidiary to, directly or indirectly, consummate any Asset Sale unless:

     (a) Arch Coal or such Restricted Subsidiary receives consideration at the time of such
Asset Sale at least equal to the Fair Market Value of the Property subject to such Asset
Sale (such Fair Market Value to be determined at the time of contractually agreeing to such
Asset Sale);

58

 

     (b) at least 75% of the consideration paid to Arch Coal or such Restricted Subsidiary
in connection with such Asset Sale is in the form of cash, Cash Equivalents or Additional
Assets or a combination thereof. For purposes of this provision, each of the following will
be deemed to be cash:

     (1) any liabilities of Arch Coal or any Restricted Subsidiary (other than
contingent liabilities, liabilities that are by their terms subordinated to the
Notes or the Note Guarantees and liabilities to the extent owed to Arch Coal or any
Subsidiary of Arch Coal) that are assumed by the transferee of any Property or
Capital Stock, as applicable, to the extent that Arch Coal and the Restricted
Subsidiaries are no longer obligated with respect to such liabilities; and

     (2) any securities, notes or other obligations received by Arch Coal or any
such Restricted Subsidiary from such transferee that are converted by Arch Coal or
such Restricted Subsidiary into cash within 180 days of receipt (to the extent of
the cash received in that conversion).

     The Net Available Cash (or any portion thereof) from Asset Sales may be applied by Arch Coal
or a Restricted Subsidiary to the extent Arch Coal or such Restricted Subsidiary elects (or is
required by the terms of any Debt) to:

     (a) Repay any secured Debt (other than Subordinated Obligations) of Arch Coal or any
Restricted Subsidiary , any Debt of a Restricted Subsidiary that is not a Guarantor (other
than Debt owed to Arch Coal or another Restricted Subsidiary) or any Debt under the Amended
and Restated Credit Agreement;

     (b) make a capital expenditure or reinvest in Additional Assets (including by means of
an Investment in Additional Assets by a Restricted Subsidiary with Net Available Cash
received by Arch Coal or another Restricted Subsidiary); or

     (c) Repay other pari passu Debt; provided that Arch Coal shall also equally and ratably
reduce Debt under the Notes through open-market purchases or by making an offer (in
accordance with the procedures set forth below for a Prepayment Offer) to all Holders to
purchase the pro rata principal amount of Notes, in each case at a purchase price equal to
100% of the principal amount thereof, plus accrued and unpaid interest to the repurchase
date (subject to the right of Holders of record on the relevant Record Date to receive
interest due on the relevant Interest Payment Date).

     Any Net Available Cash from an Asset Sale (other than an Asset Sale consisting of all of the
Capital Stock of Canyon Fuel Company, LLC or Mountain Coal Company, L.L.C.) not applied in
accordance with the preceding paragraph within 365 days from the date of the receipt of such Net
Available Cash (provided that such 365 day period shall be extended with respect to Net Available
Cash received by Arch Western or its Restricted Subsidiaries until the consummation of any asset
sale prepayment offer required to be made pursuant to the Arch Western Notes Indenture or any
agreement governing Permitted Refinancing Debt in respect thereof) or that is not segregated from
the general funds of Arch Coal for investment in identified Additional Assets in respect of a
project that shall have been commenced, and for which binding

59

 

contractual commitments have been
entered into, prior to the end of such 365-day period and that shall not have been completed or
abandoned shall constitute “Excess Proceeds;” provided, however, that the amount of any Net
Available Cash that ceases to be so segregated as contemplated above and any Net Available Cash
that is segregated in respect of a project that is abandoned or completed shall also constitute
“Excess Proceeds” at the time any such Net Available Cash ceases to be so segregated or at
the time the relevant project is so abandoned or completed, as applicable; provided further,
however, that the amount of any Net Available Cash that continues to be segregated for investment
and that is not actually reinvested within twenty-four months from the date of the receipt of such
Net Available Cash shall also constitute “Excess Proceeds.” Any Net Available Cash from an Asset
Sale consisting of all of the Capital Stock of Canyon Fuel Company, LLC or Mountain Coal Company,
L.L.C. not applied in accordance with the preceding paragraph within 365 days from the date of the
receipt of such Net Available Cash shall be segregated from the general funds of Arch Coal and
invested in cash or Cash Equivalents pending application in accordance with the preceding
paragraph. Subject to the foregoing, Arch Coal or such Restricted Subsidiary may apply the Net
Available Cash to temporarily reduce Debt outstanding under a revolving credit facility or
otherwise invest such Net Available Cash in any manner not prohibited by this Indenture pending the
final application of the Net Available Cash pursuant to this Section 4.10.

     When the aggregate amount of Excess Proceeds exceeds $200.0 million (or earlier at Arch Coal’s
option, in which case Excess Proceeds shall be deemed to include any Net Available Cash Arch Coal
elects to include in such repurchase offer), Arch Coal will be required to make an offer to
repurchase (the “Prepayment Offer”) the Notes, which offer shall be in the amount of the
Allocable Excess Proceeds (rounded to the nearest $1,000), on a pro rata basis according to
principal amount, at a purchase price equal to 100% of the principal amount thereof, plus accrued
and unpaid interest to the repurchase date (subject to the right of Holders of record on the
relevant Record Date to receive interest due on the relevant Interest Payment Date), in accordance
with the procedures (including prorating in the event of oversubscription) set forth in this
Indenture. To the extent that any portion of the amount of Net Available Cash remains after
compliance with the preceding sentence and provided that all Holders of Notes have been given the
opportunity to tender their Notes for repurchase in accordance with this Indenture, Arch Coal or
such Restricted Subsidiary may use such remaining amount for any purpose not prohibited by this
Indenture, and the amount of Excess Proceeds will be reset to zero.

     The term “Allocable Excess Proceeds” shall mean the product of:

     (a) the Excess Proceeds and

     (b) a fraction,

     (1) the numerator of which is the aggregate principal amount of the Notes
outstanding on the date of the Prepayment Offer, and

     (2) the denominator of which is the sum of the aggregate principal amount of
the Notes outstanding on the date of the Prepayment Offer and the aggregate
principal amount of other Debt of Arch Coal outstanding on the date of the
Prepayment Offer that is pari passu in right of payment with the Notes and

60

 

subject to terms and conditions in respect of Asset Sales similar in all material respects
to this Section 4.09 and requiring Arch Coal to make an offer to repurchase such
Debt at substantially the same time as the Prepayment Offer.

     Within five Business Days after Arch Coal is obligated to make a Prepayment Offer as described
in the preceding paragraph, Arch Coal shall send or arrange to be sent a written notice, by
first-class mail, to the Holders of Notes, accompanied by such information regarding Arch Coal and
its Subsidiaries as Arch Coal in good faith believes will enable such Holders to make an informed
decision with respect to such Prepayment Offer. Such notice shall state, among other things, the
purchase price and the repurchase date, which shall be, subject to any contrary requirements of
applicable law, a Business Day no earlier than 30 days nor later than 60 days from the date such
notice is mailed.

     Arch Coal will comply, to the extent applicable, with the requirements of Section 14(e) of the
Exchange Act and any other securities laws or regulations in connection with the repurchase of
Notes pursuant to this covenant. To the extent that the provisions of any securities laws or
regulations conflict with provisions of this Section 4.09, Arch Coal will comply with the
applicable securities laws and regulations and will not be deemed to have breached its obligations
under this Section 4.09 by virtue thereof.

          SECTION 4.10. Limitation on Transactions with Affiliates. Arch Coal shall not,
and shall not permit any Restricted Subsidiary to, directly or indirectly, enter into or suffer to
exist any transaction or series of transactions (including the purchase, sale, transfer,
assignment, lease, conveyance or exchange of any Property or the rendering of any service) with, or
for the benefit of, any Affiliate of Arch Coal (an “Affiliate Transaction”) involving
consideration in excess of $15.0 million, unless:

     (a) the terms of such Affiliate Transaction are not materially less favorable to Arch
Coal or such Restricted Subsidiary, as the case may be, than those that could be obtained in
a comparable arm’s-length transaction with a Person that is not an Affiliate of Arch Coal;

     (b) if such Affiliate Transaction involves aggregate payments or value in excess of
$50.0 million, the Board of Directors approves such Affiliate Transaction and, in its good
faith judgment, believes that such Affiliate Transaction complies with clause (a) of this
paragraph as evidenced by a Board Resolution promptly delivered to the Trustee; and

     (c) if such Affiliate Transaction involves aggregate payments or value in excess of
$250.0 million, Arch Coal obtains a written opinion from an Independent Financial Advisor to
the effect that the consideration to be paid or received in connection with such Affiliate
Transaction is fair, from a financial point of view, to Arch Coal or such Restricted
Subsidiary or that such Affiliate Transaction is not materially less favorable to Arch Coal
or such Restricted Subsidiary, as the case may be, than those that could be obtained in a
comparable arm’s length transaction with a Person that is not an Affiliate of Arch Coal.

61

 

     Notwithstanding the foregoing limitation, Arch Coal or any Restricted Subsidiary may
enter into or suffer to exist the following:

     (a) any transaction or series of transactions between Arch Coal and one or more
Restricted Subsidiaries, or among Restricted Subsidiaries;

     (b) any Restricted Payment permitted to be made pursuant to Section 4.08 of this
Indenture or Permitted Investments (other than pursuant to clause (b) or (c) of such
definition);

     (c) any reasonable and customary employment, consulting, service or termination
agreement, or indemnification agreement, entered into by Arch Coal or any of its Restricted
Subsidiaries with officers, directors, employees and consultants of Arch Coal or any of its
Restricted Subsidiaries and the payment of fees or compensation (including amounts paid
pursuant to employment and related agreements and employee benefit plans) for the personal
services of current or former officers, directors, employees and consultants of Arch Coal or
any of its Restricted Subsidiaries (including amounts paid pursuant to employee benefit
plans, employee stock option, stock awards or similar plans);

     (d) loans and advances to employees made in the ordinary course of business permitted
by law and consistent with the past practices of Arch Coal or such Restricted Subsidiary;

     (e) indemnities of officers, directors and employees of Arch Coal or any Restricted
Subsidiary consistent with applicable charter, bylaw or statutory provisions;

     (f) agreements in effect on the Issue Date and any modifications, extensions or
renewals thereto that are not materially less favorable taken as a whole to Arch Coal or any
Restricted Subsidiary than such agreements as in effect on the Issue Date;

     (g) pledges of Capital Stock of Unrestricted Subsidiaries for the benefit of lenders to
such Unrestricted Subsidiaries;

     (h) any transaction with a Receivables Subsidiary as part of a Receivables Facility and
otherwise in compliance with this Indenture that are fair to Arch Coal or its Restricted
Subsidiaries or not less favorable to Arch Coal or its Restricted Subsidiaries than those
that might be obtained at the time with Persons that are not Affiliates of Arch Coal (as
determined in good faith by the Board of Directors); and

     (i) transactions with Unrestricted Subsidiaries, customers, clients, suppliers,
contractors, joint venture partners or purchasers or sellers of goods or services, or
lessors or lessees of property, in each case in the ordinary course of business (including,
without limitation, pursuant to joint venture agreements) and otherwise in compliance with
the terms of this Indenture which are, in the aggregate (taking into account all the costs
and benefits associated with such transactions), materially no less favorable taken as a
whole to Arch Coal or its Restricted Subsidiaries than those that would have been obtained
in a

62

 

comparable transaction by Arch Coal or such Restricted Subsidiary with an unrelated
Person, as determined in good faith by Arch Coal.

          SECTION 4.11. Change of Control. Upon the occurrence of a Change of Control, unless
Arch Coal has previously or concurrently mailed a redemption notice with respect to all outstanding
Notes as described in Article Three, each holder of Notes shall have the right to require Arch Coal
to repurchase all or any part of such holder’s Notes pursuant to the offer described below (the
“Change of Control Offer”) at a purchase price (the “Change of Control Purchase
Price”) equal to 101% of the principal amount thereof, plus accrued and unpaid interest, if
any, to the repurchase date (subject to the right of Holders of record on the relevant Record Date
to receive interest due on the relevant Interest Payment Date). If the repurchase date is after a
Record Date and on or before the relevant Interest Payment Date, accrued and unpaid interest, if
any, will be paid to the person or entity in whose name the Note is registered at the close of
business on that Record Date, and no additional interest will be payable to Holders whose Notes
shall be subject to repurchase.

Within 30 days following any Change of Control, Arch Coal shall:

     (a) cause a notice of the Change of Control Offer to be sent at least once to the Dow
Jones News Service or similar business news service in the United States; and

     (b) send or cause to be sent, by first-class mail, with a copy to the Trustee, to each
Holder of Notes, at such Holder’s address appearing in the Security Register, a notice
stating:

     (1) that a Change of Control has occurred and a Change of Control Offer is
being made pursuant to this Section 4.11 of this Indenture and that all Notes
properly tendered will be accepted for payment;

     (2) the Change of Control Purchase Price and the repurchase date, which shall
be, subject to any contrary requirements of applicable law, a Business Day no
earlier than 30 days nor later than 60 days from the date such notice is mailed; and

     (3) the procedures that Holders of Notes must follow in order to tender their
Notes (or portions thereof) for payment, and the procedures that Holders of Notes
must follow in order to withdraw an election to tender Notes (or portions thereof)
for payment.

     Arch Coal shall not be required to make a Change of Control Offer following a Change of
Control if a third party makes the Change of Control Offer in the manner, at the times and
otherwise in compliance with the requirements set forth in this Indenture applicable to a Change of
Control Offer made by Arch Coal and purchases all Notes validly tendered and not withdrawn under
such Change of Control Offer. Notwithstanding anything to the contrary herein, a Change of Control
Offer may be made in advance of a Change of Control, conditional upon such Change of Control, if a
definitive agreement is in place for the Change of Control at the time of making of the Change of
Control Offer.

63

 

     With respect to the Notes, if Holders of not less than 95% in aggregate principal amount of
the outstanding Notes of a series validly tender and do not withdraw such Notes in a Change of
Control Offer and Arch Coal, or any third party making a Change of Control Offer in lieu of Arch
Coal as described above, purchases all of the Notes of a series validly tendered and not withdrawn
by such Holders, Arch Coal or such third party will have the right, upon not less than 30 nor more
than 60 days’ prior notice, given not more than 30 days following such purchase pursuant to the
Change of Control Offer described above, to redeem all Notes of the series that remain outstanding
following such purchase at a price in cash equal to the applicable Change of Control Purchase Price
plus, to the extent not included in the Change of Control Purchase Price, accrued and unpaid
interest, if any, thereon, to the date of redemption.

     Arch Coal shall comply, to the extent applicable, with the requirements of Section 14(e) of
the Exchange Act and any other securities laws or regulations in connection with the repurchase of
Notes pursuant to a Change of Control Offer. To the extent that the provisions of any securities
laws or regulations conflict with the provisions of this Section 4.11, Arch Coal shall comply with
the applicable securities laws and regulations and will not be deemed to have breached its
obligations under this covenant by virtue of such compliance.

          SECTION 4.12. Guarantees by Restricted Subsidiaries. Arch Coal shall not permit any
Restricted Subsidiary that is not a Guarantor, directly or indirectly, to Guarantee or secure the
payment of any other Debt of Arch Coal or any of its Restricted Subsidiaries under the Amended and
Restated Credit Agreement or any capital markets Debt unless such Restricted Subsidiary executes
and delivers a supplemental indenture to this Indenture within 15 days providing for a Note
Guarantee of the payment of the Notes by such Restricted Subsidiary; provided that this paragraph
shall not be applicable to:

     (i) any Guarantee of any Restricted Subsidiary that existed at the time such Person became a Restricted Subsidiary and was not incurred in connection with, or in
contemplation of, such Person becoming a Restricted Subsidiary;

     (ii) any Guarantee arising under or in connection with performance bonds, indemnity bonds, surety bonds or letters of credit or bankers’ acceptances or coal
sales contracts; or

     (iii) Permitted Liens.

     If the Guaranteed Debt is a Subordinated Obligation, the Guarantee of such Guaranteed Debt
must be subordinated in right of payment to the Note Guarantee to at least the extent that the
Guaranteed Debt is subordinated to the Notes or the applicable Note Guarantee.

          SECTION 4.13. Limitation on Restrictions on Distributions from Restricted
Subsidiaries. Arch Coal shall not, and shall not permit any Restricted Subsidiary to, directly
or indirectly, create or otherwise cause or suffer to exist any consensual restriction on the right
of any Restricted Subsidiary to:

64

 

     (a) pay dividends, in cash or otherwise, or make any other distributions on or in
respect of its Capital Stock, or pay any Debt or other obligation owed, to Arch Coal or any
other Restricted Subsidiary;

     (b) make any loans or advances to Arch Coal or any other Restricted Subsidiary; or

     (c) transfer any of its Property to Arch Coal or any other Restricted Subsidiary.

     (d) The foregoing limitations will not apply:

     (1) with respect to clauses (a), (b) and (c) above, to restrictions:

	 	(A)	 	in effect on the Issue Date
(including, without limitation, restrictions pursuant to the
Arch Western Notes and the Arch Western Notes Indenture, the
Arch Coal Senior Notes and each of the Arch Coal Senior Notes
Indentures, the LLC Agreement, the Amended and Restated Credit
Agreement, the Notes and this Indenture);

	 	(B)	 	relating to any agreement or
other instrument of a Restricted Subsidiary of Arch Coal and
existing at the time it became a Restricted Subsidiary if such
restriction was not created in connection with or in
anticipation of the transaction or series of transactions
pursuant to which such Restricted Subsidiary became a Restricted
Subsidiary or was acquired by Arch Coal;

	 	(C)	 	that result from any amendment,
restatement, renewal, replacement or refinancing of an agreement
referred to in clause (1)(A) or (B) above or in clause (2)(A) or
(B) below, provided such restrictions are not materially more
restrictive, taken as a whole, than those under the agreement
being amended, restated, renewed, refinanced or replaced;

	 	(D)	 	existing under, or by reason of
or with respect to applicable law, rule, regulation or order of
any governmental authority;

	 	(E)	 	on cash or other deposits or net
worth imposed by customers or required by insurance surety or
bonding companies, in each case, under contracts entered into in
the ordinary course of business;

	 	(F)	 	relating to Debt of a Receivables
Subsidiary or other contractual requirements of a Receivables
Subsidiary in connection with a Receivables Facility; provided
that such

65

 

	 	 	 	restrictions only apply to such Receivables Subsidiary or the
receivables which are subject to the Receivables Facility;

	 	(G)	 	with respect to any Person or the
Property of a Person acquired by Arch Coal or any of its
Restricted Subsidiaries existing at the time of such acquisition
and not incurred in connection with or in anticipation of such
acquisition, which restriction is not applicable to any Person
or the Property of any Person, other than the Person, or the
Property of the Person, so acquired and any amendments,
modifications, restatements, renewals, extensions, supplements,
refundings, replacements or refinancings thereof, provided that
the restrictions in any such amendments, modifications,
restatements, renewals, extensions, supplements, refundings,
replacements or refinancings are not materially more
restrictive, taken as a whole, than those in effect on the date
of the acquisition;

	 	(H)	 	contained in customary provisions
in asset sale agreements limiting the transfer of such Property
or distributions or loans from the Property to be sold pending
the closing of such sale;

	 	(I)	 	contained in customary provisions
in partnership agreements, limited liability company
organizational governance documents, joint venture agreements
and other similar agreements that restrict the transfer of
ownership interest in, or assets of, such partnership, limited
liability company, joint venture or similar Person; and

	 	(J)	 	contained in agreements or
instruments governing the Debt of a Restricted Subsidiary;
provided that such restrictions contained in any agreement or
instrument will not materially affect Arch Coal’s ability to
make anticipated principal or interest payments on the Notes (as
determined in good faith by the Board of Directors or the senior
management of Arch Coal); and

     (2) with respect to clause (c) only, to restrictions:

	 	(A)	 	relating to Debt that is
permitted to be Incurred and secured without also securing the
Notes pursuant to Sections 4.06 and 4.07 of this Indenture that
limit the right of the debtor to dispose of the Property
securing such Debt;

66

 

	 	(B)	 	resulting from customary
provisions restricting subletting, assignment or transfer of any
property or asset that is subject to a lease, license,
sub-license or similar contract or customary provisions in other
agreements that restrict assignment or transfer of such
agreements or rights thereunder; or

	 	(C)	 	customary restrictions contained
in asset sale agreements limiting the transfer of such Property
pending the closing of such sale.

          SECTION 4.14. Designation of Restricted and Unrestricted Subsidiaries. The Board of
Directors may designate any Restricted Subsidiary to be an Unrestricted Subsidiary if that
designation (which would constitute an Investment in such Subsidiary) would not result in a breach
of Section 4.08 of this Indenture or otherwise cause a Default. If a Restricted Subsidiary is
designated as an Unrestricted Subsidiary, the aggregate Fair Market Value of all outstanding
Investments owned by Arch Coal and its Restricted Subsidiaries in the Subsidiary properly
designated will be deemed to be an Investment made as of the time of the designation as set forth
under the definition of “Investment” and will reduce the amount available for Restricted Payments
under Section 4.08 of this Indenture or Permitted Investments, as determined by Arch Coal. That
designation will only be permitted if the Investment would be permitted at that time and if the
Restricted Subsidiary otherwise meets the definition of an Unrestricted Subsidiary.

     The Board of Directors may also designate any Subsidiary of Arch Coal to be an Unrestricted
Subsidiary if:

     (a) the Subsidiary to be so designated does not own any Capital Stock or Debt of, or
own or hold any Lien on any Property of, Arch Coal or any other Restricted Subsidiary and is
not required to be a Guarantor pursuant to this Indenture; and

     (b) either:

     (1) the Subsidiary to be so designated has total assets of $1.0 million or
less; or

     (2) such designation is effective immediately upon such entity becoming a
Subsidiary of Arch Coal.

     Unless so designated as an Unrestricted Subsidiary, any Person that becomes a Subsidiary of
Arch Coal will be classified as a Restricted Subsidiary; provided, however, that such Subsidiary
shall not be designated a Restricted Subsidiary and shall be automatically classified as an
Unrestricted Subsidiary if either of the requirements set forth in clauses (x) and (y) of the
second immediately following paragraph will not be satisfied after giving pro forma effect to such
classification or if such Person is a Subsidiary of an Unrestricted Subsidiary.

     In addition, neither Arch Coal nor any of its Restricted Subsidiaries shall at any time be
directly or indirectly liable for any Debt that provides that the holder thereof may (with the
passage of time or notice or both) declare a default thereon or cause the payment thereof to be

67

 

accelerated or payable prior to its Stated Maturity upon the occurrence of a default with
respect to any Debt, Lien or other obligation of any Unrestricted Subsidiary (including any right
to take enforcement action against such Unrestricted Subsidiary) except for a pledge of the Capital
Stock of any Unrestricted Subsidiary for the benefit of such holders.

     The Board of Directors may designate any Unrestricted Subsidiary to be a Restricted Subsidiary
if, immediately after giving pro forma effect to such designation,

(x) Arch Coal could Incur at least $1.00 of additional Debt pursuant to clause (1)
of the first paragraph of Section 4.06 of this Indenture and

(y) no Default or Event of Default shall have occurred and be continuing or would
result therefrom.

     Any such designation or redesignation by the Board of Directors will be evidenced by filing
with the Trustee a Board Resolution giving effect to such designation or redesignation and an
Officers’ Certificate that:

     (a) certifies that such designation or redesignation complies with the foregoing
provisions; and

     (b) gives the effective date of such designation or redesignation,

such filing with the Trustee to occur within 45 days after the end of the fiscal quarter of Arch
Coal in which such designation or redesignation is made (or, in the case of a designation or
redesignation made during the last fiscal quarter of Arch Coal’s fiscal year, within 90 days after
the end of such fiscal year).

          SECTION 4.15. Payment of Taxes and Other Claims. Arch Coal will pay or discharge and
shall cause each of the Subsidiaries to pay or discharge, or cause to be paid or discharged, before
the same shall become delinquent (a) all material taxes, assessments and governmental charges
levied or imposed upon (i) Arch Coal or any such Subsidiary, (ii) the income or profits of any such
Subsidiary which is a corporation or (iii) the property of Arch Coal or any such Subsidiary and (b)
all material lawful claims for labor, materials and supplies that, if unpaid, might by law become a
Lien upon the property of Arch Coal or any such Subsidiary; provided, however, that Arch Coal shall
not be required to pay or discharge, or cause to be paid or discharged, any such tax, assessment,
charge or claim the amount, applicability or validity of which is being contested in good faith by
appropriate proceedings and for which adequate reserves have been established.

          SECTION 4.16. Reports to Holders. Notwithstanding that Arch Coal may not be subject
to the reporting requirements of Section 13 or 15(d) of the Exchange Act, Arch Coal shall file with
the Commission and, if not filed electronically with the Commission, will provide to the Trustee
(within 15 days after it would have been required to file with the Commission) such quarterly and
annual information that would be required to be contained in a filing with the Commission on Forms
10-K and 10-Q, as if Arch Coal where required to file such forms; provided, however, that Arch Coal
shall not be so obligated to file such information, documents and reports with the Commission if
the Commission does not permit such filings; provided

68

 

further, however, that Arch Coal will be required to provide to the Trustee any such quarterly
and annual information, documents or reports that are not are so filed.

          In addition, Arch Coal and the Guarantors agree that, for so long as any Notes remain
outstanding, if at any time they are not required to file with the Commission the reports required
by the preceding paragraph, they will furnish to Holders of the Notes and to prospective investors,
upon their request, the information required to be delivered pursuant to Rule 144A(d)(4) under the
Securities Act.

          SECTION 4.17. Waiver of Stay, Extension or Usury Laws. Arch Coal and each of the
Guarantors covenants (to the extent that it may lawfully do so) that it shall not at any time
insist upon, or plead (as a defense or otherwise) or in any manner whatsoever claim or take the
benefit or advantage of, any stay or extension law or any usury law or other law which would
prohibit or forgive any of Arch Coal and the Guarantors from paying all or any portion of the
principal of, premium, if any, and/or interest on the Notes or the Note Guarantees as contemplated
herein, wherever enacted, now or at any time hereafter in force, or which may affect the covenants
or the performance of this Indenture; and (to the extent that they may lawfully do so) each of Arch
Coal and the Guarantors hereby expressly waives all benefit or advantage of any such law, and
covenants that it will not hinder, delay or impede the execution of any power herein granted to the
Trustee, but will suffer and permit the execution of every such power as though no such law had
been enacted.

          SECTION 4.18. Further Instruments and Acts. Upon request of the Trustee (but without
imposing any duty or obligation of any kind on the Trustee to make any such request), Arch Coal and
the Guarantors shall execute and deliver such further instruments and do such further acts as may
be reasonably necessary or proper to carry out more effectively the purpose of this Indenture.

          SECTION 4.19. Covenant Termination. Upon the first date that (a) the Notes have
Investment Grade Ratings from both Ratings Agencies and (b) no Default has occurred and is
continuing hereunder, Arch Coal and its Restricted Subsidiaries will cease to be subject to the
provisions of this Indenture described under Sections 4.06, 4.08, 4.09, 4.10, 4.13, 4.14 and clause
(b)(3) of Section 5.01 hereof.

ARTICLE FIVE

CONSOLIDATION, MERGER OR SALE OF ASSETS

          SECTION 5.01. Consolidation, Merger or Sale of Assets. (a) Arch Coal shall not:

     (1) merge, consolidate or amalgamate with or into any Person (other than a
merger of a Restricted Subsidiary of Arch Coal into Arch Coal); or

     (2) in a single transaction or through a series of transactions, sell,
transfer, assign, lease, convey or otherwise dispose of all or substantially all of
its properties and assets to any Person or Persons, if such transaction or series of
transactions, in the aggregate, would result in the sale, assignment, conveyance,

69

 

transfer, lease or other disposition of all or substantially all of the
Property of Arch Coal to any other Person or Persons.

(b) Clause (a) above shall not apply to Arch Coal if:

     (3) at the time and immediately after giving effect to any such consolidation,
merger, transaction or series of transactions, either Arch Coal shall be the
Surviving Person or the Surviving Person (if other than Arch Coal) formed by such
merger, consolidation or amalgamation or the Person that acquires by sale,
assignment, conveyance, transfer, lease or other disposition all or substantially
all of Arch Coal’s Property:

	 	(A)	 	shall be a corporation,
partnership or limited liability company organized and validly
existing under the laws of the United States of America, any
state thereof or the District of Columbia; provided that at any
time the Surviving Person is a partnership or a limited
liability company, there shall be a co-issuer of the Notes that
is a corporation that also satisfies the requirements of this
covenant; and

	 	(B)	 	expressly assumes (if other than
Arch Coal), by a supplemental indenture in form satisfactory to
the Trustee, executed and delivered to the Trustee by such
Surviving Person, the due and punctual performance and
observation of all the obligations of this Indenture and the
Notes;

     (4) immediately after giving effect to such transaction or series of
transactions on a pro forma basis (and treating, for purposes of this clause (b)(2)
and clause (b)(3) below any Debt that becomes, or is anticipated to become, an
obligation of the Surviving Person or any Restricted Subsidiary as a result of such
transaction or series of transactions as having been Incurred by the Surviving
Person or such Restricted Subsidiary at the time of such transaction or series of
transactions), no Default or Event of Default shall have occurred and be continuing;

     (5) immediately after giving effect to any such consolidation, merger,
transaction or series of transactions on a pro forma basis (on the assumption that
the transaction or series of transactions occurred on the first day of the
four-quarter period immediately prior to the consummation of such transaction or
series of transactions with the appropriate adjustments with respect to the
transaction or series of transactions being included in such pro forma calculation),
the Surviving Person could incur (1) at least $1.00 of additional Debt under clause
(1) of the first paragraph of Section 4.06 hereto or (2) the Consolidated Interest
Coverage Ratio of Arch Coal and its Restricted Subsidiaries would be equal to or
greater than immediately prior to such transaction; and

70

 

     (6) at the time of any such consolidation, merger, transaction or series of
transactions, Arch Coal or the Surviving Person shall deliver, or cause to be
delivered, to the Trustee, in form and substance reasonably satisfactory to the
Trustee, an Officers’ Certificate and an Opinion of Counsel, each stating that such
transaction or series of transactions and the supplemental indenture, if any, in
respect thereto comply with the requirements of this Section 5.01 and that all
conditions precedent herein relating to such transaction or series of transactions
have been satisfied.

     Clause (b)(3) above shall not apply to (1) any merger, consolidation or sale, assignment,
transfer, conveyance or other disposition of assets between or among Arch Coal and any of its
Restricted Subsidiaries or (2) a merger of Arch Coal with an Affiliate solely for the purpose of
reincorporating Arch Coal in another jurisdiction.

     (c) Arch Coal shall not permit any Guarantor to consolidate with or merge with or into
any Person or sell, assign, transfer, convey or otherwise dispose of, all or substantially
all of its assets, in one or more related transactions, to any Person unless Arch Coal has
delivered to the Trustee an Officers’ Certificate and Opinion of Counsel stating that such
consolidation, merger, transaction or series of transactions complies with the following
conditions and each of the following conditions is satisfied:

     (1) the other Person is Arch Coal or any Restricted Subsidiary that is a
Guarantor or becomes a Guarantor concurrently with the transaction; or

     (2) (A) either (x) the Guarantor shall be the Surviving Person or (y) the
entity formed by such consolidation or into which the Guarantor is merged, expressly
assumes, by a Guarantee or a supplemental indenture in form satisfactory to the
Trustee, executed and delivered to the Trustee by such surviving Person the due and
punctual performance and observance of all the obligations of such Guarantor under
the Note Guarantee; and

	 	(B)	 	the Surviving Person, if other
than the Guarantor, is a corporation or limited liability
company organized under the laws of the United States, any state
thereof or the District of Columbia and immediately after giving
effect to the transaction and any related Incurrence of Debt of,
no Default or Event of Default shall have occurred and be
continuing; or

     (3) the transaction constitutes a sale or other disposition (including by way
of consolidation or merger) of the Guarantor or the sale or disposition of all or
substantially all the assets of the Guarantor (in each case other than to another
Guarantor) and at the time of such transaction after giving pro forma effect
thereto, the provisions of clause (b)(3) of this covenant would be satisfied, the
transaction is otherwise permitted by this Indenture and the Guarantor is released
from its Guarantee at the time of such transaction in accordance with this
Indenture.

71

 

          SECTION 5.02. Successor Substituted. Upon any consolidation or merger, or any sale,
conveyance, transfer, lease or other disposition of all or substantially all of the property and
assets of Arch Coal in accordance with Section 5.01 of this Indenture, any Surviving Person formed
by such consolidation or into which Arch Coal is merged or to which such sale, conveyance,
transfer, lease or other disposition is made shall succeed to, and be substituted for, and may
exercise every right and power of, Arch Coal under this Indenture (or of the Guarantor under the
Note Guarantee, as the case may be) with the same effect as if such Surviving Person had been named
as Arch Coal (or such Guarantor) herein; provided, however, that Arch Coal shall not be released
from its obligation or covenants under this Indenture in the case of (x) a sale, transfer,
assignment, conveyance or other disposition (unless such sale, transfer, assignment, conveyance or
other disposition is of all the assets of Arch Coal as an or virtually as an entirety) or (y) a
lease.

ARTICLE SIX

DEFAULTS AND REMEDIES

          SECTION 6.01. Events of Default. (a) “Event of Default”, wherever used
herein, means in respect of each series of Notes any one of the following events (whatever the
reason for such Event of Default and whether it shall be voluntary or involuntary or be effected by
operation of law or pursuant to any judgment, decree or order of any court or any order, rule or
regulation of any administrative or governmental body):

     (i) the failure to make the payment of any interest (including Special Interest) on the
Notes when the same becomes due and payable, and such default shall continue for a period of
30 days; or

     (ii) the failure to make the payment of principal of, or premium, if any, on any of the
Notes when the same becomes due and payable at its Stated Maturity, upon acceleration,
optional redemption, required repurchase or otherwise; or

     (iii) a default in the performance, or breach, of any covenant or agreement of Arch
Coal or any Guarantor under Sections 4.09, 4.11 and 5.01; or

     (iv) failure to comply with Section 4.16 for 120 days after written notice (“Notice
of Default”) has been given, by registered or certified mail, (x) to Arch Coal by the
Trustee or (y) to Arch Coal and the Trustee by the Holders of at least 25% in aggregate
principal amount of the outstanding Notes of a series. Such notice must specify the
Default, demand that it be remedied and state that such notice is a “Notice of Default”; or

     (v) a default in the performance, or breach, of any covenant or agreement of Arch Coal
or any Guarantor under this Indenture or the Guarantees (other than a default in the
performance, or breach, of a covenant or agreement which is specifically dealt with
elsewhere in this Section 6.01) and such default or breach shall continue for a period of 60
days after Notice of Default has been given, by registered or certified mail, (x) to Arch
Coal by the Trustee or (y) to Arch Coal and the Trustee by the Holders of at least 25% in
aggregate principal amount of the outstanding Notes of a series. Such notice must

72

 

specify the Default, demand that it be remedied and state that such notice is a “Notice
of Default”; or

     (vi) a default under any Debt by Arch Coal or any Restricted Subsidiary that results in
acceleration of the maturity of such Debt, or failure to pay any such Debt at maturity, in
an aggregate amount greater than $100.0 million or its foreign currency equivalent at the
time; or

     (vii) any final judgment or judgments for the payment of money in an aggregate amount
in excess of $100.0 million (or its foreign currency equivalent at the time), to the extent
such judgments are not paid or covered by insurance provided by a reputable carrier that
shall be rendered against Arch Coal or any Restricted Subsidiary and that shall not be
waived, satisfied, stayed or discharged for any period of 60 consecutive days after the date
on which the right to appeal has expired; or

     (viii) the entry by a court of competent jurisdiction of (A) a decree or order for
relief in respect of Arch Coal, any Guarantor or any other Significant Subsidiary in an
involuntary case or proceeding under any applicable Bankruptcy Law or (B) a decree or order
adjudging Arch Coal, any Guarantor or any other Significant Subsidiary bankrupt or
insolvent, or seeking reorganization, arrangement, adjustment or composition of or in
respect of Arch Coal, any Guarantor or any other Significant Subsidiary under any applicable
law, or appointing a custodian, receiver, liquidator, assignee, trustee, sequestrator (or
other similar official) of Arch Coal, any Guarantor or any other Significant Subsidiary or
of any substantial part of their respective properties or ordering the winding up or
liquidation of their affairs, and any such decree, order or appointment pursuant to any
Bankruptcy Law for relief shall continue to be in effect, or any such other decree,
appointment or order shall be unstayed and in effect, for a period of 60 consecutive days;
or

     (ix) (A) Arch Coal, any Guarantor or any other Significant Subsidiary (x) commences a
voluntary case or proceeding under any applicable Bankruptcy Law or any other case or
proceeding to be adjudicated bankrupt or insolvent or (y) consents to the filing of a
petition, application, answer or consent seeking reorganization or relief under any
applicable Bankruptcy Law, (B) Arch Coal, any Guarantor or any other Significant Subsidiary
consents to the entry of a decree or order for relief in respect of Arch Coal, any Guarantor
or any other Significant Subsidiary in an involuntary case or proceeding under any
applicable Bankruptcy Law or to the commencement of any bankruptcy or insolvency case or
proceeding against it or, (C) Arch Coal, any Guarantor or any other Significant Subsidiary
(x) consents to the appointment of, or taking possession by, a custodian, receiver,
liquidator, administrator, supervisor, assignee, trustee, sequestrator or similar official
of Arch Coal, any Guarantor or any other Significant Subsidiary or of any substantial part
of their respective properties, (y) makes an assignment for the benefit of creditors or (z)
admits in writing its inability to pay its debts generally as they become due; or

     (x) any Note Guarantee shall be held in any judicial proceeding to be unenforceable or
invalid or shall cease for any reason (other than in accordance with the

73

 

provisions of this Indenture) to be in full force and effect or any Guarantor, or any
Person acting on behalf of any Guarantor, shall deny or disaffirm its obligations under any
Note Guarantee.

     (b) Arch Coal shall deliver to the Trustee, within 30 days after the occurrence
thereof, written notice in the form of an Officers’ Certificate of any event that with the
giving of notice or the lapse of time or both would become an Event of Default, its status
and what action is being taken or proposed to be taken with respect thereto.

     (c) If a Default or an Event of Default occurs and is continuing and is known to a
Trust Officer of the Trustee, the Trustee shall mail to each Holder notice of the Default or
Event of Default within five Business Days after its occurrence. Except in the case of a
Default or an Event of Default in payment of principal of, premium, if any, on the Notes or
interest, if any, on any Note, the Trustee may withhold the notice to the Holders if and so
long as a committee of its Trust Officers in good faith determines that withholding the
notice is in the interests of the Holders.

          SECTION 6.02. Acceleration. (a) If an Event of Default with respect to the Notes
(other than an Event of Default specified in Section 6.01(viii) or (ix) above) occurs and is
continuing, then and in every such case the Trustee or the Holders of not less than 25% in
aggregate principal amount of the Notes of a series then outstanding by written notice to Arch Coal
(and to the Trustee if such notice is given by the Holders) may and the Trustee, upon the written
request of such Holders shall, declare the principal amount, and accrued and unpaid interest to the
date of acceleration on, all of the Notes of such series then outstanding immediately due and
payable, and upon any such declaration such principal amount in respect of the Notes of such series
then outstanding shall become immediately due and payable.

     (b) If an Event of Default specified in Section 6.01(viii) or (ix) above occurs and is
continuing, then the principal amount of all of the Notes of a series then outstanding shall
ipso facto become and be immediately due and payable without any declaration or other act on
the part of the Trustee or any Holder.

     (c) At any time after a declaration of acceleration under this Indenture, but before a
judgment or decree for payment of the money due has been obtained by the Trustee, the
Holders of a majority in aggregate principal amount of the Notes of a series then
outstanding, by written notice to Arch Coal and the Trustee, may waive all past Defaults and
rescind and annul such declaration of acceleration and its consequences if:

     (1) Arch Coal or the Guarantors have paid or deposited with the Trustee a sum
sufficient to pay:

	 	(A)	 	all overdue interest, if any, on
all Notes of such series then outstanding;

	 	(B)	 	all unpaid principal of and
premium, if any, on any Notes of such series outstanding that
has become due otherwise than by such declaration of
acceleration and interest thereon at the rate borne by the Notes
of such series;

74

 

	 	(C)	 	to the extent that payment of
such interest is lawful, interest upon overdue interest, if any,
at the rate borne by the Notes of such series; and

	 	(D)	 	all sums paid or advanced by the
Trustee under this Indenture and the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents
and counsel;

     (2) the rescission would not conflict with any judgment or decree of a court of
competent jurisdiction; and

     (3) all Events of Default, other than the non-payment of amounts of principal
of, premium, if any, and interest, if any, on the Notes of such series that has
become due solely by such declaration of acceleration, have been cured or waived as
provided in Section 6.04.

     No such rescission shall affect any subsequent default or impair any right consequent thereon.

     (d) Notwithstanding Section 6.02(c) above, in the event of a declaration of
acceleration in respect of the Notes of a series because of an Event of Default specified in
Section 6.01(a)(vi) shall have occurred and be continuing, such declaration of acceleration
shall be automatically annulled if the default or failure to make payment triggering such
Event of Default shall be remedied or cured by Arch Coal or a Restricted Subsidiary or
waived by the holders of the relevant Debt within 20 days after the declaration of
acceleration of the Notes of such series with respect thereto and if (x) the annulment of
the acceleration of the Notes of such series would not conflict with any judgment or decree
of a court of competent jurisdiction and (y) all existing Events of Default, except
nonpayment of principal, premium or interest on the Notes of such series that became due
solely because of the acceleration of the Notes of such series, have been cured or waived.

     (e) Subject to the Article Seven of this Indenture relating to the duties of the
Trustee, in case an Event of Default shall occur and be continuing, the Trustee will be
under no obligation to exercise any of its rights or powers under this Indenture at the
request or direction of any of the Holders, unless such Holders shall have offered to the
Trustee reasonable indemnity. Subject to such provisions for the indemnification of the
Trustee, the Holders of at least a majority in aggregate principal amount of the Notes of a
series then outstanding will have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee or exercising any trust or
power conferred on the Trustee with respect to the Notes.

     No Holder of Notes of a series will have any right to institute any proceeding with respect to
this Indenture, or for the appointment of a receiver or trustee, or for any remedy thereunder,
unless:

75

 

     (1) such Holder has previously given to the Trustee written notice of a
continuing Event of Default;

     (2) the registered Holders of at least 25% in aggregate principal amount of the
Notes of such series then outstanding have made a written request and offered
reasonable indemnity to the Trustee to institute such proceeding as Trustee; and

     (3) the Trustee shall not have received from the registered Holders of at least
a majority in aggregate principal amount of the Notes of such series then
outstanding a direction inconsistent with such request and shall have failed to
institute such proceeding within 60 days.

However, such limitations do not apply to a suit instituted by a Holder of any Note for enforcement
of payment of the principal of, and premium, if any, or interest on, such Note on or after the
respective due dates expressed in such Note.

          SECTION 6.03. Other Remedies. If an Event of Default occurs and is continuing, the
Trustee may in its discretion proceed to protect and enforce its rights and the rights of the
Holders by such appropriate judicial proceedings as the Trustee shall deem most effectual to
protect and enforce any such rights, whether for the specific enforcement of any covenant or
agreement in this Indenture or in aid of the exercise of any power granted herein, or to enforce
any other proper remedy.

     All rights of action and claims under this Indenture or the Notes may be prosecuted and
enforced by the Trustee without the possession of any of the Notes or the production thereof in any
proceeding relating thereto, and any such proceeding instituted by the Trustee shall be brought in
its own name and as trustee of an express trust, and any recovery of judgment shall, after
provision for the payment of the reasonable compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel, be for the ratable benefit of the Holders in respect of which
such judgment has been recovered.

          SECTION 6.04. Waiver of Past Defaults. The Holders of not less than a majority in
principal amount of the Notes of a series then outstanding may on behalf of the Holders of all the
Notes such series waive any past Default hereunder and its consequences, except a Default:

     (a) in respect of the payment of the principal of (or premium, if any), or interest on,
any Note, or

     (b) in respect of a covenant or provision hereof which under Article Nine cannot be
modified or amended without the consent of the Holder of each outstanding Note affected.

     Upon any such waiver, such Default shall cease to exist, and any Event of Default arising
therefrom shall be deemed to have been cured, for every purpose of this Indenture; but no such
waiver shall extend to any subsequent or other Default or Event of Default or impair any right
consequent thereon.

76

 

          SECTION 6.05. Control by Majority. The Holders of not less than a majority in
aggregate principal amount of the then outstanding Notes of a series shall have the right to direct
the time, method and place of conducting any proceeding for exercising any remedy available to the
Trustee or exercising any trust or power conferred on the Trustee under this Indenture; provided
that:

     (a) the Trustee may refuse to follow any direction that conflicts with law, this
Indenture or that the Trustee determines in good faith may be unduly prejudicial to the
rights of Holders not joining in the giving of such direction;

     (b) the Trustee may refuse to follow any direction that the Trustee determines is
unduly prejudicial to the rights of other Holders or would involve the Trustee in personal
liability; and

     (c) the Trustee may take any other action deemed proper by the Trustee that is not
inconsistent with such direction.

     Prior to taking or not taking any action hereunder, the Trustee shall be entitled to
indemnification satisfactory to it in its sole discretion against all losses and expenses caused by
taking or not taking such action.

          SECTION 6.06. Limitation on Suits. A Holder may not pursue any remedy with respect to
this Indenture or a series of Notes unless:

     (a) the Holder has previously given the Trustee written notice of a continuing Event of
Default;

     (b) the Holders of at least 25% in aggregate principal amount of the Notes of such
series then outstanding shall have made a written request to the Trustee to pursue such
remedy;

     (c) such Holder or Holders offer the Trustee indemnity reasonably satisfactory to the
Trustee against any costs, liability or expense;

     (d) the Trustee does not comply with the request within 60 days after receipt of the
request and the offer of indemnity; and

     (e) during such 60-day period, the Holders of a majority in aggregate principal amount
of the Notes of such series outstanding do not give the Trustee a direction that is
inconsistent with the request.

     The limitations in the foregoing provisions of this Section 6.06, however, do not apply to a
suit instituted by a Holder for the enforcement of the payment of the principal of, premium, if
any, or interest, if any, on such Note on or after the respective due dates expressed in such Note.

     A Holder may not use this Indenture to prejudice the rights of any other Holder or to obtain a
preference or priority over another Holder.

77

 

          SECTION 6.07. Unconditional Right of Holders to Receive Payment. Notwithstanding any
other provision of this Indenture, the right of any Holder to receive payment of principal of,
premium, if any, and interest, if any, on the Notes held by such Holder, on or after the respective
due dates expressed or provided for in the Notes, or to bring suit for the enforcement of any such
payment on or after such respective dates, shall not be impaired or affected without the consent of
such Holder.

          SECTION 6.08. Collection Suit by Trustee. Arch Coal covenants that if default is made
in the payment of:

     (a) any installment of interest on any Note when such interest becomes due and payable
and such default continues for a period of 30 days, or

     (b) the principal of (or premium, if any, on) any Note at the Maturity thereof,

Arch Coal shall, upon demand of the Trustee, pay to the Trustee for the benefit of the Holders of
such Notes, the whole amount then due and payable on such Notes for principal (and premium, if
any), and interest, and interest on any overdue principal (and premium, if any) and, to the extent
that payment of such interest shall be legally enforceable, upon any overdue installment of
interest, at the rate borne by the Notes, and, in addition thereto, such further amount as shall be
sufficient to cover the amounts provided for in Section 7.07 and such further amount as shall be
sufficient to cover the costs and expenses of collection, including the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel.

     (c) If Arch Coal fails to pay such amounts forthwith upon such demand, the Trustee, in
its own name as trustee of an express trust, may institute a judicial proceeding for the
collection of the sums so due and unpaid, may prosecute such proceeding to judgment or final
decree and may enforce the same against Arch Coal or any other obligor upon the Notes and
collect the moneys adjudged or decreed to be payable in the manner provided by law out of
the property of Arch Coal or any other obligor upon the Notes, wherever situated.

          SECTION 6.09. Trustee May File Proofs of Claim. The Trustee may file such proofs of
claim and other papers or documents as may be necessary or advisable in order to have the claims of
the Trustee (including any claim for the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel, and any other amounts due the Trustee under
Section 7.07) and the Holders allowed in any judicial proceedings relative to Arch Coal or any
Guarantor, their creditors or their property and, unless prohibited by law or applicable
regulations, may vote on behalf of the Holders at their direction in any election of a trustee in
bankruptcy or other Person performing similar functions, and any Custodian in any such judicial
proceeding is hereby authorized by each Holder to make payments to the Trustee and, in the event
that the Trustee shall consent to the making of such payments directly to the Holders, to pay to
the Trustee any amount due it for the reasonable compensation, expenses, disbursements and advances
of the Trustee, its agents and its counsel, and any other amounts due the Trustee under Section
7.07.

78

 

     Nothing herein contained shall be deemed to empower the Trustee to authorize or consent to, or
accept or adopt on behalf of any Holder, any plan of reorganization, arrangement, adjustment or
composition affecting the Notes or the rights of any Holder thereof, or to authorize the Trustee to
vote in respect of the claim of any Holder in any such proceeding.

          SECTION 6.10. Application of Money Collected. If the Trustee collects any money or
other property (or the same is distributed) pursuant to this Article Six, it shall pay out the
money or property in the following order:

	 	 	 	 	 

	 

	 	FIRST:
	 	to the Trustee (including any predecessor Trustee) for amounts due under Section
7.07;
	 
	 	 	 	 
	 

	 	SECOND:
	 	to Holders for amounts due and unpaid on the Notes for principal of, premium, if
any, and interest, if any, ratably, without preference or priority of any kind,
according to the amounts due and payable on the Notes for principal, premium, if any,
and interest, if any, respectively; and
	 
	 	 	 	 
	 

	 	THIRD:
	 	to Arch Coal, any Guarantor or any other obligors of the Notes, as their interests
may appear, or as a court of competent jurisdiction may direct.

     The Trustee may fix a record date and payment date for any payment to Holders pursuant to this
Section 6.10. At least 15 days before such record date, Arch Coal shall mail to each Holder and
the Trustee a notice that states the record date, the payment date and amount to be paid.

          SECTION 6.11. Undertaking for Costs. A court may in its discretion require, in any
suit for the enforcement of any right or remedy under this Indenture or in any suit against the
Trustee for any action taken or omitted by it as Trustee, the filing by any party litigant in the
suit of an undertaking to pay the costs of such suit, and such court may in its discretion assess
reasonable costs, including reasonable attorneys’ fees, against any party litigant in such suit,
having due regard to the merits and good faith of the claims or defenses made by the party
litigant. This Section 6.11 does not apply to a suit by the Trustee, a suit by Holders of more than
10% in aggregate principal amount of the Notes of a series then outstanding or to any suit by any
Holder pursuant to Section 6.07.

          SECTION 6.12. Restoration of Rights and Remedies. If the Trustee or any Holder has
instituted any proceeding to enforce any right or remedy under this Indenture and such proceeding
has been discontinued or abandoned for any reason, or has been determined adversely to the Trustee
or to such Holder, then and in every such case, subject to any determination in such proceeding,
Arch Coal, any Guarantor, the Trustee and the Holders shall be restored severally and respectively
to their former positions hereunder and thereafter all rights and remedies of the Trustee and the
Holders shall continue as though no such proceeding had been instituted.

          SECTION 6.13. Rights and Remedies Cumulative. Except as otherwise provided with
respect to the replacement or payment of mutilated, destroyed, lost or stolen Notes in Section
2.07, no right or remedy herein conferred upon or reserved to the Trustee or to the Holders is
intended to be exclusive of any other right or remedy, and every right and remedy

79

 

shall, to the extent permitted by law, be cumulative and in addition to every other right and
remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The
assertion of any right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.

          SECTION 6.14. Delay or Omission Not Waiver. No delay or omission of the Trustee or of
any Holder of any Note to exercise any right or remedy accruing upon any Event of Default shall
impair any such right or remedy or constitute a waiver of any such Event of Default or an
acquiescence therein. Every right and remedy given by this Article Six or by law to the Trustee or
to the Holders may be exercised from time to time, and as often as may be deemed expedient, by the
Trustee or by the Holders, as the case may be.

          SECTION 6.15. Record Date. Arch Coal may set a record date for purposes of
determining the identity of Holders entitled to vote or to consent to any action by vote or consent
authorized or permitted by Sections 6.04, 6.05 and 11.04. Unless this Indenture provides
otherwise, such record date shall be the later of 30 days prior to the first solicitation of such
consent or the date of the most recent list of Holders furnished to the Trustee pursuant to Section
2.05 prior to such solicitation.

          SECTION 6.16. Waiver of Stay or Extension Laws. Arch Coal covenants (to the extent
that it may lawfully do so) that it shall not at any time insist upon, or plead, or in any manner
whatsoever claim or take the benefit or advantage of, any stay or extension law wherever enacted,
now or at any time hereafter in force, which may affect the covenants or the performance of this
Indenture; and Arch Coal (to the extent that it may lawfully do so) hereby expressly waives all
benefit or advantage of any such law and covenants that it shall not hinder, delay or impede the
execution of any power herein granted to the Trustee, but shall suffer and permit the execution of
every such power as though no such law had been enacted.

ARTICLE SEVEN

TRUSTEE

          SECTION 7.01. Duties of Trustee. (a) If an Event of Default has occurred and is
continuing of which a Trust Officer of the Trustee has actual knowledge, the Trustee shall exercise
such of the rights and powers vested in it by this Indenture, and use the same degree of care and
skill in their exercise as a prudent person would exercise or use under the circumstances in the
conduct of such person’s own affairs;

     (b) except during the continuance of an Event of Default of which a Trust Officer of
the Trustee has actual knowledge: (i) the Trustee undertakes to perform such duties and
only such duties as are specifically set forth in this Indenture and no others and no
implied covenants or obligations shall be read into this Indenture against the Trustee; and
(ii) in the absence of bad faith on its part, the Trustee may conclusively rely, as to the
truth of the statements and the correctness of the opinions expressed therein, upon
certificates or opinions furnished to the Trustee and conforming to the requirements of this
Indenture. In the case of any such certificates or opinions which by any provisions hereof
are specifically required to be furnished to the Trustee, the Trustee shall examine

80

 

same to determine whether they conform to the requirements of this Indenture (but need
not confirm or investigate the accuracy of mathematical calculations or other facts stated
therein);

     (c) the Trustee shall not be relieved from liability for its own negligent action, its
own negligent failure to act or its own willful misconduct, except that:

     (1) this paragraph does not limit the effect of paragraph (b) of this Section
7.01;

     (2) the Trustee shall not be liable for any error of judgment made in good
faith by a Trust Officer unless it is proved that the Trustee was negligent in
ascertaining the pertinent facts; and

     (3) the Trustee shall not be liable with respect to any action it takes or
omits to take in good faith in accordance with a direction received by it pursuant
to Section 6.05;

     (d) the Trustee shall not be liable for interest on any money received by it except as
the Trustee may agree in writing with Arch Coal or any Guarantor. Money held in trust by
the Trustee need not be segregated from other funds except to the extent required by law;

     (e) no provision of this Indenture shall require the Trustee to expend or risk its own
funds or otherwise incur financial liability in the performance of any of its duties
hereunder or in the exercise of any of its rights or powers, if it shall have reasonable
grounds to believe that repayment of such funds or adequate indemnity against such risk or
liability is not reasonably assured to it; and

     (f) whether or not therein expressly so provided, every provision of this Indenture
relating to the conduct or affecting the liability of or affording protection to the Trustee
shall be subject to the provisions of this Section 7.01 and to the provisions of the TIA.

          SECTION 7.02. Certain Rights of Trustee. (a) Subject to Section 7.01:

     (1) the Trustee may rely, and shall be protected in acting or refraining from
acting, upon any resolution, certificate, statement, instrument, opinion, report,
notice, request, direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document believed by it to be genuine and to have
been signed or presented by the proper person;

     (2) before the Trustee acts or refrains from acting, except in connection with
the original issuance of the Notes on the date hereof, it may require an Officers’
Certificate or an Opinion of Counsel, which shall conform to Section 12.05. The
Trustee shall not be liable for any action it takes or omits to take in good faith
in reliance on such certificate or opinion;

81

 

     (3) the Trustee may act through its attorneys and agents and shall not be
responsible for the misconduct or negligence of any attorney or agent appointed with
due care by it hereunder;

     (4) the Trustee shall be under no obligation to exercise any of the rights or
powers vested in it by this Indenture at the request or direction of any of the
Holders, unless such Holders shall have offered to the Trustee reasonable security
or indemnity against the costs, expenses and liabilities that might be incurred by
it in compliance with such request or direction;

     (5) the Trustee shall not be liable for any action it takes or omits to take in
good faith that it believes to be authorized or within its rights or powers,
provided that the Trustee’s conduct does not constitute negligence or bad faith;

     (6) whenever in the administration of this Indenture the Trustee shall deem it
desirable that a matter be proved or established prior to taking, suffering or
omitting any action hereunder, the Trustee (unless other evidence be herein
specifically prescribed) may, in the absence of bad faith on its part, rely upon an
Officers’ Certificate;

     (7) the Trustee shall not be bound to make any investigation into the facts or
matters stated in any resolution, certificate, statement, instrument, opinion,
report, notice, request, direction, consent, order, bond, debenture, note, other
evidence of indebtedness or other paper or document, but the Trustee, in its
discretion, may make such further inquiry or investigation into such facts or
matters as it may see fit, and, if the Trustee shall determine to make such further
inquiry or investigation, it shall be entitled to examine the books, records and
premises of Arch Coal personally or by agent or attorney;

     (8) the rights, privileges, protections, immunities and benefits given to the
Trustee, including, without limitation, its right to be indemnified, are extended
to, and shall be enforceable by, the Trustee in each of its capacities hereunder,
and each agent, custodian and other Person employed to act hereunder; and the
permissive right of the Trustee to take any action under this Indenture or under any
other agreement in connection herewith shall not be construed as a duty;

     (9) each Guarantor shall pay on demand to the Trustee any and all costs, fees
and expenses (including without limitation, reasonable legal fees of counsel)
incurred by the Trustee in enforcing any rights under any Guarantee;

     (10) the Trustee shall not be deemed to have notice of any Default or Event of
Default unless a Trust Officer of the Trustee has actual knowledge thereof or unless
written notice of any event which is in fact such a default is received by the
Trustee at the Corporate Trust Office of the Trustee, and such notice references the
Notes and this Indenture;

82

 

     (11) the permissive right of the Trustee to take any action under this
Indenture or under any other agreement in connection herewith shall not be construed
as a duty;

     (12) unless otherwise specifically provided in this Indenture, any demand,
request, direction or notice from Arch Coal shall be sufficient if signed by an
Officer of Arch Coal; and

     (13) the trustee may consult with counsel and the advice of such counsel or any
Opinion of Counsel shall be full and complete authorization and protection from
liability in respect of any action taken, suffered or omitted by it hereunder in
good faith and in reliance thereon.

     (b) The Trustee may request that Arch Coal deliver an Officers’ Certificate setting
forth the names of the individuals and/or titles of officers authorized at such time to take
specified actions pursuant to this Indenture, which Officers’ Certificate may be signed by
any person authorized to sign an Officers’ Certificate, including any person specified as so
authorized in any such certificate previously delivered and not superseded.

          SECTION 7.03. Individual Rights of Trustee. The Trustee, any Paying Agent, any
Registrar or any other agent of Arch Coal or of the Trustee, in its individual or any other
capacity, may become the owner or pledgee of Notes and, subject to TIA Sections 310(b) and 311, may
otherwise deal with Arch Coal with the same rights it would have if it were not Trustee, Paying
Agent, Registrar or such other agent.

          SECTION 7.04. Trustee’s Disclaimer. The recitals contained herein and in the Notes,
except for the Trustees certificates of authentication, shall be taken as the statements of Arch
Coal, and the Trustee assumes no responsibility for their correctness. The Trustee makes no
representations as to the validity or sufficiency of this Indenture or of the Notes, except that
the Trustee represents that it is duly authorized to execute and deliver this Indenture,
authenticate the Notes and perform its obligations hereunder and agrees that the statements made by
it in a Statement of Eligibility on Form T-1 supplied to Arch Coal will be true and accurate,
subject to the qualifications set forth therein. The Trustee shall not be accountable for the use
or application by Arch Coal of Notes or the proceeds thereof. It shall not be responsible for the
use or application of any money received by any Paying Agent other than the Trustee, and it shall
not be responsible for any statement or recital herein or any statement in the Notes or any other
document in connection with the issuance or sale of the Notes or pursuant to this Indenture other
than its certificate of authentication.

          SECTION 7.05. Notice of Defaults. If any Default or any Event of Default occurs and
is continuing and if such Default or Event of Default is known to the Trustee, the Trustee shall
mail to each Holder in the manner and to the extent provided in TIA Section 313(c) notice of the
Default or Event of Default within 45 days its occurrence, unless such Default or Event of Default
has been cured; provided, however, that, except in the case of a default in the payment of the
principal of, premium, if any, or interest on any Note, the Trustee shall be protected in
withholding such notice if and so long as a committee of its Trust Officers in good faith determine
that the withholding of such notice is in the interest of the Holders.

83

 

     The Trustee shall not be deemed to have knowledge of a Default unless a Trust Officer has
actual knowledge of such Default or written notice of such Default has been received by the Trustee
at the Corporate Trust Office, and such notice references the Notes and this Indenture.

          SECTION 7.06. Reports by Trustee to Holders. Within 60 days after January 1 of each
year commencing with the first January 1 after the Issue Date, the Trustee shall transmit to the
Holders, in the manner and to the extent provided in TIA Section 313(c), a brief report dated as of
such date that complies with TIA Section 313(a). The Trustee also shall comply with TIA Section
313(b) and (c).

     Arch Coal shall promptly notify the Trustee whenever the Notes become listed on any securities
exchange and of any delisting thereof and the Trustee shall comply with TIA Section 313(d).

          SECTION 7.07. Compensation and Indemnity. Arch Coal, failing which each Guarantor,
shall pay to the Trustee such compensation as shall be agreed in writing for its services
hereunder. The Trustee’s compensation shall not be limited by any law on compensation of a trustee
of an express trust. Arch Coal, failing which each Guarantor, shall reimburse the Trustee upon
request for all reasonable out-of-pocket expenses incurred or made by it, including costs of
collection, in addition to the compensation for its services. Such expenses shall include the
reasonable compensation and out-of-pocket expenses of the Trustee’s agents and counsel.

     Arch Coal, failing which each Guarantor, shall indemnify the Trustee (in any of its capacities
in connection with any of the transactions contemplated hereby, including, without limitation,
under this Indenture) and its officers, directors, employees and agents for, and hold it and them
harmless from and against any and all loss, liability or expense (including attorneys’ fees and
expenses) incurred by it or any of them without willful misconduct, negligence or bad faith on its
part arising out of or in connection with the administration of this trust and the performance of
its duties hereunder (including the costs and expenses of enforcing this Indenture including this
Section 7.07 and of defending itself against any claim, whether asserted by Arch Coal, the
Guarantors, any Holder or any other Person). The Trustee shall notify Arch Coal promptly of any
claim for which it may seek indemnity. Failure by the Trustee to so notify Arch Coal shall not
relieve Arch Coal or the Guarantors of their obligations hereunder. Arch Coal shall defend the
claim and the Trustee shall cooperate in such defense. The Trustee may have separate counsel and
Arch Coal shall pay the fees and expenses of such counsel. Arch Coal need not pay for any
settlement made without its consent, which consent may not be unreasonably withheld. Arch Coal
shall not reimburse any expense or indemnify against any loss, liability or expense incurred by the
Trustee through the Trustee’s own willful misconduct, negligence or bad faith.

     To secure Arch Coal’s and each of the Guarantor’s payment obligations in this Section 7.07,
the Trustee shall have a Lien prior to the Notes on all money or property held or collected by the
Trustee, hereunder, in its capacity as Trustee, except money or property held in trust to pay
principal of, premium, if any, and interest on particular Notes.

84

 

     When the Trustee incurs expenses after the occurrence of a Default specified in Section
6.01(a)(vii) or (viii) with respect to Arch Coal, the Guarantors, or any Restricted Subsidiary, the
expenses are intended to constitute expenses of administration under Bankruptcy Law.

     Arch Coal’s and each of the Guarantor’s obligations under this Section 7.07, including the
Lien and claim of the Trustee, and any claim arising hereunder shall survive the resignation or
removal of any Trustee, the satisfaction and discharge of Arch Coal’s or Guarantor’s obligations
pursuant to Article Eight and any rejection or termination under any Bankruptcy Law, and the
termination of this Indenture for any reason, and shall apply with equal force and effect to the
Trustee in each of its capacities hereunder and each agent, custodian and other Person employed to
act hereunder.

     “Trustee” for purposes of this Section 7.07 shall include any predecessor Trustee;
provided, however, that the negligence, willful misconduct or bad faith of any Trustee hereunder
shall not affect the rights of any other Trustee hereunder.

          SECTION 7.08. Replacement of Trustee. A resignation or removal of the Trustee and
appointment of a successor Trustee shall become effective only upon the successor Trustee’s
acceptance of appointment as provided in this Section 7.08.

     The Trustee may resign at any time by so notifying Arch Coal. The Holders of a majority in
outstanding principal amount of the outstanding Notes may remove the Trustee by so notifying the
Trustee and Arch Coal. Arch Coal shall remove the Trustee if:

     (a) the Trustee fails to comply with Section 7.10;

     (b) the Trustee is adjudged bankrupt or insolvent;

     (c) a receiver or other public officer takes charge of the Trustee or its property; or

     (d) the Trustee otherwise becomes incapable of acting.

     If the Trustee resigns or is removed, or if a vacancy exists in the office of Trustee for any
reason, Arch Coal shall promptly appoint a successor Trustee. Within one year after the successor
Trustee takes office, the Holders of a majority in principal amount of the outstanding Notes may
appoint a successor Trustee to replace the successor Trustee appointed by Arch Coal. If the
successor Trustee does not deliver its written acceptance required by the next succeeding paragraph
of this Section 7.08 within 30 days after the retiring Trustee resigns or is removed, the retiring
Trustee, Arch Coal or the Holders of a majority in principal amount of the outstanding Notes may,
at the expense of Arch Coal, petition any court of competent jurisdiction for the appointment of a
successor Trustee.

     A successor Trustee shall deliver a written acceptance of its appointment to the retiring
Trustee and to Arch Coal. Thereupon the resignation or removal of the retiring Trustee shall
become effective, and the successor Trustee shall have all the rights, powers and duties of the
Trustee under this Indenture. The successor Trustee shall mail a notice of its succession to

85

 

Holders. The retiring Trustee shall promptly transfer all property held by it as Trustee to the
successor Trustee.

     If a successor Trustee does not take office within 60 days after the retiring Trustee resigns
or is removed, the retiring Trustee, Arch Coal or the Holders of at least 25% in outstanding
principal amount of the Notes may, at Arch Coal’s expense, petition any court of competent
jurisdiction for the appointment of a successor Trustee at the expense of Arch Coal.

     If the Trustee fails to comply with Section 7.10, any Holder may petition any court of
competent jurisdiction for the removal of the Trustee and the appointment of a successor Trustee.

     The retiring Trustee shall promptly transfer all property held by it as Trustee to the
successor Trustee, provided that all sums owing to the retiring Trustee hereunder have been paid
and subject to the lien provided for in Section 7.07. Notwithstanding the replacement of the
Trustee pursuant to this Section 7.08, Arch Coal’s and the Guarantors’ obligations under Section
7.07 shall continue for the benefit of the retiring Trustee.

          SECTION 7.09. Successor Trustee by Merger. Any corporation into which the Trustee may
be merged or converted or with which it may be consolidated, or any corporation resulting from any
merger, conversion or consolidation to which the Trustee shall be a party, or any corporation
succeeding to all or substantially all of the corporate trust business of the Trustee, shall be the
successor of the Trustee hereunder, provided such corporation shall be otherwise qualified and
eligible under this Article Seven, without the execution or filing of any paper or any further act
on the part of any of the parties hereto. In case any Notes shall have been authenticated, but not
delivered, by the Trustee then in office, any successor by merger, conversion or consolidation to
such authenticating Trustee may adopt such authentication and deliver the Notes so authenticated
with the same effect as if such successor Trustee had itself authenticated such Notes. In case at
that time any of the Notes shall not have been authenticated, any successor Trustee may
authenticate such Notes either in the name of any predecessor hereunder or in the name of the
successor Trustee. In all such cases such certificates shall have the full force and effect which
this Indenture provides for the certificate of authentication of the Trustee shall have; provided,
however, that the right to adopt the certificate of authentication of any predecessor Trustee or to
authenticate Notes in the name of any predecessor Trustee shall apply only to its successor or
successors by merger, conversion or consolidation.

          SECTION 7.10. Eligibility; Disqualification. The Trustee shall at all times satisfy
the requirements of TIA Section 310(a)(1) and (5). The Trustee shall have a combined capital and
surplus of at least $50,000,000 as set forth in its most recent published annual report of
condition. No obligor upon the Notes or Person directly controlling, controlled by, or under
common control with such obligor shall serve as trustee upon the Notes. The Trustee shall comply
with TIA Section 310(b); provided, however, that there shall be excluded from the operation of TIA
Section 310(b)(1) any indenture or indentures under which other securities or certificates of
interest or participation in other notes of Arch Coal are outstanding if the requirements for such
exclusion set forth in TIA Section 310(b)(1) are met.

     For purposes of Section 310(b)(1) of the TIA and to the extent permitted thereby, the Trustee,
in its capacity as trustee in respect of the Securities of any series, shall not be deemed to

86

 

have a conflict of interest arising from its capacity as trustee in respect of the Securities of any
other series.

     Nothing herein shall prevent the Trustee from filing with the Commission the application
referred to in the second to last paragraph of Section 310(b) of the TIA.

     If the Trustee has or shall acquire a conflicting interest within the meaning of the TIA, the
Trustee shall either eliminate such interest or resign, to the extent and in the manner provided
by, and subject to the provisions of, the Trust Indenture Act and this Indenture.

          SECTION 7.11. Preferential Collection of Claims Against Arch Coal. The Trustee shall
comply with TIA Section 311(a), excluding any creditor relationship listed in TIA Section 311(b).
A Trustee who has resigned or been removed shall be subject to TIA Section 311(a) to the extent
indicated therein.

          SECTION 7.12. Appointment of Co-Trustee. (a) It is the purpose of this Indenture that
there shall be no violation of any law of any jurisdiction denying or restricting the right of
banking corporations or associations to transact business as trustee in such jurisdiction. It is
recognized that in case of litigation under this Indenture, and in particular in case of the
enforcement thereof on default, or in the case the Trustee deems that by reason of any present or
future law of any jurisdiction it may not exercise any of the powers, rights or remedies herein
granted to the Trustee or hold title to the properties, in trust, as herein granted or take any
action which may be desirable or necessary in connection therewith, it may be necessary that the
Trustee appoint an individual or institution as a separate or co-trustee. The following provisions
of this Section 7.12 are adopted to these ends.

     (b) In the event that the Trustee appoints an additional individual or institution as a
separate or co-trustee, each and every remedy, power, right, claim, demand, cause of action,
immunity, estate, title, interest and Lien expressed or intended by this Indenture to be
exercised by or vested in or conveyed to the Trustee with respect thereto shall be
exercisable by and vest in such separate or co-trustee but only to the extent necessary to
enable such separate or co-trustee to exercise such powers, rights and remedies, and only to
the extent that the Trustee by the laws of any jurisdiction is incapable of exercising such
powers, rights and remedies, and every covenant and obligation necessary to the exercise
thereof by such separate or co-trustee shall run to and be enforceable by either of them.

     (c) Should any instrument in writing from Arch Coal be required by the separate or
co-trustee so appointed by the Trustee for more fully and certainly vesting in and
confirming to him or it such properties, rights, powers, trusts, duties and obligations, any
and all such instruments in writing shall, on request, be executed, acknowledged and
delivered by Arch Coal; provided, however, that if an Event of Default shall have occurred
and be continuing, if Arch Coal does not execute any such instrument within 15 days after
request therefor, the Trustees shall be empowered as an attorney-in-fact for Arch Coal to
execute any such instrument in Arch Coal’s name and stead. In case any separate or
co-trustee or a successor to either shall die, become incapable or acting, resign or be
removed, all the estates, properties, rights, powers, trusts, duties and obligations of

87

 

such separate or co-trustee, so far as permitted by law, shall vest in and be exercised by the
Trustee until the appointment of a new trustee or successor to such separate or co-trustee.

     (d) Each separate trustee and co-trustee shall, to the extent permitted by law, be
appointed and act subject to the following provisions and conditions:

          (1) all rights and powers, conferred or imposed upon the Trustee shall be conferred or
imposed upon and may be exercised or performed by such separate trustee or co-trustee; and

          (2) no trustee hereunder shall be personally liable by reason of any act or omission of
any other trustee hereunder.

     (e) Any notice, request or other writing given to the Trustee shall be deemed to have
been given to each of the then separate trustees and co-trustees, as effectively as if given
to each of them. Every instrument appointing any separate trustee or co-trustee shall refer
to this Indenture and the conditions of this Article Seven.

     (f) Any separate trustee or co-trustee may at any time appoint the Trustee as its agent
or attorney-in-fact with full power and authority, to the extent not prohibited by law, to
do any lawful act under or in respect of this Indenture on its behalf and in its name. If
any separate trustee or co-trustee shall die, become incapable of acting, resign or be
removed, all of its estates, properties, rights, remedies and trusts shall vest in and be
exercised by the Trustee, to the extent permitted by law, without the appointment of a new
or successors trustee.

ARTICLE EIGHT

DEFEASANCE; SATISFACTION AND DISCHARGE

          SECTION 8.01. Arch Coal’s Option to Effect Defeasance or Covenant Defeasance. Arch
Coal may, at its option by a resolution of its Board of Directors, at any time, with respect to the
Notes and the Indenture and all obligations of the Guarantors with respect to their Note
Guarantees, elect to have either Section 8.02 or 8.03 be applied to outstanding Notes upon
compliance with the conditions set forth below this Article Eight.

          SECTION 8.02. Defeasance and Discharge. Upon Arch Coal’s exercise under Section 8.01
of the option applicable to this Section 8.02, Arch Coal shall be deemed to have been discharged
from its obligations with respect to the Notes and this Indenture on the date the conditions set
forth in Section 8.04 are satisfied (hereinafter, “legal defeasance”). For this purpose,
such legal defeasance means that Arch Coal shall be deemed to have paid and discharged the entire
indebtedness represented by the Notes and to have satisfied all its other obligations under the
Notes and this Indenture (and the Trustee, at the expense of Arch Coal, shall execute proper
instruments acknowledging the same), except for the following which shall survive until otherwise
terminated or discharged hereunder: (a) the rights of Holders of Notes to receive, solely from the
trust fund described in Section 8.08 and as more fully set forth in such Section, payments in
respect of the principal of (and premium, if any, on) and interest on such Notes when such payments
are due, (b) the provisions set forth in Section 8.06 below and (c) the

88

 

rights, powers, trusts, duties and immunities of the Trustee hereunder. Subject to compliance with this Article Eight, Arch
Coal may exercise its option under this Section 8.02 notwithstanding the prior exercise of its
option under Section 8.03 below with respect to the
Notes. If Arch Coal exercises its legal defeasance option, payment of the Notes may not be
accelerated because of an Event of Default.

          SECTION 8.03. Covenant Defeasance. Upon Arch Coal’s exercise under Section 8.01 of
the option applicable to this Section 8.03, Arch Coal shall be released from its obligations under
any covenant contained in Sections 4.04 through 4.14, 4.16 (and thereafter any omission to comply
with these covenants will not constitute a Default or Event of Default with respect to the Notes)
(other than the covenants to comply with TIA Section 314(a) to the extent that such obligations
thereunder cannot be terminated), 5.01(b)(3) and 6.01(a)(vi), (vii), (viii) and (ix) (only with
respect to Significant Subsidiaries) with respect to the Notes on and after the date the conditions
set forth below are satisfied (hereinafter, “covenant defeasance”). For this purpose, such
covenant defeasance means that, Arch Coal may omit to comply with and shall have no liability in
respect of any term, condition or limitation set forth in any such covenant, whether directly or
indirectly, by reason of any reference elsewhere herein to any such covenant or by reason of any
reference in any such covenant to any other provision herein or in any other document and such
omission to comply shall not constitute a Default or an Event of Default, but except as specified
above, the remainder of this Indenture and such Notes shall be unaffected thereby.

          SECTION 8.04. Conditions to Defeasance. The legal defeasance option or the covenant
defeasance option may be exercised only if:

     (a) Arch Coal irrevocably deposits in trust with the Trustee money or U.S. Government
Obligations, or a combination thereof, for the payment of principal of, premium, if any, and
interest on the Notes to maturity or redemption, as the case may be;

     (b) Arch Coal delivers to the Trustee a certificate from a nationally recognized firm
of independent certified public accountants expressing their opinion that the payments of
principal, premium, if any, and interest when due and without reinvestment on the deposited
U.S. Government Obligations plus any deposited money without investment will provide cash at
such times and in such amounts as will be sufficient to pay principal, premium, if any, and
interest when due on all the Notes to be defeased to maturity or redemption, as the case may
be;

     (c) 91 days pass after the deposit is made, and during the 91-day period, no Default
described in Section 6.01(a)(viii) and (ix) occurs with respect to Arch Coal or any other
Person making such deposit which is continuing at the end of the period;

     (d) no Default or Event of Default (other than that resulting from borrowing funds to
be applied to make such deposit and any similar and simultaneous deposit relating to other
Debt and, in each case, the granting of Liens in connection therewith) has occurred and is
continuing on the date of such deposit and after giving effect thereto;

89

 

     (e) such deposit does not constitute a default under any other material agreement or
instrument binding on Arch Coal or any of its Restricted Subsidiaries;

     (f) in the case of the legal defeasance option, Arch Coal delivers to the Trustee an
Opinion of Counsel stating that:

          (1) Arch Coal has received from the Internal Revenue Service a ruling, or

          (2) since the date of this Indenture there has been a change in the applicable U.S.
federal income tax law, to the effect that, and based thereon such Opinion of Counsel shall
confirm that, the Holders of the Notes will not recognize income, gain or loss for U.S.
federal income tax purposes as a result of such defeasance and will be subject to U.S.
federal income tax on the same amounts, in the same manner and at the same time as would
have been the case if such defeasance has not occurred;

     (g) in the case of the covenant defeasance option, Arch Coal delivers to the Trustee:

          (1) an Opinion of Counsel to the effect that the Holders of the Notes will not
recognize income, gain or loss for U.S. federal income tax purposes as a result of such
covenant defeasance and will be subject to U.S. federal income tax on the same amounts, in
the same manner and at the same times as would have been the case if such covenant
defeasance had not occurred; and

          (2) an Officers’ Certificate and an Opinion of Counsel, each stating that all
conditions precedent to the defeasance and discharge of the Notes have been complied with as
required by this Article Eight.

          SECTION 8.05. Satisfaction and Discharge of Indenture. The Indenture will be
discharged and will cease to be of further effect as to all Notes issued thereunder, when

     (1) either:

	 	(A)	 	all Notes that have been
authenticated (except lost, stolen or destroyed Notes that have
been replaced or paid and Notes for whose payment money has
theretofore been deposited in trust and thereafter repaid to
Arch Coal) have been delivered to the Trustee for cancellation;
or

	 	(B)	 	all Notes that have not been
delivered to the Trustee for cancellation are to be called for
redemption within one year and an irrevocable notice of
redemption with respect thereto has been deposited with the
Trustee or will become due and payable within one year and Arch
Coal or a Guarantor has irrevocably deposited or caused to be
deposited with the Trustee as trust funds in trust solely for
the benefit of the Holders, cash in U.S. dollars, U.S.
Government Obligations, or a combination thereof, in such

90

 

	 	 	 	amounts as will be sufficient without consideration of any
reinvestment of interest, to pay and discharge the entire
indebtedness on the Notes not delivered to the Trustee for
cancellation for principal, premium, if any, and accrued
interest to the date of maturity or redemption;

          (2) no Default or Event of Default will have occurred and be continuing on the date of
such deposit or will occur as a result of such deposit and such deposit will not result in a
breach or violation of, or constitute a default under, any other instrument to which Arch
Coal or any Guarantor is a party or by which Arch Coal or any Guarantor is bound;

          (3) Arch Coal or any Guarantor has paid or caused to be paid all sums payable by it
under this Indenture; and

          (4) Arch Coal has delivered irrevocable instructions to the Trustee under this
Indenture to apply the deposited money toward the payment of the Notes at maturity or the
Redemption Date, as the case may be.

In addition, Arch Coal must deliver an Officers’ Certificate and an Opinion of Counsel to the
Trustee stating that all conditions precedent to satisfaction and discharge have been satisfied.

          SECTION 8.06. Survival of Certain Obligations. Notwithstanding Sections 8.01 and
8.05, any obligations of Arch Coal and the Guarantors in Sections 2.02 through 2.12, 6.07, 7.07,
7.08, and 8.07 through 8.09 shall survive until the Notes have been paid in full. Thereafter, any
obligations of Arch Coal and the Guarantors in Sections 7.07, 8.07 and 8.08 shall survive such
satisfaction and discharge. Nothing contained in this Article Eight shall abrogate any of the
obligations or duties of the Trustee under this Indenture.

          SECTION 8.07. Acknowledgment of Discharge by Trustee. Subject to Section 8.09, after
the conditions of Section 8.01 or 8.04 have been satisfied, the Trustee upon written request shall
acknowledge in writing the discharge of all of Arch Coal’s obligations under this Indenture except
for those surviving obligations specified in this Article Eight.

          SECTION 8.08. Application of Trust Money. Subject to Section 8.09, the Trustee shall
hold in trust cash in U.S. Dollars or U.S. Government Obligations deposited with it pursuant to
this Article Eight and all payments received with respect to such U.S. Government Obligations. It
shall apply the deposited cash in U.S. Dollars or U.S. Government Obligations and the payments
received with respect to such U.S. Government Obligations through the Paying Agent and in
accordance with this Indenture to the payment of principal of, premium, if any, interest, on the
Notes; but such money need not be segregated from other funds except to the extent required by law.

          SECTION 8.09. Repayment to Arch Coal. Subject to Sections 7.07, and 8.01 through
8.06, the Trustee and the Paying Agent shall promptly pay to Arch Coal upon request set forth in an
Officers’ Certificate any excess money held by them at any time and thereupon shall be relieved
from all liability with respect to such money. The Trustee and the Paying Agent shall pay to Arch
Coal upon request any money held by them for the payment of principal, premium,

91

 

if any, or interest, if any, that remains unclaimed for two years; provided that the Trustee or Paying Agent
before being required to make any such payment may cause to be published (a) in The Wall Street
Journal or another leading newspaper in New York, New York, (b) through the newswire service of
Bloomberg or, if Bloomberg does not then operate, any similar agency or mail to each Holder
entitled to such money at such Holder’s address (as set forth in the Security
Register) notice that such money remains unclaimed and that after a date specified therein
(which shall be at least 30 days from the date of such publication or mailing) any unclaimed
balance of such money then remaining will be repaid to Arch Coal. After payment to Arch Coal,
Holders entitled to such money must look to Arch Coal for payment as general creditors unless an
applicable law designates another Person, and all liability of the Trustee and such Paying Agent
with respect to such money shall cease.

          SECTION 8.10. Indemnity for Government Securities. Arch Coal shall pay and shall
indemnify the Trustee against any tax, fee or other charge imposed on or assessed against deposited
U.S. Government Obligations or the principal, premium, if any, interest, if any, received on such
U.S. Government Obligations.

          SECTION 8.11. Reinstatement. If the Trustee or Paying Agent is unable to apply cash
in U.S. Dollars or U.S. Government Obligations in accordance with this Article Eight by reason of
any legal proceeding or by reason of any order or judgment of any court or governmental authority
enjoining, restraining or otherwise prohibiting such application, Arch Coal’s and the Guarantors’
obligations under this Indenture and the Notes shall be revived and reinstated as though no deposit
had occurred pursuant to this Article Eight until such time as the Trustee or any such Paying Agent
is permitted to apply all such U.S. Government Obligations in accordance with this Article Eight;
provided, however, that, if Arch Coal has made any payment of principal of, premium, if any, and
interest, if any, on any Notes because of the reinstatement of its obligations, Arch Coal shall be
subrogated to the rights of the Holders of such Notes to receive such payment from the cash in U.S.
Dollars or U.S. Government Obligations held by the Trustee or Paying Agent.

ARTICLE NINE

AMENDMENTS AND WAIVERS

          SECTION 9.01. Without Consent of Holders. Arch Coal, when authorized by a resolution
of the Board of Directors (as evidenced by the delivery of such resolution to the Trustee), any
Guarantor and the Trustee may modify, amend or supplement this Indenture, any Guarantee or the
Notes without notice to or consent of any Holder to:

     (a) cure any ambiguity, omission, defect or inconsistency in any manner that is not
adverse in any material respect to any Holder of the Notes;

     (b) provide for the assumption by a Surviving Person of the obligations of Arch Coal
under this Indenture;

     (c) provide for uncertificated Notes in addition to or in place of certificated Notes
(provided that the uncertificated Notes are issued in registered form for purposes of

92

 

Section 163(f) of the Code, or in a manner such that the uncertificated Notes are described
in Section 163(f)(2)(B) of the Code);

     (d) add Note Guarantees with respect to the Notes or confirm and evidence the release,
termination or discharge of any security or Note Guarantee when such release, termination or
discharge is permitted by this Indenture;

     (e) secure the Notes, add to the covenants of Arch Coal and the Restricted Subsidiaries
for the benefit of the Holders of the Notes or surrender any right or power conferred upon
Arch Coal;

     (f) make any change that does not adversely affect the rights of any Holder of the
Notes;

     (g) comply with any requirement of the Commission in connection with the qualification
of this Indenture under the Trust Indenture Act;

     (h) provide for the issuance of Additional Notes in accordance with this Indenture;

     (i) to evidence and provide for the acceptance of appointment by a successor Trustee;

     (j) to conform the text of this Indenture or the Notes to any provision of the
“Description of Notes” section of Arch Coal’s Offering Memorandum dated June 8, 2011
relating to the Notes to the extent that such provision in such “Description of Notes” was
intended to be a recitation of a provision of this Indenture or the Notes; or

     (k) to make any amendment to the provisions of this Indenture relating to the transfer
and legending of the Notes as permitted by this Indenture, including, without limitation to
facilitate the issuance and administration of the Notes; provided, however, that (i)
compliance with this Indenture as so amended would not result in the Notes being transferred
in violation of the Securities Act or any applicable securities law and (ii) such amendment
does not materially and adversely affect the rights of Holders to transfer the Notes.

          SECTION 9.02. With Consent of Holders. (a) Except as provided in Section 9.02(b)
below and Section 6.04 and without prejudice to Section 9.01, Arch Coal and the Trustee may,
provided that any amendment or supplement that affects the terms of any series of Notes as distinct
from any other series of Notes shall require the consent of the holders of a majority in principal
amount of the outstanding Notes of such series (including consents obtained in connection with a
tender offer or exchange offer for such Notes):

     (i) amend this Indenture, the Notes, or the Note Guarantees; or

     (ii) waive any past default or compliance by Arch Coal or the Guarantors with any
provision of this Indenture, the Notes or the Note Guarantees;

93

 

with the written consent of the Holders of at least a majority in aggregate principal amount of the
Notes then outstanding including consents obtained in connection with a tender offer or in exchange
for the Notes.

     (b) Without the consent of each Holder affected thereby, no amendment, modification,
supplement or waiver, including a waiver pursuant to Section 6.04 and an amendment,
modification or supplement pursuant to Section 9.01, may:

     (i) reduce the amount of Notes whose Holders must consent to an amendment or waiver;

     (ii) reduce the rate of, or extend the time for payment of, interest on any Note;

     (iii) reduce the principal of, or extend the Stated Maturity of, any Note;

     (iv) make any Note payable in money other than that stated in the Note;

     (v) impair the right of any Holder of the Notes to receive payment of principal of,
premium, if any, and interest, on, such Holder’s Notes on or after the due dates therefor or
to institute suit for the enforcement of any payment on or with respect to such Holder’s
Notes;

     (vi) reduce the premium payable upon the redemption of any Note or change the time at
which any Note may be redeemed (other than any notice provisions), pursuant to Section 3.01
of this Indenture;

     (vii) reduce the premium payable upon a Change of Control or, at any time after a
Change of Control has occurred, change the time at which the Change of Control Offer
relating thereto must be made or at which the Notes must be repurchased pursuant to such
Change of Control Offer;

     (viii) at any time after Arch Coal is obligated to make a Prepayment Offer with the
Excess Proceeds from Asset Sales, change the time at which such Prepayment Offer must be
made or at which the Notes must be repurchased pursuant thereto;

     (ix) modify or change any provision of this Indenture affecting the ranking of the
Notes or the Note Guarantees in a manner adverse to the Trustee or the Holders of the Notes;
or

     (x) release any Guarantor from any of its obligations under its Note Guarantee or this
Indenture other than in accordance with the provisions of this Indenture, or amend or modify
any provision relating to such release.

     The consent of the Holders of the Notes is not necessary to approve the particular form of any
proposed amendment. It is sufficient if such consent approves the substance of the proposed
amendment. After an amendment becomes effective, Arch Coal shall mail, or arrange to be mailed, to
each registered Holder of the Notes at such Holder’s address appearing in the Security Register a
notice briefly describing such amendment. However, the failure to give such notice to

94

 

all Holders of the Notes, or any defect therein, will not impair or affect the validity of the amendment.

          SECTION 9.03. Compliance with Trust Indenture Act. Every amendment, modification or
supplement to this Indenture or the Notes shall be set forth in a supplemental indenture that
complies with the applicable provisions of the TIA as then in effect.

          SECTION 9.04. Effect of Supplemental Indentures; Revocation and Effect of Consents.

     (a) Upon the execution of any supplemental indenture under this Article Nine, this Indenture
shall be modified in accordance therewith, and such supplemental indenture shall form a part of
this Indenture for all purposes; and every Holder theretofore or thereafter authenticated and
delivered hereunder shall be bound thereby.

     (b) Until an amendment, supplement or waiver under this Article Nine becomes effective, a
consent to it by a Holder of a Note is a continuing consent by the Holder of a Note and every
subsequent Holder of a Note or portion of a Note that evidences the same debt as the consenting
Holder’s Note, even if notation of the consent is not made on any Note. However, any such Holder
of a Note or subsequent Holder of a Note may revoke the consent as to its Note if the Trustee
receives written notice of revocation before the date the waiver, supplement or amendment becomes
effective. An amendment, supplement or waiver becomes effective in accordance with its terms and
thereafter binds every Holder.

     (c) Arch Coal may, but shall not be obligated to, fix a record date for the purpose of
determining the Holders entitled to consent to any amendment, supplement or waiver. If a record
date is fixed, then, notwithstanding the second sentence of paragraph (b) above, those Persons who
were Holders at such record date (or their duly designated proxies), and only those Persons, shall
be entitled to give such consent to such amendment, supplement or waiver or to revoke any consent
previously given whether or not such Persons continue to be Holders after such record date. No
such consent shall be valid or effective for more than 120 days after such record date.

          SECTION 9.05. Notation on or Exchange of Notes. If an amendment, modification or
supplement changes the terms of a Note, Arch Coal or Trustee may require the Holder to deliver it
to the Trustee. The Trustee may place an appropriate notation on the Note and on any Note
subsequently authenticated regarding the changed terms and return it to the Holder. Alternatively,
if Arch Coal so determines, Arch Coal in exchange for the Note shall issue and the Trustee shall
authenticate a new Note that reflects the changed terms. Failure to make the appropriate notation
or to issue a new Note shall not affect the validity of such amendment, modification or supplement.

          SECTION 9.06. Payment for Consent. Arch Coal will not, and will not permit any of its
Subsidiaries to, directly or indirectly, pay or cause to be paid any consideration, whether by way
of interest, fee or otherwise, to any Holder of any Notes for or as an inducement to any consent,
waiver or amendment of any of the terms or provisions of this Indenture or the Notes unless such
consideration is offered to be paid or is paid to all Holders of the Notes that

95

 

consent, waive or agree to amend in the time frame set forth in the solicitation documents relating to such consent,
waiver or agreement.

          SECTION 9.07. Notice of Amendment or Waiver. Promptly after the execution by Arch
Coal and the Trustee of any supplemental indenture or waiver pursuant to the provisions of Section
9.02, Arch Coal shall give notice thereof to the Holders of each outstanding Note affected, in the
manner provided for in Section 12.02(b), setting forth in general terms the
substance of such supplemental indenture or waiver. However, the failure to give such notice
to all Holders, or any defect therein, will not impair or affect the validity of the supplemental
indenture or waiver.

          SECTION 9.08. Trustee to Sign Supplemental Indentures. In executing any supplemental
indenture, the Trustee shall be entitled to receive indemnity reasonably satisfactory to it and to
receive and shall be fully protected in relying upon, in addition to the documents required by
Section 12.04, an Officers’ Certificate and an Opinion of Counsel stating that such supplemental
indenture is authorized or permitted by this Indenture and that all conditions precedent to the
execution, delivery and performance of such supplemental indenture have been satisfied.

     The Trustee shall sign all supplemental indentures that comply with the requirements of this
Indenture, except that the Trustee may, but need not, sign any supplemental indenture that
adversely affects its rights.

ARTICLE TEN

GUARANTEE

          SECTION 10.01. Note Guarantee. (a) Each Guarantor hereby fully and unconditionally
guarantees, on an unsecured, senior, joint and several basis with each other Note Guarantee, to
each Holder and to the Trustee and its successors and assigns on behalf of each Holder, the full
payment of principal of, premium, if any, interest, if any, and all other monetary obligations of
Arch Coal under this Indenture and the Notes (including obligations to the Trustee) with respect to
each Note authenticated and delivered by the Trustee or its agent pursuant to and in accordance
with this Indenture, in accordance with the terms of this Indenture (all the foregoing being
hereinafter collectively called the “Obligations”). Each Guarantor further agrees that the
Obligations may be extended or renewed, in whole or in part, without notice or further assent from
such Guarantor and that such Guarantor will remain bound under this Article Ten notwithstanding any
extension or renewal of any Obligation. All payments under such Guarantee will be made in U.S.
Dollars.

     (b) Each Guarantor hereby agrees that its obligations hereunder shall be as if they
were the principal debtor and not merely surety, unaffected by, and irrespective of, any
validity, irregularity or unenforceability of any Note or this Indenture, any failure to
enforce the provisions of any Note or this Indenture, any waiver, modification or indulgence
granted to Arch Coal with respect thereto by the Holders or the Trustee, or any other
circumstance which may otherwise constitute a legal or equitable discharge of a surety or
guarantor (except payment in full); provided, however, that, notwithstanding the foregoing,
no such waiver, modification, indulgence or circumstance shall without the

96

 

written consent of the Guarantor increase the principal amount of a Note or the interest rate thereon or
change the currency of payment with respect to any Note, or alter the Stated Maturity
thereof. Each Guarantor hereby waives diligence, presentment, demand of payment, filing of
claims with a court in the event of merger or bankruptcy of Arch Coal, any right to require
that the Trustee pursue or exhaust its legal or equitable remedies against Arch Coal prior
to exercising its rights under the Guarantee (including, for the avoidance of doubt, any
right which the Guarantor may have to require the seizure and sale of the assets of Arch Coal to satisfy the outstanding principal of, interest
on or any other amount payable under each Note prior to recourse against the Guarantor or
its assets), protest or notice with respect to any Note or the Debt evidenced thereby and
all demands whatsoever, and covenants that the Guarantee will not be discharged with respect
to any Note except by payment in full of the principal thereof and interest thereon or as
otherwise provided in this Indenture, including Section 10.03. If at any time any payment of
principal of, premium, if any, and interest, if any, on such Note is rescinded or must be
otherwise restored or returned upon the insolvency, bankruptcy or reorganization of Arch
Coal, the Guarantor’s obligations hereunder with respect to such payment shall be reinstated
as of the date of such rescission, restoration or returns as though such payment had become
due but had not been made at such times.

     (c) The Guarantor also agrees to pay any and all costs and expenses (including
reasonable attorneys’ fees) incurred by the Trustee or any Holder in enforcing any rights
under this Section 10.01.

          SECTION 10.02. Subrogation. (a) The Guarantor shall be subrogated to all rights of
the Holders against Arch Coal in respect of any amounts paid to such Holders by the Guarantor
pursuant to the provisions of its Guarantee.

     (b) The Guarantor agrees that it shall not be entitled to any right of subrogation in
relation to the Holders in respect of any Obligations guaranteed hereby until payment in
full of all Obligations. The Guarantor further agrees that, as between themselves, on the
one hand, and the Holders and the Trustee, on the other hand, (x) the maturity of the
Obligations guaranteed hereby may be accelerated as provided in Section 6.02 for the
purposes of their Guarantee herein, notwithstanding any stay, injunction or other
prohibition preventing such acceleration in respect of the Obligations guaranteed hereby,
and (y) in the event of any declaration of acceleration of such obligations as provided in
Section 6.02, such Obligations (whether or not due and payable) shall forthwith become due
and payable by the Guarantor for the purposes of this Section 10.02 subject to Section
10.01(b) above.

          SECTION 10.03. Release of Guarantors. The Guarantee of any Guarantor will be
automatically and unconditionally released and discharged upon any of the following:

     (a) in the event of a sale or other disposition, by way of merger, consolidation or
otherwise, of the Capital Stock of any Guarantor, after which the applicable Guarantor is no
longer a Restricted Subsidiary, such Guarantor will be released and relieved of any
obligations under its Guarantee; provided that the Net Available Cash from such sale or

97

 

other disposition is applied in accordance with the applicable provisions of Section 4.09 of
this Indenture;

     (b) upon the release or discharge of the Guarantee of the Amended and Restated Credit
Agreement or the Guarantee of a Guarantor that resulted in the creation of the Note
Guarantee of such Guarantor, except a discharge or release by or as a result of payment
under such other Guarantee pursuant to Section 4.12, such Guarantor will be released and
relieved of any obligations under its Note Guarantee;

     (c) upon the designation of any Guarantor as an Unrestricted Subsidiary in accordance
with the terms of this Indenture, such Guarantor will be released and relieved of any
obligations under its Note Guarantee; and

     (d) upon legal defeasance or satisfaction and discharge of this Indenture as provided
in Article Eight;

and in each such case, prior to release and discharge or such Note Guarantee, Arch Coal will
have delivered to the Trustee an Officers’ Certificate and an Opinion of Counsel, each
stating that all conditions precedent herein provided for relating to such transactions have
been complied with and that such release is authorized and permitted hereunder.

     The Trustee shall execute any documents reasonably requested by either Arch Coal or a
Guarantor in order to evidence the release of such Guarantor from its obligations under its
Guarantee under this Article Ten.

          SECTION 10.04. Additional Guarantors. Arch Coal covenants and agrees that it shall
cause any Person which becomes obligated to Guarantee the Notes, pursuant to the terms of Section
4.12, to execute a supplemental indenture and any other documentation requested by the Trustee
satisfactory in form and substance to the Trustee in accordance with Section 4.12 pursuant to which
such Restricted Subsidiary shall Guarantee the obligations of Arch Coal under the Notes and this
Indenture in accordance with this Article Ten with the same effect and to the same extent as if
such Person had been named herein as a Guarantor.

          SECTION 10.05. Limitation of Guarantee. The Guarantee is limited in an amount not to
exceed the maximum amount that can be guaranteed by the Guarantor without rendering such Guarantee,
as it relates to the Guarantor, voidable under applicable law relating to fraudulent conveyance or
fraudulent transfer of similar laws affecting the rights of the creditors generally.

          SECTION 10.06. Notation Not Required. Neither Arch Coal nor the Guarantor shall be
required to make a notation on the Notes to reflect any Guarantee or any release, termination or
discharge thereof.

          SECTION 10.07. Successors and Assigns. This Article Ten shall be binding upon the
Guarantor and each of their successors and assigns and shall inure to the benefit of the successors
and assigns of the Trustee and the Holders and, in the event of any transfer or assignment of
rights by any Holder or the Trustee, the rights and privileges conferred upon that

98

 

party in this Indenture and in the Notes shall automatically extend to and be vested in such transferee or
assigns, all subject to the terms and conditions of this Indenture.

          SECTION 10.08. No Waiver. Neither a failure nor a delay on the part of either the
Trustee or the Holders in exercising any right, power or privilege under this Article Ten shall
operate as a waiver thereof, nor shall a single or partial exercise thereof preclude any other or
further exercise of any right, power or privilege. The rights, remedies and benefits of the
Trustee and the Holders herein expressly specified are cumulative and are not exclusive of any
other rights, remedies or benefits which either may have under this Article Ten at law, in equity,
by statute or otherwise.

          SECTION 10.09. Modification. No modification, amendment or waiver of any provision of
this Article Ten, nor the consent to any departure by the Guarantor therefrom, shall in any event
be effective unless the same shall be in writing and signed by the Trustee, and then such waiver or
consent shall be effective only in the specific instance and for the purpose for which given. No
notice to or demand on the Guarantor in any case shall entitle the Guarantor to any other or
further notice or demand in the same, similar or other circumstance.

ARTICLE ELEVEN

HOLDERS’ MEETINGS

          SECTION 11.01. Purposes of Meetings. A meeting of the Holders may be called at any
time pursuant to this Article Eleven for any of the following purposes:

     (a) to give any notice to Arch Coal or any Guarantor or to the Trustee, or to give any
directions to the Trustee, or to consent to the waiving of any Default hereunder and its
consequences, or to take any other action authorized to be taken by Holders pursuant to
Article Nine;

     (b) to remove the Trustee and appoint a successor trustee pursuant to Article Seven; or

     (c) to consent to the execution of an indenture supplement pursuant to Section 9.02.

          SECTION 11.02. Place of Meetings. Meetings of Holders may be held at such place or
places as the Trustee or, in case of its failure to act, Arch Coal, any Guarantor or the Holders
calling the meeting, shall from time to time determine.

          SECTION 11.03. Call and Notice of Meetings. (a) The Trustee may at any time (upon
not less than 21 days’ notice) call a meeting of Holders to be held at such time and at such place
in St. Louis, Missouri or in such other city as determined by the Trustee pursuant to Section
11.02. Notice of every meeting of Holders, setting forth the time and the place of such meeting
and in general terms the action proposed to be taken at such meeting, shall be mailed to each
Holder in the manner contemplated by Section 12.02(b).

     (b) In case at any time Arch Coal, pursuant to a resolution of the Board of Directors,
or the Holders of at least 10% in aggregate principal amount at maturity of the

99

 

Notes then outstanding, shall have requested the Trustee to call a meeting of the Holders, by written
request setting forth in reasonable detail the action proposed to be taken at the meeting,
and the Trustee shall not have made the first giving of the notice of such meeting within 20
days after receipt of such request, then Arch Coal or the Holders of Notes in the amount
above specified may determine the time (not less than 21 days after notice is given) and the
place in St. Louis, Missouri or in such other city as determined by Arch Coal or the Holders
pursuant to Section 11.02 for such meeting and may call such meeting to take any action
authorized in Section 11.01 by giving notice thereof as provided in Section 11.01(a).

          SECTION 11.04. Voting at Meetings. To be entitled to vote at any meeting of Holders,
a Person shall be (i) a Holder at the relevant record date set in accordance with Section 6.15 or
(ii) a Person appointed by an instrument in writing as proxy for a Holder or Holders by such Holder
or Holders. The only Persons who shall be entitled to be present or to speak at any meeting of
Holders shall be the Person so entitled to vote at such meeting and their counsel and any
representatives of the Trustee and its counsel and any representatives of Arch Coal and any
Guarantor and their counsel.

          SECTION 11.05. Voting Rights, Conduct and Adjournment. (a) Notwithstanding any other
provisions of this Indenture, the Trustee may make such reasonable regulations as it may deem
advisable for any meeting of Holders in regard to proof of the holding of Notes and of the
appointment of proxies and in regard to the appointment and duties of inspectors of votes, the
submission and examination of proxies, certificates and other evidence of the right to vote, and
such other matters concerning the conduct of the meeting as it shall deem appropriate. Except as
otherwise permitted or required by any such regulations, the holding of Notes shall be proved in
the manner specified in Section 2.03 and the appointment of any proxy shall be proved in such
manner as is deemed appropriate by the Trustee or by having the signature of the Person executing
the proxy witnessed or guaranteed by any bank, banker or trust company customarily authorized to
certify to the holding of a Note such as a Global Note.

     (b) At any meeting of Holders, the presence of Persons holding or representing Notes in
an aggregate principal amount at Stated Maturity sufficient under the appropriate provision
of this Indenture to take action upon the business for the transaction of which such meeting
was called shall constitute a quorum. Subject to any required aggregate principal amount at
Stated Maturity of Notes required for the taking of any action pursuant to Article Nine, in
no event shall less than a majority of the votes given by Persons holding or representing
Notes at any meeting of Holders be sufficient to approve an action. Any meeting of Holders
duly called pursuant to Section 11.03 may be adjourned from time to time by vote of the
Holders (or proxies for the Holders) of a majority of the Notes represented at the meeting
and entitled to vote, whether or not a quorum shall be present; and the meeting may be held
as so adjourned without further notice. No action at a meeting of Holders shall be
effective unless approved by Persons holding or representing Notes in the aggregate
principal amount at Stated Maturity required by the provision of this Indenture pursuant to
which such action is being taken.

100

 

     (c) At any meeting of Holders, each Holder or proxy shall be entitled to one vote for
each $1,000 aggregate principal amount at Stated Maturity of outstanding Notes held or
represented.

          SECTION 11.06. Revocation of Consent by Holders at Meetings. At any time prior to
(but not after) the evidencing to the Trustee of the taking of any action at a meeting of Holders
by the Holders of the percentage in aggregate principal amount at maturity of the Notes specified
in this Indenture in connection with such action, any Holder of a Note the serial number of which
is included in the Notes the Holders of which have consented to such action may, by filing written
notice with the Trustee at its principal Corporate Trust Office and upon proof of holding as
provided herein, revoke such consent so far as concerns such Note. Except as aforesaid, any such
consent given by the Holder of any Note shall be conclusive and binding
upon such Holder and upon all future Holders and owners of such Note and of any Note issued in
exchange therefor, in lieu thereof or upon transfer thereof, irrespective of whether or not any
notation in regard thereto is made upon such Note. Any action taken by the Holders of the
percentage in aggregate principal amount at maturity of the Notes specified in this Indenture in
connection with such action shall be conclusively binding upon Arch Coal, the Guarantors, the
Trustee and the Holders. This Section 11.06 shall not apply to revocations of consents to
amendments, supplements or waivers, which shall be governed by the provisions of Section 9.04.

ARTICLE TWELVE

MISCELLANEOUS

          SECTION 12.01. Trust Indenture Act Controls. If and to the extent that any provision
of this Indenture limits, qualifies or conflicts with the duties imposed by, or with another
provision (an “incorporated provision”) included in this Indenture by operation of,
Sections 310 to 318, inclusive, of the TIA incorporated hereto in accordance with Section 1.03
hereto, such imposed duties or incorporated provision shall control.

          SECTION 12.02. Notices. (a) Any notice or communication shall be in writing and
delivered in person or mailed by first class mail, overnight air courier guaranteeing next-day
delivery or sent by facsimile transmission addressed as follows provided that any of the foregoing
given to the Trustee will be effective only upon receipt:

if to Arch Coal, Inc. or any Guarantor:

Arch Coal, Inc.

One CityPlace Drive

Suite 300

St. Louis, Missouri 63141

Telephone: 1-800-238-7398

Facsimile: 314-994-2734

Attention: General Counsel

With copies to:

Simpson Thacher & Bartlett LLP

425 Lexington Avenue

101

 

New York, New York 10017-3954

Facsimile: (212) 455-2502

Attention: Risë B. Norman

if to the Trustee:

UMB Bank National Association

2 South Broadway, 6th Floor

St. Louis, Missouri 63102

Telephone: (314) 612-8490

Facsimile: (314) 612-8499

Attention: Corporate Trust Department

     Arch Coal, the Guarantors or the Trustee by notice to the other may designate additional or
different addresses for subsequent notices or communications. All communications delivered to the
Trustee shall be deemed effective when received.

     (b) Notices to the Holders regarding the Notes shall be mailed to each Holder by
first-class mail, delivered in person or by overnight air courier guaranteeing next-day
delivery at such Holder’s respective address as it appears on the registration books of the
Registrar.

     Notices given by (i) first-class mail shall be deemed given five calendar days after mailing,
(ii) by hand shall be deemed given upon delivery and (iii) by overnight air courier guaranteeing
next-day delivery shall be deemed given the next Business Day after timely delivery to the courier.
Failure to mail a notice or communication to a Holder or any defect in it shall not affect its
sufficiency with respect to other Holders. If a notice or communication is delivered in the manner
provided above, it is duly given whether or not the addressee receives it.

     In the case by reason of suspension of regular mail service or by reason of any other cause it
shall be impracticable to give such notice by mail, then such notification as shall be made with
the approval of the Trustee shall constitute a sufficient notification for every purpose hereunder.

     (c) Where this Indenture provides for notice in any manner, such notice may be waived
in writing by the Person entitled to receive such notice, either before or after the event,
and such waiver shall be the equivalent of such notice. Waivers of notice by Holders shall
be filed with the Trustee, but such filing shall not be a condition precedent to the
validity of any action taken in reliance upon such waiver.

          SECTION 12.03. Communication by Holders with Other Holders. Holders may communicate
pursuant to TIA Section 312(b) with other Holders with respect to their rights under this Indenture
or the Notes. Arch Coal, any Guarantor, the Trustee, the Registrar and anyone else shall have the
protection of TIA Section 312(c).

102

 

          SECTION 12.04. Certificate and Opinion as to Conditions Precedent. Upon any
request or application by Arch Coal or any Guarantor to the Trustee to take or refrain from taking
any action under this Indenture (except in connection with the original issuance of the Notes on
the date hereof), Arch Coal or any Guarantor, as the case may be, shall furnish upon request to the
Trustee:

     (a) an Officers’ Certificate in form reasonably satisfactory to the Trustee stating
that, in the opinion of the signer, all conditions precedent, if any, provided for in this
Indenture relating to the proposed action have been complied with; and

     (b) an Opinion of Counsel in form reasonably satisfactory to the Trustee stating that,
in the opinion of such counsel, all such conditions precedent have been complied with.

     Any Officers’ Certificate may be based, insofar as it relates to legal matters, upon an
Opinion of Counsel, unless the officer signing such certificate knows, or in the exercise of
reasonable care should know, that such Opinion of Counsel with respect to the matters upon which
such Officers’ Certificate is based are erroneous. Any Opinion of Counsel may be based and may
state that it is so based, insofar as it relates to factual matters, upon an Officers’ Certificate
stating that the information with respect to such factual matters is in the possession of Arch
Coal, unless the counsel signing such Opinion of Counsel knows, or in the exercise of reasonable
care should know, that the Officers’ Certificate with respect to the matters upon which such
Opinion of Counsel is based are erroneous.

          SECTION 12.05. Statements Required in Certificate or Opinion. Every certificate or
opinion with respect to compliance with a condition or covenant provided for in this Indenture
shall include:

     (a) a statement that each individual signing such certificate or opinion has read such
covenant or condition and the definitions herein relating thereto;

     (b) a brief statement as to the nature and scope of the examination or investigation
upon which the statements or opinions contained in such certificate or opinion are based;

     (c) a statement that, in the opinion of each such individual, he or she has made such
examination or investigation as is necessary to enable him to express an informed opinion as
to whether or not such covenant or condition has been complied with; and

     (d) a statement as to whether, in the opinion of each such individual, such condition
or covenant has been complied with.

          SECTION 12.06. Rules by Trustee, Paying Agent and Registrar. The Trustee may make
reasonable rules for action by or at a meeting of Holders. The Registrar and the Paying Agent may
make reasonable rules for their functions.

          SECTION 12.07. Legal Holidays. If an Interest Payment Date or other payment date is
not a Business Day, payment shall be made on the next succeeding day that is a Business

103

 

Day, and no interest shall accrue for the intervening period. If a Record Date is not a
Business Day, the Record Date shall not be affected.

          SECTION 12.08. Governing Law. THIS INDENTURE AND THE NOTES SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

          SECTION 12.09. No Recourse Against Others. No director, officer, employee,
incorporator, stockholder, member, manager or partner of Arch Coal or any Guarantor, as such, shall
have any liability for any obligations of Arch Coal or any Guarantor under the Notes, this
Indenture or any Note Guarantees or for any claim based on, in respect of, or by reason of, such
obligations or their creation. By accepting a Note, each Holder shall waive and release all such
liability. The waiver and release shall be part of the consideration for the issue of the Notes.

          SECTION 12.10. Successors. All agreements of Arch Coal and any Guarantor in this
Indenture and the Notes shall bind their respective successors. All agreements of the Trustee in
this Indenture shall bind its successors.

          SECTION 12.11. Electronic Means. The parties agree that the transaction described
herein may be conducted and related documents may be stored by electronic means. Copies,
telecopies, facsimiles, electronic files and other reproductions of original executed documents
shall be deemed to be authentic and valid counterparts of such original documents for all purposes,
including the filing of any claim, action or suit in the appropriate court of law.

          SECTION 12.12. Multiple Originals. The parties may sign any number of copies of this
Indenture. Each signed copy shall be an original, but all of them together represent the same
agreement. One signed copy is enough to prove this Indenture.

          SECTION 12.13. Table of Contents, Cross-Reference Sheet and Headings. The table of
contents, cross-reference sheet and headings of the Articles and Sections of this Indenture have
been inserted for convenience of reference only, are not intended to be considered a part hereof
and shall not modify or restrict any of the terms or provisions hereof.

          SECTION 12.14. Severability. In case any provision in this Indenture or in the Notes
shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the
remaining provisions shall not in any way be affected or impaired thereby.

     This Indenture may be signed in any number of counterparts each of which so executed shall be
deemed to be an original, but all such counterparts shall together constitute but one and the same
Indenture.

[SIGNATURE PAGES FOLLOW]

104

 

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

	 	 	 	 	 
	 	Arch Coal, Inc.

as Issuer

 	 
	 	By:  	/s/ John T. Drexler
 	 
	 	 	Name:  	John T. Drexler 	 
	 	 	Title:  	Senior Vice President and Chief Financial
Officer 	 
	 
	 	Allegheny Land Company

As Guarantor

 	 
	 	By:  	/s/ John T. Drexler
 	 
	 	 	Name:  	John T. Drexler 	 
	 	 	Title:  	Vice President 	 
	 
	 	Arch Coal Sales Company, Inc.

As Guarantor

 	 
	 	By:  	/s/ John T. Drexler
 	 
	 	 	Name:  	John T. Drexler 	 
	 	 	Title:  	Vice President 	 
	 
	 	Arch Coal Terminal, Inc.

As Guarantor

 	 
	 	By:  	/s/ John T. Drexler
 	 
	 	 	Name:  	John T. Drexler 	 
	 	 	Title:  	Vice President 	 
	 
	 	Arch Coal Development, LLC

As Guarantor

 	 
	 	By:  	/s/ John T. Drexler
 	 
	 	 	Name:  	John T. Drexler 	 
	 	 	Title:  	Vice President 	 
	 

Signature Page to Indenture

 

 

	 	 	 	 	 
	 	Arch Energy Resources, LLC

As Guarantor

 	 
	 	By:  	/s/ John T. Drexler
 	 
	 	 	Name:  	John T. Drexler 	 
	 	 	Title:  	Vice President 	 
	 
	 	Arch Reclamation Services, Inc.

As Guarantor

 	 
	 	By:  	/s/ John T. Drexler
 	 
	 	 	Name:  	John T. Drexler 	 
	 	 	Title:  	Vice President 	 
	 
	 	Ark Land Company

As Guarantor

 	 
	 	By:  	/s/ John T. Drexler
 	 
	 	 	Name:  	John T. Drexler 	 
	 	 	Title:  	Vice President 	 
	 
	 	Arch Land KH, Inc.

As Guarantor

 	 
	 	By:  	/s/ John T. Drexler
 	 
	 	 	Name:  	John T. Drexler 	 
	 	 	Title:  	Vice President 	 
	 
	 	Arch Land LT, Inc.

As Guarantor

 	 
	 	By:  	/s/ John T. Drexler
 	 
	 	 	Name:  	John T. Drexler 	 
	 	 	Title:  	Vice President 	 
	 

Signature Page to Indenture

 

 

	 	 	 	 	 
	 	Ark Land WR, Inc.

As Guarantor

 	 
	 	By:  	/s/ John T. Drexler
 	 
	 	 	Name:  	John T. Drexler 	 
	 	 	Title:  	Vice President 	 
	 
	 	Ashland Terminal, Inc.

As Guarantor

 	 
	 	By:  	/s/ John T. Drexler
 	 
	 	 	Name:  	John T. Drexler 	 
	 	 	Title:  	Vice President 	 
	 
	 	Catenary Coal Holdings, Inc.

As Guarantor

 	 
	 	By:  	/s/ John T. Drexler
 	 
	 	 	Name:  	John T. Drexler 	 
	 	 	Title:  	Vice President 	 
	 
	 	Coal-Mac, Inc.

As Guarantor

 	 
	 	By:  	/s/ John T. Drexler
 	 
	 	 	Name:  	John T. Drexler 	 
	 	 	Title:  	Vice President 	 
	 
	 	Cumberland River Coal Company

As Guarantor

 	 
	 	By:  	/s/ John T. Drexler
 	 
	 	 	Name:  	John T. Drexler 	 
	 	 	Title:  	Vice President 	 
	 

Signature Page to Indenture

 

 

	 	 	 	 	 
	 	Lone Mountain Processing, Inc.

As Guarantor

 	 
	 	By:  	/s/ John T. Drexler
 	 
	 	 	Name:  	John T. Drexler 	 
	 	 	Title:  	Vice President 	 
	 
	 	Mingo Logan Coal Company

As Guarantor

 	 
	 	By:  	/s/ John T. Drexler
 	 
	 	 	Name:  	John T. Drexler 	 
	 	 	Title:  	Vice President 	 
	 
	 	Mountain Gem Land, Inc.

As Guarantor

 	 
	 	By:  	/s/ John T. Drexler
 	 
	 	 	Name:  	John T. Drexler 	 
	 	 	Title:  	Vice President 	 
	 
	 	Mountain Mining, Inc.

As Guarantor

 	 
	 	By:  	/s/ John T. Drexler
 	 
	 	 	Name:  	John T. Drexler 	 
	 	 	Title:  	Vice President 	 
	 
	 	Mountaineer Land Company

As Guarantor

 	 
	 	By:  	/s/ John T. Drexler
 	 
	 	 	Name:  	John T. Drexler 	 
	 	 	Title:  	Vice President 	 
	 

Signature Page to Indenture

 

 

	 	 	 	 	 
	 	Otter Creek Coal, LLC

As Guarantor

 	 
	 	By:  	/s/ John T. Drexler
 	 
	 	 	Name:  	John T. Drexler 	 
	 	 	Title:  	Vice President 	 
	 
	 	Prairie Holdings, Inc.

As Guarantor

 	 
	 	By:  	/s/ John T. Drexler
 	 
	 	 	Name:  	John T. Drexler 	 
	 	 	Title:  	Vice President 	 
	 
	 	Western Energy Resources, Inc.

As Guarantor

 	 
	 	By:  	/s/ John T. Drexler
 	 
	 	 	Name:  	John T. Drexler 	 
	 	 	Title:  	Vice President 	 
	 

Signature Page to Indenture

 

 

	 	 	 	 	 
	 	UMB Bank National Association,

as Trustee

 	 
	 	By:  	/s/ Victor Zarrilli
 	 
	 	 	Name:  	Victor Zarrilli 	 
	 	 	Title:  	Senior Vice President 	 
	 

Signature Page to Indenture

 

 

EXHIBIT A-1

[FORM OF FACE OF NOTE]

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

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

     THIS GLOBAL NOTE AND ANY RELATED DOCUMENTATION MAY BE AMENDED OR SUPPLEMENTED FROM TIME TO
TIME TO MODIFY THE RESTRICTIONS ON AND PROCEDURES FOR OR RESALES AND OTHER TRANSFERS OF THIS GLOBAL
NOTE TO REFLECT ANY CHANGE IN APPLICABLE LAW OR REGULATION (OR THE INTERPRETATION THEREOF) OR IN
PRACTICES RELATING TO THE RESALE OR TRANSFER OF RESTRICTED SECURITIES GENERALLY. THE HOLDER OF
THIS GLOBAL NOTE SHALL BE DEEMED, BY THE ACCEPTANCE HEREOF, TO HAVE AGREED TO ANY SUCH AMENDMENT OR
SUPPLEMENT.

     THIS NOTE AND THE RELATED GUARANTEES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY STATE SECURITIES LAWS. NEITHER THIS NOTE NOR THE
RELATED GUARANTEES NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED,
TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR
UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, REGISTRATION AS SET FORTH BELOW. BY ITS
ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT (A) IT IS A “QUALIFIED INSTITUTIONAL BUYER” (AS
DEFINED IN RULE 144A UNDER THE SECURITIES ACT (“RULE 144A”)), OR (B) IT IS NOT A U.S. PERSON AND IS
ACQUIRING THIS NOTE IN AN OFFSHORE TRANSACTION, (2) AGREES TO OFFER, SELL, PLEDGE OR OTHERWISE
TRANSFER SUCH NOTE PRIOR TO THE DATE WHICH IS ONE YEAR AFTER THE DATE OF ORIGINAL ISSUE HEREOF ONLY
(A) TO ARCH COAL, (B) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER

 

 

THE SECURITIES ACT, (C) FOR SO LONG AS THE NOTES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A TO A
PERSON IT REASONABLY BELIEVES IS A “QUALIFIED INSTITUTIONAL BUYER” AS DEFINED IN RULE 144A THAT
PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE
IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D) OUTSIDE THE UNITED STATES
PURSUANT TO OFFERS AND SALES TO NON-U.S. PERSONS IN AN OFFSHORE TRANSACTION PURSUANT TO REGULATION
S UNDER THE SECURITIES ACT IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 904 UNDER THE
SECURITIES ACT OR (E) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF
THE SECURITIES ACT, SUBJECT TO ARCH COAL’S AND THE TRUSTEE’S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR
TRANSFER PURSUANT TO CLAUSE (E) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION
AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM.

     EACH PURCHASER OF THIS GLOBAL NOTE OR ANY INTEREST HEREIN IS HEREBY NOTIFIED THAT THE SELLER
OF THIS GLOBAL NOTE MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE
SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER.

     THE HOLDER OF THIS GLOBAL NOTE IS SUBJECT TO, AND ENTITLED TO THE BENEFITS OF, THE
REGISTRATION RIGHTS AGREEMENT, DATED AS OF JUNE 14, 2011 AMONG ARCH COAL, THE GUARANTORS AND THE
OTHER PARTIES REFERRED TO THEREIN.

     [[INCLUDE ONLY IF REGULATION S GLOBAL NOTE] UNTIL 40 DAYS AFTER THE COMMENCEMENT OF THE
OFFERING, AN OFFER OR SALE OF SECURITIES WITHIN THE UNITED STATES BY A DEALER (AS DEFINED IN THE
SECURITIES ACT) MAY VIOLATE THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT IF SUCH OFFER OR
SALE IS MADE OTHERWISE THAN IN ACCORDANCE WITH RULE 144A UNDER THE SECURITIES ACT.]

     [[INCLUDE ONLY IF REGULATION S GLOBAL NOTE] BY ITS ACQUISITION HEREOF, THE HOLDER HEREOF
REPRESENTS THAT IT IS NOT A U.S. PERSON, NOR IS IT PURCHASING FOR THE ACCOUNT OF A U.S. PERSON, AND
IS ACQUIRING THIS NOTE IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH REGULATION S UNDER THE
SECURITIES ACT.]

A-1-2

 

[If Restricted Global Note — CUSIP Number 039380 AD2/ISIN Number US039380AD29]

[If Regulation S Global Note — CUSIP Number U0393C AB1/ISIN Number USU0393CAB10]

[If Exchange Note — CUSIP Number 039380 AE0/ISIN Number US039380AE02]

No._____

7.000% SENIOR NOTE DUE 2019

     Arch Coal, Inc., a Delaware corporation, for value received promises to pay to Cede & Co. or
registered assigns the principal sum of $___________(          ) on June 15, 2019.

     From June 14, 2011, or from the most recent Interest Payment Date to which interest has been
paid or provided for, cash interest on this Note will accrue at 7.000%, payable semiannually on
June 15 and December 15 of each year, beginning on December 15, 2011, to the Person in whose name
this Note (or any predecessor Note) is registered at the close of business on the preceding June 1
or December 1, as the case may be.

     THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK.

     Unless the certificate of authentication hereon has been executed by the Trustee referred to
on the reverse hereof by manual signature of an authorized signatory, this Note shall not be
entitled to any benefit under the Indenture or be valid or obligatory for any purpose.

     Reference is hereby made to the further provisions of this Note set forth on the reverse
hereof and to the provisions of the Indenture, which provisions shall for all purposes have the
same effect as if set forth at this place. Terms defined in the Indenture and not defined herein
have the meanings ascribed thereto in the Indenture.

A-1-3

 

     IN WITNESS WHEREOF, Arch Coal, Inc. has caused this Note to be signed manually or by facsimile
by its duly authorized signatory.

Dated: June 14, 2011

	 	 	 	 	 
	 	Arch Coal, Inc.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

TRUSTEE’S CERTIFICATE OF AUTHENTICATION

UMB BANK NATIONAL ASSOCIATION,

as Trustee, certifies that this is one of the Notes referred to in the Indenture.

	 	 	 	 	 
	 	By:  	 	 
	 	 	Authorized Signatory 	 
	 	 	 	 
	 

A-1-4

 

[FORM OF REVERSE SIDE OF NOTE]

7.000% Senior Note Due 2019

1. Interest

     Arch Coal, Inc., a Delaware corporation, and its successors and assigns under the Indenture
hereinafter referred to, being herein called “Arch Coal”, for value received promises to
pay interest on the principal amount of this Note from June 14, 2011 at the rate per annum shown
above. Interest will be computed on the basis of a 360-day year of twelve 30-day months. Arch
Coal will pay interest on overdue principal at the interest rate borne by the Notes compounded
semiannually, and it shall pay interest on overdue installments of interest at the same rate
compounded semiannually to the extent lawful. Any interest paid on this Note shall be increased to
the extent necessary to pay Special Interest as set forth in this Note.

2. Special Interest

     The Holder is entitled to the benefits of the Registration Rights Agreement dated June 14,
2011, among Arch Coal, Allegheny Land Company, a Delaware corporation, Arch Coal Sales Company,
Inc., a Delaware corporation, Arch Coal Terminal, Inc., a Delaware corporation, Arch Development,
LLC, a Delaware limited liability company, Arch Energy Resources, LLC, a Delaware limited liability
company, Arch Reclamation Services, Inc., a Delaware corporation, Ark Land Company, a Delaware
corporation, Ark Land KH, Inc., a Delaware corporation, Ark Land LT, Inc., a Delaware corporation,
Ark Land WR, Inc., a Delaware corporation, Ashland Terminal, Inc., a Delaware corporation, Catenary
Coal Holdings, Inc., a Delaware corporation, Coal-Mac, Inc., a Kentucky corporation, Cumberland
River Coal Company, a Delaware corporation, Lone Mountain Processing, Inc., a Delaware corporation,
Mingo Logan Coal Company, a Delaware corporation, Mountain Gem Land, Inc., a West Virginia
corporation, Mountain Mining, Inc., a Delaware corporation, Mountaineer Land Company, a Delaware
corporation, Otter Creek Coal, LLC, a Delaware limited liability company, Prairie Holdings, Inc., a
Delaware corporation, Western Energy Resources, Inc., a Delaware corporation (collectively the
“Guarantors”) and the Initial Purchasers (the “Registration Rights Agreement”).

     In the event that (a) the Registered Exchange Offer (as defined in the Registration Rights
Agreement) is not consummated within 365 days following the date of the Indenture (or, if such
365th day is not a Business Day, the next succeeding Business Day), or (b) a Shelf
Registration Statement (as defined in the Registration Rights Agreement) is required to be filed
pursuant to the terms of the Registration Rights Agreement but has not been declared effective
under the Securities Act within 365 days following the date of the Indenture (or, if such
365th day is not a Business Day, the next succeeding Business Day) (each event referred
to in clauses (a) through (b) above, a “Registration Deadline Event”), then Arch Coal will
be required to pay additional interest (“Special Interest”) in cash on June 15 and December
15 of each year, commencing on the first such date following any Registration Deadline Event, at a
rate per annum equal to 0.25% of the principal amount of the Notes with respect to the first 90-day
period following such Registration Deadline Event. Such amount of Special Interest shall increase
by an additional 0.25% per annum to a maximum of 1.00% per annum for each subsequent 90-day period
until such Registration Deadline Event has been cured. Upon the cure of any Registration Deadline

A-1-5

 

Event, Special Interest with respect to such event shall cease to accrue from the date of the
filing, effectiveness or consummation that cured such event, as the case may be, if Arch Coal and
the Guarantors are otherwise in compliance with this paragraph. However, if, after any such
Special Interest ceases to accrue, a different Registration Deadline Event occurs, Special Interest
will again accrue as described.

3. Method of Payment

     Arch Coal shall pay interest on this Note (except defaulted interest) to the persons who are
registered Holders of this Note at the close of business on the Record Date for the next Interest
Payment Date even if this Note is cancelled after the Record Date and on or before the Interest
Payment Date. Arch Coal shall pay principal and interest in U.S. Dollars in immediately available
funds that at the time of payment is legal tender for payment of public and private debts;
provided, however, that payment of interest may be made at the option of Arch Coal by check mailed
to the Holder.

     The amount of payments in respect of interest on each Interest Payment Date shall correspond
to the aggregate principal amount of Notes represented by the Restricted Global Note and the
Regulation S Global Note, as established by the Registrar at the close of business on the relevant
Record Date. Payments of principal shall be made upon surrender of the Restricted Global Note and
Regulation S Global Note to the Paying Agent.

4. Paying Agent and Registrar

     Initially, UMB Bank National Association or one of its affiliates will act as Paying Agent and
Registrar. Arch Coal or any of its Affiliates incorporated in the United States may act as Paying
Agent, Registrar or co-Registrar, subject to the provisions of the Indenture.

5. Indenture

     Arch Coal issued the Notes under an indenture dated as of June 14, 2011 (the
“Indenture”), among Arch Coal, the Guarantors and UMB Bank National Association, as trustee
(the “Trustee”). The terms of the Notes include those stated in the Indenture and those
made part of the Indenture by reference to the Trust Indenture Act of 1939, as amended, as in
effect on the date of the Indenture and, to the extent required by any amendment after such date,
as so amended (the “Trust Indenture Act”). The Notes are subject to all such terms, and
Holders are referred to the Indenture and the Trust Indenture Act for a statement of those terms.

     The Notes are unsecured senior guaranteed obligations of Arch Coal and are issued in an
initial aggregate principal amount $1,000,000,000. The Indenture imposes certain limitations on
Arch Coal, the Guarantors and their affiliates, including, without limitation, limitations on the
incurrence of indebtedness and issuance of stock, the payment of dividends and other payment
restrictions affecting Arch Coal and its subsidiaries, the sale of assets, transactions with and
among affiliates of Arch Coal and the Restricted Subsidiaries, change of control and Liens.

6. Optional Redemption

A-1-6

 

          Except as set forth in this and the next two paragraphs, the 2019 Notes will not be redeemable
at the option of Arch Coal prior to June 15, 2015. Starting on that date, Arch Coal may redeem all
or any portion of the 2019 Notes, at once or over time, after giving the required notice under the
Indenture. The 2019 Notes may be redeemed at the Redemption Prices set forth below, plus accrued
and unpaid interest to the Redemption Date (subject to the right of Holders of record on the
relevant Record Date to receive interest, if any, due on the relevant Interest Payment Date). The
following prices are for 2019 Notes redeemed during the 12-month period commencing on June 15 of
the years set forth below, and are expressed as percentages of principal amount:

	 	 	 	 	 
	 	 	Redemption	 
	Year	 	Price	 
	2015
	 	 	103.500	%
	2016
	 	 	101.750	%
	2017 and thereafter
	 	 	100.000	%

     In addition, at any time and from time to time, prior to June 15, 2014, on one or more
occasions, Arch Coal may redeem an aggregate principal amount of 2019 Notes not to exceed 35% of
the aggregate principal amount of the 2019 Notes (calculated giving effect to any issuance of
Additional Notes of the 2019 Notes) with the proceeds of one or more Equity Offerings, at a
redemption price equal to 107.000% of the principal amount thereof, plus accrued and unpaid
interest to the Redemption Date (subject to the right of Holders of record on the relevant Record
Date to receive interest due on the relevant Interest Payment Date); provided, however, that after
giving effect to any such redemption, at least 65% of the aggregate principal amount of the 2019
Notes (calculated giving effect to any issuance of Additional Notes of the 2019 Notes) remains
outstanding immediately after the occurrence of such redemption (excluding any 2019 Notes held by
Arch Coal or any of its Subsidiaries). Any such redemption shall be made within 90 days after the
date of the closing of such Equity Offering upon not less than 30 nor more than 60 days’ prior
notice.

     At any time prior to June 15, 2015, Arch Coal may, at its option, on one or more occasions
redeem all or a part of the 2019 Notes, upon not less than 30 nor more than 60 days’ prior notice,
at a redemption price equal to 100% of the principal amount of the 2019 Notes redeemed plus the
2019 Notes Applicable Premium as of the date of redemption, and, without duplication, accrued and
unpaid interest, if any, to the Redemption Date (subject to the rights of Holders of record on the
relevant Record Date to receive interest due on the relevant Interest Payment Date).

     Any redemption pursuant to this Section 6 shall be made pursuant to the provisions of Article
Three in the Indenture.

7. Notice of Redemption

     Notice of redemption will be given at least 30 days but not more than 60 days before the
Redemption Date to the Holder of this Note to be redeemed at the addresses contained in the
Security Register. If this Note is in a denomination larger than $2,000 of principal amount it may
be redeemed in part but only in integral multiples of $1,000. In the event of a redemption of

A-1-7

 

less than all of the Notes, the Notes for redemption will be chosen by the Trustee in
accordance with the Indenture. If this Note is redeemed subsequent to a Record Date with respect
to any Interest Payment Date specified above, then any accrued interest will be paid to the Holder
at the close of business on such Record Date. If money sufficient to pay the Redemption Price of
and accrued interest on all Notes (or portions thereof) to be redeemed on the Redemption Date is
deposited with the applicable Paying Agent on or before the Redemption Date and certain other
conditions are satisfied, interest ceases to accrue on such Notes (or such portions thereof) called
for redemption on or after such date.

8. Repurchase at the Option of Holders Upon a Change of Control

     Upon the occurrence of a Change of Control, unless Arch Coal has previously or concurrently
mailed a redemption notice with respect to all outstanding Notes in accordance with the Indenture,
Holders of Notes shall have the right to require Arch Coal to repurchase all or any part of such
Holder’s Notes pursuant to the offer described below (the “Change of Control Offer”) at a
purchase price (the “Change of Control Purchase Price”) equal to 101% of the principal
amount thereof, plus accrued and unpaid interest, if any, to the repurchase date (subject to the
right of Holders of record on the relevant Record Date to receive interest due on the relevant
Interest Payment Date). If the repurchase date is after a Record Date and on or before the relevant
Interest Payment Date, the accrued and unpaid interest, if any, will be paid to the person or
entity in whose name the Note is registered at the close of business on that Record Date, and no
additional interest will be payable to Holders whose Notes shall be subject to repurchase.

     Within 30 days following any Change of Control, Arch Coal shall:

     (a) cause a notice of the Change of Control Offer to be sent at least once to the Dow
Jones News Service or similar business news service in the United States; and

     (b) send, or cause to be sent, by first-class mail, with a copy to the Trustee, to each
Holder of Notes, at such Holder’s address appearing in the Security Register, a notice
stating:

     (1) that a Change of Control has occurred and a Change of Control Offer is
being made pursuant to Section 4.11 of the Indenture and that all Notes properly
tendered will be accepted for payment;

     (2) the Change of Control Purchase Price and the repurchase date, which shall
be, subject to any contrary requirements of applicable law, a Business Day no
earlier than 30 days nor later than 60 days from the date such notice is mailed; and

     (3) the procedures that holders of Notes must follow in order to tender their
Notes (or portions thereof) for payment, and the procedures that holders of Notes
must follow in order to withdraw an election to tender Notes (or portions thereof)
for payment.

A-1-8

 

     Arch Coal shall not be required to make a Change of Control Offer following a Change of
Control if a third party makes the Change of Control Offer in the manner, at the times and
otherwise in compliance with the requirements set forth in the Indenture applicable to a Change of
Control Offer made by Arch Coal and purchases all Notes validly tendered and not withdrawn under
such Change of Control Offer. Notwithstanding anything to the contrary herein, a Change of Control
Offer may be made in advance of a Change of Control, conditional upon such Change of Control, if a
definitive agreement is in place for the Change of Control at the time of making of the Change of
Control Offer.

     With respect to the Notes, if Holders of not less than 95% in aggregate principal amount of
the outstanding Notes of a series validly tender and do not withdraw such Notes in a Change of
Control Offer and Arch Coal, or any third party making a Change of Control Offer in lieu of Arch
Coal as described above, purchases all of the Notes of a series validly tendered and not withdrawn
by such Holders, Arch Coal or such third party will have the right, upon not less than 30 nor more
than 60 days’ prior notice, given not more than 30 days following such purchase pursuant to the
Change of Control Offer described above, to redeem all Notes of the series that remain outstanding
following such purchase at a price in cash equal to the applicable Change of Control Purchase Price
plus, to the extent not included in the Change of Control Purchase Price, accrued and unpaid
interest, if any, thereon, to the date of redemption.

     Arch Coal shall comply, to the extent applicable, with the requirements of Section 14(e) of
the Exchange Act and any other securities laws or regulations in connection with the repurchase of
Notes pursuant to a Change of Control Offer. To the extent that the provisions of any securities
laws or regulations conflict with the provisions of Section 4.11 of the Indenture, Arch Coal will
comply with the applicable securities laws and regulations and will not be deemed to have breached
its obligations under this covenant by virtue of such compliance.

9. Denominations

     The Notes are in denominations of $2,000 and integral multiples of $1,000 of principal amount
in excess thereof. The transfer of Notes may be registered, and Notes may be exchanged, as
provided in the Indenture. The Registrar may require a Holder, among other things, to furnish
appropriate endorsements and transfer documents and to pay any taxes and fees required by law or
permitted by the Indenture.

10. Unclaimed Money

     All moneys paid by Arch Coal or the Guarantors to the Trustee or a Paying Agent for the
payment of the principal of, or premium, if any, or interest on, any Notes that remain unclaimed at
the end of two years after such principal, premium or interest has become due and payable may be
repaid to Arch Coal or the Guarantors, subject to applicable law, and the Holder of such Note
thereafter may look only to Arch Coal or the Guarantors for payment thereof.

11. Discharge and Defeasance

     Subject to certain conditions, Arch Coal at any time may terminate some or all of its
obligations and the obligations of the Guarantors under the Notes, the Guarantees and the

A-1-9

 

Indenture if Arch Coal irrevocably deposits with the Trustee U.S. Dollars or U.S. Government
Obligations, or a combination thereof, for the payment of principal and interest on the Notes to
redemption or maturity, as the case may be.

12. Amendment, Supplement and Waiver

     Subject to certain exceptions set forth in the Indenture, the Indenture may be amended or
supplemented with the written consent of the Holders of at least a majority in aggregate principal
amount of the relevant Notes then outstanding (including consents obtained in connection with a
tender offer or exchange offer for the Notes) and any existing default or compliance with any
provisions may be waived with the consent of the Holders of at least a majority in aggregate
principal amount of the Notes then outstanding. However, without the consent of the Holder of each
outstanding Note affected thereby, an amendment may not:

	 	(a)	 	reduce the amount of Notes whose Holders must consent to an amendment or
waiver;

	 	(b)	 	reduce the rate of, or extend the time for payment of, interest on any Note;

	 	(c)	 	reduce the principal of, or extend the Stated Maturity of, any Note;

	 	(d)	 	make any Note payable in money other than that stated in the Note;

	 	(e)	 	impair the right of any Holder to receive payment of principal of, premium, if
any, and interest, on, such Holder’s Notes on or after the due dates therefor or to
institute suit for the enforcement of any payment on or with respect to such Holder’s
Notes;

	 	(f)	 	reduce the premium payable upon the redemption of any Note or change the time
at which any Note may be redeemed (other than any notice provisions), pursuant to
Section 3.01 of the Indenture;

	 	(g)	 	reduce the premium payable upon a Change of Control or, at any time after a
Change of Control has occurred, change the time at which the Change of Control Offer
relating thereto must be made or at which the Notes must be repurchased pursuant to
such Change of Control Offer;

	 	(h)	 	at any time after Arch Coal is obligated to make a Prepayment Offer with the
Excess Proceeds from Asset Sales, change the time at which such Prepayment Offer must
be made or at which the Notes must be repurchased pursuant thereto;

	 	(i)	 	modify or change any provision of the Indenture affecting the ranking of the
Notes or the Note Guarantees in a manner adverse to the Trustee or the Holders; or

	 	(j)	 	release any Guarantor from any of its obligations under its Note Guarantee or
the Indenture other than in accordance with the provisions of the Indenture, or amend
or modify any provision relating to such release.

A-1-10

 

     The consent of the Holders is not necessary under the Indenture to approve the particular form
of any proposed amendment. It is sufficient if such consent approves the substance of the proposed
amendment.

     Notwithstanding the foregoing, without notice to or the consent of any Holder of the Notes,
Arch Coal, the Guarantors and the Trustee may, among other things, modify, amend or supplement the
Indenture:

     (a) cure any ambiguity, omission, defect or inconsistency in any manner that is not
adverse in any material respect to any holder of the Notes;

     (b) provide for the assumption by a Surviving Person of the obligations of Arch Coal
under the Indenture;

     (c) provide for uncertificated Notes in addition to or in place of certificated Notes
(provided that the uncertificated Notes are issued in registered form for purposes of
Section 163(f) of the Code, or in a manner such that the uncertificated Notes are described
in Section 163(f)(2)(B) of the Code);

     (d) add Note Guarantees with respect to the Notes or confirm and evidence the release,
termination or discharge of any security or Note Guarantee when such release, termination or
discharge is permitted by the Indenture;

     (e) secure the Notes, add to the covenants of Arch Coal and the Restricted Subsidiaries
for the benefit of the Holders or surrender any right or power conferred upon Arch Coal;

     (f) make any change that does not adversely affect the rights of any holder of the
Notes;

     (g) comply with any requirement of the Commission in connection with the qualification
of the Indenture under the Trust Indenture Act;

     (h) provide for the issuance of Additional Notes in accordance with the Indenture;

     (i) to evidence and provide for the acceptance of appointment by a successor Trustee;

     (j) to conform the text of the Indenture or the Notes to any provision of the
“Description of Notes” section of Arch Coal’s Offering Memorandum dated June 8, 2011
relating to the Notes to the extent that such provision in such “Description of Notes” was
intended to be a recitation of a provision of the Indenture or the Notes; or

     (k) to make any amendment to the provisions of the Indenture relating to the transfer
and legending of the Notes as permitted by the Indenture, including, without limitation to
facilitate the issuance and administration of the Notes; provided, however, that (i)
compliance with the Indenture as so amended would not result in the Notes being transferred
in violation of the Securities Act or any applicable securities law and (ii) such

A-1-11

 

amendment does not materially and adversely affect the rights of Holders to transfer
the Notes.

     After an amendment becomes effective in accordance with the above position, Arch Coal shall
mail, or arrange to be mailed, to each Holder at such Holder’s address appearing in the Security
Register a notice briefly describing such amendment. However, the failure to give such notice to
all Holders, or any defect therein, will not impair or affect the validity of the amendment.

13. Defaults and Remedies

     The Notes have the Events of Default as set forth in Section 6.01 of the Indenture. If an
Event of Default occurs and is continuing, the Trustee, by notice to Arch Coal, or the registered
Holders of not less than 25% in aggregate principal amount of the Notes then outstanding by notice
to Arch Coal and the Trustee, subject to certain limitations, may declare all the Notes to be due
and payable immediately. Certain events of bankruptcy or insolvency are Events of Default and
shall result in the Notes being due and payable immediately upon the occurrence of such Events of
Default.

     Holders may not enforce the Indenture or the Notes except as provided in the Indenture. The
Trustee may refuse to enforce the Indenture or the Notes unless it receives an indemnity
satisfactory to it. Subject to certain limitations, Holders of a majority in aggregate principal
amount of the Notes may direct the Trustee in its exercise of any trust or power. The Holders of a
majority in aggregate principal amount of the Notes then outstanding by written notice to the
Trustee may rescind any acceleration and its consequence if the rescission would not conflict with
any judgment or decree and if all existing Events of Default have been cured or waived except
nonpayment of principal, premium, if any, or interest that has become due solely because of such
acceleration. The above description of Events of Default and remedies is qualified by reference,
and subject in its entirety, to the more complete description thereof contained in the Indenture.

14. Trustee Dealings with Arch Coal

     Subject to certain limitations imposed by the Trust Indenture Act, the Trustee under the
Indenture, in its individual or any other capacity, may become the owner or pledgee of Notes and
may otherwise deal with and collect obligations owed to it by Arch Coal, the Guarantors or any of
their Affiliates with the same rights it would have if it were not Trustee. Any Paying Agent,
Registrar, co-Registrar or co-Paying Agent may do the same with like rights.

15. No Recourse Against Others

     No director, officer, employee, incorporator, stockholder, member, manager or partner of Arch
Coal or any Guarantor, as such, shall have any liability for any obligations of Arch Coal or any
Guarantor under the Notes, the Indenture or any Note Guarantees or for any claim based on, in
respect of, or by reason of, such obligations or their creation. By accepting a Note, each Holder
shall waive and release all such liability. The waiver and release shall be part of the
consideration for the issue of the Notes.

A-1-12

 

16. Authentication

     This Note shall not be valid until an authorized officer of the Trustee (or an authenticating
agent) manually signs the certificate of authentication on the other side of this Note.

17. Governing Law

     THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK.

     Arch Coal or a Guarantor shall furnish to any Holder upon written request and without charge
to the Holder a copy of the Indenture. Requests may be made to:

	 	 	 	Arch Coal, Inc.

One CityPlace Drive

Suite 300

St. Louis, Missouri 63141

A-1-13

 

ASSIGNMENT FORM

To assign and transfer this Note, fill in the form below:

(I) or (Arch Coal) assign and transfer this Note to

 

(Insert assignee’s social security or tax I.D. no.)

 

(Print or type assignee’s name, address and postal code)

and irrevocably appoint ____________________ agent to transfer this Note on the books of Arch Coal.
The agent may substitute another to act for him.

	 	 	 

	Your Signature:
	 	 
	 

	 	 
	 

	 	(Sign exactly as your name appears on the other side of this Note)
	 
	 	 
	Signature Guarantee: 
	 
	 

	 	 
	 

	 	(Participant in a recognized signature guarantee medallion program)

Date: _______________________________________________

Certifying
Signature: ___________________________________

     [Include only if Original Note and delete if Exchange Note — In connection with any transfer
of any Notes evidenced by this certificate occurring prior to the date that is two years after the
later of the date of original issuance of such Notes and the last date, if any, on which the Notes
were owned by Arch Coal or any Affiliate of Arch Coal, the undersigned confirms that such Notes are
being transferred in accordance with the transfer restrictions set forth in such Notes and:

CHECK ONE BOX BELOW

	 	 	 	 	 

	(1)

	 	o
	 	to Arch Coal; or
	 
	 	 	 	 
	(2)

	 	o
	 	pursuant to and in compliance with Rule 144A under the U.S. Securities
Act of 1933; or
	 
	 	 	 	 
	(3)

	 	o
	 	pursuant to and in compliance with Regulation S under the U.S.
Securities Act of 1933; or
	 
	 	 	 	 
	(4)

	 	o
	 	pursuant to another available exemption from the registration
requirements of the U.S. Securities Act of 1933; or
	 
	 	 	 	 
	(5)

	 	o
	 	pursuant to an effective registration statement under the U.S.
Securities Act of 1933.

A-1-14

 

     Unless one of the boxes is checked, the Trustee will refuse to register any of the Notes
evidenced by this certificate in the name of any person other than the registered Holder thereof;
provided, however, that if box (2) is checked, by executing this form, the Transferor is deemed to
have certified that such Notes are being transferred to a person it reasonably believes is a
“qualified institutional buyer” as defined in Rule 144A under the U.S. Securities Act of 1933 who
has received notice that such transfer is being made in reliance on Rule 144A; if box (3) is
checked, by executing this form, the Transferor is deemed to have certified that such transfer is
made pursuant to an offer and sale that occurred outside the United States in compliance with
Regulation S under the U.S. Securities Act; and if box (4) is checked, the Trustee may require,
prior to registering any such transfer of the Notes, such legal opinions, certifications and other
information as Arch Coal reasonably requests to confirm that such transfer is being made pursuant
to an exemption from or in a transaction not subject to, the registration requirements of the U.S.
Securities Act of 1933.

Signature: __________________________________________________

Signature Guarantee: __________________________________________

(Participant in a recognized signature guarantee medallion program)

Certifying Signature: ______________________ Date: _____________________

Signature Guarantee: __________________________________________

(Participant in a recognized signature guarantee medallion program)]

OPTION OF HOLDER TO ELECT PURCHASE

     If you want to elect to have this Note or a portion thereof repurchased pursuant to Section
4.09 or 4.11 of the Indenture, check the box:  ̈

     If the purchase is in part, indicate the portion (in denominations of $1,000 or any integral
multiple thereof) to be purchased:

Your signature:

(Sign exactly as your name appears on the other side of this Note)

Date:

Certifying Signature: __________________________________________

A-1-15

 

SCHEDULE A

SCHEDULE OF PRINCIPAL AMOUNT

     The following decreases/increases in the principal amount of this Security have been made:

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Principal	 	 
	 	 	 	 	 	 	Amount	 	 
	 	 	Decrease in	 	Increase in	 	Following such	 	Notation Made
	Date of	 	Principal	 	Principal	 	Decrease/	 	by or on Behalf
	Decrease/Increase	 	Amount	 	Amount	 	Increase	 	of Registrar
	 

	 	 
	 	 
	 	 
	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 
	 	 
	 	 
	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 
	 	 
	 	 
	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 
	 	 
	 	 
	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 
	 	 
	 	 
	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 
	 	 
	 	 
	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 
	 	 
	 	 
	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 
	 	 
	 	 
	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 
	 	 
	 	 
	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 
	 	 
	 	 
	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 
	 	 
	 	 
	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 
	 	 
	 	 
	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 
	 	 
	 	 
	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 
	 	 
	 	 
	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 
	 	 
	 	 
	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 
	 	 
	 	 
	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 
	 	 
	 	 
	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 
	 	 
	 	 
	 	 

A-1-16

 

EXHIBIT A-2

[FORM OF FACE OF NOTE]

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

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

     THIS GLOBAL NOTE AND ANY RELATED DOCUMENTATION MAY BE AMENDED OR SUPPLEMENTED FROM TIME TO
TIME TO MODIFY THE RESTRICTIONS ON AND PROCEDURES FOR OR RESALES AND OTHER TRANSFERS OF THIS GLOBAL
NOTE TO REFLECT ANY CHANGE IN APPLICABLE LAW OR REGULATION (OR THE INTERPRETATION THEREOF) OR IN
PRACTICES RELATING TO THE RESALE OR TRANSFER OF RESTRICTED SECURITIES GENERALLY. THE HOLDER OF
THIS GLOBAL NOTE SHALL BE DEEMED, BY THE ACCEPTANCE HEREOF, TO HAVE AGREED TO ANY SUCH AMENDMENT OR
SUPPLEMENT.

     THIS NOTE AND THE RELATED GUARANTEES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY STATE SECURITIES LAWS. NEITHER THIS NOTE NOR THE
RELATED GUARANTEES NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED,
TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR
UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, REGISTRATION AS SET FORTH BELOW. BY ITS
ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT (A) IT IS A “QUALIFIED INSTITUTIONAL BUYER” (AS
DEFINED IN RULE 144A UNDER THE SECURITIES ACT (“RULE 144A”)), OR (B) IT IS NOT A U.S. PERSON AND IS
ACQUIRING THIS NOTE IN AN OFFSHORE TRANSACTION, (2) AGREES TO OFFER, SELL, PLEDGE OR OTHERWISE
TRANSFER SUCH NOTE PRIOR TO THE DATE WHICH IS ONE YEAR AFTER THE DATE OF ORIGINAL ISSUE HEREOF ONLY
(A) TO ARCH COAL, (B) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER

 

 

THE SECURITIES ACT, (C) FOR SO LONG AS THE NOTES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A TO A
PERSON IT REASONABLY BELIEVES IS A “QUALIFIED INSTITUTIONAL BUYER” AS DEFINED IN RULE 144A THAT
PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE
IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D) OUTSIDE THE UNITED STATES
PURSUANT TO OFFERS AND SALES TO NON-U.S. PERSONS IN AN OFFSHORE TRANSACTION PURSUANT TO REGULATION
S UNDER THE SECURITIES ACT IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 904 UNDER THE
SECURITIES ACT OR (E) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF
THE SECURITIES ACT, SUBJECT TO ARCH COAL’S AND THE TRUSTEE’S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR
TRANSFER PURSUANT TO CLAUSE (E) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION
AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM.

     EACH PURCHASER OF THIS GLOBAL NOTE OR ANY INTEREST HEREIN IS HEREBY NOTIFIED THAT THE SELLER
OF THIS GLOBAL NOTE MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE
SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER.

     THE HOLDER OF THIS GLOBAL NOTE IS SUBJECT TO, AND ENTITLED TO THE BENEFITS OF, THE
REGISTRATION RIGHTS AGREEMENT, DATED AS OF JUNE 14, 2011 AMONG ARCH COAL, THE GUARANTORS AND THE
OTHER PARTIES REFERRED TO THEREIN.

     [[INCLUDE ONLY IF REGULATION S GLOBAL NOTE] UNTIL 40 DAYS AFTER THE COMMENCEMENT OF THE
OFFERING, AN OFFER OR SALE OF SECURITIES WITHIN THE UNITED STATES BY A DEALER (AS DEFINED IN THE
SECURITIES ACT) MAY VIOLATE THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT IF SUCH OFFER OR
SALE IS MADE OTHERWISE THAN IN ACCORDANCE WITH RULE 144A UNDER THE SECURITIES ACT.]

     [[INCLUDE ONLY IF REGULATION S GLOBAL NOTE] BY ITS ACQUISITION HEREOF, THE HOLDER HEREOF
REPRESENTS THAT IT IS NOT A U.S. PERSON, NOR IS IT PURCHASING FOR THE ACCOUNT OF A U.S. PERSON, AND
IS ACQUIRING THIS NOTE IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH REGULATION S UNDER THE
SECURITIES ACT.]

A-2-2

 

[If Restricted Global Note — CUSIP Number 039380 AF7/ISIN Number US039380AF76]

[If Regulation S Global Note — CUSIP Number U0393C AC9/ISIN Number USU0393CAC92]

[If Exchange Note — CUSIP Number 039380 AG5/ISIN Number US039380AG59]

No._____

7.250% SENIOR NOTE DUE 2021

     Arch Coal, Inc., a Delaware corporation, for value received promises to pay to Cede & Co. or
registered assigns the principal sum of $___________(      ) on June 15, 2021.

     From June 14, 2011, or from the most recent Interest Payment Date to which interest has been
paid or provided for, cash interest on this Note will accrue at 7.250%, payable semiannually on
June 15 and December 15 of each year, beginning on December 15, 2011, to the Person in whose name
this Note (or any predecessor Note) is registered at the close of business on the preceding June 1
or December 1, as the case may be.

     THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK.

     Unless the certificate of authentication hereon has been executed by the Trustee referred to
on the reverse hereof by manual signature of an authorized signatory, this Note shall not be
entitled to any benefit under the Indenture or be valid or obligatory for any purpose.

     Reference is hereby made to the further provisions of this Note set forth on the reverse
hereof and to the provisions of the Indenture, which provisions shall for all purposes have the
same effect as if set forth at this place. Terms defined in the Indenture and not defined herein
have the meanings ascribed thereto in the Indenture.

A-2-3

 

     IN WITNESS WHEREOF, Arch Coal, Inc. has caused this Note to be signed manually or by facsimile
by its duly authorized signatory.

	 	 	 	 	 
	Dated:  June 14, 2011

	 	Arch Coal, Inc.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

TRUSTEE’S CERTIFICATE OF AUTHENTICATION

UMB BANK NATIONAL ASSOCIATION,

as Trustee, certifies that this is one of the Notes referred to in the Indenture.

	 	 	 	 	 
	By:  	 	 
	 	Authorized Signatory 	 
	 	 	 

A-2-4

 

	 	 	 	 	 

[FORM OF REVERSE SIDE OF NOTE]

7.250% Senior Note Due 2021

1. Interest

     Arch Coal, Inc., a Delaware corporation, and its successors and assigns under the Indenture
hereinafter referred to, being herein called “Arch Coal”, for value received promises to
pay interest on the principal amount of this Note from June 14, 2011 at the rate per annum shown
above. Interest will be computed on the basis of a 360-day year of twelve 30-day months. Arch
Coal will pay interest on overdue principal at the interest rate borne by the Notes compounded
semiannually, and it shall pay interest on overdue installments of interest at the same rate
compounded semiannually to the extent lawful. Any interest paid on this Note shall be increased to
the extent necessary to pay Special Interest as set forth in this Note.

2. Special Interest

     The Holder is entitled to the benefits of the Registration Rights Agreement dated June 14,
2011, among Arch Coal, Allegheny Land Company, a Delaware corporation, Arch Coal Sales Company,
Inc., a Delaware corporation, Arch Coal Terminal, Inc., a Delaware corporation, Arch Development,
LLC, a Delaware limited liability company, Arch Energy Resources, LLC, a Delaware limited liability
company, Arch Reclamation Services, Inc., a Delaware corporation, Ark Land Company, a Delaware
corporation, Ark Land KH, Inc., a Delaware corporation, Ark Land LT, Inc., a Delaware corporation,
Ark Land WR, Inc., a Delaware corporation, Ashland Terminal, Inc., a Delaware corporation, Catenary
Coal Holdings, Inc., a Delaware corporation, Coal-Mac, Inc., a Kentucky corporation, Cumberland
River Coal Company, a Delaware corporation, Lone Mountain Processing, Inc., a Delaware corporation,
Mingo Logan Coal Company, a Delaware corporation, Mountain Gem Land, Inc., a West Virginia
corporation, Mountain Mining, Inc., a Delaware corporation, Mountaineer Land Company, a Delaware
corporation, Otter Creek Coal, LLC, a Delaware limited liability company, Prairie Holdings, Inc., a
Delaware corporation, Western Energy Resources, Inc., a Delaware corporation (collectively the
“Guarantors”) and the Initial Purchasers (the “Registration Rights Agreement”).

     In the event that (a) the Registered Exchange Offer (as defined in the Registration Rights
Agreement) is not consummated within 365 days following the date of the Indenture (or, if such
365th day is not a Business Day, the next succeeding Business Day), or (b) a Shelf
Registration Statement (as defined in the Registration Rights Agreement) is required to be filed
pursuant to the terms of the Registration Rights Agreement but has not been declared effective
under the Securities Act within 365 days following the date of the Indenture (or, if such
365th day is not a Business Day, the next succeeding Business Day) (each event referred
to in clauses (a) through (b) above, a “Registration Deadline Event”), then Arch Coal will
be required to pay additional interest (“Special Interest”) in cash on June 15 and December
15 of each year, commencing on the first such date following any Registration Deadline Event, at a
rate per annum equal to 0.25% of the principal amount of the Notes with respect to the first 90-day
period following such Registration Deadline Event. Such amount of Special Interest shall increase
by an additional 0.25% per annum to a maximum of 1.00% per annum for each subsequent 90-day period
until such Registration Deadline Event has been cured. Upon the cure of any Registration Deadline

A-2-5

 

Event, Special Interest with respect to such event shall cease to accrue from the date of the
filing, effectiveness or consummation that cured such event, as the case may be, if Arch Coal and
the Guarantors are otherwise in compliance with this paragraph. However, if, after any such
Special Interest ceases to accrue, a different Registration Deadline Event occurs, Special Interest
will again accrue as described.

3. Method of Payment

     Arch Coal shall pay interest on this Note (except defaulted interest) to the persons who are
registered Holders of this Note at the close of business on the Record Date for the next Interest
Payment Date even if this Note is cancelled after the Record Date and on or before the Interest
Payment Date. Arch Coal shall pay principal and interest in U.S. Dollars in immediately available
funds that at the time of payment is legal tender for payment of public and private debts;
provided, however, that payment of interest may be made at the option of Arch Coal by check mailed
to the Holder.

     The amount of payments in respect of interest on each Interest Payment Date shall correspond
to the aggregate principal amount of Notes represented by the Restricted Global Note and the
Regulation S Global Note, as established by the Registrar at the close of business on the relevant
Record Date. Payments of principal shall be made upon surrender of the Restricted Global Note and
Regulation S Global Note to the Paying Agent.

4. Paying Agent and Registrar

     Initially, UMB Bank National Association or one of its affiliates will act as Paying Agent and
Registrar. Arch Coal or any of its Affiliates incorporated in the United States may act as Paying
Agent, Registrar or co-Registrar, subject to the provisions of the Indenture.

5. Indenture

     Arch Coal issued the Notes under an indenture dated as of June 14, 2011 (the
“Indenture”), among Arch Coal, the Guarantors and UMB Bank National Association, as trustee
(the “Trustee”). The terms of the Notes include those stated in the Indenture and those
made part of the Indenture by reference to the Trust Indenture Act of 1939, as amended, as in
effect on the date of the Indenture and, to the extent required by any amendment after such date,
as so amended (the “Trust Indenture Act”). The Notes are subject to all such terms, and
Holders are referred to the Indenture and the Trust Indenture Act for a statement of those terms.

     The Notes are unsecured senior guaranteed obligations of Arch Coal and are issued in an
initial aggregate principal amount $1,000,000,000. The Indenture imposes certain limitations on
Arch Coal, the Guarantors and their affiliates, including, without limitation, limitations on the
incurrence of indebtedness and issuance of stock, the payment of dividends and other payment
restrictions affecting Arch Coal and its subsidiaries, the sale of assets, transactions with and
among affiliates of Arch Coal and the Restricted Subsidiaries, change of control and Liens.

6. Optional Redemption

A-2-6

 

          Except as set forth in this and the next two paragraphs, the 2021 Notes will not be redeemable
at the option of Arch Coal prior to June 15, 2016. Starting on that date, Arch Coal may redeem all
or any portion of the 2021 Notes, at once or over time, after giving the required notice under the
Indenture. The 2021 Notes may be redeemed at the Redemption Prices set forth below, plus accrued
and unpaid interest to the Redemption Date (subject to the right of Holders of record on the
relevant Record Date to receive interest, if any, due on the relevant Interest Payment Date). The
following prices are for 2021 Notes redeemed during the 12-month period commencing on June 15 of
the years set forth below, and are expressed as percentages of principal amount:

	 	 	 	 	 
	 	 	Redemption	 
	Year	 	Price	 
	2016
	 	 	103.625	%
	2017
	 	 	102.417	%
	2018
	 	 	101.208	%
	2019 and thereafter
	 	 	100.000	%

     In addition, at any time and from time to time, prior to June 15, 2014, on one or more
occasions, Arch Coal may redeem an aggregate principal amount of 2021 Notes not to exceed 35% of
the aggregate principal amount of the 2021 Notes (calculated giving effect to any issuance of
Additional Notes of the 2021 Notes) with the proceeds of one or more Equity Offerings, at a
redemption price equal to 107.250% of the principal amount thereof, plus accrued and unpaid
interest to the Redemption Date (subject to the right of Holders of record on the relevant Record
Date to receive interest due on the relevant Interest Payment Date); provided, however, that after
giving effect to any such redemption, at least 65% of the aggregate principal amount of the 2021
Notes (calculated giving effect to any issuance of Additional Notes of the 2021 Notes) remains
outstanding immediately after the occurrence of such redemption (excluding any 2021 Notes held by
Arch Coal or any of its Subsidiaries). Any such redemption shall be made within 90 days after the
date of the closing of such Equity Offering upon not less than 30 nor more than 60 days’ prior
notice.

     At any time prior to June 15, 2016, Arch Coal may, at its option, on one or more occasions
redeem all or a part of the 2021 Notes, upon not less than 30 nor more than 60 days’ prior notice,
at a redemption price equal to 100% of the principal amount of the 2021 Notes redeemed plus the
2021 Notes Applicable Premium as of the date of redemption, and, without duplication, accrued and
unpaid interest, if any, to the Redemption Date (subject to the rights of Holders of record on the
relevant Record Date to receive interest due on the relevant Interest Payment Date).

     Any redemption pursuant to this Section 6 shall be made pursuant to the provisions of Article
Three in the Indenture.

7. Notice of Redemption

     Notice of redemption will be given at least 30 days but not more than 60 days before the
Redemption Date to the Holder of this Note to be redeemed at the addresses contained in the
Security Register. If this Note is in a denomination larger than $2,000 of principal amount it

A-2-7

 

may be redeemed in part but only in integral multiples of $1,000. In the event of a
redemption of less than all of the Notes, the Notes for redemption will be chosen by the Trustee in
accordance with the Indenture. If this Note is redeemed subsequent to a Record Date with respect
to any Interest Payment Date specified above, then any accrued interest will be paid to the Holder
at the close of business on such Record Date. If money sufficient to pay the Redemption Price of
and accrued interest on all Notes (or portions thereof) to be redeemed on the Redemption Date is
deposited with the applicable Paying Agent on or before the Redemption Date and certain other
conditions are satisfied, interest ceases to accrue on such Notes (or such portions thereof) called
for redemption on or after such date.

8. Repurchase at the Option of Holders Upon a Change of Control

     Upon the occurrence of a Change of Control, unless Arch Coal has previously or concurrently
mailed a redemption notice with respect to all outstanding Notes in accordance with the Indenture,
Holders of Notes shall have the right to require Arch Coal to repurchase all or any part of such
Holder’s Notes pursuant to the offer described below (the “Change of Control Offer”) at a
purchase price (the “Change of Control Purchase Price”) equal to 101% of the principal
amount thereof, plus accrued and unpaid interest, if any, to the repurchase date (subject to the
right of Holders of record on the relevant Record Date to receive interest due on the relevant
Interest Payment Date). If the repurchase date is after a Record Date and on or before the relevant
Interest Payment Date, the accrued and unpaid interest, if any, will be paid to the person or
entity in whose name the Note is registered at the close of business on that Record Date, and no
additional interest will be payable to Holders whose Notes shall be subject to repurchase.

     Within 30 days following any Change of Control, Arch Coal shall:

     (a) cause a notice of the Change of Control Offer to be sent at least once to the Dow
Jones News Service or similar business news service in the United States; and

     (b) send, or cause to be sent, by first-class mail, with a copy to the Trustee, to each
Holder of Notes, at such Holder’s address appearing in the Security Register, a notice
stating:

     (1) that a Change of Control has occurred and a Change of Control Offer is
being made pursuant to Section 4.11 of the Indenture and that all Notes properly
tendered will be accepted for payment;

     (2) the Change of Control Purchase Price and the repurchase date, which shall
be, subject to any contrary requirements of applicable law, a Business Day no
earlier than 30 days nor later than 60 days from the date such notice is mailed; and

     (3) the procedures that holders of Notes must follow in order to tender their
Notes (or portions thereof) for payment, and the procedures that holders of Notes
must follow in order to withdraw an election to tender Notes (or portions thereof)
for payment.

A-2-8

 

     Arch Coal shall not be required to make a Change of Control Offer following a Change of
Control if a third party makes the Change of Control Offer in the manner, at the times and
otherwise in compliance with the requirements set forth in the Indenture applicable to a Change of
Control Offer made by Arch Coal and purchases all Notes validly tendered and not withdrawn under
such Change of Control Offer. Notwithstanding anything to the contrary herein, a Change of Control
Offer may be made in advance of a Change of Control, conditional upon such Change of Control, if a
definitive agreement is in place for the Change of Control at the time of making of the Change of
Control Offer.

     With respect to the Notes, if Holders of not less than 95% in aggregate principal amount of
the outstanding Notes of a series validly tender and do not withdraw such Notes in a Change of
Control Offer and Arch Coal, or any third party making a Change of Control Offer in lieu of Arch
Coal as described above, purchases all of the Notes of a series validly tendered and not withdrawn
by such Holders, Arch Coal or such third party will have the right, upon not less than 30 nor more
than 60 days’ prior notice, given not more than 30 days following such purchase pursuant to the
Change of Control Offer described above, to redeem all Notes of the series that remain outstanding
following such purchase at a price in cash equal to the applicable Change of Control Purchase Price
plus, to the extent not included in the Change of Control Purchase Price, accrued and unpaid
interest, if any, thereon, to the date of redemption.

     Arch Coal shall comply, to the extent applicable, with the requirements of Section 14(e) of
the Exchange Act and any other securities laws or regulations in connection with the repurchase of
Notes pursuant to a Change of Control Offer. To the extent that the provisions of any securities
laws or regulations conflict with the provisions of Section 4.11 of the Indenture, Arch Coal will
comply with the applicable securities laws and regulations and will not be deemed to have breached
its obligations under this covenant by virtue of such compliance.

9. Denominations

     The Notes are in denominations of $2,000 and integral multiples of $1,000 of principal amount
in excess thereof. The transfer of Notes may be registered, and Notes may be exchanged, as
provided in the Indenture. The Registrar may require a Holder, among other things, to furnish
appropriate endorsements and transfer documents and to pay any taxes and fees required by law or
permitted by the Indenture.

10. Unclaimed Money

     All moneys paid by Arch Coal or the Guarantors to the Trustee or a Paying Agent for the
payment of the principal of, or premium, if any, or interest on, any Notes that remain unclaimed at
the end of two years after such principal, premium or interest has become due and payable may be
repaid to Arch Coal or the Guarantors, subject to applicable law, and the Holder of such Note
thereafter may look only to Arch Coal or the Guarantors for payment thereof.

11. Discharge and Defeasance

     Subject to certain conditions, Arch Coal at any time may terminate some or all of its
obligations and the obligations of the Guarantors under the Notes, the Guarantees and the

A-2-9

 

Indenture if Arch Coal irrevocably deposits with the Trustee U.S. Dollars or U.S. Government
Obligations, or a combination thereof, for the payment of principal and interest on the Notes to
redemption or maturity, as the case may be.

12. Amendment, Supplement and Waiver

     Subject to certain exceptions set forth in the Indenture, the Indenture may be amended or
supplemented with the written consent of the Holders of at least a majority in aggregate principal
amount of the relevant Notes then outstanding (including consents obtained in connection with a
tender offer or exchange offer for the Notes) and any existing default or compliance with any
provisions may be waived with the consent of the Holders of at least a majority in aggregate
principal amount of the Notes then outstanding. However, without the consent of the Holder of each
outstanding Note affected thereby, an amendment may not:

	 	(a)	 	reduce the amount of Notes whose Holders must consent to an amendment or
waiver;
	 
	 	(b)	 	reduce the rate of, or extend the time for payment of, interest on any Note;
	 
	 	(c)	 	reduce the principal of, or extend the Stated Maturity of, any Note;
	 
	 	(d)	 	make any Note payable in money other than that stated in the Note;
	 
	 	(e)	 	impair the right of any Holder to receive payment of principal of, premium, if
any, and interest, on, such Holder’s Notes on or after the due dates therefor or to
institute suit for the enforcement of any payment on or with respect to such Holder’s
Notes;
	 
	 	(f)	 	reduce the premium payable upon the redemption of any Note or change the time
at which any Note may be redeemed (other than any notice provisions), pursuant to
Section 3.01 of the Indenture;
	 
	 	(g)	 	reduce the premium payable upon a Change of Control or, at any time after a
Change of Control has occurred, change the time at which the Change of Control Offer
relating thereto must be made or at which the Notes must be repurchased pursuant to
such Change of Control Offer;
	 
	 	(h)	 	at any time after Arch Coal is obligated to make a Prepayment Offer with the
Excess Proceeds from Asset Sales, change the time at which such Prepayment Offer must
be made or at which the Notes must be repurchased pursuant thereto;
	 
	 	(i)	 	modify or change any provision of the Indenture affecting the ranking of the
Notes or the Note Guarantees in a manner adverse to the Trustee or the Holders; or
	 
	 	(j)	 	release any Guarantor from any of its obligations under its Note Guarantee or
the Indenture other than in accordance with the provisions of the Indenture, or amend
or modify any provision relating to such release.

A-2-10

 

     The consent of the Holders is not necessary under the Indenture to approve the particular
form of any proposed amendment. It is sufficient if such consent approves the substance of the
proposed amendment.

     Notwithstanding the foregoing, without notice to or the consent of any Holder of the Notes,
Arch Coal, the Guarantors and the Trustee may, among other things, modify, amend or supplement the
Indenture:

     (a) cure any ambiguity, omission, defect or inconsistency in any manner that is not
adverse in any material respect to any holder of the Notes;

     (b) provide for the assumption by a Surviving Person of the obligations of Arch Coal
under the Indenture;

     (c) provide for uncertificated Notes in addition to or in place of certificated Notes
(provided that the uncertificated Notes are issued in registered form for purposes of
Section 163(f) of the Code, or in a manner such that the uncertificated Notes are described
in Section 163(f)(2)(B) of the Code);

     (d) add Note Guarantees with respect to the Notes or confirm and evidence the release,
termination or discharge of any security or Note Guarantee when such release, termination or
discharge is permitted by the Indenture;

     (e) secure the Notes, add to the covenants of Arch Coal and the Restricted Subsidiaries
for the benefit of the Holders or surrender any right or power conferred upon Arch Coal;

     (f) make any change that does not adversely affect the rights of any holder of the
Notes;

     (g) comply with any requirement of the Commission in connection with the qualification
of the Indenture under the Trust Indenture Act;

     (h) provide for the issuance of Additional Notes in accordance with the Indenture;

     (i) to evidence and provide for the acceptance of appointment by a successor Trustee;

     (j) to conform the text of the Indenture or the Notes to any provision of the
“Description of Notes” section of Arch Coal’s Offering Memorandum dated June 8, 2011
relating to the Notes to the extent that such provision in such “Description of Notes” was
intended to be a recitation of a provision of the Indenture or the Notes; or

     (k) to make any amendment to the provisions of the Indenture relating to the transfer
and legending of the Notes as permitted by the Indenture, including, without limitation to
facilitate the issuance and administration of the Notes; provided, however, that (i)
compliance with the Indenture as so amended would not result in the Notes being transferred
in violation of the Securities Act or any applicable securities law and (ii) such

A-2-11

 

amendment does not materially and adversely affect the rights of Holders to transfer
the Notes.

     After an amendment becomes effective in accordance with the above position, Arch Coal shall
mail, or arrange to be mailed, to each Holder at such Holder’s address appearing in the Security
Register a notice briefly describing such amendment. However, the failure to give such notice to
all Holders, or any defect therein, will not impair or affect the validity of the amendment.

13. Defaults and Remedies

     The Notes have the Events of Default as set forth in Section 6.01 of the Indenture. If an
Event of Default occurs and is continuing, the Trustee, by notice to Arch Coal, or the registered
Holders of not less than 25% in aggregate principal amount of the Notes then outstanding by notice
to Arch Coal and the Trustee, subject to certain limitations, may declare all the Notes to be due
and payable immediately. Certain events of bankruptcy or insolvency are Events of Default and
shall result in the Notes being due and payable immediately upon the occurrence of such Events of
Default.

     Holders may not enforce the Indenture or the Notes except as provided in the Indenture. The
Trustee may refuse to enforce the Indenture or the Notes unless it receives an indemnity
satisfactory to it. Subject to certain limitations, Holders of a majority in aggregate principal
amount of the Notes may direct the Trustee in its exercise of any trust or power. The Holders of a
majority in aggregate principal amount of the Notes then outstanding by written notice to the
Trustee may rescind any acceleration and its consequence if the rescission would not conflict with
any judgment or decree and if all existing Events of Default have been cured or waived except
nonpayment of principal, premium, if any, or interest that has become due solely because of such
acceleration. The above description of Events of Default and remedies is qualified by reference,
and subject in its entirety, to the more complete description thereof contained in the Indenture.

14. Trustee Dealings with Arch Coal

     Subject to certain limitations imposed by the Trust Indenture Act, the Trustee under the
Indenture, in its individual or any other capacity, may become the owner or pledgee of Notes and
may otherwise deal with and collect obligations owed to it by Arch Coal, the Guarantors or any of
their Affiliates with the same rights it would have if it were not Trustee. Any Paying Agent,
Registrar, co-Registrar or co-Paying Agent may do the same with like rights.

15. No Recourse Against Others

     No director, officer, employee, incorporator, stockholder, member, manager or partner of Arch
Coal or any Guarantor, as such, shall have any liability for any obligations of Arch Coal or any
Guarantor under the Notes, the Indenture or any Note Guarantees or for any claim based on, in
respect of, or by reason of, such obligations or their creation. By accepting a Note, each Holder
shall waive and release all such liability. The waiver and release shall be part of the
consideration for the issue of the Notes.

A-2-12

 

16. Authentication

     This Note shall not be valid until an authorized officer of the Trustee (or an authenticating
agent) manually signs the certificate of authentication on the other side of this Note.

17. Governing Law

     THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK.

     Arch Coal or a Guarantor shall furnish to any Holder upon written request and without charge
to the Holder a copy of the Indenture. Requests may be made to:

Arch Coal, Inc.

One CityPlace Drive

Suite 300

St. Louis, Missouri 63141

A-2-13

 

ASSIGNMENT FORM

To assign and transfer this Note, fill in the form below:

(I) or (Arch Coal) assign and transfer this Note to

 

(Insert assignee’s social security or tax I.D. no.)

 

(Print or type assignee’s name, address and postal code)

and irrevocably appoint ____________________ agent to transfer this Note on the books of Arch Coal.
The agent may substitute another to act for him.

	 	 	 	 	 
	Your Signature:  	
 	 	 
	 	 	(Sign exactly as your name appears on the other side of this Note) 	 

	 	 	 	 	 
	 	 	 
	 	Signature Guarantee:  	 	 
	 	 	(Participant in a recognized signature guarantee medallion program) 	 

Date:                                         

Certifying Signature:                                         

     [Include only if Original Note and delete if Exchange Note — In connection with any transfer
of any Notes evidenced by this certificate occurring prior to the date that is two years after the
later of the date of original issuance of such Notes and the last date, if any, on which the Notes
were owned by Arch Coal or any Affiliate of Arch Coal, the undersigned confirms that such Notes are
being transferred in accordance with the transfer restrictions set forth in such Notes and:

CHECK ONE BOX BELOW

	(1)	 	o   to Arch Coal; or
	 
	(2)	 	o   pursuant to and in compliance with Rule 144A under the U.S. Securities
Act of 1933; or
	 
	(3)	 	o   pursuant to and in compliance with Regulation S under the U.S.
Securities Act of 1933; or
	 
	(4)	 	o   pursuant to another available exemption from the registration
requirements of the U.S. Securities Act of 1933; or
	 
	(5)	 	o   pursuant to an effective registration statement under the U.S.
Securities Act of 1933.

A-2-14

 

     Unless one of the boxes is checked, the Trustee will refuse to register any of the Notes
evidenced by this certificate in the name of any person other than the registered Holder thereof;
provided, however, that if box (2) is checked, by executing this form, the Transferor is deemed to
have certified that such Notes are being transferred to a person it reasonably believes is a
“qualified institutional buyer” as defined in Rule 144A under the U.S. Securities Act of 1933 who
has received notice that such transfer is being made in reliance on Rule 144A; if box (3) is
checked, by executing this form, the Transferor is deemed to have certified that such transfer is
made pursuant to an offer and sale that occurred outside the United States in compliance with
Regulation S under the U.S. Securities Act; and if box (4) is checked, the Trustee may require,
prior to registering any such transfer of the Notes, such legal opinions, certifications and other
information as Arch Coal reasonably requests to confirm that such transfer is being made pursuant
to an exemption from or in a transaction not subject to, the registration requirements of the U.S.
Securities Act of 1933.

Signature:                     

Signature Guarantee:                     

(Participant in a recognized signature guarantee medallion program)

Certifying Signature:                      Date:                    

Signature Guarantee:                     

(Participant in a recognized signature guarantee medallion program)]

OPTION OF HOLDER TO ELECT PURCHASE

     If you want to elect to have this Note or a portion thereof repurchased pursuant to Section
4.09 or 4.11 of the Indenture, check the box: o

     If the purchase is in part, indicate the portion (in denominations of $1,000 or any integral
multiple thereof) to be purchased:

Your signature:

(Sign exactly as your name appears on the other side of this Note)

Date:

Certifying Signature:        
             
             
             
             
    

A-2-15

 

SCHEDULE A

SCHEDULE OF PRINCIPAL AMOUNT

     The following decreases/increases in the principal amount of this Security have been made:

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Principal Amount	 	Notation Made by or
	Date of	 	Decrease in	 	Increase in	 	Following such	 	on Behalf of
	Decrease/Increase	 	Principal Amount	 	Principal Amount	 	Decrease/ Increase	 	Registrar
	 

	 	 
	 	 
	 	 
	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 
	 	 
	 	 
	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 
	 	 
	 	 
	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 
	 	 
	 	 
	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 
	 	 
	 	 
	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 
	 	 
	 	 
	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 
	 	 
	 	 
	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 
	 	 
	 	 
	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 
	 	 
	 	 
	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 
	 	 
	 	 
	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 
	 	 
	 	 
	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 
	 	 
	 	 
	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 
	 	 
	 	 
	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 
	 	 
	 	 
	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 
	 	 
	 	 
	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 
	 	 
	 	 
	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 
	 	 
	 	 
	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 
	 	 
	 	 
	 	 

A-2-16

 

EXHIBIT B-1

FORM OF TRANSFER CERTIFICATE FOR TRANSFER FROM RESTRICTED GLOBAL

NOTE TO REGULATION S GLOBAL NOTE

(Transfers pursuant to § 2.06(a)(ii) of the Indenture)

UMB National Association

2 South Broadway, 6th Floor

St. Louis, Missouri 63102

Re: 7.000% Senior Notes Due 2019 (the “Notes”)

     Reference is hereby made to the Indenture dated as of June 14, 2011, (the “Indenture”)
among Arch Coal, Inc., a Delaware corporation (“Arch Coal”) and Allegheny Land Company, a
Delaware corporation, Arch Coal Sales Company, Inc., a Delaware corporation, Arch Coal Terminal,
Inc., a Delaware corporation, Arch Development, LLC, a Delaware limited liability company, Arch
Energy Resources, LLC, a Delaware limited liability company, Arch Reclamation Services, Inc., a
Delaware corporation, Ark Land Company, a Delaware corporation, Ark Land KH, Inc., a Delaware
corporation, Ark Land LT, Inc., a Delaware corporation, Ark Land WR, Inc., a Delaware corporation,
Ashland Terminal, Inc., a Delaware corporation, Catenary Coal Holdings, Inc., a Delaware
corporation, Coal-Mac, Inc., a Kentucky corporation, Cumberland River Coal Company, a Delaware
corporation, Lone Mountain Processing, Inc., a Delaware corporation, Mingo Logan Coal Company, a
Delaware corporation, Mountain Gem Land, Inc., a West Virginia corporation, Mountain Mining, Inc.,
a Delaware corporation, Mountaineer Land Company, a Delaware corporation, Otter Creek Coal, LLC, a
Delaware limited liability company, Prairie Holdings, Inc., a Delaware corporation, Western Energy
Resources, Inc., a Delaware corporation (collectively the “Guarantors”), and UMB Bank
National Association, a national banking association duly organized and existing under the laws of
the United States. Capitalized terms used but not defined herein shall have the meanings given them
in the Indenture.

     This letter relates to                      aggregate principal amount of Notes that are held as a
beneficial interest in the form of the Restricted Global Note (CUSIP No. 039380 AD2; ISIN No.
US039380AD29) with the Depositary in the name of [name of transferor](the “Transferor”).
The Transferor has requested an exchange or transfer of such beneficial interest for an equivalent
beneficial interest in the Regulation S Global Note (CUSIP No. U0393C AB1; ISIN No. USU0393CAB10).

     In connection with such request, the Transferor does hereby certify that such transfer has
been effected in accordance with the transfer restrictions set forth in the Notes and:

	 	(a)	 	with respect to transfers made in reliance on Regulation S (“Regulation
S”) under the United States Securities Act of 1933, as amended (the “U.S.
Securities Act”), does certify that:

	 	(i)	 	the offer of the Notes was not made to a person in the United States;

B-1-1

 

     (ii) either (1) at the time the buy order is originated the transferee is outside the
United States or the Transferor and any person acting on its behalf reasonably believe that
the transferee is outside the United States or; (2) the transaction was executed in, on or
through the facilities of a designated offshore securities market described in paragraph (b)
of Rule 902 of Regulation S and neither the Transferor nor any person acting on its behalf
knows that the transaction was pre-arranged with a buyer in the United States;

     (iii) no directed selling efforts have been made in the United States by the
Transferor, an affiliate thereof or any person their behalf in contravention of the
requirements of Rule 903 or 904 of Regulation S, as applicable;

     (iv) the transaction is not part of a plan or scheme to evade the registration
requirements of the U.S. Securities Act; and

     (v) the Transferor is not Arch Coal, a distributor of the Notes, an affiliate of Arch
Coal or any such distributor (except any officer or director who is an affiliate solely by
virtue of holding such position) or a person acting on behalf of any of the foregoing.

	 	(b)	 	with respect to transfers made in reliance on Rule 144 the Transferor certifies
that the Notes are being transferred in a transaction permitted by Rule 144 under the
U.S. Securities Act.

     You, Arch Coal, the Guarantors and the Trustee are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested party in any
administrative or legal proceedings or official inquiry with respect to the matters covered hereby.
Terms used in this certificate have the meanings set forth in Regulation S.

	 	 	 	 	 
	[Name of Transferor]

 	 
	By:  	 	 
	 	Name:  	 	 
	 	Title:  	 	 
	 	Date:  	
 	 
	 	cc:  
	

 
	 	Attn:  
	

 
	 

B-2-2

 

EXHIBIT B-2

FORM OF TRANSFER CERTIFICATE FOR TRANSFER FROM RESTRICTED GLOBAL

NOTE TO REGULATION S GLOBAL NOTE

(Transfers pursuant to § 2.06(a)(ii) of the Indenture)

UMB National Association

2 South Broadway, 6th Floor

St. Louis, Missouri 63102

Re: 7.250% Senior Notes Due 2021 (the “Notes”)

     Reference is hereby made to the Indenture dated as of June 14, 2011, (the “Indenture”)
among Arch Coal, Inc., a Delaware corporation (“Arch Coal”) and Allegheny Land Company, a
Delaware corporation, Arch Coal Sales Company, Inc., a Delaware corporation, Arch Coal Terminal,
Inc., a Delaware corporation, Arch Development, LLC, a Delaware limited liability company, Arch
Energy Resources, LLC, a Delaware limited liability company, Arch Reclamation Services, Inc., a
Delaware corporation, Ark Land Company, a Delaware corporation, Ark Land KH, Inc., a Delaware
corporation, Ark Land LT, Inc., a Delaware corporation, Ark Land WR, Inc., a Delaware corporation,
Ashland Terminal, Inc., a Delaware corporation, Catenary Coal Holdings, Inc., a Delaware
corporation, Coal-Mac, Inc., a Kentucky corporation, Cumberland River Coal Company, a Delaware
corporation, Lone Mountain Processing, Inc., a Delaware corporation, Mingo Logan Coal Company, a
Delaware corporation, Mountain Gem Land, Inc., a West Virginia corporation, Mountain Mining, Inc.,
a Delaware corporation, Mountaineer Land Company, a Delaware corporation, Otter Creek Coal, LLC, a
Delaware limited liability company, Prairie Holdings, Inc., a Delaware corporation, Western Energy
Resources, Inc., a Delaware corporation (collectively the “Guarantors”), and UMB Bank
National Association, a national banking association duly organized and existing under the laws of
the United States. Capitalized terms used but not defined herein shall have the meanings given them
in the Indenture.

     This letter relates to ______________ aggregate principal amount of Notes that are held as a
beneficial interest in the form of the Restricted Global Note (CUSIP No. 039380 AF7; ISIN No.
US039380AF76) with the Depositary in the name of [name of transferor](the “Transferor”).
The Transferor has requested an exchange or transfer of such beneficial interest for an equivalent
beneficial interest in the Regulation S Global Note (CUSIP No. U0393C AC9; ISIN No. USU0393CAC92).

     In connection with such request, the Transferor does hereby certify that such transfer has
been effected in accordance with the transfer restrictions set forth in the Notes and:

	 	(a)	 	with respect to transfers made in reliance on Regulation S (“Regulation
S”) under the United States Securities Act of 1933, as amended (the “U.S.
Securities Act”), does certify that:

     (i) the offer of the Notes was not made to a person in the United States;

B-2-1

 

     (ii) either (1) at the time the buy order is originated the transferee is outside the
United States or the Transferor and any person acting on its behalf reasonably believe that
the transferee is outside the United States or; (2) the transaction was executed in, on or
through the facilities of a designated offshore securities market described in paragraph (b)
of Rule 902 of Regulation S and neither the Transferor nor any person acting on its behalf
knows that the transaction was pre-arranged with a buyer in the United States;

     (iii) no directed selling efforts have been made in the United States by the
Transferor, an affiliate thereof or any person their behalf in contravention of the
requirements of Rule 903 or 904 of Regulation S, as applicable;

     (iv) the transaction is not part of a plan or scheme to evade the registration
requirements of the U.S. Securities Act; and

     (v) the Transferor is not Arch Coal, a distributor of the Notes, an affiliate of Arch
Coal or any such distributor (except any officer or director who is an affiliate solely by
virtue of holding such position) or a person acting on behalf of any of the foregoing.

	 	(b)	 	with respect to transfers made in reliance on Rule 144 the Transferor certifies
that the Notes are being transferred in a transaction permitted by Rule 144 under the
U.S. Securities Act.

     You, Arch Coal, the Guarantors and the Trustee are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested party in any
administrative or legal proceedings or official inquiry with respect to the matters covered hereby.
Terms used in this certificate have the meanings set forth in Regulation S.

[Name of Transferor]

	 	 	 	 	 

	By:
	 	 	 	 
	 

	 	 

Name:
	 	 
	 

	 	Title:	 	 
	 

	 	Date:	 	 
	 
	 	cc:  
	

 
	 	Attn:  
	

 
	 

B-2-2

 

EXHIBIT C-1

FORM OF TRANSFER CERTIFICATE FOR TRANSFER FROM REGULATION S GLOBAL

NOTE TO RESTRICTED GLOBAL NOTE

(Transfers pursuant to § 2.06(a)(iii) of the Indenture)

UMB National Association

2 South Broadway, 6th Floor

St. Louis, Missouri 63102

Re: 7.000% Senior Notes Due 2019 (the “Notes”)

     Reference is hereby made to the Indenture dated as of June 14, 2011, (the “Indenture”)
among Arch Coal, Inc., a Delaware corporation (“Arch Coal”) and Allegheny Land Company, a
Delaware corporation, Arch Coal Sales Company, Inc., a Delaware corporation, Arch Coal Terminal,
Inc., a Delaware corporation, Arch Development, LLC, a Delaware limited liability company, Arch
Energy Resources, LLC, a Delaware limited liability company, Arch Reclamation Services, Inc., a
Delaware corporation, Ark Land Company, a Delaware corporation, Ark Land KH, Inc., a Delaware
corporation, Ark Land LT, Inc., a Delaware corporation, Ark Land WR, Inc., a Delaware corporation,
Ashland Terminal, Inc., a Delaware corporation, Catenary Coal Holdings, Inc., a Delaware
corporation, Coal-Mac, Inc., a Kentucky corporation, Cumberland River Coal Company, a Delaware
corporation, Lone Mountain Processing, Inc., a Delaware corporation, Mingo Logan Coal Company, a
Delaware corporation, Mountain Gem Land, Inc., a West Virginia corporation, Mountain Mining, Inc.,
a Delaware corporation, Mountaineer Land Company, a Delaware corporation, Otter Creek Coal, LLC, a
Delaware limited liability company, Prairie Holdings, Inc., a Delaware corporation, Western Energy
Resources, Inc., a Delaware corporation (collectively the “Guarantors”), and UMB Bank
National Association, a national banking association duly organized and existing under the laws of
the United States. Capitalized terms used but not defined herein shall have the meanings given them
in the Indenture.

     This letter relates to $_________ aggregate principal amount at maturity of Notes that are
held in the form of the Regulation S Global Note with the Depositary (Common Code No. _______; ISIN
No. ________) in the name of Cede & Co. (the “Transferor”) to effect the transfer of the
Notes in exchange for an equivalent beneficial interest in the Restricted Global Note (CUSIP No.
________, ISIN No. ________).

     In connection with such request, and in respect of such Notes the Transferor does hereby
certify that such Notes are being transferred in accordance with the transfer restrictions set
forth in the Notes and that:

	 	 	CHECK ONE BOX BELOW:

	 	o:	 	the Transferor is relying on Rule 144A under the United States
Securities Act of 1933, as amended (the “Securities Act”) for exemption
from such Act’s registration requirements; it is transferring such Notes to a
person it

C-1-1

 

	 	 	 	reasonably believes is a “qualified institutional buyer” as defined in Rule
144A that purchases for its own account, or for the account of a qualified
institutional buyer, and to whom the Transferor has given notice that the
transfer is made in reliance on Rule 144A and the transfer is being made in
accordance with any applicable securities laws of any state of the United
States; or
	 
	 	o:	 	the Transferor is relying on an exemption other than Rule 144A from the
registration requirements of the Securities Act, subject to Arch Coal’s and the
Trustee’s right prior to any such offer, sale or transfer to require the
delivery of an Opinion of Counsel, certification and/or other information
satisfactory to each of them.

     You, Arch Coal, the Guarantors and the Trustee are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested party in any
administrative or legal proceedings or official inquiry with respect to the matters covered hereby.

[Name of Transferor]

	 	 	 	 	 

	By:
	 	 	 	 
	 

	 	 

Name:
	 	 
	 

	 	Title:	 	 
	 

	 	Dated:	 	 
	 
	 	cc:  
	

 
	 	Attn:  
	

 
	 

C-1-2

 

EXHIBIT C-2

FORM OF TRANSFER CERTIFICATE FOR TRANSFER FROM REGULATION S GLOBAL

NOTE TO RESTRICTED GLOBAL NOTE

(Transfers pursuant to § 2.06(a)(iii) of the Indenture)

UMB National Association

2 South Broadway, 6th Floor

St. Louis, Missouri 63102

Re: 7.250% Senior Notes Due 2021 (the “Notes”)

     Reference is hereby made to the Indenture dated as of June 14, 2011, (the “Indenture”)
among Arch Coal, Inc., a Delaware corporation (“Arch Coal”) and Allegheny Land Company, a
Delaware corporation, Arch Coal Sales Company, Inc., a Delaware corporation, Arch Coal Terminal,
Inc., a Delaware corporation, Arch Development, LLC, a Delaware limited liability company, Arch
Energy Resources, LLC, a Delaware limited liability company, Arch Reclamation Services, Inc., a
Delaware corporation, Ark Land Company, a Delaware corporation, Ark Land KH, Inc., a Delaware
corporation, Ark Land LT, Inc., a Delaware corporation, Ark Land WR, Inc., a Delaware corporation,
Ashland Terminal, Inc., a Delaware corporation, Catenary Coal Holdings, Inc., a Delaware
corporation, Coal-Mac, Inc., a Kentucky corporation, Cumberland River Coal Company, a Delaware
corporation, Lone Mountain Processing, Inc., a Delaware corporation, Mingo Logan Coal Company, a
Delaware corporation, Mountain Gem Land, Inc., a West Virginia corporation, Mountain Mining, Inc.,
a Delaware corporation, Mountaineer Land Company, a Delaware corporation, Otter Creek Coal, LLC, a
Delaware limited liability company, Prairie Holdings, Inc., a Delaware corporation, Western Energy
Resources, Inc., a Delaware corporation (collectively the “Guarantors”), and UMB Bank
National Association, a national banking association duly organized and existing under the laws of
the United States. Capitalized terms used but not defined herein shall have the meanings given them
in the Indenture.

     This letter relates to $_________ aggregate principal amount at maturity of Notes that are
held in the form of the Regulation S Global Note with the Depositary (Common Code No. _______; ISIN
No. ________) in the name of Cede & Co. (the “Transferor”) to effect the transfer of the
Notes in exchange for an equivalent beneficial interest in the Restricted Global Note (CUSIP No.
________, ISIN No. ________).

     In connection with such request, and in respect of such Notes the Transferor does hereby
certify that such Notes are being transferred in accordance with the transfer restrictions set
forth in the Notes and that:

	 	 	CHECK ONE BOX BELOW:

	 	o:	 	the Transferor is relying on Rule 144A under the United States
Securities Act of 1933, as amended (the “Securities Act”) for exemption
from such Act’s registration requirements; it is transferring such Notes to a
person it

C-2-1

 

	 	 	 	reasonably believes is a “qualified institutional buyer” as defined in Rule
144A that purchases for its own account, or for the account of a qualified
institutional buyer, and to whom the Transferor has given notice that the
transfer is made in reliance on Rule 144A and the transfer is being made in
accordance with any applicable securities laws of any state of the United
States; or
	 
	 	o:	 	the Transferor is relying on an exemption other than Rule 144A from the
registration requirements of the Securities Act, subject to Arch Coal’s and the
Trustee’s right prior to any such offer, sale or transfer to require the
delivery of an Opinion of Counsel, certification and/or other information
satisfactory to each of them.

     You, Arch Coal, the Guarantors and the Trustee are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested party in any
administrative or legal proceedings or official inquiry with respect to the matters covered hereby.

[Name of Transferor]

	 	 	 	 	 

	By:
	 	 	 	 
	 

	 	 

Name:
	 	 
	 

	 	Title:	 	 
	 

	 	Dated:	 	 
	 
	 	cc:  
	

 
	 	Attn:  
	

 
	 

C-2-2

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00190-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00190-of-00352.parquet"}]]