Exhibit 10.3
Deed
Execution copy
Deed of Guarantee
Peabody Energy Corporation
ArcelorMittal S.A.
ArcelorMittal Netherlands B.V.
ArcelorMittal Mining Australasia B.V.
Peabody Acquisition Co. No. 3 Pty Ltd
Peabody Acquisition Co. No 2 Pty Ltd
tony.damian@freehills.com
(Freehills LOGO) [c65699c6569900.gif]

     
MLC Centre Martin Place Sydney NSW 2000 Australia
  Telephone +61 2 9225 5000 Facsimile +61 2 9322 4000
GPO Box 4227 Sydney NSW 2001 Australia
  www.freehills.com DX 361 Sydney
 
   
Sydney Melbourne Perth Brisbane Singapore
  Associated offices in Jakarta Beijing Shanghai Hanoi Ho Chi Minh City

 

--------------------------------------------------------------------------------

 

(Freehills LOGO) [c65699c6569901.gif]

     
Deed of Guarantee
   
 
   
Date ► 29 July 2011
   
 
   
Between the parties
   
 
   
Peabody
  Peabody Energy Corporation

 
  of 701 Market Street, St. Louis, Missouri, United States of America, 63101

 
  (Peabody)
 
   
Peabody Shareholder
  Peabody Acquisition Co. No. 2 Pty Ltd

 
  ACN 146 797 417 of Level 13, BOQ Centre, 259 Queen Street, Brisbane,
Queensland 4000

 
  (Peabody Shareholder)
 
   
ArcelorMittal
  ArcelorMittal S.A.

 
  of 19 avenue de la Liberté, L-2930 Luxembourg City, Luxembourg

 
  (ArcelorMittal)
 
   
AM
  ArcelorMittal Netherlands B.V.

 
  of Eemhavenweg 70, 3089 KH Rotterdam, Netherlands

 
  (AM)
 
   
AM BV2
  ArcelorMittal Mining Australasia B.V.

 
  of Eemhavenweg 70, 3089 KH Rotterdam, Netherlands

 
  (AM BV2)
 
   
Holdco
  Peabody Acquisition Co. No. 3 Pty Ltd

 
  ACN 152 004 398 of Level 13, BOQ Centre, 259 Queen Street, Brisbane,
Queensland 4000

 
  (Holdco)  
Recitals
 
1     Holdco, a subsidiary of Peabody Shareholder and an indirect subsidiary of
Peabody, owns all the shares in Bidco.
 
   
 
 
2     Bidco may propose to make an off-market takeover bid for all of

 

--------------------------------------------------------------------------------

 

(Freehills LOGO) [c65699c6569901.gif]
Parties

     
 
        the shares on issue in Macarthur Coal Limited (Macarthur) (the Takeover
Bid).  
 
 
3     Holdco, Bidco, AM, AM BV2 and Peabody Shareholder are parties to the
Co-operation and Contribution Agreement pursuant to which Peabody Shareholder
and AM BV2 will provide funding to Holdco, in the ratio of 60:40, in exchange
for a proportionate number of shares in Holdco. Holdco is to fund Bidco for the
sole purposes of:
 
 
 
•    paying for the Macarthur shares acquired by Bidco as a result of the
Takeover Bid; and
 
 
 
•    paying any Duty arising in connection with the Takeover Bid.
 
 
 
4    Holdco, Bidco, AM, AM BV2 and Peabody Shareholder are also parties to the
Shareholders’ Deed which regulate their respective rights in Holdco.
 
 
 
5    Peabody has, at the request of AM, agreed to grant a guarantee and
indemnity in favour of AM in relation to various obligations of Peabody
Shareholder under the Co-operation and Contribution Agreement and Peabody
Shareholder’s payment obligation upon AM’s exit from Holdco under the
Shareholders’ Deed on the terms of this deed.
 
 
 
6      ArcelorMittal has, at the request of Holdco, agreed to grant a guarantee
and indemnity in favour of Holdco in relation to various obligations of AM and
AM BV2 under the Co-operation and Contribution Agreement and the Shareholders’
Deed on the terms of this deed.
 
This deed witnesses as follows:
   

 

--------------------------------------------------------------------------------

 

(Freehills LOGO) [c65699c6569901.gif]

1   Definitions and interpretation and agreement components     1.1   Deed
components       This deed includes any schedule.   1.2   Definitions       The
meanings of the terms used in this deed are set out below, unless the context
otherwise appears or requires.

      Term   Meaning
Bidco
  Peabody Acquisition Co. No. 4 Pty Ltd (ACN 152 004 772).
 
   
Business Day
  a day on which banks are open for business in Brisbane (Australia), Paris
(France) and St. Louis, Missouri (United States of America) other than a
Saturday, Sunday or public holiday in Brisbane (Australia), Paris (France) and
St. Louis, Missouri (United States of America) and which is a ‘business day’ as
defined in the official listing rules of ASX.
 
   
Duty
  any stamp, transaction or registration duty or similar charge imposed by any
Governmental Agency and includes any interest, fine, penalty, charge or other
amount imposed in respect of any of them, but excludes any Tax.
 
   
Claim
  any claim, demand, legal proceeding or cause of action including any claim,
demand, legal proceeding or cause of action:  
 
 
1    based in contract (including breach of any warranty);
 
 
 
2    based in tort (including misrepresentation or negligence);
 
 
 
3    under common law or equity; or
 
 
 
4    under statute (including the Competition and Consumer Act 2010 (Cth), or
like provisions in any state or territory legislation),
 
 
  in any way relating to this deed or the transactions contemplated by it.
 
   
Control
  has the meaning given in section 50AA of the Corporations Act.
 
   
Co-operation and Contribution Agreement
  the Co-operation and Contribution Agreement entered into on or about the date
of this deed by Peabody Shareholder, AM, AM BV2, Holdco and Bidco.
 
   
Corporations Act
  the Corporations Act 2001 (Cth).
 
   

page 4

--------------------------------------------------------------------------------

 

      (Freehills LOGO) [c65699c6569901.gif]   1 <Definitions and interpretation
and agreement components

      Term   Meaning
Governmental Agency
  any government or governmental, administrative, monetary, fiscal or judicial
body, department, commission, authority, tribunal, agency or entity in any part
of the world.
 
   
GST
  goods and services tax or similar value added tax levied or imposed in
Australia under the GST Law or otherwise on a supply.
 
   
GST Act
  the A New Tax System (Goods and Services Tax) Act 1999 (Cth).
 
   
GST Law
  has the same meaning as in the GST Act.
 
   
Loss
  losses, liabilities, damages, costs, charges and expenses and includes Taxes,
Duties and tax costs.
 
   
Pre-Bid Acceptance Deed
  the pre-bid acceptance deed entered into on or about the date of this deed by
AM and Bidco.  
Shareholders’ Deed
  the Shareholders’ Deed to be entered into on or about the date of this deed by
Peabody Shareholder, AM, AM BV2, Holdco and Bidco.
 
   
Tax
  any tax, levy, charge, impost, fee, deduction, goods and services tax,
compulsory loan or withholding, that is assessed, levied, imposed or collected
by any Governmental Agency and includes any interest, fine, penalty, charge, fee
or any other amount imposed on, or in respect of any of the above but excludes
Duty.

1.3 Interpretation

    In this deed headings and words in bold are inserted for convenience and do
not affect the interpretation of this deed and unless the contrary intention
appears:

  (a)   a reference to this deed or another instrument includes any variation or
replacement of any of them;     (b)   a reference to a statute, ordinance, code
or other law includes regulations and other instruments under it and
consolidations, amendments, re-enactments or replacements of any of them;    
(c)   the singular includes the plural and vice versa;     (d)   the word
‘person’ includes a firm, a body corporate, an unincorporated association or an
authority;     (e)   a reference to a person includes a reference to the
person’s executors, administrators, successors, substitutes (including persons
taking by novation) and assigns;

page 5

--------------------------------------------------------------------------------

 

      (Freehills LOGO) [c65699c6569901.gif]   2 <Guarantees and indemnities

  (f)   if a period of time is specified and dates from a given day or the day
of an act or event, it is to be calculated exclusive of that day;     (g)   a
reference to a day is to be interpreted as the period of time commencing at
midnight and ending 24 hours later;     (h)   if an act prescribed under this
deed to be done by a party on or by a given day is done after 5.00pm on that
day, it is taken to be done on the next day;     (i)   if an event must occur on
a stipulated day that is not a Business Day then the stipulated day will be
taken to be the next Business Day;     (j)   a reference to time is a reference
to time in Brisbane, Australia;     (k)   a reference to any thing (including
any amount) is a reference to the whole and each part of it and a reference to a
group of persons is a reference to any one or more of them;     (l)   a
reference to a part, clause, party, attachment, exhibit or schedule is a
reference to a part and clause of, and a party, attachment, exhibit and schedule
to, this deed and a reference to this deed includes any attachment, exhibit and
schedule;     (m)   a reference to $ is to Australian currency unless
denominated otherwise; and     (n)   a term defined in the Corporations Act
shall have the same meaning in this deed.

1.4   Inclusive expressions       Specifying anything in this deed after the
words ‘including’, ‘includes’ or ‘for example’ or similar expressions does not
limit what else is included unless there is express wording to the contrary.

2   Guarantees and indemnities   2.1   Peabody guarantee and indemnity

  (a)   Peabody unconditionally and irrevocably guarantees to AM and AM BV2 the
due and punctual performance of:

  (1)   Peabody Shareholder’s obligations under the Co-operation and
Contribution Agreement; and     (2)   Peabody Shareholder’s obligations under
the Shareholders’ Deed,

      (collectively, the Peabody Relevant Obligations).

  (b)   If Peabody Shareholder does not comply with any of the Peabody Relevant
Obligations on time and in accordance with the Co-operation and Contribution
Agreement or the Shareholders’ Deed (as applicable), then Peabody agrees to
comply with those obligations on demand from AM and AM BV2. A demand may be made
whether or not AM or AM BV2 has first made demand on Peabody Shareholder.    
(c)   As a separate and additional liability, Peabody indemnifies AM and AM BV2
against all Loss, actions, proceedings and judgments of any nature, incurred by,
brought, made or recovered against AM or AM BV2 arising from:

  (1)   any default or delay in the due and punctual performance by Peabody
Shareholder of the Peabody Relevant Obligations; or

page 6

--------------------------------------------------------------------------------

 

      (Freehills LOGO) [c65699c6569901.gif]   3 Extent of guarantees and
indemnities

  (2)   an obligation Peabody Shareholder would otherwise have under the Peabody
Relevant Obligations that is found to be void, voidable or unenforceable; or    
(3)   an obligation Peabody would otherwise have under clauses 2.1(a) or 2.1(b)
that is found to be void, voidable or unenforceable.

      Peabody agrees to pay amounts due under this clause 2.1(c) on demand from
AM or AM BV2. AM and AM BV2 do not need to incur expense or make payment before
enforcing this right of indemnity.

2.2   ArcelorMittal guarantee and indemnity

  (a)   ArcelorMittal unconditionally and irrevocably guarantees to Peabody
Shareholder and Holdco, the due and punctual performance of all of AM’s and AM
BV2’s obligations under the Co-operation and Contribution Agreement, under the
Shareholders’ Deed and under the Pre-Bid Acceptance Deed (collectively the, AM
Relevant Obligations).     (b)   If AM or AM BV2 does not comply with any of the
AM Relevant Obligations on time and in accordance with the Co-operation and
Contribution Agreement and the Shareholders’ Deed, then ArcelorMittal agrees to
comply with those obligations on demand from Peabody Shareholder or Holdco, as
the case may be. A demand may be made whether or not Peabody Shareholder or
Holdco has first made demand on AM or AM BV2.     (c)   As a separate and
additional liability, ArcelorMittal indemnifies Peabody Shareholder and Holdco
against all Loss, actions, proceedings and judgments of any nature, incurred by,
brought, made or recovered against Peabody Shareholder or Holdco arising from:

  (1)   any default or delay in the due and punctual performance of the AM
Relevant Obligations;     (2)   an obligation AM or AM BV2 would otherwise have
under the AM Relevant Obligations that is found to be void, voidable or
unenforceable; or     (3)   an obligation ArcelorMittal would otherwise have
under clauses 2.2(a) or 2.2(b) that is found to be void, voidable or
unenforceable.

      ArcelorMittal agrees to pay amounts due under this clause 2.1(c) on demand
from Peabody Shareholder or Holdco. Peabody Shareholder and Holdco do not need
to incur expense or make payment before enforcing this right of indemnity.

3   Extent of guarantees and indemnities

 

  (a)   The liability of Peabody and the rights given to AM and AM BV2 under
this deed are not affected by any act or omission or any other thing which might
otherwise affect them under law or otherwise. For example, those rights and
liabilities are not affected by any act or omission:

  (1)   varying or replacing in any way and for any reason any agreement or
arrangement under which the obligations guaranteed under clause 2.1(a) are
expressed to be owing; or     (2)   releasing Peabody Shareholder or giving
Peabody Shareholder a concession (such as more time to pay).

  (b)   The liability of ArcelorMittal and the rights given to Peabody
Shareholder and Holdco under this deed are not affected by any act or omission
or any other

page 7

--------------------------------------------------------------------------------

 

      (Freehills LOGO) [c65699c6569901.gif]   4 Duration

      thing which might otherwise affect them under law or otherwise. For
example, those rights and liabilities are not affected by any act or omission:

  (1)   varying or replacing in any way and for any reason any agreement or
arrangement under which the obligations guaranteed under clause 2.2(a) are
expressed to be owing; or     (2)   releasing AM, AM BV2 or both or giving AM,
AM BV2 or both a concession (such as more time to pay).

4   Duration
 
  4.1   Continuing guarantees and indemnities       Subject to clause 4.2, this
deed remains in full force and effect for so long as:

  (a)   Peabody Shareholder has any liability or obligation to AM or AM BV2
under the Peabody Relevant Obligations; or     (b)   AM or AM BV2 has any
liability or obligation to Peabody Shareholder or Holdco under the AM Relevant
Obligations,

    until all of those liabilities or obligations have been fully discharged.  
4.2   Term of guarantees and indemnities

  (a)   Notwithstanding anything else in this deed:

  (1)   subject to the remainder of this clause 4.2(a), the liability of Peabody
and the rights given to AM and AM BV2 under this deed shall only remain in full
force and effect for so long as Peabody Shareholder is Controlled by Peabody and
shall thereafter terminate and cease to be of any further force or effect;    
(2)   if Peabody ceases to Control the Peabody Shareholder during the Sale Right
Period (as defined in the Shareholders’ Deed) in circumstances where the
provisions of clause 4.2(a)(3) do not apply, the liability of Peabody and the
rights given to AM and AM BV2 under this deed, with respect to the payment
obligations in clauses 21.1(d) and 21.1(f) of the Shareholders’ Deed only, shall
remain in full force and effect until:

  (A)   if a Sale Right Notice (as defined in the Shareholders’ Deed) has not
been delivered before the end of the Sale Right Period, the end of the Sale
Right Period; or     (B)   if a Sale Right Notice (as defined in the
Shareholders’ Deed) has been delivered before the end of the Sale Right Period
which has not completed by the end of the Sale Right Period, the Sale Right
Shares Closing Date (as defined in the Shareholders’ Deed),

      and shall thereafter terminate and cease to be of any further force or
effect; and     (3)   if Peabody ceases to Control the Peabody Shareholder (as
defined in the Shareholders’ Deed) as a result of a Peabody Sale (as defined in
the Shareholders’ Deed) and AM is provided with a guarantee in relation to the
obligations under clauses 21.1(d) and 21.1(f) of the Shareholders’ Deed on terms
that are substantially equivalent to the guarantee given by Peabody in this deed
from a person that has a

page 8

--------------------------------------------------------------------------------

 

      (Freehills LOGO) [c65699c6569901.gif]   5 No withholdings

      credit rating (as rated by Standard & Poors or Moody’s) that is not lower
than Peabody’s, then the liability of Peabody and the rights given to AM and AM
BV2 under this deed will terminate and will cease to be of any further force or
effect.

  (b)   Notwithstanding anything else in this deed, the liability of
ArcelorMittal and the rights given to Peabody Shareholder and Holdco under this
deed shall only remain in full force and effect for so long as AM and AM BV2 are
Controlled by ArcelorMittal and shall thereafter terminate and cease to be of
any further force or effect.     (c)   This clause 4.2 does not affect any
rights that have accrued to a party before its rights under this deed terminated
and ceased to be of any further force or effect.

5   No withholdings

 

  (a)   All payments that become due under this deed, must be made free and
clear and without deduction of all present and future withholdings (including
taxes, duties, levies, imposts, deductions and charges of Australia or any other
jurisdiction).     (b)   If Peabody is compelled by law to deduct any
withholding, then in addition to any payment due under this deed, it must pay to
AM or AM BV2 such amount as is necessary to ensure that the net amount received
by AM or AM BV2 after withholding equals the amount AM or AM BV2 would otherwise
been entitled to if not for the withholding.     (c)   If ArcelorMittal is
compelled by law to deduct any withholding, then in addition to any payment due
under this deed, it must pay to Peabody Shareholder or Holdco such amount as is
necessary to ensure that the net amount received by Peabody Shareholder or
Holdco after withholding equals the amount Holdco would otherwise been entitled
to if not for the withholding.

6   Currency         All moneys that become liable to be paid under this deed
must be paid in the currency in which they are payable under the Shareholders’
Deed and the Co-operation and Contribution Agreement, as applicable, and free of
any commissions and expenses relating to foreign currency conversion or any
other charges or expenses.   7   Suspension of rights     7.1   Peabody’s rights
are suspended       As long as any obligation is required, or may be required,
to be complied with in connection with this deed, Peabody may not, without AM’s
consent:

  (a)   reduce its liability under this deed by claiming that it, Peabody
Shareholder, Holdco or any other person has a right of set-off or counterclaim
against AM or AM BV2;     (b)   claim, or exercise any right to claim, to be
entitled (whether by way of subrogation or otherwise) to the benefit of another
guarantee, indemnity, mortgage, charge or other encumbrance:

page 9

--------------------------------------------------------------------------------

 

      (Freehills LOGO) [c65699c6569901.gif]   8 Guarantor’s liability  

  (1)   in connection with the Co-operation and Contribution Agreement, the
Shareholders’ Deed or any other amount payable under this deed; or     (2)   in
favour of a person other than AM in connection with any obligations of, or any
other amounts payable, by Peabody Shareholder or Holdco to, or for the account
of, that other person; or

  (c)   claim an amount in the liquidation, administration or insolvency of
Peabody Shareholder or Holdco or of another guarantor of any of the Peabody
Shareholder or Holdco’s obligations.

7.2 ArcelorMittal’s rights are suspended
As long as any obligation is required, or may be required, to be complied with
in connection with this deed, ArcelorMittal may not, without Holdco’s consent:

  (a)   except as provided for in clause 3.3(b) of the Co-operation and
Contribution Agreement, reduce its liability under this deed by claiming that it
or AM or AM BV2 or any other person has a right of set-off or counterclaim
against Peabody Shareholder or Holdco;     (b)   claim, or exercise any right to
claim, to be entitled (whether by way of subrogation or otherwise) to the
benefit of another guarantee, indemnity, mortgage, charge or other encumbrance:

  (1)   in connection with the Co-operation and Contribution Agreement, the
Shareholders’ Deed or any other amount payable under this deed; or     (2)   in
favour of a person other than Peabody Shareholder or Holdco in connection with
any obligations of, or any other amounts payable, by AM or AM BV2 to, or for the
account of, that other person; or

  (c)   claim an amount in the liquidation, administration or insolvency of AM
or AM BV2 or of another guarantor of any of AM’s or AM BV2’s obligations.

8   Guarantor’s liability  

  (a)   Peabody’s liability in respect of any Claim shall not exceed Peabody
Shareholder’s liability in respect of that Claim.     (b)   ArcelorMittal’s
liability in respect of any Claim shall not exceed AM’s liability or AM BV2’s
liability (as the case may be) in respect of that Claim.

9   Duties, costs and expenses     9.1   Duties       The parties must pay
equally all Duty in respect of the execution, delivery and performance of this
deed, unless otherwise provided for in this deed.

9.2 Parties to pay own other costs

  (a)   Except as set out in clause 9.1 and unless otherwise provided for in
this deed, each party must pay its own costs and expenses in respect of the
negotiation, preparation, execution, delivery and registration of this deed and
any other deed or document entered into or signed under this deed.

page 10

--------------------------------------------------------------------------------

 

      (Freehills LOGO) [c65699c6569901.gif]   10 GST  

  (b)   Any action to be taken by any party in performing its obligations under
this deed must be taken at its own cost and expense unless otherwise provided in
this deed.

10   GST
 
  10.1   Definitions       Words used in this clause 10 that have a defined
meaning in the GST Law have the same meaning as in the GST Law unless the
context indicates otherwise.   10.2   GST

  (a)   Unless expressly included, the consideration for any supply under or in
connection with this deed does not include GST.     (b)   To the extent that any
supply made under or in connection with this deed is a taxable supply (other
than any supply made under another deed that contains a specific provision
dealing with GST), the recipient must pay, in addition to the consideration
provided under this deed for that supply (unless it expressly includes GST) an
amount (additional amount) equal to the amount of that consideration (or its GST
exclusive market value) multiplied by the rate at which GST is imposed in
respect of the supply. The recipient must pay the additional amount at the same
time as the consideration to which it is referable.     (c)   Whenever an
adjustment event occurs in relation to any taxable supply to which clause
10.2(b) applies:

  (1)   the supplier must determine the amount of the GST component of the
consideration payable; and     (2)   if the GST component of that consideration
differs from the amount previously paid, the amount of the difference must be
paid by, refunded to or credited to the recipient, as applicable.

10.3   Tax invoices       The supplier must issue a tax invoice to the recipient
of a supply to which clause 10.2 applies no later than 10 days following payment
of the GST inclusive consideration for that supply under that clause.   10.4  
Reimbursements       If either party is entitled under this deed to be
reimbursed or indemnified by the other party for a cost or expense incurred in
connection with this deed, the reimbursement or indemnity payment must not
include any GST component of the cost or expense to the extent that the cost or
expense is the consideration for a creditable acquisition made by the party
being reimbursed or indemnified, or by its representative member.   11   General
    11.1   Notices

  (a)   Any notice or other communication (including any request, demand,
consent or approval) to or by a party to this deed must be in legible writing
and in English

page 11

--------------------------------------------------------------------------------

 

      (Freehills LOGO) [c65699c6569901.gif]   11 General

      addressed as shown below (or as specified to the sender by any party by
notice):

              Party   Address   Attention   Facsimile
Peabody
  701 Market Street, St.
Louis, Missouri 63101
United States of America   Chief Legal Officer   +1 314 342 3419
 
           
 
      Carole Whittall
with a copy to the London office of AM:    
ArcelorMittal
  19 avenue de la Liberté,
L-2930 Luxembourg City,
Luxembourg   Attention: Carole Whittall

7th Floor Berkeley Square
House, Berkeley Square
London W1J 6AD
United Kingdom   +44 20 7629 5351
 
           
Peabody Shareholder
  Level 13, BOQ Centre, 259
Queen Street, Brisbane,
Queensland 4000
Australia   The Company Secretary   +61 7 3225 5555
 
           
Holdco
  Level 13, BOQ Centre, 259
Queen Street, Brisbane,
Queensland 4000
Australia   The Company Secretary   +61 7 3225 5555
 
           
 
      Carole Whittall
with a copy to the London office of AM:    
AM
  Eemhavenweg 70, 3089
KH Rotterdam
Netherlands   Attention: Carole Whittall

Address:
7th Floor
Berkeley Square House,
Berkeley Square, London
W1J 6AD   +44 20 7629 5351
 
           
 
      Carole Whittall
with a copy to the London office of AM:    
 
      Attention: Carole Whittall

Address:    
AM BV2
  Eemhavenweg 70, 3089
KH Rotterdam
Netherlands   7th Floor Berkeley Square
House, Berkeley Square,
London W1J 6AD   +44 20 7629 5351

page 12

--------------------------------------------------------------------------------

 

      (Freehills LOGO) [c65699c6569901.gif]   11 General

      If the sender is a company, the notice or communication must be signed by
an officer or under the common seal of the sender.     (b)   A notice or
communication given in accordance with clause 11.1(a) can be relied on by the
addressee and the addressee is not liable to any other person for any
consequences of that reliance if the addressee believes it to be genuine,
correct and authorised by the sender.     (c)   Any notice or other
communication to or by a party to this deed is regarded as being given by the
sender and received by the addressee:

  (1)   if by delivery in person, when delivered to the addressee;     (2)   if
by registered mail (with acknowledgement of receipt) within Australia, 4
Business Days from and including the date of postage;     (3)   if by registered
mail (with acknowledgement of receipt) to or from a place outside Australia, 7
Business Days from and including the date of postage;     (4)   if by facsimile
transmission, when a facsimile confirmation receipt is received indicating
successful delivery,

      but if the delivery or receipt is on a day that is not a Business Day or
is after 5.00pm (addressee’s time) it is regarded as received at 9.00am on the
following Business Day.     (d)   A facsimile transmission is regarded as
legible unless the addressee telephones the sender within 2 hours after the
transmission is received or regarded as received under clause 11.1(a) and
informs the sender that it is not legible.     (e)   In this clause 11.1,
reference to an addressee includes a reference to an addressee’s officers,
agents or employees.

11.2   Governing law and jurisdiction

  (a)   This deed is governed by the laws of New South Wales.     (b)   Each
party irrevocably submits to the non-exclusive jurisdiction of the courts of New
South Wales.

11.3   Service of process

  (a)   Without preventing any other mode of service, any document in an action
(including any writ of summons or other originating process or any third or
other party notice) may be served on any party by being delivered to or left for
that party at its address for service of notices under clause 11.1.     (b)  
ArcelorMittal irrevocably appoints Mallesons Stephen Jaques (attention: David
Friedlander / Paul Schroder) of Level 61, Governor Phillip Tower, 1 Farrer
Place, Sydney New South Wales 2000, as its agent for the service of process in
Australia in relation to any matter arising out of this deed. If Mallesons
Stephen Jaques ceases to be able to act as such or have an address in Australia,
ArcelorMittal agrees to appoint a new process agent in Australia and deliver to
the other parties within 2 Business Days a copy of a written acceptance of
appointment by the process agent, upon receipt of which the new appointment
becomes effective for the purpose of this deed. ArcelorMittal must inform the
other parties in writing of any change in the address of its process agent
within 2 Business Days of the change.     (c)   Peabody irrevocably appoints
Freehills (attention: Tony Damian / Andrew Rich) of Level 32, MLC Centre, 19
Martin Place, Sydney New South Wales 2000, as its agent for the service of
process in Australia in relation to any matter arising

page 13

--------------------------------------------------------------------------------

 

      (Freehills LOGO) [c65699c6569901.gif]   11 General

      out of this deed. If Freehills ceases to be able to act as such or have an
address in Australia, Peabody agrees to appoint a new process agent in Australia
and deliver to the other parties within 2 Business Days a copy of a written
acceptance of appointment by the process agent, upon receipt of which the new
appointment becomes effective for the purpose of this deed. Peabody must inform
the other parties in writing of any change in the address of its process agent
within 2 Business Days of the change.

11.4   Waivers and variation

  (a)   A provision of, or a right, discretion or authority created under, this
deed may not be:

  (1)   waived except in writing signed by the party granting the waiver; and  
  (2)   varied except in writing signed by the parties,

      except to the extent this deed expressly provides otherwise.     (b)   A
failure or delay in exercise, or partial exercise, of a power, right, authority,
discretion or remedy arising from a breach of, or default under this deed does
not result in a waiver of that right, power, authority, discretion or remedy.

11.5   Assignment

  (a)   Neither AM nor AM BV2 may assign the benefit of this deed without the
written consent of Peabody.     (b)   Neither Peabody Shareholder nor Holdco may
assign the benefit of this deed without the written consent of ArcelorMittal.  
  (c)   Peabody may not transfer or delegate its obligations under this deed
without the written consent of AM and AM BV2.     (d)   ArcelorMittal may not
transfer or delegate its obligations under this deed without the written consent
of Peabody Shareholder and Holdco.

11.6   Further assurances       Each party must do all things and execute all
further documents reasonably necessary to give full effect to this deed and the
transactions contemplated by it.   11.7   Approvals and consent       If the
doing of any act, matter or thing under this deed is dependent on the approval
or consent of a party, that party may give conditionally or unconditionally or
withhold its approval or consent in its absolute discretion, unless this deed
expressly provides otherwise.   11.8   Remedies cumulative       Except as
provided in this deed and permitted by law, the rights, powers and remedies
provided in this deed are cumulative with and not exclusive to the rights,
powers or remedies provided by law independently of this deed.   11.9  
Counterparts       This deed may be executed in any number of counterparts which
together will constitute one instrument. A party may execute this deed by
signing any counterpart.

page 14

--------------------------------------------------------------------------------

 

      (Freehills LOGO) [c65699c6569901.gif]   11 General

11.10   Prohibition and enforceability       Any provision of, or the
application of any provision of, in this deed that is void, illegal or
unenforceable in any jurisdiction is to be read down for the purpose of that
jurisdiction, if possible, so as to be valid and enforceable, and otherwise
shall be severed to the extent of the invalidity, illegality or
unenforceability, without affecting the remaining provisions of this deed or
affecting the validity or enforceability of that provision in any other
jurisdiction.   11.11   No merger       The rights and obligations of the
parties under this deed do not merge on or adversely affect, and is not
adversely affected by, any of the following:

  (a)   completion of any transaction contemplated by this deed;     (b)   any
other guarantee, indemnity, mortgage, charge or other encumbrance, or other
right or remedy to which a party is entitled; or     (c)   a judgment which a
party obtains against another party or any other person in connection with this
deed.

    A party may still exercise its rights under this deed as well as under the
judgment, mortgage, charge or other encumbrance or the right or remedy described
above.   11.12   Entire agreement       This deed embodies the entire agreement
between the parties and supersede any prior negotiation, conduct, arrangement,
understanding or agreement, express or implied, with respect to the subject
matter of this deed.   11.13   Contra proferentem excluded       No term or
condition of this deed will be construed adversely to a party solely on the
ground that the party was responsible for the preparation of this deed or that
provision.   11.14   Attorneys       If this deed is executed by attorneys, each
of the attorneys executing this deed states that the attorney has no notice of
the revocation of the power of attorney appointing that attorney.

page 15

--------------------------------------------------------------------------------

 

(LOGO) [c65699c6569901.gif]
Signing page

         
 
  Executed as a deed
 
   
 
       
 
  Signed, sealed and delivered by    
 
  Peabody Energy Corporation    
 
  by its Authorized Officer    
 
       
sign here ►
  /s/ Robert L. Reilly
 
   
 
  Authorized Officer    
 
       
print name
  Robert L. Reilly
 
   
 
       
 
  in the presence of    
 
       
sign here ►
  /s/ Bryan L. Sutter
 
   
 
  Witness    
 
       
print name
  Bryan L. Sutter
 
   
 
       
 
  Signed, sealed and delivered by    
 
  ArcelorMittal S.A.    
 
  by its attorney    
 
       
sign here ►
  /s/ Peter Kukielski
 
   
 
  Attorney    
 
       
print name
  Peter Kukielski
 
   
 
       
 
  in the presence of    
 
       
sign here ►
  /s/ Sudhir Mahesharari
 
   
 
  Witness    
 
       
print name
  Sudhir Mahesharari
 
   

page 16

--------------------------------------------------------------------------------

 

(LOGO) [c65699c6569901.gif]
Signing page

         
 
  Signed, sealed and delivered by    
 
  ArcelorMittal Netherlands B.V.    
 
  by its attorney    
 
       
sign here ►
  /s/ Carole Whittall
 
   
 
  Attorney    
 
       
print name
  Carole Whittall
 
   
 
       
 
  in the presence of    
 
       
sign here ►
  /s/ Anne Van Ysendyck
 
   
 
  Witness    
 
       
print name
  Anne Van Ysendyck
 
   
 
       
 
  Signed, sealed and delivered by    
 
  ArcelorMittal Mining Australasia B.V.    
 
  by its attorney    
 
       
sign here ►
  /s/ Carole Whittall
 
   
 
  Attorney    
 
       
print name
  Carole Whittall
 
   
 
       
 
  in the presence of    
 
       
sign here ►
  /s/ Anne Van Ysendyck
 
   
 
  Witness    
 
       
print name
  Anne Van Ysendyck
 
   

page 17

--------------------------------------------------------------------------------

 

(LOGO) [c65699c6569901.gif]
Signing page

         
 
  Signed, sealed and delivered by    
 
  Peabody Acquisition Co. No. 3 Pty Ltd in accordance    
 
  with section 127 of the Corporations Act 2001 (Cth)    
 
  by    
 
       
sign here ►
  /s/ Murray Hundleby
 
   
 
  Company Secretary              
print name
  Murray Hundleby
 
   
 
       
sign here ►
  /s/ Julian Derek Thornton
 
   
 
  Director    
 
       
print name
  Julian Derek Thornton    
 
       
 
       
 
  Signed, sealed and delivered by    
 
  Peabody Acquisition Co. No. 2 Pty Ltd in accordance    
 
  with section 127 of the Corporations Act 2001 (Cth)    
 
  by    
 
       
sign here ►
  /s/ Murray Hundleby
 
   
 
  Company Secretary    
 
       
print name
  Murray Hundleby
 
             
 
       
sign here ►
  /s/ Julian Derek Thornton
 
   
 
  Director    
 
       
print name
  Julian Derek Thornton
 
   

page 18