Exhibit 10.1
EXECUTION COPY
THIRD AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT
DATED AS OF JANUARY 25, 2010
BY AND AMONG
P&L RECEIVABLES COMPANY, LLC,
as Seller,
PEABODY ENERGY CORPORATION,
as initial Servicer,
ARCLAR COMPANY, LLC,
PEABODY MIDWEST MINING, LLC,
TWENTYMILE COAL, LLC,
CABALLO COAL, LLC,
COALSALES II, LLC,
PEABODY WESTERN COAL COMPANY,
POWDER RIVER COAL, LLC,
PEABODY HOLDING COMPANY, LLC,
COALTRADE, LLC,
and
COALSALES, LLC,
as Sub-Servicers,
THE VARIOUS CONDUIT PURCHASERS FROM TIME TO TIME PARTY HERETO,
THE VARIOUS RELATED COMMITTED PURCHASERS FROM TIME TO TIME PARTY HERETO,
THE VARIOUS PURCHASER AGENTS FROM TIME TO TIME PARTY HERETO,
THE VARIOUS LC PARTICIPANTS FROM TIME TO TIME PARTY HERETO,
and
PNC BANK, NATIONAL ASSOCIATION,
as Administrator and as LC Bank

 

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TABLE OF CONTENTS

              Page
ARTICLE I. AMOUNTS AND TERMS OF THE INVESTMENTS
    2    
Section 1.1 Investment Facility
    2    
Section 1.2 Making Investments; Initial Investment; Initial Assignment and
Assumption
    3    
Section 1.3 Transfer of Receivables and Other Purchased Assets
    6    
Section 1.4 Terms and Conditions for Sale, Assignment and Transfer
    6    
Section 1.5 Purchased Assets Coverage Percentage Computation
    9    
Section 1.6 Settlement Procedures
    9    
Section 1.7 Fees
    13    
Section 1.8 Payments and Computations, Etc
    14    
Section 1.9 Increased Costs
    15    
Section 1.10 Requirements of Law
    15    
Section 1.11 Inability to Determine Euro-Rate
    16    
Section 1.12 Extension of the Facility Termination Date
    17    
Section 1.13 Letters of Credit
    18    
Section 1.14 Issuance of Letters of Credit
    18    
Section 1.15 Requirements For Issuance of Letters of Credit
    19    
Section 1.16 Disbursements, Reimbursement
    19    
Section 1.17 Repayment of Participation Advances
    20    
Section 1.18 Documentation
    20    
Section 1.19 Determination to Honor Drawing Request
    21    
Section 1.20 Nature of Participation and Reimbursement Obligations
    21    
Section 1.21 Indemnity
    23    
Section 1.22 Liability for Acts and Omissions
    23    
ARTICLE II. REPRESENTATIONS AND WARRANTIES; COVENANTS; TERMINATION EVENTS
    24    
Section 2.1 Representations and Warranties; Covenants
    24    
Section 2.2 Termination Events
    25    
ARTICLE III. INDEMNIFICATION
    25    
Section 3.1 Indemnities by the Seller
    25  

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TABLE OF CONTENTS
(continued)

                Page    
Section 3.2 Indemnities by the Servicer
    27    
ARTICLE IV. ADMINISTRATION AND COLLECTIONS
    27    
Section 4.1 Appointment of the Servicer
    27    
Section 4.2 Duties of the Servicer
    28    
Section 4.3 Lock-Box Arrangements
    29    
Section 4.4 Enforcement Rights
    29    
Section 4.5 Responsibilities of the Seller
    30    
Section 4.6 Servicing Fee
    31    
Section 4.7 Agents
    31    
ARTICLE V. MISCELLANEOUS
    36    
Section 5.1 Amendments, Etc
    36    
Section 5.2 Notices, Etc
    36    
Section 5.3 Successors and Assigns; Assignability; Participations
    37    
Section 5.4 Costs, Expenses and Taxes
    39    
Section 5.5 No Proceedings; Limitation on Payments
    39    
Section 5.6 Confidentiality
    40    
Section 5.7 GOVERNING LAW AND JURISDICTION
    40    
Section 5.8 Execution in Counterparts
    41    
Section 5.9 Survival of Termination; Non-Waiver
    41    
Section 5.10 WAIVER OF JURY TRIAL
    41    
Section 5.11 Entire Agreement
    41    
Section 5.12 Headings
    42    
Section 5.13 Sharing of Recoveries
    42    
Section 5.14 Purchaser Groups’ Liabilities
    42    
 
         
EXHIBIT I             DEFINITIONS
       
EXHIBIT II            CONDITIONS PRECEDENT
       
EXHIBIT III           REPRESENTATIONS AND WARRANTIES
       
EXHIBIT IV           COVENANTS
       
EXHIBIT V            TERMINATION EVENTS
       
SCHEDULE I         CREDIT AND COLLECTION POLICY
       

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TABLE OF CONTENTS
(continued)

              Page  
SCHEDULE II              LOCK-BOX BANKS AND LOCK-BOX ACCOUNTS
       
SCHEDULE III            TRADE NAMES
       
SCHEDULE IV            OFFICE LOCATIONS
       
ANNEX A                    FORM OF INFORMATION PACKAGE
       
ANNEX B                    FORM OF INVESTMENT NOTICE
       
ANNEX C                    FORM OF PAYDOWN NOTICE
       
ANNEX D                    FORM OF COMPLIANCE CERTIFICATE
       
ANNEX E                     FORM OF LETTER OF CREDIT APPLICATION
       
ANNEX F                     FORM OF ASSUMPTION AGREEMENT
       
ANNEX G                    FORM OF TRANSFER SUPPLEMENT
       

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     This THIRD AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT (as amended,
supplemented or otherwise modified from time to time, this “Agreement”) is
entered into as of January 25, 2010, by and among P&L RECEIVABLES COMPANY, LLC,
a Delaware limited liability company, as seller (the “Seller”), PEABODY ENERGY
CORPORATION, a Delaware corporation (“Peabody”), as initial servicer (in such
capacity, collectively, together with its successors and permitted assigns in
such capacity, the “Servicer”), ARCLAR COMPANY, LLC, an Indiana limited
liability company, PEABODY MIDWEST MINING, LLC, an Indiana limited liability
company, TWENTYMILE COAL, LLC, a Delaware limited liability company, CABALLO
COAL, LLC, a Delaware limited liability company, COALSALES II, LLC, a Delaware
limited liability company, PEABODY WESTERN COAL COMPANY, a Delaware corporation,
POWDER RIVER COAL, LLC, a Delaware limited liability company, PEABODY HOLDING
COMPANY, LLC, a Delaware limited liability company, COALTRADE, LLC, a Delaware
limited liability company, COALSALES, LLC, a Delaware limited liability company
(each a “Sub-Servicer” and collectively the “Sub-Servicers”), the various
CONDUIT PURCHASERS from time to time party hereto, the various RELATED COMMITTED
PURCHASERS from time to time party hereto, the various LC PARTICIPANTS from time
to time party hereto, the various PURCHASER AGENTS from time to time party
hereto, and PNC BANK, NATIONAL ASSOCIATION, a national banking association
(“PNC”), as administrator (in such capacity, together with its successors and
assigns in such capacity, the “Administrator”) and as issuer of Letters of
Credit (in such capacity, together with its successors and assigns in such
capacity, the “LC Bank”).
     PRELIMINARY STATEMENTS. Certain terms that are capitalized and used
throughout this Agreement are defined in Exhibit I. References in the Exhibits
hereto to the “Agreement” refer to this Agreement, as amended, supplemented or
otherwise modified from time to time.
     The Seller desires to sell, transfer and assign receivables, and the
Purchasers desire to acquire such receivables from time to time on the terms and
subject to the conditions set forth herein.
     This Agreement amends and restates in its entirety, as of the Closing Date,
the Second Amended and Restated Receivables Purchase Agreement, dated as of
December 15, 2009 (as amended, restated, supplemented or otherwise modified
prior to the date hereof, the “Original Agreement”), among the Seller, the
Servicer, the Sub-Servicers, Market Street Funding LLC and the Administrator.
Notwithstanding the amendment and restatement of the Original Agreement by this
Agreement, (i) the Seller and Servicer shall continue to be liable to PNC,
Market Street Funding LLC or any other Indemnified Party or Affected Person (as
such terms are defined in the Original Agreement) for fees and expenses which
are accrued and unpaid under the Original Agreement on the date hereof
(collectively, the “Original Agreement Outstanding Amounts”) and all agreements
to indemnify such parties in connection with events or conditions arising or
existing prior to the effective date of this Agreement and (ii) the security
interest created under the Original Agreement shall remain in full force and
effect as security for such Original Agreement Outstanding Amounts until such
Original Agreement Outstanding Amounts shall have been paid in full. Upon the
effectiveness of this Agreement, each reference to the Original Agreement in any
other document, instrument or agreement shall mean and be a reference to this
Agreement. Nothing contained herein, unless expressly herein stated to the
contrary, is intended

 

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to amend, modify or otherwise affect any other instrument, document or agreement
executed and/or delivered in connection with the Original Agreement.
     In consideration of the mutual agreements, provisions and covenants
contained herein, the parties hereto agree as follows:
ARTICLE I.
AMOUNTS AND TERMS OF THE INVESTMENTS
     Section 1.1 Investment Facility.
     (a) On the terms and subject to the conditions hereof, the Seller may, from
time to time before the Facility Termination Date, (i) ratably (based on the
aggregate Commitments of the Related Committed Purchasers in their respective
Purchaser Groups) request that the Conduit Purchasers, or, only if a Conduit
Purchaser denies such request or is unable to fund (and provides notice of such
denial or inability to the Seller, the Administrator and its Purchaser Agent),
ratably request that the Related Committed Purchasers, make investments (each,
an “Investment”) in the Purchased Assets and (ii) request that the LC Bank issue
or cause the issuance of Letters of Credit. Subject to Section 1.6(b) concerning
reinvestments, at no time will a Conduit Purchaser have any obligation to make
an Investment. Each Related Committed Purchaser severally hereby agrees, on the
terms and subject to the conditions hereof, to make Investments from time to
time from the date hereof to the Facility Termination Date, based on the
applicable Purchaser Group’s Percentage of each Investment requested pursuant to
Section 1.2(a) (and, in the case of each Related Committed Purchaser, its
Commitment Percentage of its Purchaser Group’s Percentage of such Investment)
and, on the terms of and subject to the conditions of this Agreement, the LC
Bank agrees to issue Letters of Credit in return for (and each LC Participant
hereby severally agrees to make participation advances in connection with any
draws under such Letters of Credit equal to such LC Participant’s Pro Rata Share
of such draws), the Purchased Assets from time to time from the date hereof to
the Facility Termination Date; provided, that under no circumstances shall any
Purchaser make any Investment (including, without limitation, any mandatory
deemed Investment pursuant to Section 1.1(b)) or issue any Letters of Credit
hereunder, as applicable, if, after giving effect to such Investment or
issuance, the (i) Group Capital of such Purchaser’s Purchaser Group would exceed
(A) its Purchaser Group’s Group Commitment (as the same may be reduced from time
to time pursuant to Section 1.1(c)) minus (B) the related LC Participant’s Pro
Rata Share of the LC Participation Amount, (ii) the Aggregate Capital plus the
LC Participation Amount would exceed the Purchase Limit, (iii) the LC
Participation Amount would exceed the aggregate of the Commitments of the LC
Bank and the LC Participants or (iv) the Purchased Assets Coverage Percentage
would exceed 100%.
     The Seller may, subject to the requirements and conditions set forth
herein, use the proceeds of any Investment or Reinvestment by the Purchasers
hereunder, to satisfy its Reimbursement Obligation to the LC Bank and the LC
Participants (ratably, based on the outstanding amounts funded by the LC Bank
and each such LC Participant) pursuant to Section 1.16 below.

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     (b) In addition, in the event the Seller fails to reimburse the LC Bank and
each applicable LC Participant for the full amount of any drawing under any
Letter of Credit on the applicable Drawing Date (out of its own funds available
therefor, or otherwise, at such time), pursuant to Section 1.16, then the Seller
shall, automatically (and without the requirement of any further action on the
part of any Person hereunder), be deemed to have requested a new Investment from
the Conduit Purchasers or Related Committed Purchasers, as applicable, on such
date, pursuant to the terms hereof, in an amount equal to the amount of such
Reimbursement Obligation at such time. Subject to the limitations on funding set
forth in Section 1.1(a) above (and otherwise herein), the Conduit Purchasers or
Related Committed Purchasers, as applicable, shall fund such deemed Investment
request and deliver the proceeds thereof directly to the Administrator to be
immediately distributed (ratably) to the LC Bank and the applicable LC
Participants in satisfaction of the Seller’s Reimbursement Obligation pursuant
to Section 1.16 below, to the extent of the amounts permitted to be funded by
the Conduit Purchasers or Related Committed Purchasers, as applicable, at such
time, hereunder.
     (c) The Seller may, upon at least 30 days’ written notice to the
Administrator, irrevocably reduce the unused portion of the Purchase Limit in
whole or in part (but not below the amount that would cause the Aggregate
Capital plus the LC Participation Amount to exceed the Purchase Limit or would
cause the Group Capital of any Purchaser Group to exceed its Group Commitment,
in each case, after giving effect to such reduction); provided, that each
partial reduction shall be in the amount of at least $5,000,000, or an integral
multiple of $1,000,000 in excess thereof, and that, unless terminated in whole,
the Purchase Limit shall in no event be reduced below $50,000,000. Each
reduction in the Commitments hereunder shall be made ratably among the
Purchasers in accordance with their respective Purchaser Group’s Percentages and
their respective Commitments. The Administrator shall promptly advise the
Purchaser Agents of any notice pursuant to this Section 1.1(c); it being
understood that (in addition to and without limiting any other requirements for
termination, prepayment and/or the funding of the LC Collateral Account
hereunder) no such reduction shall be effective unless and until (i) in the case
of a reduction of the Purchase Limit in whole to zero ($0), the amount on
deposit in the LC Collateral Account is at least equal to the then outstanding
LC Participation Amount and (ii) in the case of a partial reduction, the amount
on deposit in the LC Collateral Account is at least equal to the difference
between the then outstanding LC Participation Amount and the Purchase Limit as
so reduced by such partial reduction.
     Section 1.2 Making Investments; Initial Investment; Initial Assignment and
Assumption.
     (a) Each request for any Investment hereunder may be made on any day upon
the Seller’s irrevocable written notice in the form of Annex B (each, an
“Investment Notice”) delivered to the Administrator and each Purchaser Agent in
accordance with Section 5.2 (which notice must be received by the Administrator
and each Purchaser Agent before 11:00 a.m., New York City time) at least two
Business Days before the requested Investment Date, which notice shall specify:
(A) the amount requested to be paid to the Seller (such amount, which shall not
be less than $300,000 and shall be in integral multiples of $100,000, with
respect to each Purchaser Group, (B) the requested date of such Investment
(which shall be a Business Day) and (C) the

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pro forma calculation of the Purchased Assets Coverage Percentage after giving
effect to the increase in the Capital.
     (b) On the date of each Investment hereunder, each applicable Purchaser
(determined in accordance with Section 1.1(a)) shall, upon satisfaction of the
applicable conditions set forth in Exhibit II, make available to the Seller in
same day funds, at Bank of America, N.A., account number 4426927763, ABA
No. 026009593, an amount equal to the Capital of the Investment being funded by
such Purchaser.
     (c) Notwithstanding the otherwise applicable conditions precedent to
Investments hereunder, upon effectiveness of this Agreement in accordance with
its terms and immediately prior to giving effect to Section 1.2(d) below, Market
Street Funding LLC, as a Conduit Purchaser, shall be deemed to have outstanding
Capital hereunder equal to its outstanding Capital under the Original Agreement
immediately prior to the effectiveness of this Agreement.
     (d) Immediately upon effectiveness of this Agreement in accordance with its
terms and after giving effect to Section1.2(c) above:
     (i) Market Street Funding LLC, as a Related Committed Purchaser, hereby
assigns and delegates to Calyon New York Branch, as a Related Committed
Purchaser, $100,000,000 of Market Street Funding LLC’s existing $275,000,000
Commitment and the related obligation hereunder to make Investments and
Reinvestments from time to time in accordance with the terms hereof, and Calyon
New York Branch, as a Related Committed Purchaser, hereby assumes such
$100,000,000 Commitment and such obligation hereunder to make Investments and
Reinvestments from time to time in accordance with the terms hereof;
     (ii) Market Street Funding LLC, as a Conduit Purchaser and as a Related
Committed Purchaser, hereby assigns and delegates to Atlantic Asset
Securitization LLC, as a Conduit Purchaser, $70,363,636 of the outstanding
Capital funded by Market Street Funding LLC through the date hereof, and
Atlantic Asset Securitization LLC, as a Conduit Purchaser, hereby accepts such
$70,363,636 of outstanding Capital so assigned; provided, that payment by
Atlantic Asset Securitization LLC to Market Street Funding LLC of the amount
payable by Atlantic Asset Securitization LLC pursuant to the following paragraph
shall be a condition precedent to the assignment effected by this clause (ii);
and
     (iii) PNC Bank, National Association, as an LC Participant, hereby assigns
and delegates to Calyon New York Branch, as an LC Participant, $100,000,000 of
PNC Bank, National Association’s $275,000,000 Commitment and the related
obligation hereunder to make participation advances to the LC Bank from time to
time in accordance with the terms hereof, and Calyon New York Branch, as an LC
Participant, hereby assumes such $100,000,000 Commitment and such obligation
hereunder to make participation advances to the LC Bank from time to time in
accordance with the terms hereof.

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     As consideration for the foregoing assignments and assumptions, Atlantic
Asset Securitization LLC shall pay to Market Street Funding LLC by wire transfer
of immediately available funds to the account specified by Market Street Funding
LLC (or by its Purchaser Agent on its behalf) on the date hereof, $70,363,636.
After giving effect to the assignments and assumptions described in this
Section 1.2(d) and effective as of the Closing Date:
     (i) there shall be two Purchaser Groups as follows, one of which consists
of Market Street Funding LLC, as a Conduit Purchaser and as a Related Committed
Purchaser, and PNC Bank, National Association, as LC Bank and as an LC
Participant, and the other of which consists of Altantic Asset Securitization
LLC, as a Conduit Purchaser, and Calyon New York Branch, as a Related Committed
Purchaser and as an LC Participant;
     (ii) the Group Commitment of Market Street Funding LLC’s Purchaser Group
shall be $175,000,000, and the Group Commitment of Atlantic Asset Securitization
LLC’s Purchaser Group shall be $100,000,000;
     (iii) the Commitment of Market Street Funding LLC, as a Related Committed
Purchaser shall be $175,000,000, and the Commitment of Calyon New York Branch,
as a Related Committed Purchaser shall be $100,000,000;
     (iv) the Commitment of PNC Bank, National Association, as LC Bank and as an
LC Participant shall be $175,000,000, and the Commitment of Calyon New York
Branch, as an LC Participant shall be $100,000,000;
     (v) the Aggregate Capital shall be $193,500,000, the Capital funded by
Market Street Funding LLC shall be $123,136,364, and the Capital funded by
Atlantic Asset Securitization LLC shall be $70,363,636;
     (vi) Atlantic Asset Securitization LLC shall have the rights and
obligations of a Conduit Purchaser hereunder, and Calyon New York Branch shall
have the rights and obligations of a Related Committed Purchaser and LC
Participant hereunder, to the extent of the Commitments so assigned to and
assumed by them, respectively; and
     (vii) Market Street Funding LLC and PNC Bank, National Association shall,
to the extent of the assignment by them pursuant to this Section 1.2(d), be
released from the portion of their respective Commitments so assigned.
     The parties hereto acknowledge and agree that the assignments and
assumptions effected by this Section 1.2(d) shall be deemed to satisfy the
requirements of Section 1.4(g) and Section 5.3(c) hereof relating to the
execution and delivery of an Assumption Agreement and a Transfer Supplement and
any other requirements hereunder and under the Original Agreement for
assignments of Capital and Commitments.

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     Section 1.3 Transfer of Receivables and Other Purchased Assets.
     (a) Sale of Receivables. In consideration of the Investments, assignments
and assumptions described in Sections 1.2(c) and 1.2(d) above, the entry into
this Agreement by the Administrator, the Purchasers and the Purchaser Agents and
the Administrator’s agreement (on behalf of the applicable Purchasers) to make
payments to the Seller from time to time in accordance with Section 1.4,
effective on the Closing Date, the Seller hereby sells, conveys, transfers and
assigns to the Administrator, on behalf of the Purchasers, all of Seller’s
right, title and interest in and to (i) all Pool Receivables existing on the
Closing Date or thereafter arising or acquired by the Seller from time to time
prior to the Facility Termination Date and (ii) all Related Security, whether
existing on the Closing Date or thereafter arising at any time and acquired by
the Seller.
     (b) Purchase of Purchased Assets. Subject to the terms and conditions
hereof, the Administrator (on behalf of the Purchasers) hereby purchases and
accepts from the Seller the Pool Receivables and all other Related Security
sold, assigned and transferred pursuant to Section 1.3(a) (collectively, the
“Purchased Assets”).
     (c) Obligations Not Assumed. The foregoing sale, assignment and transfer
does not constitute and is not intended to result in the creation, or an
assumption by the Administrator, any Purchaser Agent or any Purchaser, of any
obligation of the Seller, any Originator or any other Person under or in
connection with the Receivables or any other Related Security, all of which
shall remain the obligations and liabilities of the Seller, the Originator
and/or such other Person, as applicable.
     Section 1.4 Terms and Conditions for Sale, Assignment and Transfer. Subject
to the terms and conditions hereof, including Exhibit II, in consideration for
the sale, assignment and transfer of the Purchased Assets by the Seller to the
Administrator (on behalf of the Purchasers) hereunder:
     (a) Investments. On the Closing Date, and thereafter from time to time
prior to the Facility Termination Date, on request of the Seller for an
Investment in accordance with Section 1.2(a), the applicable Purchasers in each
Purchaser Group (determined in accordance with Section 1.1(a)), in accordance
with Section 1.2(b), shall pay to the Seller the applicable Purchaser Group’s
Percentage of the amount requested by the Seller under Section 1.2(a).
     (b) Reinvestments. On each Business Day prior to the Facility Termination
Date, the Servicer, on behalf of the Administrator, shall pay to the Seller, out
of Collections of the Pool Receivables, the amount available for reinvestment in
accordance with Section 1.6(b)(ii). Each such payment is herein referred to as a
“Reinvestment”.
     (c) Deferred Purchase Price. The Servicer, on behalf of the Administrator
and the Purchasers, shall pay to the Seller, from Collections, the amounts
payable to the Seller from time to time pursuant to Section 1.6(b)(ii),
Section 1.6(b)(iv) and clause sixth of Section 1.6(d)(ii) (such amounts, the
“Deferred Purchase Price” with respect to the Purchased Assets) at the times
specified in such Sections. The parties hereto acknowledge and agree that the
Administrator and

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the Purchasers shall have the right to, and intend to, set off (i) the Seller’s
obligation to pay (or cause to be paid) to the Purchasers (or to the
Administrator on their behalf) all Collections on the portion of the Purchased
Assets attributable to the Deferred Purchase Price against (ii) the
Administrator’s and the Purchasers’ obligations to pay (or cause to be paid) to
the Seller the Deferred Purchase Price.
     (d) Seller Payments Limited to Collections. Notwithstanding any provision
contained in this Agreement to the contrary, none of the Administrator, the
Purchaser Agents or the Purchasers shall be obligated to pay any amount to the
Seller as the purchase price of the Purchased Assets pursuant to subsections (b)
and (c) above except to the extent of Collections on Receivables available for
distribution to the Seller in accordance with this Agreement. Any amount that
the Administrator, any Purchaser Agent or any Purchaser does not pay pursuant to
the preceding sentence shall not constitute a claim (as defined in § 101 of the
Bankruptcy Code) against or corporate obligation of such Person for any such
insufficiency unless and until such amount becomes available for distribution to
the Seller in accordance with Section 1.6(d)(ii).
     (e) Intent of the Parties. The Seller, the Administrator, the Purchaser
Agents and the Purchasers intend that the sale, assignment and transfer of
Purchased Assets to the Administrator (on behalf of the Purchasers) shall be
treated as a sale for all purposes (other than for federal, state and local
income and franchise tax purposes as provided in the following paragraph of this
clause (e)). If notwithstanding the intent of the parties, such sale, transfer
and assignment is not treated as a sale for such purposes, such sale, assignment
and transfer shall be treated as the grant of, and the Seller does hereby grant
to the Administrator (for the benefit of the Purchasers) a security interest in
the following property to secure all of the Seller’s obligations (monetary or
otherwise) under this Agreement and the other Transaction Documents to which it
is a party, whether now or hereafter existing or arising, due or to become due,
direct or indirect, absolute or contingent: all of the Seller’s right, title and
interest in, to and under all of the following, whether now or hereafter owned,
existing or arising: (i) all Pool Receivables, (ii) all Related Security with
respect to such Pool Receivables, (iii) all Collections with respect to such
Pool Receivables, (iv) the Lock-Box Accounts and all amounts on deposit therein,
and all certificates and instruments, if any, from time to time evidencing such
Lock-Box Accounts and amounts on deposit therein, (v) all rights (but none of
the obligations) of the Seller, including any security interests granted to it,
under the Sale Agreement and the Contribution Agreement, (vi) the Servicer Note
and (vii) all proceeds of, and all amounts received or receivable under any or
all of, the foregoing (collectively, the “Pool Assets”). The Seller hereby
authorizes the Administrator to file financing statements describing as the
collateral covered thereby as “all assets of the debtor, whether now owned or
hereafter created, acquired or arising, and all proceeds of the foregoing” or
words to that effect, notwithstanding that such wording may be broader in scope
than the collateral described in this Agreement. The Administrator, for the
benefit of the Purchasers, shall have, with respect to the Pool Assets, and in
addition to all the other rights and remedies available to the Administrator and
the Purchasers, all the rights and remedies of a secured party under any
applicable UCC.
     Notwithstanding the foregoing paragraph of this clause (e), the Seller, the
Administrator, the Purchaser Agents, the Purchasers and all other parties to
this Agreement intend and agree to treat, for U.S. federal, state and local
income and franchise tax (in the nature of income tax)

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purposes only, the sale, assignment and transfer of the Purchased Assets to the
Administrator (on behalf of the Purchasers) as a loan to the Seller secured by
the Pool Assets. The provisions of this Agreement and all related Transaction
Documents shall be construed to further these intentions of the parties.
     (f) LC Participant Investments. Whenever the LC Bank issues a Letter of
Credit pursuant to Section 1.14 hereof, each LC Participant shall, automatically
and without further action of any kind upon the effective date of issuance of
such Letter of Credit, have irrevocably deemed to make an Investment hereunder
in the event that such Letter of Credit is subsequently drawn and such drawn
amount shall not have been reimbursed pursuant to Section 1.16 upon such draw.
All such Investments shall comprise Base Rate Portions of Capital in an amount
equal to the amount of such draw (without regard to the numerical requirements
set forth in Section 1.2(a)), shall be made ratably by the LC Participants
according to their Pro Rata Shares and shall accrue Discount. In the event that
any Letter of Credit expires or is surrendered without being drawn (in whole or
in part) then, in such event, the foregoing commitment to make Investments shall
expire with respect to such Letter of Credit and the LC Participation Amount
shall automatically reduce by the amount of the Letter of Credit which is no
longer outstanding.
     (g) Additional Purchasers or Purchaser Groups. The Seller may, with the
written consent of the Administrator (and, in the case of a new LC Participant,
the LC Bank), which consent may be granted or withheld in their sole discretion,
add additional Persons as Purchasers (either to an existing Purchaser Group or
by creating new Purchaser Groups) or cause an existing Related Committed
Purchaser or related LC Participant to increase its Commitment in connection
with a corresponding increase in the Purchase Limit; provided, that the
Commitment of any Related Committed Purchaser or related LC Participant may only
be increased with the prior written consent of such Related Committed Purchaser
or related LC Participant. Each new Conduit Purchaser, Related Committed
Purchaser or related LC Participant (or Purchaser Group) shall become a party
hereto, by executing and delivering to the Administrator, each Purchaser Agent
and the Seller, an Assumption Agreement in the form of Annex F hereto (which
Assumption Agreement shall, in the case of any new Conduit Purchaser, Related
Committed Purchaser or LC Participant, be executed by each Person in such new
Purchaser’s Purchaser Group).
     (h) Nature of Obligations; Defaulting Purchasers. Each Related Committed
Purchaser’s and related LC Participant’s obligations hereunder shall be several,
such that the failure of any Related Committed Purchaser or related LC
Participant to make a payment in connection with any Investment or drawing under
a Letter of Credit hereunder, as the case may be, shall not relieve any other
Related Committed Purchaser or related LC Participant of its obligation
hereunder to make payment for any such Investment or drawing. Further, in the
event any Related Committed Purchaser or related LC Participant fails to satisfy
its obligation to make an Investment or payment with respect to such drawing as
required hereunder, upon receipt of notice of such failure from the
Administrator (or any relevant Purchaser Agent), subject to the limitations set
forth herein, the non-defaulting Related Committed Purchasers or related LC
Participants in such defaulting Related Committed Purchaser’s or related LC
Participant’s Purchaser Group shall fund the defaulting Related Committed
Purchaser’s or related LC Participant’s Commitment Percentage of the related
Investment or drawing pro rata in proportion

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to their relative Commitment Percentages (determined without regard to the
Commitment Percentage of the defaulting Related Committed Purchaser or related
LC Participant; it being understood that a defaulting Related Committed
Purchaser’s or related LC Participant’s Commitment Percentage of any such
Investment or drawing shall be first funded by the Related Committed Purchasers
or related LC Participants in such defaulting Related Committed Purchaser’s or
related LC Participant’s Purchaser Group and thereafter if there are no other
Related Committed Purchasers or related LC Participants in such Purchaser Group
or if such other Related Committed Purchasers or related LC Participants are
also defaulting Related Committed Purchasers or related LC Participants, then
such defaulting Related Committed Purchaser’s or related LC Participant’s
Commitment Percentage of such Investment or drawing shall be funded by each
other Purchaser Group ratably and applied in accordance with this
Section 1.4(h)). Notwithstanding anything in this Section 1.4(h) to the
contrary, no Related Committed Purchaser or related LC Participant shall be
required to make any Investment or payment with respect to such drawing pursuant
to this Section 1.4(h) for an amount which would cause the aggregate Capital of
such Related Committed Purchaser or the related LC Participant’s Pro Rata Share
of the LC Participation Amount (after giving effect to such Investment or
payment with respect to such drawing) to exceed its Commitment.
     Section 1.5 Purchased Assets Coverage Percentage Computation.
          The Purchased Assets Coverage Percentage shall be initially computed
on the Closing Date. Thereafter, until the Facility Termination Date, such
Purchased Assets Coverage Percentage shall be automatically recomputed (or
deemed to be recomputed) on each Business Day other than a Termination Day. From
and after the occurrence of any Termination Day, the Purchased Assets Coverage
Percentage shall (until the event(s) giving rise to such Termination Day are
satisfied or are waived in accordance with Section 5.1) be deemed to be 100%.
The Purchased Assets Coverage Percentage shall become zero when the Final Payout
Date has occurred and the Servicer shall have received the accrued Servicing Fee
thereon.
     Section 1.6 Settlement Procedures.
     (a) The collection of the Pool Receivables shall be administered by the
Servicer in accordance with this Agreement. The Seller shall provide to the
Servicer on a timely basis all information needed for such administration,
including notice of the occurrence of any Termination Day and current
computations of the Purchased Assets Coverage Percentage.
     (b) The Servicer shall, on each day on which Collections of Pool
Receivables are received (or deemed received) by the Seller or the Servicer:
     (i) set aside and hold in trust (and shall, at the request of the
Administrator, segregate in a separate account approved by the Administrator)
for the benefit of the Purchasers, out of such Collections, first, an amount
equal to the Aggregate Discount accrued through such day for each Portion of
Capital and not previously set aside, second, an amount equal to the Fees
accrued and unpaid through such day, and third, to the extent funds are
available therefor, an amount equal to the Servicing Fee accrued through such
day and not previously set aside,

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     (ii) subject to Section 1.6(f), if such day is not a Termination Day, remit
to the Seller the remainder of such Collections. Such remainder shall, (x) to
the extent representing a return of the Aggregate Capital, be automatically
reinvested (ratably among the Purchasers according to each Purchaser’s Capital)
in Pool Receivables, and in the Related Security, Collections and other proceeds
with respect thereto and (y) to the extent not representing a return of the
Aggregate Capital, be paid to the Seller in respect of the Deferred Purchase
Price for the Purchased Assets; provided, however, that if the Purchased Assets
Coverage Percentage would exceed 100%, then the Servicer shall not reinvest or
remit to the Seller, but shall set aside and hold in trust for the benefit of
the Purchasers (and shall, at the request of the Administrator, segregate in a
separate account approved by the Administrator) a portion of such Collections
that, together with the other Collections set aside pursuant to this paragraph,
shall equal the amount necessary to reduce the Purchased Assets Coverage
Percentage to 100% (determined as if such Collections set aside had been applied
to reduce the Aggregate Capital at such time), which amount shall be deposited
to the Administration Account (for the benefit of the Purchasers) on the next
Settlement Date in accordance with Section 1.6(c); provided, further, that
(x) in the case of any Purchaser that is a Conduit Purchaser, if such Purchaser
has provided notice (a “Declining Notice”) to its Purchaser Agent, the
Administrator, and the Servicer that such Purchaser (a “Declining Conduit
Purchaser”) no longer wishes Collections with respect to any Portion of Capital
funded or maintained by such Purchaser to be reinvested pursuant to this clause
(ii), and (y) in the case of any Purchaser that has provided notice (an “Exiting
Notice”) to its Purchaser Agent of its refusal, pursuant to Section 1.12, to
extend its Commitment hereunder (an “Exiting Purchaser”) then in either case
(x) or (y), above, such Purchaser’s ratable share (determined according to
outstanding Capital) of such remaining Collections shall not be reinvested or
remitted to the Seller and shall instead be held in trust for the benefit of
such Purchaser and applied in accordance with clause (iii) below,
     (iii) if such day is a Termination Day (or any day following the provision
of a Declining Notice or an Exiting Notice), set aside, segregate and hold in
trust (and shall, at the request of the Administrator, segregate in a separate
account approved by the Administrator) for the benefit of the Purchasers the
entire remainder of such Collections (or in the case of a Declining Conduit
Purchaser or an Exiting Purchaser an amount equal to such Purchaser’s ratable
share (determined according to outstanding Capital) of such Collections;
provided, that solely for the purpose of determining such Purchaser’s ratable
share of such Collections, such Purchaser’s Capital shall be deemed to remain
constant from the date of the provision of a Declining Notice or an Exiting
Notice, as the case may be, until the date such Purchaser’s Capital has been
paid in full; it being understood that if such day is also a Termination Day,
such Declining Conduit Purchaser’s or Exiting Purchaser’s Capital shall be
recalculated taking into account amounts received by such Purchaser in respect
of this parenthetical and thereafter Collections shall be set aside for such
Purchaser ratably in respect of its Capital (as recalculated)); provided,
further, that if amounts are set aside and held in trust on any Termination Day
of the type described in clause (a) of the definition of “Termination Day” (or
any day following the provision of a Declining Notice or an Exiting Notice) and,
thereafter, the conditions set forth in Section 2 of Exhibit II are satisfied or
waived by the Administrator and the Majority Purchaser

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Agents (or in the case of a Declining Notice or an Exiting Notice, such
Declining Notice or Exiting Notice, as the case may be, has been revoked by the
related Declining Conduit Purchaser or Exiting Purchaser, respectively and
written notice thereof has been provided to the Administrator, the related
Purchaser Agent and the Servicer), such previously set-aside amounts shall, to
the extent representing a return of Aggregate Capital (or the Capital of the
Declining Conduit Purchaser or Exiting Purchaser, as the case may be) and
ratably (determined according to outstanding Capital), be reinvested and/or paid
to the Seller in respect of the Deferred Purchase Price for the Purchased Assets
in accordance with clause (ii) above on the day of such subsequent satisfaction
or waiver of conditions or revocation of Declining Notice or Exiting Notice, as
the case may be, and
     (iv) subject to Section 1.6(f), pay to the Seller (on behalf of the
Administrator and the Purchasers) for the Seller’s own account and in payment of
the Deferred Purchase Price for the Purchased Assets any Collections in excess
of: (x) amounts required to be reinvested in accordance with clause (ii) above
or the last proviso to clause (iii) above, plus (y) the amounts that are
required to be set aside pursuant to clause (i) above, the provisos to clause
(ii) and clause (iii) above, plus (z) all reasonable and appropriate
out-of-pocket costs and expenses of the Servicer for servicing, collecting and
administering the Pool Receivables.
     (c) The Servicer shall, in accordance with the priorities set forth in
Section 1.6(d), deposit into the Administration Account (or such other account
designated by the Administrator), on each Settlement Date (or, solely with
respect to Collections held for the Purchasers pursuant to Section 1.6(f)(iii),
such other date approved by the Administrator with at least five (5) Business
Days prior written notice to the Administrator of such payment), Collections
held for the Purchasers pursuant to Section 1.6(b)(i) or 1.6(f) plus the amount
of Collections then held for the Purchasers pursuant to clauses (b)(ii) and
(iii) of Section 1.6; provided, that if Peabody or an Affiliate thereof is the
Servicer, such day is not a Termination Day and the Administrator has not
notified Peabody (or such Affiliate) that the right to retain the portion of
Collections set aside pursuant to Section 1.6(b)(i) that represents the
Servicing Fee is revoked, Peabody (or such Affiliate) may retain the portion of
the Collections set aside pursuant to Section 1.6(b)(i) that represents the
Servicing Fee in payment in full of the accrued Servicing Fees so set aside. On
the last day of each Settlement Period, the Administrator will notify the
Servicer by facsimile of the amount of Discount accrued with respect to each
Portion of Capital during such Settlement Period or portion thereof.
     (d) Upon receipt of funds deposited into the Administration Account
pursuant to clause (c) above, the Administrator shall cause such funds to be
distributed as follows:
     (i) if such distribution occurs on a day that is not a Termination Day and
the Purchased Assets Coverage Percentage does not exceed 100%, first to the
Purchaser Agents (for the benefit of the Purchasers in their respective
Purchaser Groups) in payment in full of all accrued Discount and Fees with
respect to each Portion of Capital, and second, if the Servicer has set aside
amounts in respect of the Servicing Fee pursuant to clause (b)(i) above and has
not retained such amounts pursuant to clause (c) above, to

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the Servicer (payable in arrears on each Settlement Date) in payment in full of
the accrued Servicing Fees so set aside, and
     (ii) if such distribution occurs on a Termination Day or on a day when the
Purchased Assets Coverage Percentage exceeds 100%, first to the Purchaser Agents
(for the benefit of the Purchasers in their respective Purchaser Groups) in
payment in full of all accrued Discount and Fees with respect to each Portion of
Capital, second to the Purchaser Agents (for the benefit of the Purchasers in
their respective Purchaser Groups) in payment in full of Capital (or, if such
day is not a Termination Day, the amount necessary to reduce the Purchased
Assets Coverage Percentage to 100%) (determined as if such Collections had been
applied to reduce the aggregate outstanding Capital), third, to the LC
Collateral Account for the benefit of the LC Bank and the LC Participants, the
amount (if any) necessary to cause the amount of cash collateral held in the LC
Collateral Account to equal the aggregate outstanding amount of the LC
Participation Amount (or, if such day is not a Termination Day, the amount
necessary to reduce the Purchased Assets Coverage Percentage to 100%)
(determined as if such Collections had been applied to reduce the aggregate
outstanding amount of the LC Participation Amount), fourth, to the Servicer in
payment in full of all accrued Servicing Fees, fifth, if the Capital and accrued
Discount with respect to each Portion of Capital have been reduced to zero, and
all accrued Servicing Fees payable to the Servicer have been paid in full, to
the Purchaser Agents (for the benefit of such Purchaser Agent and the Purchasers
in their respective Purchaser Groups), the Administrator and any other
Indemnified Party or Affected Person in payment in full of any other amounts
owed thereto by the Seller hereunder, and sixth, after the occurrence of the
Final Payout Date, all additional Collections with respect to the Purchased
Assets shall be paid to the Seller for its own account in payment of the
Deferred Purchase Price for such Purchased Assets.
     (e) For the purposes of this Section 1.6:
     (i) if on any day the Outstanding Balance of any Pool Receivable is reduced
or adjusted as a result of any defective, rejected, returned, repossessed or
foreclosed goods or services, or any revision, cancellation, allowance, rebate,
discount or other adjustment made by the Seller or any Affiliate of the Seller,
or any setoff or dispute between the Seller or any Affiliate of the Seller and
an Obligor, the Seller shall be deemed to have received on such day a Collection
of such Pool Receivable in the amount of such reduction or adjustment;
     (ii) if on any day any of the representations or warranties in Section l(g)
or (n) of Exhibit III is not true with respect to any Pool Receivable, the
Seller shall be deemed to have received on such day a Collection of such Pool
Receivable in full;
     (iii) except as provided in clause (i) or (ii) above, or as otherwise
required by applicable law or the relevant Contract, all Collections received
from an Obligor of any Receivable shall be applied to the Receivables of such
Obligor in the order of the age of such Receivables, starting with the oldest
such Receivable, unless such Obligor designates in writing its payment for
application to specific Receivables; and

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     (iv) if and to the extent the Administrator, any Purchaser Agent or any
Purchaser shall be required for any reason to pay over to an Obligor (or any
trustee, receiver, custodian or similar official in any Insolvency Proceeding)
any amount received by it hereunder, such amount shall be deemed not to have
been so received by the Administrator, such Purchaser Agent or such Purchaser
but rather to have been retained by the Seller and, accordingly, the
Administrator, such Purchaser Agent or such Purchaser, as the case may be, shall
have a claim against the Seller for such amount, payable when and to the extent
that any distribution from or on behalf of such Obligor is made in respect
thereof.
     (f) If at any time the Seller shall wish to cause the reduction of
Aggregate Capital (but not to commence the liquidation, or reduction to zero, of
the entire Aggregate Capital), the Seller may do so as follows:
     (i) the Seller shall give the Administrator, each Purchaser Agent and the
Servicer written notice in the form of Annex C (the “Paydown Notice”) (A) at
least two Business Days’ prior to the date of such reduction for any reduction
of Aggregate Capital less than or equal to $20,000,000 and (B) at least five
Business Days’ prior to the date of such reduction for any reduction of
Aggregate Capital greater than $20,000,000, in each case such notice shall
include the amount of such reduction and the proposed date on which such
reduction shall commence;
     (ii) on the proposed date of the commencement of such reduction and on each
day thereafter, the Servicer shall cause Collections not to be reinvested until
the amount thereof not so reinvested shall equal the desired amount of
reduction; and
     (iii) the Servicer shall hold such Collections in trust for the benefit of
the Administrator (for the benefit of each Purchaser), for payment to the
Administrator by deposit into the Administration Account on the next Settlement
Date immediately following the current Settlement Period or such other date
approved by the Administrator and the Majority Purchaser Agents, and Capital
shall be deemed reduced in the amount to be paid to the Administrator only when
in fact finally so paid;
provided, that the amount of any such reduction shall be not less than $300,000
and shall be an integral multiple of $100,000. Upon receipt by the Administrator
in the Administration Account of any amount paid in reduction of the Aggregate
Capital pursuant to sub-clause (iii) above, the Administrator shall cause such
funds to be distributed to the Purchaser Agents (for the benefit of the
Purchasers in their respective Purchaser Groups) in payment of each Purchaser’s
outstanding Capital.
     Section 1.7 Fees.
          The Seller shall pay to the Administrator, the Purchasers and the
Purchaser Agents the fees in the amounts and on the dates set forth in those
certain fee letter agreements for each Purchaser Group, in each case, from time
to time entered into among Peabody, the Seller

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and the applicable Purchaser Agent and/or the Administrator (as such letter
agreements may be amended, supplemented or otherwise modified from time to time,
the “Fee Letters”).
     Section 1.8 Payments and Computations, Etc.
     (a) All amounts to be paid or deposited by the Seller or the Servicer
hereunder shall be made without reduction for offset or counterclaim and shall
be paid or deposited no later than noon (New York City time) on the day when due
in same day funds to the Administration Account. All amounts received after noon
(New York City time) will be deemed to have been received on the next Business
Day. Amounts payable hereunder to or for the benefit of the Administrator, the
Purchasers or the Purchaser Agents (or their related Affected Persons or
Indemnified Parties) shall be distributed as follows:
     (i) Any amounts to be distributed by or on behalf of the Administrator
hereunder to any Purchaser Agent, Purchaser or Purchaser Group shall be
distributed to the account specified in writing from time to time by the
applicable Purchaser Agent to the Administrator, and the Administrator shall
have no obligation to distribute any such amounts unless and until it actually
receives payment of such amounts by the Seller or the Servicer, as applicable,
in the Administration Account. Except as expressly set forth herein (including,
without limitation, as set forth in Section 1.6(b)(iii) with respect to
Collections held in trust for Declining Conduit Purchasers and Exiting
Purchasers), the Administrator shall distribute (or cause to be distributed)
such amounts to the Purchaser Agents for the Purchasers within their respective
Purchaser Groups ratably (x) in the case of such amounts paid in respect of
Discount and Fees, according to the Discount and Fees payable to the Purchasers
and (y) in the case of such amounts paid in respect of Capital (or in respect of
any other obligations other than Discount and Fees), according to the
outstanding Capital funded by the Purchasers.
     (ii) Except as expressly set forth herein (including, without limitation,
as set forth in Section 1.6(b)(iii) with respect to Collections held in trust
for Declining Conduit Purchasers and Exiting Purchasers), each Purchaser Agent
shall distribute the amounts paid to it hereunder for the benefit of the
Purchasers in its Purchaser Group to the Purchasers within its Purchaser Group
ratably (x) in the case of such amounts paid in respect of Discount and Fees,
according to the Discount and Fees payable to such Purchasers and (y) in the
case of such amounts paid in respect of Capital (or in respect of any other
obligations other than Discount and Fees), according to the outstanding Capital
funded by such Purchasers.
     (b) The Seller or the Servicer, as the case may be, shall, to the extent
permitted by law, pay interest on any amount not paid or deposited by the Seller
or the Servicer, as the case may be, when due hereunder, at an interest rate
equal to 2.0% per annum above the Base Rate, payable on demand.
     (c) All computations of interest under clause (b) above and all
computations of Discount, fees and other amounts hereunder shall be made on the
basis of a year of 360 (or 365 or 366, as applicable, with respect to Discount
or other amounts calculated by reference to the

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Base Rate) days for the actual number of days elapsed. Whenever any payment or
deposit to be made hereunder shall be due on a day other than a Business Day,
such payment or deposit shall be made on the next Business Day and such
extension of time shall be included in the computation of such payment or
deposit.
     Section 1.9 Increased Costs.
     (a) If the Administrator, the LC Bank, any Purchaser Agent, any Purchaser,
any Liquidity Bank, any other Program Support Provider or any of their
respective Affiliates (each an “Affected Person”) reasonably determines that the
existence of or compliance with: (i) any law or regulation or any change therein
or in the interpretation or application thereof, in each case adopted, issued or
occurring after the date hereof, or (ii) any request, guideline or directive
from any central bank or other Governmental Authority (whether or not having the
force of law) issued or occurring after the date of this Agreement, affects or
would affect the amount of capital required or expected to be maintained by such
Affected Person, and such Affected Person determines that the amount of such
capital is increased by or based upon the existence of any commitment to make
Investments in (or otherwise to maintain the Investments in) Pool Receivables or
issue any Letter of Credit related to this Agreement or any related liquidity
facility, credit enhancement facility and other commitments of the same type,
then, upon demand by such Affected Person (with a copy to the Administrator),
the Seller shall promptly pay to the Administrator, for the account of such
Affected Person, from time to time as specified by such Affected Person,
additional amounts sufficient to compensate such Affected Person in the light of
such circumstances, to the extent that such Affected Person reasonably
determines such increase in capital to be allocable to the existence of any of
such commitments. A certificate as to such amounts submitted to the Seller and
the Administrator by such Affected Person shall be conclusive and binding for
all purposes, absent manifest error.
     (b) If, due to either: (i) the introduction of or any change in or in the
interpretation of any law or regulation or (ii) compliance with any guideline or
request from any central bank or other Governmental Authority (whether or not
having the force of law), there shall be any increase in the cost to any
Affected Person of agreeing to purchase or purchasing, or maintaining the
ownership of, the Purchased Assets in respect of which Discount is computed by
reference to the Euro-Rate, then, upon demand by such Affected Person, the
Seller shall promptly pay to such Affected Person, from time to time as
specified by such Affected Person, additional amounts sufficient to compensate
such Affected Person for such increased costs. A certificate as to such amounts
submitted to the Seller and the Administrator by such Affected Person shall be
conclusive and binding for all purposes, absent manifest error.
     (c) If such increased costs affect the related Affected Person’s portfolio
of financing transactions, such Affected Person shall use reasonable averaging
and attribution methods to allocate such increased costs to the transactions
contemplated by this Agreement.
     Section 1.10 Requirements of Law.
          If any Affected Person reasonably determines that the existence of or
compliance with: (a) any law or regulation or any change therein or in the
interpretation or application

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thereof, in each case adopted, issued or occurring after the date hereof, or
(b) any request, guideline or directive from any central bank or other
Governmental Authority (whether or not having the force of law) issued or
occurring after the date of this Agreement:
     (i) does or shall subject such Affected Person to any tax of any kind
whatsoever with respect to this Agreement, any purchase of or investment in the
Purchased Assets or any increase in the amount of Capital relating thereto, or
does or shall change the basis of taxation of payments to such Affected Person
on account of Collections, Discount or any other amounts payable hereunder
(excluding taxes imposed on the overall or branch pre-tax net income of such
Affected Person, and franchise taxes imposed on such Affected Person, by the
jurisdiction under the laws of which such Affected Person is organized or
otherwise is considered doing business (unless the Affected Person would not be
considered doing business in such jurisdiction, but for having entered into, or
engaged in the transactions in connection with, this Agreement or any other
Transaction Document) or a political subdivision thereof),
     (ii) does or shall impose, modify or hold applicable any reserve, special
deposit, compulsory loan or similar requirement against assets held by, or
deposits or other liabilities in or for the account of, purchases, advances or
loans by, or other credit extended by, or any other acquisition of funds by, any
office of such Affected Person that are not otherwise included in the
determination of the Euro-Rate or the Base Rate hereunder, or
     (iii) does or shall impose on such Affected Person any other condition, and
the result of any of the foregoing is: (A) to increase the cost to such Affected
Person of agreeing to purchase or purchasing or maintaining the ownership of, or
issuing any Letter of Credit in respect of, the Purchased Assets (or interests
therein) or any Portion of Capital, or (B) to reduce any amount receivable
hereunder (whether directly or indirectly);
then, in any such case, upon demand by such Affected Person, the Seller shall
promptly pay to such Affected Person additional amounts necessary to compensate
such Affected Person for such additional cost or reduced amount receivable. All
such amounts shall be payable as incurred. A certificate from such Affected
Person to the Seller and the Administrator certifying, in reasonably specific
detail, the basis for, calculation of, and amount of such additional costs or
reduced amount receivable shall be conclusive and binding for all purposes,
absent manifest error; provided, however, that no Affected Person shall be
required to disclose any confidential or tax planning information in any such
certificate.
     Section 1.11 Inability to Determine Euro-Rate.
     (a) If the Administrator (or any Purchaser Agent) determines before the
first day of any Settlement Period (which determination shall be final and
conclusive) that, by reason of circumstances affecting the interbank eurodollar
market generally, deposits in dollars (in the relevant amounts for such
Settlement Period) are not being offered to banks in the interbank

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eurodollar market for such Settlement Period, or adequate means do not exist for
ascertaining the Euro-Rate for such Settlement Period, then the Administrator or
such Purchaser Agent, as applicable, shall give notice thereof to the Seller.
Thereafter, until the Administrator or such Purchaser Agent notifies the Seller
that the circumstances giving rise to such suspension no longer exist, (i) no
Portion of Capital shall be funded at the Alternate Rate determined by reference
to the Euro-Rate and (ii) the Discount for any outstanding Portions of Capital
then funded at the Alternate Rate determined by reference to the Euro-Rate
shall, on the last day of the then current Settlement Period, be converted to
the Alternate Rate determined by reference to the Base Rate.
     (b) If, on or before the first day of any Settlement Period, the
Administrator shall have been notified by any Affected Person that, such
Affected Person has determined (which determination shall be final and
conclusive) that, any enactment, promulgation or adoption of or any change in
any applicable law, rule or regulation, or any change in the interpretation or
administration thereof by a governmental authority, central bank or comparable
agency charged with the interpretation or administration thereof, or compliance
by such Affected Person with any guideline, request or directive (whether or not
having the force of law) of any such authority, central bank or comparable
agency shall make it unlawful or impossible for such Affected Person to fund or
maintain any Portion of Capital at the Alternate Rate and based upon the
Euro-Rate, the Administrator shall notify the Seller thereof. Upon receipt of
such notice, until the Administrator notifies the Seller that the circumstances
giving rise to such determination no longer apply, (i) no Portion of Capital
shall be funded at the Alternate Rate determined by reference to the Euro-Rate
and (ii) the Discount for any outstanding Portions of Capital then funded at the
Alternate Rate determined by reference to the Euro-Rate shall be converted to
the Alternate Rate determined by reference to the Base Rate either (A) on the
last day of the then current Settlement Period if such Affected Person may
lawfully continue to maintain such Portion of Capital at the Alternate Rate
determined by reference to the Euro-Rate to such day, or (B) immediately, if
such Affected Person may not lawfully continue to maintain such Portion of
Capital at the Alternate Rate determined by reference to the Euro-Rate to such
day.
     Section 1.12 Extension of the Facility Termination Date.
          Provided that no Termination Event or Unmatured Termination Event
exists and is continuing, the Seller may request the extension of the Facility
Termination Date set forth in clause (a) of the definition thereof or determined
pursuant to clause (d) of the definition thereof, in either case, by providing
written notice to the Administrator and each Purchaser Agent; provided such
request is made not more than 120 days prior to, and not less than 60 days prior
to, the then current Facility Termination Date; and provided, further, that no
extension of the Facility Termination Date determined pursuant to clause (d) of
the definition thereof with respect to any Purchaser Group shall be for period
of more than 364 days after the then scheduled date on which the Facility
Termination Date will occur with respect to such Purchaser Group pursuant to
such clause (d). In the event that the Purchasers are all agreeable to such
extension, the Administrator shall so notify the Seller and the Servicer in
writing (it being understood that the Purchasers may accept or decline such a
request in their sole discretion and on such terms as they may elect) not less
than 30 days prior to the then current Facility Termination Date and the Seller,
the Servicer, the Sub-Servicers, the Administrator, the Purchaser Agents and the

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Purchasers shall enter into such documents as the Administrator, the Purchaser
Agents and the Purchasers may deem necessary or appropriate to reflect such
extension, and all reasonable costs and expenses incurred by the Purchasers, the
Purchaser Agents and the Administrator in connection therewith (including
reasonable Attorney Costs) shall be paid by the Seller. In the event any
Purchaser declines the request for such extension, such Purchaser (or its
Purchaser Agent) shall so notify the Administrator and the Administrator shall
so notify the Seller of such determination; provided, that the failure of the
Administrator to notify the Seller of the determination to decline such
extension shall not affect the understanding and agreement that the applicable
Purchasers shall be deemed to have refused to grant the requested extension in
the event the Administrator fails to affirmatively notify the Seller, in
writing, of their agreement to accept the requested extension. If the Facility
Termination Date is extended with respect to one or more, but less than all
Purchasers, then the Purchase Limit shall be reduced ratably with respect to the
Purchasers in each Purchaser Group by an amount equal to the Commitment(s) of
the Exiting Purchaser(s) and the Commitment Percentages and Group Commitments of
the Purchasers within each Purchaser Group shall be appropriately adjusted.
     Section 1.13 Letters of Credit.
          Subject to the terms and conditions hereof, the LC Bank shall issue or
cause the issuance of standby Letters of Credit (“Letters of Credit”) on behalf
of the Seller (and, if applicable, on behalf of, or for the account of, the
Servicer or any Sub-Servicer); provided, however, that the LC Bank will not be
required to issue or cause to be issued any Letters of Credit to the extent that
the issuance of such Letters of Credit would then cause (a) the sum of (i) the
Aggregate Capital plus (ii) the LC Participation Amount to exceed the Purchase
Limit or (b) the LC Participation Amount to exceed the aggregate of the
Commitments of the LC Bank and the LC Participants. All amounts drawn upon
Letters of Credit shall accrue Discount. Letters of Credit that have not been
drawn upon shall not accrue Discount.
     Section 1.14 Issuance of Letters of Credit.
     (a) The Seller may request the LC Bank, upon two (2) Business Days’ prior
written notice submitted on or before 11:00 a.m., New York time, to issue a
Letter of Credit by delivering to the Administrator an Investment Notice
substantially in the form of Annex B attached hereto and the LC Bank’s form of
Letter of Credit Application (the “Letter of Credit Application”), substantially
in the form of Annex E attached hereto completed to the satisfaction of the
Administrator and the LC Bank; and, such other certificates, documents and other
papers and information as the Administrator may reasonably request. The Seller
also has the right to give instructions and make agreements with respect to any
Letter of Credit Application and the disposition of documents, and to agree with
the Administrator upon any amendment, extension or renewal of any Letter of
Credit.
     (b) Each Letter of Credit shall, among other things, (i) provide for the
payment of sight drafts or other written demands for payment when presented for
honor thereunder in accordance with the terms thereof and when accompanied by
the documents described therein and (ii) have an expiry date not later than
twelve (12) months after such Letter of Credit’s date of issuance, extension or
renewal, as the case may be, and in no event later than twelve (12) months

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after the Facility Termination Date. Each Letter of Credit shall be subject
either to the Uniform Customs and Practice for Documentary Credits (2007
Revision), International Chamber of Commerce Publication No. 600, and any
amendments or revisions thereof adhered to by the LC Bank (“UCP 600”) or the
International Standby Practices (ISP98-International Chamber of Commerce
Publication Number 590), and any amendments or revisions thereof adhered to by
the LC Bank (the “ISP98 Rules”), as determined by the LC Bank.
     (c) The Administrator shall promptly notify the LC Bank and the LC
Participants, at such Person’s address for notices hereunder, of the request by
the Seller for a Letter of Credit hereunder, and shall provide the LC Bank and
the LC Participants with the Letter of Credit Application delivered to the
Administrator by the Seller pursuant to paragraph (a), above, by the close of
business on the day received or if received on a day that is not a Business Day
or on any Business Day after 11:00 a.m. New York time on such day, on the next
Business Day.
     Section 1.15 Requirements For Issuance of Letters of Credit.
     The Seller shall authorize and direct the LC Bank to name the Seller as the
“Applicant” or “Account Party” of each Letter of Credit.
     Section 1.16 Disbursements, Reimbursement.
     (a) Immediately upon the issuance of each Letter of Credit, each LC
Participant shall be deemed to, and hereby irrevocably and unconditionally
agrees to, purchase from the LC Bank a participation in such Letter of Credit
and each drawing thereunder in an amount equal to such LC Participant’s Pro Rata
Share of the face amount of such Letter of Credit and the amount of such
drawing, respectively.
     (b) In the event of any request for a drawing under a Letter of Credit by
the beneficiary or transferee thereof, the LC Bank will promptly notify the
Administrator and the Seller of such request. Provided that it shall have
received such notice, the Seller shall reimburse (such obligation to reimburse
the LC Bank shall sometimes be referred to as a “Reimbursement Obligation”) the
LC Bank prior to 12:00 p.m., New York time on each date that an amount is paid
by the LC Bank under any Letter of Credit (each such date, a “Drawing Date”) in
an amount equal to the amount so paid by the LC Bank. In the event the Seller
fails to reimburse the LC Bank for the full amount of any drawing under any
Letter of Credit by 12:00 p.m., New York time, on the Drawing Date, the LC Bank
will promptly notify each LC Participant thereof, and the Seller shall be deemed
to have requested that an Investment be made by the Purchasers in the Purchaser
Groups for the LC Bank and the LC Participants to be disbursed on the Drawing
Date under such Letter of Credit in accordance with Section 1.1(b), subject to
the amount of the unutilized portion of the Purchase Limit. Any notice given by
the LC Bank pursuant to this Section may be oral if immediately confirmed in
writing; provided that the lack of such an immediate confirmation shall not
affect the conclusiveness or binding effect of such oral notice.
     (c) Each LC Participant shall upon any notice pursuant to clause (b) above
make available to the LC Bank an amount in immediately available funds equal to
its Pro Rata Share of the amount of the drawing, whereupon the LC Participants
shall each be deemed to have

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made an Investment in that amount. If any LC Participant so notified fails to
make available to the LC Bank the amount of such LC Participant’s Pro Rata Share
of such amount by no later than 2:00 p.m., New York time on the Drawing Date,
then interest shall accrue on such LC Participant’s obligation to make such
payment, from the Drawing Date to the date on which such LC Participant makes
such payment (i) at a rate per annum equal to the Federal Funds Rate during the
first three days following the Drawing Date and (ii) at a rate per annum equal
to the rate applicable to Capital on and after the fourth day following the
Drawing Date. The LC Bank will promptly give notice of the occurrence of the
Drawing Date, but failure of the LC Bank to give any such notice on the Drawing
Date or in sufficient time to enable any LC Participant to effect such payment
on such date shall not relieve such LC Participant from its obligation under
this clause (c), provided that such LC Participant shall not be obligated to pay
interest as provided in subclauses (i) and (ii) above until and commencing from
the date of receipt of notice from the LC Bank or the Administrator of a
drawing. Each LC Participant’s Commitment shall continue until the last to occur
of any of the following events: (A) the LC Bank ceases to be obligated to issue
or cause to be issued Letters of Credit hereunder; (B) no Letter of Credit
issued hereunder remains outstanding and uncancelled or (C) all Persons (other
than the Seller) have been fully reimbursed for all payments made under or
relating to Letters of Credit.
     Section 1.17 Repayment of Participation Advances.
     (a) Upon (and only upon) receipt by the LC Bank for its account of
immediately available funds from the Seller (i) in reimbursement of any payment
made by the LC Bank under a Letter of Credit with respect to which any LC
Participant has made a participation advance to the LC Bank, or (ii) in payment
of Discount on the Investments made or deemed to have been made in connection
with any such draw, the LC Bank will pay to each LC Participant, ratably (based
on the outstanding drawn amounts funded by each such LC Participant in respect
of such Letter of Credit), in the same funds as those received by the LC Bank;
it being understood, that the LC Bank shall retain a ratable amount of such
funds that were not the subject of any payment in respect of such Letter of
Credit by any LC Participant.
     (b) If the LC Bank is required at any time to return to the Seller, or to a
trustee, receiver, liquidator, custodian, or any official in any insolvency
proceeding, any portion of the payments made by the Seller to the LC Bank
pursuant to this Agreement in reimbursement of a payment made under the Letter
of Credit or interest or fee thereon, each LC Participant shall, on demand of
the LC Bank, forthwith return to the LC Bank the amount of its Pro Rata Share of
any amounts so returned by the LC Bank plus interest at the Federal Funds Rate
from the date the payment was first made to such LC Participant through, but not
including, the date the payment is returned by such LC Participant.
     Section 1.18 Documentation.
          The Seller agrees to be bound by the terms of the Letter of Credit
Application and by the LC Bank’s interpretations of any Letter of Credit issued
for the Seller and by the LC Bank’s written regulations and customary practices
relating to letters of credit, though the LC Bank’s interpretation of such
regulations and practices may be different from the Seller’s own. In the event
of a conflict between the Letter of Credit Application and this Agreement, this

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Agreement shall govern. It is understood and agreed that, except in the case of
gross negligence or willful misconduct by the LC Bank, the LC Bank shall not be
liable for any error, negligence and/or mistakes, whether of omission or
commission, in following the Seller’s instructions or those contained in the
Letters of Credit or any modifications, amendments or supplements thereto.
     Section 1.19 Determination to Honor Drawing Request.
          In determining whether to honor any request for drawing under any
Letter of Credit by the beneficiary thereof, the LC Bank shall be responsible
only to determine that the documents and certificates required to be delivered
under such Letter of Credit have been delivered and that they comply on their
face with the requirements of such Letter of Credit and that any other drawing
condition appearing on the face of such Letter of Credit has been satisfied in
the manner so set forth.
     Section 1.20 Nature of Participation and Reimbursement Obligations.
          Each LC Participant’s obligation in accordance with this Agreement to
make participation advances as a result of a drawing under a Letter of Credit,
and the obligations of the Seller to reimburse the LC Bank upon a draw under a
Letter of Credit, shall be absolute, unconditional and irrevocable, and shall be
performed strictly in accordance with the terms of this Article I under all
circumstances, including the following circumstances:
     (i) any set-off, counterclaim, recoupment, defense or other right which
such LC Participant may have against the LC Bank, the Administrator, any
Purchaser Agent, any Purchaser, the Seller or any other Person for any reason
whatsoever;
     (ii) the failure of the Seller or any other Person to comply with the
conditions set forth in this Agreement for the making of an Investment,
Reinvestments, requests for Letters of Credit or otherwise, it being
acknowledged that such conditions are not required for the making of
participation advances hereunder;
     (iii) any lack of validity or enforceability of any Letter of Credit;
     (iv) any claim of breach of warranty that might be made by the Seller, the
LC Bank or any LC Participant against the beneficiary of a Letter of Credit, or
the existence of any claim, set-off, defense or other right which the Seller,
the LC Bank or any LC Participant may have at any time against a beneficiary,
any successor beneficiary or any transferee of any Letter of Credit or the
proceeds thereof (or any Persons for whom any such transferee may be acting),
the LC Bank, any LC Participant, any Purchaser Agent, any Purchaser or any other
Person, whether in connection with this Agreement, the transactions contemplated
herein or any unrelated transaction (including any underlying transaction
between the Seller or any Subsidiaries of the Seller or any Affiliates of the
Seller and the beneficiary for which any Letter of Credit was procured);
     (v) the lack of power or authority of any signer of, or lack of validity,
sufficiency, accuracy, enforceability or genuineness of, any draft, demand,
instrument,

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certificate or other document presented under any Letter of Credit, or any such
draft, demand, instrument, certificate or other document proving to be forged,
fraudulent, invalid, defective or insufficient in any respect or any statement
therein being untrue or inaccurate in any respect, even if the Administrator or
the LC Bank has been notified thereof;
     (vi) payment by the LC Bank under any Letter of Credit against presentation
of a demand, draft or certificate or other document which does not comply with
the terms of such Letter of Credit other than as a result of the gross
negligence or willful misconduct of the LC Bank;
     (vii) the solvency of, or any acts or omissions by, any beneficiary of any
Letter of Credit, or any other Person having a role in any transaction or
obligation relating to a Letter of Credit, or the existence, nature, quality,
quantity, condition, value or other characteristic of any property or services
relating to a Letter of Credit;
     (viii) any failure by the LC Bank or any of the LC Bank’s Affiliates to
issue any Letter of Credit in the form requested by the Seller, unless the LC
Bank has received written notice from the Seller of such failure within three
Business Days after the LC Bank shall have furnished the Seller a copy of such
Letter of Credit and such error is material and no drawing has been made thereon
prior to receipt of such notice;
     (ix) any Material Adverse Effect on the Seller, any Originator or any
Affiliates thereof;
     (x) any breach of this Agreement or any Transaction Document by any party
thereto;
     (xi) the occurrence or continuance of an Insolvency Proceeding with respect
to the Seller, any Originator or any Affiliate thereof;
     (xii) the fact that a Termination Event or an Unmatured Termination Event
shall have occurred and be continuing;
     (xiii) the fact that this Agreement or the obligations of Seller or
Servicer hereunder shall have been terminated; and
     (xiv) any other circumstance or happening whatsoever, whether or not
similar to any of the foregoing.
     Nothing in this Section 1.20 shall relieve the LC Bank from liability for
its gross negligence or willful misconduct, as determined by a final
non-appealable judgment of a court of competent jurisdiction.

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     Section 1.21 Indemnity.
          In addition to other amounts payable hereunder, the Seller hereby
agrees to protect, indemnify, pay and save harmless the Administrator, the LC
Bank, each LC Participant and any of the LC Bank’s Affiliates that have issued a
Letter of Credit from and against any and all claims, demands, liabilities,
damages, taxes, penalties, interest, judgments, losses, costs, charges and
expenses (including Attorney Costs) which the Administrator, the LC Bank, any LC
Participant or any of their respective Affiliates may incur or be subject to as
a consequence, direct or indirect, of the issuance of any Letter of Credit,
other than as a result of (a) the gross negligence or willful misconduct of the
party to be indemnified as determined by a final judgment of a court of
competent jurisdiction or (b) the wrongful dishonor by the LC Bank of a proper
demand for payment made under any Letter of Credit, except if such dishonor
resulted from any act or omission, whether rightful or wrongful, of any present
or future de jure or de facto Governmental Authority (all such acts or omissions
herein called “Governmental Acts”).
     Section 1.22 Liability for Acts and Omissions.
          As between the Seller, on the one hand, and the Administrator, the LC
Bank, the LC Participants, the Purchaser Agents and the Purchasers, on the
other, the Seller assumes all risks of the acts and omissions of, or misuse of
the Letters of Credit by, the respective beneficiaries of such Letters of
Credit. In furtherance and not in limitation of the respective foregoing, none
of the Administrator, the LC Bank, the LC Participants, the Purchaser Agents or
the Purchasers shall be responsible for: (i) the form, validity, sufficiency,
accuracy, genuineness or legal effect of any document submitted by any party in
connection with the application for an issuance of any such Letter of Credit,
even if it should in fact prove to be in any or all respects invalid,
insufficient, inaccurate, fraudulent or forged (even if the LC Bank shall have
been notified thereof); (ii) the validity or sufficiency of any instrument
transferring or assigning or purporting to transfer or assign any such Letter of
Credit or the rights or benefits thereunder or proceeds thereof, in whole or in
part, which may prove to be invalid or ineffective for any reason; (iii) the
failure of the beneficiary of any such Letter of Credit, or any other party to
which such Letter of Credit may be transferred, to comply fully with any
conditions required in order to draw upon such Letter of Credit or any other
claim of the Seller against any beneficiary of such Letter of Credit, or any
such transferee, or any dispute between or among the Seller and any beneficiary
of any Letter of Credit or any such transferee; (iv) errors, omissions,
interruptions or delays in transmission or delivery of any messages, by mail,
cable, telegraph, telex or otherwise, whether or not they be in cipher;
(v) errors in interpretation of technical terms; (vi) any loss or delay in the
transmission or otherwise of any document required in order to make a drawing
under any such Letter of Credit or of the proceeds thereof; (vii) the
misapplication by the beneficiary of any such Letter of Credit of the proceeds
of any drawing under such Letter of Credit; or (viii) any consequences arising
from causes beyond the control of the Administrator, the LC Bank, the LC
Participants, the Purchaser Agents and the Purchasers, including any
Governmental Acts, and none of the above shall affect or impair, or prevent the
vesting of, any of the LC Bank’s rights or powers hereunder. Nothing in the
preceding sentence shall relieve the LC Bank from liability for its gross
negligence or willful misconduct, as determined by a final non-appealable
judgment of a

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court of competent jurisdiction, in connection with actions or omissions
described in such clauses (i) through (viii) of such sentence. In no event shall
the Administrator, the LC Bank, the LC Participants, the Purchaser Agents, the
Purchasers or their respective Affiliates, be liable to the Seller or any other
Person for any indirect, consequential, incidental, punitive, exemplary or
special damages or expenses (including without limitation attorneys’ fees), or
for any damages resulting from any change in the value of any property relating
to a Letter of Credit.
          Without limiting the generality of the foregoing, the Administrator,
the LC Bank, the LC Participants, the Purchaser Agents, the Purchasers and each
of their respective Affiliates (i) may rely on any written communication
believed in good faith by such Person to have been authorized or given by or on
behalf of the applicant for a Letter of Credit; (ii) may honor any presentation
if the documents presented appear on their face to comply with the terms and
conditions of the relevant Letter of Credit; (iii) may honor a previously
dishonored presentation under a Letter of Credit, whether such dishonor was
pursuant to a court order, to settle or compromise any claim of wrongful
dishonor, or otherwise, and shall be entitled to reimbursement to the same
extent as if such presentation had initially been honored, together with any
interest paid by the LC Bank or its Affiliates; (iv) may honor any drawing that
is payable upon presentation of a statement advising negotiation or payment,
upon receipt of such statement (even if such statement indicates that a draft or
other document is being delivered separately), and shall not be liable for any
failure of any such draft or other document to arrive, or to conform in any way
with the relevant Letter of Credit; (v) may pay any paying or negotiating bank
claiming that it rightfully honored under the laws or practices of the place
where such bank is located; and (vi) may settle or adjust any claim or demand
made on the Administrator, the LC Bank, the LC Participants, the Purchaser
Agents, the Purchasers or their respective Affiliates, in any way related to any
order issued at the applicant’s request to an air carrier, a letter of guarantee
or of indemnity issued to a carrier or any similar document (each an “Order”)
and honor any drawing in connection with any Letter of Credit that is the
subject of such Order, notwithstanding that any drafts or other documents
presented in connection with such Letter of Credit fail to conform in any way
with such Letter of Credit.
          In furtherance and extension and not in limitation of the specific
provisions set forth above, any action taken or omitted by the LC Bank under or
in connection with the Letters of Credit issued by it or any documents and
certificates delivered thereunder, if taken or omitted in good faith and without
gross negligence or willful misconduct, as determined by a final non-appealable
judgment of a court of competent jurisdiction, shall not put the LC Bank under
any resulting liability to the Seller, any LC Participant or any other Person.
ARTICLE II.
REPRESENTATIONS AND WARRANTIES; COVENANTS; TERMINATION EVENTS
     Section 2.1 Representations and Warranties; Covenants.
          Each of the Seller, Peabody and the Servicer hereby makes the
representations and warranties, and hereby agrees to perform and observe the
covenants, applicable to it set forth in Exhibits III and IV, respectively.

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     Section 2.2 Termination Events.
          If any of the Termination Events set forth in Exhibit V shall occur,
the Administrator may (with the consent of the Majority Purchasers) or shall (at
the direction of the Majority Purchasers), by notice to the Seller, declare the
Facility Termination Date to have occurred (in which case the Facility
Termination Date shall be deemed to have occurred); provided, that automatically
upon the occurrence of any event (without any requirement for the passage of
time or the giving of notice) described in paragraph (f) of Exhibit V, the
Facility Termination Date shall occur. Upon any such declaration, occurrence or
deemed occurrence of the Facility Termination Date, the Administrator, the
Purchaser Agents and the Purchasers shall have, in addition to the rights and
remedies that they may have under this Agreement, all other rights and remedies
provided after default under the Illinois UCC and under other applicable law,
which rights and remedies shall be cumulative.
ARTICLE III.
INDEMNIFICATION
     Section 3.1 Indemnities by the Seller.
          Without limiting any other rights that the Administrator, the
Purchaser Agents, the Purchasers, the Liquidity Banks, any Program Support
Provider or any of their respective Affiliates, employees, officers, directors,
agents, counsel, successors, transferees or permitted assigns (each, an
“Indemnified Party”) may have hereunder or under applicable law, the Seller
hereby agrees to indemnify each Indemnified Party from and against any and all
claims, damages, expenses, costs, losses and liabilities (including Attorney
Costs) (all of the foregoing being collectively referred to as “Indemnified
Amounts”) arising out of or resulting from this Agreement (whether directly or
indirectly), the use of proceeds of Investments or Reinvestments, the ownership
of any portion of the Purchased Assets, or any interest therein, or in respect
of any Receivable, Related Security or Contract, excluding, however:
(a) Indemnified Amounts to the extent resulting from gross negligence or willful
misconduct on the part of such Indemnified Party or its employees, officers,
directors, agents, counsel, successors, transferees or permitted assigns,
(b) any indemnification which has the effect of recourse for the non-payment of
the Receivables to any indemnitor (except as otherwise specifically provided in
this Agreement), or (c) overall net income taxes or franchise taxes imposed on
such Indemnified Party by the jurisdiction under the laws of which such
Indemnified Party is organized or any political subdivision thereof. Without
limiting or being limited by the foregoing, and subject to the exclusions set
forth in the preceding sentence, the Seller shall pay on demand (which demand
shall be accompanied by documentation of the Indemnified Amounts, in reasonable
detail) to each Indemnified Party any and all amounts necessary to indemnify
such Indemnified Party from and against any and all Indemnified Amounts relating
to or resulting from any of the following:
               (i) the failure of any Receivable included in the calculation of
the Net Receivables Pool Balance as an Eligible Receivable to be an Eligible
Receivable, the failure of any information contained in an Information Package
to be true and correct on the date thereof (or, if such information is stated
therein to be as of a different date, on such different date), or the failure of
any other information provided to any Purchaser or the Administrator with
respect to

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Receivables or this Agreement to be true and correct on the date so provided
(or, if such information is stated therein to be as of a different date, on such
different date),
               (ii) the failure of any representation, warranty or statement
made or deemed made by the Seller (or any of its officers) under or in
connection with this Agreement to have been true and correct as of the date made
or deemed made in all respects when made,
               (iii) the failure by the Seller to comply with any applicable
law, rule or regulation with respect to any Pool Receivable or the related
Contract, or the failure of any Pool Receivable or the related Contract to
conform to any such applicable law, rule or regulation,
               (iv) the failure to vest in the Administrator (on behalf of the
Purchasers) a valid and enforceable first priority perfected ownership or
security interest in the Pool Assets, free and clear of any Adverse Claim,
               (v) the failure to have filed, or any delay in filing, financing
statements or other similar instruments or documents under the UCC of any
applicable jurisdiction or other applicable laws with respect to any Receivables
in, or purporting to be in, the Receivables Pool and the other Pool Assets,
whether at the time of any Investment or Reinvestment or at any subsequent time,
               (vi) any dispute, claim, offset or defense (other than discharge
in bankruptcy of the Obligor) of the Obligor to the payment of any Receivable
in, or purporting to be in, the Receivables Pool (including a defense based on
such Receivable or the related Contract not being a legal, valid and binding
obligation of such Obligor enforceable against it in accordance with its terms),
or any other claim resulting from the sale of the goods or services related to
such Receivable or the furnishing or failure to furnish such goods or services
or relating to collection activities with respect to such Receivable (if such
collection activities were performed by the Seller or any of its Affiliates
acting as Servicer or by any agent or independent contractor retained by the
Seller or any of its Affiliates),
               (vii) any failure of the Seller (or any of its Affiliates acting
as the Servicer) to perform its duties or obligations in accordance with the
provisions hereof or under the Contracts,
               (viii) any products liability or other claim, investigation,
litigation or proceeding arising out of or in connection with merchandise,
insurance or services that are the subject of any Contract,
               (ix) the commingling of Collections at any time with other funds,
               (x) the use of proceeds of Investments or Reinvestments, or
               (xi) any reduction in Capital as a result of the distribution of
Collections pursuant to Section 1.6(d), if all or a portion of such
distributions shall thereafter be rescinded or otherwise must be returned for
any reason.

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     Section 3.2 Indemnities by the Servicer.
          Without limiting any other rights that any Indemnified Party may have
hereunder or under applicable law, the Servicer hereby agrees to indemnify each
Indemnified Party from and against any and all Indemnified Amounts arising out
of or resulting from (whether directly or indirectly): (a) the failure of any
information contained in an Information Package to be true and correct on the
date thereof (or, if such information is stated therein to be as of a different
date, on such different date), or the failure of any other information provided
to any such Indemnified Party by, or on behalf of, the Servicer to be true and
correct on the date so provided (or, if such information is stated therein to be
as of a different date, on such different date), (b) the failure of any
representation, warranty or statement made or deemed made by the Servicer (or
any of its officers) under or in connection with this Agreement to have been
true and correct as of the date made or deemed made in all respects when made,
(c) the failure by the Servicer to comply with any applicable law, rule or
regulation with respect to any Pool Receivable or the related Contract, (d) any
dispute, claim, offset or defense of the Obligor to the payment of any
Receivable in, or purporting to be in, the Receivables Pool resulting from or
related to the collection activities with respect to such Receivable, or (e) any
failure of the Servicer to perform its duties or obligations in accordance with
the provisions hereof.
ARTICLE IV.
ADMINISTRATION AND COLLECTIONS
     Section 4.1 Appointment of the Servicer.
     (a) The servicing, administering and collection of the Pool Receivables
shall be conducted by the Person so designated from time to time as the Servicer
in accordance with this Section. Until the Administrator gives notice to Peabody
(in accordance with this Section) of the designation of a new Servicer, Peabody
is hereby designated as, and hereby agrees to perform the duties and obligations
of, the Servicer pursuant to the terms hereof. Upon the occurrence of a
Termination Event, the Administrator may designate as Servicer any Person
(including itself) to succeed Peabody or any successor Servicer, on the
condition in each case that any such Person so designated shall agree to perform
the duties and obligations of the Servicer pursuant to the terms hereof.
     (b) Upon the designation of a successor Servicer as set forth in clause (a)
above, Peabody agrees that it will terminate its activities as Servicer
hereunder in a manner that the Administrator determines will facilitate the
transition of the performance of such activities to the new Servicer, and
Peabody shall cooperate with and assist such new Servicer. Such cooperation
shall include access to and transfer of related records and use by the new
Servicer of all licenses, hardware or software necessary or desirable to collect
the Pool Receivables and the Related Security.
     (c) Peabody acknowledges that, in making their decision to execute and
deliver this Agreement, the Administrator and the Purchasers have relied on
Peabody’s agreement to act as Servicer hereunder. Accordingly, Peabody agrees
that it will not voluntarily resign as Servicer.

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     (d) The Servicer may and hereby does delegate its duties and obligations
hereunder to the Originators as subservicer (each a “Sub-Servicer”); provided,
that, in such delegation: (i) each such Sub-Servicer shall and hereby does agree
in writing to perform the duties and obligations of the Servicer pursuant to the
terms hereof, (ii) the Servicer shall remain primarily liable for the
performance of the duties and obligations so delegated, (iii) the Seller, the
Administrator, the Purchaser Agents and the Purchasers shall have the right to
look solely to the Servicer for performance, and (iv) the terms of any agreement
with any Sub-Servicer shall and hereby do provide that the Administrator may
terminate such agreement upon the termination of the Servicer hereunder by
giving notice of its desire to terminate such agreement to the Servicer (and the
Servicer shall provide appropriate notice to each such Sub-Servicer); provided,
however, that if any such delegation is to any Person other than Arclar Company,
LLC, Peabody Midwest Mining, LLC, Twentymile Coal, LLC, Caballo Coal, LLC,
COALSALES II, LLC, Peabody Western Coal Company, Powder River Coal, LLC, Peabody
Holding Company, LLC, COALTRADE, LLC or COALSALES, LLC, the Administrator shall
have consented in writing in advance to such delegation.
     Section 4.2 Duties of the Servicer.
     (a) The Servicer shall take or cause to be taken all such action as may be
necessary or advisable to administer and collect each Pool Receivable from time
to time, all in accordance with this Agreement and all applicable laws, rules
and regulations, with reasonable care and diligence, and in accordance with the
Credit and Collection Policy. The Servicer shall set aside, for the accounts of
the Seller, the Administrator, the Purchaser Agents and the Purchasers, the
amount of the Collections to which each is entitled in accordance with
Article I. The Servicer may, in accordance with the applicable Credit and
Collection Policy, extend the maturity of any Pool Receivable and extend the
maturity or adjust the Outstanding Balance of any Defaulted Receivable as the
Servicer may determine to be appropriate to maximize Collections thereof;
provided, however, that: for the purposes of this Agreement, (i) such extension
shall not change the number of days such Pool Receivable has remained unpaid
from the date of the invoice date related to such Pool Receivable, (ii) such
extension or adjustment shall not alter the status of such Pool Receivable as a
Delinquent Receivable or a Defaulted Receivable or limit the rights of any of
the Purchasers, the Purchaser Agents or the Administrator under this Agreement
and (iii) if a Termination Event has occurred and is continuing and Peabody or
an Affiliate thereof is serving as the Servicer, Peabody or such Affiliate may
make such extension or adjustment only upon the prior approval of the
Administrator. The Seller shall deliver to the Servicer and the Servicer shall
hold for the benefit of the Seller and the Administrator (individually and for
the benefit of the Purchasers), in accordance with their respective interests,
all records and documents (including computer tapes or disks) with respect to
each Pool Receivable. Notwithstanding anything to the contrary contained herein,
the Administrator may direct the Servicer (whether the Servicer is Peabody or
any other Person) to commence or settle any legal action to enforce collection
of any Pool Receivable or to foreclose upon or repossess any Related Security.
     (b) The Servicer shall, as soon as practicable following actual receipt of
collected funds, turn over to the Seller the collections of any indebtedness
that is not a Pool Receivable, less, if Peabody or an Affiliate thereof is not
the Servicer, all reasonable and appropriate out-of-

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pocket costs and expenses of such Servicer of servicing, collecting and
administering such collections. The Servicer, if other than Peabody or an
Affiliate thereof, shall, as soon as practicable upon demand, deliver to the
Seller all records in its possession that evidence or relate to any indebtedness
that is not a Pool Receivable, and copies of records in its possession that
evidence or relate to any indebtedness that is a Pool Receivable.
     (c) The Servicer’s obligations hereunder shall terminate on the Final
Payout Date.
     After such termination, if Peabody or an Affiliate thereof was not the
Servicer on the date of such termination, the Servicer shall promptly deliver to
the Seller all books, records and related materials that the Seller previously
provided to the Servicer, or that have been obtained by the Servicer, in
connection with this Agreement.
     Section 4.3 Lock-Box Arrangements.
          Prior to the Closing Date, the Seller shall enter into Lock-Box
Agreements with all of the Lock-Box Banks and deliver original counterparts
thereof to the Administrator. Upon the occurrence of a Termination Event, the
Administrator may at any time thereafter give notice to each Lock-Box Bank that
the Administrator is exercising its rights under the Lock-Box Agreements to do
any or all of the following: (a) to have the exclusive ownership and control of
the Lock-Box Accounts transferred to the Administrator (for the benefit of the
Purchasers) and to exercise exclusive dominion and control over the funds
deposited therein, (b) to have the proceeds that are sent to the respective
Lock-Box Accounts redirected pursuant to the Administrator’s instructions rather
than deposited in the applicable Lock-Box Account, and (c) to take any or all
other actions permitted under the applicable Lock-Box Agreement. The Seller
hereby agrees that if the Administrator at any time takes any action set forth
in the preceding sentence, the Administrator shall have exclusive control (for
the benefit of the Purchasers) of the proceeds (including Collections) of all
Pool Receivables and the Seller hereby further agrees to take any other action
that the Administrator may reasonably request to transfer such control. Any
proceeds of Pool Receivables received by the Seller or the Servicer thereafter
shall be sent immediately to the Administrator. The parties hereto hereby
acknowledge that if at any time the Administrator takes control of any Lock-Box
Account, the Administrator shall not have any rights to the funds therein in
excess of the unpaid amounts due to the Administrator, the Purchaser Agents, the
Purchasers or any other Person hereunder, and the Administrator shall distribute
or cause to be distributed such funds in accordance with Section 4.2(b) and
Article I (in each case as if such funds were held by the Servicer thereunder).
     Section 4.4 Enforcement Rights.
     (a) At any time following the occurrence and during the continuation of a
Termination Event:
     (i) the Administrator may direct the Obligors that payment of all amounts
payable under any Pool Receivable is to be made directly to the Administrator or
its designee (on behalf of the Purchasers),

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     (ii) the Administrator may instruct the Seller or the Servicer to give
notice of the Purchasers’ interest in Pool Receivables to each Obligor, which
notice shall direct that payments be made directly to the Administrator or its
designee (on behalf of the Purchasers), and the Seller or the Servicer, as the
case may be, shall give such notice at the expense of the Seller or the
Servicer, as the case may be; provided, that if the Seller or the Servicer, as
the case may be, fails to so notify each Obligor, the Administrator (at the
Seller’s or the Servicer’s, as the case may be, expense) may so notify the
Obligors, and
     (iii) the Administrator may request the Servicer to, and upon such request
the Servicer shall: (A) assemble all of the records necessary or desirable to
collect the Pool Receivables and the Related Security, and transfer or license
to a successor Servicer the use of all software necessary or desirable to
collect the Pool Receivables and the Related Security, and make the same
available to the Administrator or its designee (for the benefit of the
Purchasers) at a place selected by the Administrator, and (B) segregate all
cash, checks and other instruments received by it from time to time constituting
Collections in a manner acceptable to the Administrator and, promptly upon
receipt, remit all such cash, checks and instruments, duly endorsed or with duly
executed instruments of transfer, to the Administrator or its designee (on
behalf of the Purchasers).
     (b) The Seller hereby authorizes the Administrator, and irrevocably
appoints the Administrator as its attorney-in-fact with full power of
substitution and with full authority in the place and stead of the Seller, which
appointment is coupled with an interest, to take any and all steps in the name
of the Seller and on behalf of the Seller necessary or desirable following the
occurrence and during the continuation of a Termination Event, in the
determination of the Administrator, to collect any and all amounts or portions
thereof due under any and all Pool Assets, including endorsing the name of the
Seller on checks and other instruments representing Collections and enforcing
such Pool Assets. Notwithstanding anything to the contrary contained in this
subsection, none of the powers conferred upon such attorney-in-fact pursuant to
the preceding sentence shall subject such attorney-in-fact to any liability if
any action taken by it shall prove to be inadequate or invalid, nor shall they
confer any obligations upon such attorney-in-fact in any manner whatsoever.
     Section 4.5 Responsibilities of the Seller.
     (a) Anything herein to the contrary notwithstanding, the Seller shall:
(i) perform all of its obligations, if any, under the Contracts related to the
Pool Receivables to the same extent as if such Pool Receivables had not been
transferred hereunder, and the exercise by the Administrator, any Purchaser
Agent or any Purchaser of their respective rights hereunder shall not relieve
the Seller from such obligations, and (ii) pay when due any taxes, including any
sales taxes payable in connection with the Pool Receivables and their creation
and satisfaction. Neither the Administrator nor any Purchaser Agent nor any
Purchaser shall have any obligation or liability with respect to any Pool Asset,
nor shall any of them be obligated to perform any of the obligations of the
Seller, Peabody or any Originator thereunder.
     (b) Peabody hereby irrevocably agrees that if at any time it shall cease to
be the Servicer hereunder, it shall act (if the then-current Servicer so
requests) as the data-processing

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agent of the Servicer and, in such capacity, Peabody shall conduct the
data-processing functions of the administration of the Receivables and the
Collections thereon in substantially the same way that Peabody conducted such
data-processing functions while it acted as the Servicer.
     Section 4.6 Servicing Fee.
     (a) Subject to clause (b), the Servicer shall be paid a fee equal to 1.00%
per annum(the “Servicing Fee Rate”) of the daily average aggregate Outstanding
Balance of the Pool Receivables. Such fee shall be paid through the
distributions contemplated by Section 1.6(d).
     (b) If the Servicer ceases to be Peabody or an Affiliate thereof, the
servicing fee shall be the greater of: (i) the amount calculated pursuant to
clause (a), and (ii) an alternative amount specified by the successor Servicer
not to exceed 110% of the aggregate reasonable costs and expenses incurred by
such successor Servicer in connection with the performance of its obligations as
Servicer.
     Section 4.7 Agents.
     (a) Appointment and Authorization.
     (i) Each Purchaser and Purchaser Agent hereby irrevocably designates and
appoints PNC Bank, National Association, as the “Administrator” hereunder and
authorizes the Administrator to take such actions and to exercise such powers as
are delegated to the Administrator hereby and to exercise such other powers as
are reasonably incidental thereto. The Administrator shall hold, in its name,
for the benefit of each Purchaser, ratably, the Purchased Assets. The
Administrator shall not have any duties other than those expressly set forth
herein or any fiduciary relationship with any Purchaser or Purchaser Agent, and
no implied obligations or liabilities shall be read into this Agreement, or
otherwise exist, against the Administrator. The Administrator does not assume,
nor shall it be deemed to have assumed, any obligation to, or relationship of
trust or agency with, the Seller, the Servicer or any Sub-Servicer.
Notwithstanding any provision of this Agreement or any other Transaction
Document to the contrary, in no event shall the Administrator ever be required
to take any action which exposes the Administrator to personal liability or
which is contrary to the provision of any Transaction Document or applicable
law.
     (ii) Each Purchaser hereby irrevocably designates and appoints the
respective institution identified as the Purchaser Agent for such Purchaser’s
Purchaser Group on the signature pages hereto or in the Assumption Agreement or
Transfer Supplement pursuant to which such Purchaser becomes a party hereto, and
each authorizes such Purchaser Agent to take such action on its behalf under the
provisions of this Agreement and to exercise such powers and perform such duties
as are expressly delegated to such Purchaser Agent by the terms of this
Agreement, if any, together with such other powers as are reasonably incidental
thereto. Notwithstanding any provision to the contrary elsewhere in this
Agreement, no Purchaser Agent shall have any duties or responsibilities, except
those expressly set forth herein, or any fiduciary relationship with

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any Purchaser or other Purchaser Agent or the Administrator, and no implied
covenants, functions, responsibilities, duties, obligations or liabilities on
the part of such Purchaser Agent shall be read into this Agreement or otherwise
exist against such Purchaser Agent.
     (iii) Except as otherwise specifically provided in this Agreement, the
provisions of this Section 4.7 are solely for the benefit of the Purchaser
Agents, the Administrator and the Purchasers, and none of the Seller, the
Servicer or any Sub-Servicer shall have any rights as a third-party beneficiary
or otherwise under any of the provisions of this Section 4.7, except that this
Section 4.7 shall not affect any obligations which any Purchaser Agent, the
Administrator or any Purchaser may have to the Seller, the Servicer or any
Sub-Servicer under the other provisions of this Agreement. Furthermore, no
Purchaser shall have any rights as a third-party beneficiary or otherwise under
any of the provisions hereof in respect of a Purchaser Agent which is not the
Purchaser Agent for such Purchaser.
     (iv) In performing its functions and duties hereunder, the Administrator
shall act solely as the agent of the Purchasers and the Purchaser Agents and
does not assume nor shall be deemed to have assumed any obligation or
relationship of trust or agency with or for the Seller, the Servicer or any
Sub-Servicer or any of their successors and assigns. In performing its functions
and duties hereunder, each Purchaser Agent shall act solely as the agent of its
respective Purchaser and does not assume nor shall be deemed to have assumed any
obligation or relationship of trust or agency with or for the Seller, the
Servicer, any Sub-Servicer any other Purchaser, any other Purchaser Agent or the
Administrator, or any of their respective successors and assigns.
     (b) Delegation of Duties. The Administrator may execute any of its duties
through agents or attorneys-in-fact and shall be entitled to advice of counsel
concerning all matters pertaining to such duties. The Administrator shall not be
responsible for the negligence or misconduct of any agents or attorneys-in-fact
selected by it with reasonable care.
     (c) Exculpatory Provisions. None of the Purchaser Agents, the Administrator
or any of their respective directors, officers, agents or employees shall be
liable for any action taken or omitted (i) with the consent or at the direction
of the Majority Purchaser Agents (or in the case of any Purchaser Agent, the
Purchasers within its Purchaser Group that have a majority of the aggregate
Commitment of such Purchaser Group) or (ii) in the absence of such Person’s
gross negligence or willful misconduct. The Administrator shall not be
responsible to any Purchaser, Purchaser Agent or other Person for (i) any
recitals, representations, warranties or other statements made by the Seller,
the Servicer, any Sub-Servicer, any Originator or any of their Affiliates,
(ii) the value, validity, effectiveness, genuineness, enforceability or
sufficiency of any Transaction Document, (iii) any failure of the Seller, the
Servicer, any Sub-Servicer, any Originator or any of their Affiliates to perform
any obligation hereunder or under the other Transaction Documents to which it is
a party (or under any Contract), or (iv) the satisfaction of any condition
specified in Exhibit II. The Administrator shall not have any obligation to any
Purchaser or Purchaser Agent to ascertain or inquire about the observance or
performance of any agreement contained in any Transaction Document or to inspect
the properties, books or records of the Seller, the Servicer, any Sub-Servicer,
any Originator or any of their respective Affiliates.

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     (d) Reliance by Agents.
     (i) Each Purchaser Agent and the Administrator shall in all cases be
entitled to rely, and shall be fully protected in relying, upon any document or
other writing or conversation believed by it to be genuine and correct and to
have been signed, sent or made by the proper Person and upon advice and
statements of legal counsel (including counsel to the Seller or the Servicer),
independent accountants and other experts selected by the Administrator. Each
Purchaser Agent and the Administrator shall in all cases be fully justified in
failing or refusing to take any action under any Transaction Document unless it
shall first receive such advice or concurrence of the Majority Purchaser Agents
(or in the case of any Purchaser Agent, the Purchasers within its Purchaser
Group that have a majority of the aggregate Commitment of such Purchaser Group),
and assurance of its indemnification, as it deems appropriate.
     (ii) The Administrator shall in all cases be fully protected in acting, or
in refraining from acting, under this Agreement in accordance with a request of
the Majority Purchaser Agents or the Purchaser Agents, and such request and any
action taken or failure to act pursuant thereto shall be binding upon all
Purchasers, the Administrator and Purchaser Agents.
     (iii) The Purchasers within each Purchaser Group with a majority of the
Commitment of such Purchaser Group shall be entitled to request or direct the
related Purchaser Agent to take action, or refrain from taking action, under
this Agreement on behalf of all of the Purchasers within such Purchaser Group.
Each Purchaser Agent also shall in all cases be fully protected in acting, or in
refraining from acting, under this Agreement in accordance with a request of the
Majority Purchaser Agents, and such request and any action taken or failure to
act pursuant thereto shall be binding upon all of such Purchaser Agent’s
Purchasers.
     (iv) Unless otherwise advised in writing by a Purchaser Agent or by any
Purchaser on whose behalf such Purchaser Agent is purportedly acting, each party
to this Agreement may assume that (i) such Purchaser Agent is acting for the
benefit of each of the Purchasers in respect of which such Purchaser Agent is
identified as being the “Purchaser Agent” in the definition of “Purchaser Agent”
hereto, as well as for the benefit of each assignee or other transferee from any
such Person, and (ii) each action taken by such Purchaser Agent has been duly
authorized and approved by all necessary action on the part of the Purchasers on
whose behalf it is purportedly acting. Each Purchaser Agent and its Purchaser(s)
shall agree amongst themselves as to the circumstances and procedures for
removal, resignation and replacement of such Purchaser Agent. Each Purchaser
shall promptly notify the Seller, the Servicer and the Administrator in writing
of any removal, resignation or replacement of such Purchaser’s Purchaser Agent.
     (e) Notice of Termination Events. Neither any Purchaser Agent nor the
Administrator shall be deemed to have knowledge or notice of the occurrence of
any Termination Event or Unmatured Termination Event unless such Purchaser Agent
or the

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Administrator, as applicable, has received notice from any Purchaser, Purchaser
Agent, the Servicer, any Sub-Servicer or the Seller stating that a Termination
Event or an Unmatured Termination Event has occurred hereunder and describing
such Termination Event or Unmatured Termination Event. In the event that the
Administrator receives such a notice, it shall promptly give notice thereof to
each Purchaser Agent whereupon each such Purchaser Agent shall promptly give
notice thereof to its related Purchasers. In the event that a Purchaser Agent
receives such a notice (other than from the Administrator), it shall promptly
give notice thereof to the Administrator. The Administrator shall take such
action concerning a Termination Event or an Unmatured Termination Event as may
be directed by the Majority Purchaser Agents (unless such action otherwise
requires the consent of all Purchasers, the LC Bank and/or the Required LC
Participants), but until the Administrator receives such directions, the
Administrator may (but shall not be obligated to) take such action, or refrain
from taking such action, as the Administrator deems advisable and in the best
interests of the Purchasers and the Purchaser Agents.
     (f) Non-Reliance on Administrator, Purchaser Agents and Other Purchasers.
Each Purchaser expressly acknowledges that none of the Administrator, the
Purchaser Agents nor any of their respective officers, directors, employees,
agents, attorneys-in-fact or Affiliates has made any representations or
warranties to it and that no act by the Administrator, or any Purchaser Agent
hereafter taken, including any review of the affairs of the Seller, the
Servicer, any Sub-Servicer, any Originator or any of their respective
Affiliates, shall be deemed to constitute any representation or warranty by the
Administrator or such Purchaser Agent, as applicable. Each Purchaser represents
and warrants to the Administrator and the Purchaser Agents that, independently
and without reliance upon the Administrator, Purchaser Agents or any other
Purchaser and based on such documents and information as it has deemed
appropriate, it has made and will continue to make its own appraisal of and
investigation into the business, operations, property, prospects, financial and
other conditions and creditworthiness of the Seller, the Servicer, the
Sub-Servicers, the Originators and the Receivables and its own decision to enter
into this Agreement and to take, or omit, action under any Transaction Document.
Except for items specifically required to be delivered hereunder, the
Administrator shall not have any duty or responsibility to provide any Purchaser
Agent or any Purchaser with any information concerning the Seller, the Servicer,
the Sub-Servicers, the Originators or any of their Affiliates that comes into
the possession of the Administrator or any of its officers, directors,
employees, agents, attorneys-in-fact or Affiliates.
     (g) Administrators and Affiliates. Each of the Purchasers, the Purchaser
Agents and the Administrator and any of their respective Affiliates may extend
credit to, accept deposits from and generally engage in any kind of banking,
trust, debt, entity or other business with the Seller, the Servicer, any
Sub-Servicer, any Originator or any of their Affiliates. With respect to the
acquisition of the Eligible Receivables pursuant to this Agreement, each of the
Purchaser Agents and the Administrator shall have the same rights and powers
under this Agreement as any Purchaser and may exercise the same as though it
were not such an agent, and the terms “Purchaser” and “Purchasers” shall
include, to the extent applicable, each of the Purchaser Agents and the
Administrator in their individual capacities.

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     (h) Indemnification. Each LC Participant and Related Committed Purchaser
shall indemnify and hold harmless the Administrator (solely in its capacity as
Administrator) and the LC Bank (solely in its capacity as LC Bank) and their
respective officers, directors, employees, representatives and agents (to the
extent not reimbursed by the Seller, the Servicer, any Sub-Servicer or any
Originator and without limiting the obligation of the Seller, the Servicer, any
Sub-Servicer or any Originator to do so), ratably (based on its Commitment) from
and against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, settlements, costs, expenses or disbursements of any
kind or nature whatsoever (including in connection with any investigative or
threatened proceeding, whether or not the Administrator, the LC Bank or such
Person shall be designated a party thereto) that may at any time be imposed on,
incurred by or asserted against the Administrator, the LC Bank or such Person as
a result of, or related to, any action taken or omitted by the Administrator or
the LC Bank under the Transaction Documents, any of the transactions
contemplated by the Transaction Documents or the execution, delivery or
performance of the Transaction Documents or any other document furnished in
connection therewith (but excluding any such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, settlements, costs, expenses or
disbursements resulting solely from the gross negligence or willful misconduct
of the Administrator, the LC Bank or such Person as determined by a final
non-appealable judgment of a court of competent jurisdiction). Without limiting
the generality of the foregoing, each LC Participant agrees to reimburse the
Administrator and the LC Bank, ratably according to its Pro Rata Share, promptly
upon demand, for any out of pocket expenses (including reasonable counsel fees)
incurred by the Administrator or the LC Bank in connection with the
administration, modification, amendment or enforcement (whether through
negotiations, legal proceedings or otherwise) of, or legal advice in respect of,
its rights and responsibilities under this Agreement.
     (i) Successor Administrator. The Administrator may, upon at least thirty
(30) days’ notice to the Seller, the Servicer and each Purchaser Agent, resign
as Administrator. Such resignation shall not become effective until a successor
Administrator is appointed by the Majority Purchaser Agents, with the consent of
the Seller (which consent shall not be unreasonably withheld or delayed and
which consent shall not be required if a Termination Event shall have occurred
and is continuing), and has accepted such appointment. Upon such acceptance of
its appointment as Administrator hereunder by a successor Administrator, such
successor Administrator shall succeed to and become vested with all the rights
and duties of the retiring Administrator, and the retiring Administrator shall
be discharged from its duties and obligations under the Transaction Documents.
After any retiring Administrator’s resignation hereunder, the provisions of
Sections 3.1 and 3.2 and this Section 4.7 shall inure to its benefit as to any
actions taken or omitted to be taken by it while it was the Administrator.
     (j) UCC Filings. Each of the Seller, the Purchaser Agents and the
Purchasers expressly recognizes and agrees that the Administrator may be listed
as the assignee or secured party of record on the various UCC filings required
to be made hereunder in order to perfect the sale of the Purchased Assets from
the Seller to the Purchasers, that such listing shall be for administrative
convenience only in creating a record or nominee owner to take certain actions
hereunder on behalf of the Purchasers and that such listing will not affect in
any way the status of the Purchasers as the owners of the Purchased Assets. In
addition, such listing shall impose no

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duties on the Administrator other than those expressly and specifically
undertaken in accordance with this clause (j).
ARTICLE V.
MISCELLANEOUS
     Section 5.1 Amendments, Etc.
          No amendment or waiver of any provision of this Agreement or any other
Transaction Document, or consent to any departure by the Seller, the Servicer or
any Sub-Servicer therefrom, shall be effective unless in a writing signed by the
Administrator, the LC Bank, the Majority Purchaser Agents and the Majority LC
Participants; provided, however, that no such amendment shall (i) decrease the
outstanding amount of, or extend the repayment of or any scheduled payment date
for the payment of, any Discount in respect of any Portion of Capital or any
Fees owed to a Purchaser without the prior written consent of such Purchaser;
(ii) forgive or waive or otherwise excuse any repayment of Capital without the
prior written consent of each Purchaser affected thereby; (iii) increase the
Commitment of any Purchaser without its prior written consent; (iv) amend or
modify the Pro Rata Share of any LC Participant without its prior written
consent; (v) amend or modify the provisions of this Section 5.1 or the
definition of “Majority Purchaser Agents”, “Majority LC Participants” or
“Required LC Participants” without the prior written consent of all Purchaser
Agents, the LC Bank and all LC Participants; (vi) waive any Termination Event
arising from an Event of Bankruptcy with respect to Seller, the Servicer, any
Sub-Servicer or any Originator; (vii) without the prior written consent of all
Purchasers affected thereby, extend the Facility Termination Date or waive,
amend or otherwise modify the definition of Facility Termination Date;
(viii) amend, modify or otherwise affect the rights or duties of the
Administrator, any Purchaser Agent or the LC Bank hereunder without the prior
written consent of the Administrator, such Purchaser Agent or the LC Bank, as
the case may be; and (ix) amend, waive or modify any definition or provision
expressly requiring the consent of the Required LC Participants without the
prior written consent of the LC Bank and the Required LC Participants, and, in
the case of any amendment, by the other parties thereto; and then such
amendment, waiver or consent shall be effective only in the specific instance
and for the specific purpose for which given. No failure on the part of the
Administrator, any Purchaser Agent or any Purchaser to exercise, and no delay in
exercising any right hereunder shall operate as a waiver thereof, nor shall any
single or partial exercise of any right hereunder preclude any other or further
exercise thereof or the exercise of any other right.
     Section 5.2 Notices, Etc.
          All notices and other communications hereunder shall, unless otherwise
stated herein, be in writing (which shall include facsimile communication) and
be sent or delivered to each party hereto at its address set forth under its
name on the signature pages hereof or at such other address as shall be
designated by such party in a written notice to the other parties hereto.
Notices and communications by facsimile shall be effective when sent (and shall
be followed by hard copy sent by first class mail), and notices and
communications sent by other means shall be effective when received.

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     Section 5.3 Successors and Assigns; Assignability; Participations.
     (a) Successors and Assigns. This Agreement shall be binding upon and inure
to the benefit of the parties hereto and their respective successors and
assigns. Except as otherwise provided in Section 4.1(d), neither the Seller nor
the Servicer may assign or transfer any of its rights or delegate any of its
duties hereunder or under any Transaction Document without the prior consent of
the Administrator, the LC Bank, the Required LC Participants and the Purchaser
Agents.
     (b) Participations. (i) Except as otherwise specifically provided herein,
any Purchaser may sell to one or more Persons (each a “Participant”)
participating interests in the interests of such Purchaser hereunder. Such
Purchaser shall remain solely responsible for performing its obligations
hereunder, and the Seller, the Servicer, each Purchaser Agent and the
Administrator shall continue to deal solely and directly with such Purchaser in
connection with such Purchaser’s rights and obligations hereunder. A Purchaser
shall not agree with a Participant to restrict such Purchaser’s right to agree
to any amendment or waiver of this Agreement or any other Transaction Document,
except such amendments or waivers that require the consent of all Purchasers;
provided, that no such agreement between any Purchaser and any such Participant
shall be binding upon the other parties hereto. (ii) Notwithstanding anything
contained in paragraph (a) or clause (i) of paragraph (b) of this Section 5.3,
each of the LC Bank and each LC Participant may sell participations in all or
any part of any Investment made by such LC Participant to another bank or other
entity so long as (i) no such sale of a participation shall, without the consent
of the Seller, require the Seller to file a registration statement with the SEC
and (ii) no holder of any such participation shall be entitled to require such
LC Participant to take or omit to take any action hereunder except that such LC
Participant may agree with such participant that, without such Participant’s
consent, such LC Participant will not consent to an amendment, modification or
waiver referred to in Section 5.1. Any such Participant shall not have any
rights hereunder or under the Transaction Documents.
     (c) Assignments by Certain Related Committed Purchasers. Any Related
Committed Purchaser may assign to one or more Persons (each a “Purchasing
Related Committed Purchaser”), reasonably acceptable to the Administrator, the
LC Bank and the related Purchaser Agent in its sole discretion, any portion of
its Commitment (which shall be inclusive of its Commitment as an LC Participant)
pursuant to a supplement hereto, substantially in the form of Annex G with any
changes as are reasonably acceptable to the Administrator (each, a “Transfer
Supplement”), executed by each such Purchasing Related Committed Purchaser, such
selling Related Committed Purchaser, such related Purchaser Agent and the
Administrator and with the consent of the Seller (provided, that the consent of
the Seller shall not be unreasonably withheld or delayed and that no such
consent shall be required if a Termination Event or Unmatured Termination Event
has occurred and is continuing; provided, further, that no consent of the Seller
shall be required if the assignment is made by any Related Committed Purchaser
to the Administrator, to any Purchaser Agent, to any other Related Committed
Purchaser, to any Affiliate of the Administrator or any Related Committed
Purchaser, to any Program Support Provider or any Person which (i) is in the
business of issuing commercial paper notes and (ii) is associated with or
administered by the Administrator or any Affiliate of the Administrator). Any
such assignment by Related Committed Purchaser may not be for an amount less
than

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$10,000,000. Upon (i) the execution of the Transfer Supplement, (ii) delivery of
an executed copy thereof to the Seller, the Servicer, such related Purchaser
Agent and the Administrator and (iii) payment by the Purchasing Related
Committed Purchaser to the selling Related Committed Purchaser of the agreed
purchase price, if any, such selling Related Committed Purchaser shall be
released from its obligations hereunder to the extent of such assignment and
such Purchasing Related Committed Purchaser shall for all purposes be a Related
Committed Purchaser party hereto and shall have all the rights and obligations
of a Related Committed Purchaser hereunder to the same extent as if it were an
original party hereto. The amount of the Commitment of the selling Related
Committed Purchaser allocable to such Purchasing Related Committed Purchaser
shall be equal to the amount of the Commitment of the selling Related Committed
Purchaser transferred regardless of the purchase price, if any, paid therefor.
     (d) Assignments to Liquidity Banks and other Program Support Providers. Any
Conduit Purchaser may at any time grant to one or more of its Liquidity Banks or
other Program Support Providers, interests in its portion of the Purchased
Assets. In the event of any such grant by such Conduit Purchaser of an interest
to a Liquidity Bank or other Program Support Provider, such Conduit Purchaser
shall remain responsible for the performance of its obligations hereunder. The
Seller agrees that each Liquidity Bank and Program Support Provider of any
Conduit Purchaser hereunder shall be entitled to the benefits of Sections 1.9
and 1.10.
     (e) Other Assignment by Conduit Purchasers. Each party hereto agrees and
consents (i) to any Conduit Purchaser’s assignment, grant of security interests
in or other transfers of any portion of its interest in the Purchased Assets,
including without limitation to any collateral agent in connection with its
commercial paper program and (ii) to the complete assignment by any Conduit
Purchaser of all of its rights and obligations hereunder to any other Person,
and upon such assignment such Conduit Purchaser shall be released from all
obligations and duties, if any, hereunder; provided, that such Conduit Purchaser
may not, without the prior consent of its Related Committed Purchasers, make any
such transfer of its rights hereunder unless the assignee (i) is principally
engaged in the purchase of assets similar to the assets being purchased
hereunder, (ii) has as its Purchaser Agent the Purchaser Agent of the assigning
Conduit Purchaser and (iii) issues commercial paper or other Notes with credit
ratings substantially comparable to the ratings of the assigning Conduit
Purchaser. Any assigning Conduit Purchaser shall deliver to any assignee a
Transfer Supplement with any changes as have been approved by the parties
thereto, duly executed by such Conduit Purchaser, assigning any portion of its
interest in the Purchased Assets to its assignee. Such Conduit Purchaser shall
promptly (i) notify each of the other parties hereto of such assignment and
(ii) take all further action that the assignee reasonably requests in order to
evidence the assignee’s right, title and interest in such interest in the
Purchased Assets and to enable the assignee to exercise or enforce any rights of
such Conduit Purchaser hereunder. Upon the assignment of any portion of its
interest in the Purchased Assets, the assignee shall have all of the rights
hereunder with respect to such interest (except that the Discount therefor shall
thereafter accrue at the rates determined with respect to the assigning Conduit
Purchaser unless the Seller, the related Purchaser Agent and the assignee shall
have agreed upon a different Discount).
     (f) Opinions of Counsel. If required by the Administrator or the applicable
Purchaser Agent or to maintain the ratings of the Notes of any Conduit
Purchaser, each Transfer

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Supplement or other assignment and acceptance agreement must be accompanied by
an opinion of counsel of the assignee as to such matters as the Administrator or
such Purchaser Agent may reasonably request.
     Section 5.4 Costs, Expenses and Taxes.
     (a) In addition to the rights of indemnification granted under
Sections 1.18 and 3.1, the Seller agrees to pay on demand (which demand shall be
accompanied by documentation thereof in reasonable detail) all reasonable costs
and expenses in connection with the preparation, execution, delivery and
administration (including periodic internal audits by the Administrator of Pool
Receivables, provided that at any time when no Termination Event exists and is
continuing, the Seller shall not be required to pay the costs and expenses of
more than one such audit per year) of this Agreement, the other Transaction
Documents and the other documents and agreements to be delivered hereunder (and
all reasonable costs and expenses in connection with any amendment, waiver or
modification of any thereof), including: (i) Attorney Costs for the
Administrator, the Purchaser Agents, the Purchasers and their respective
Affiliates and agents with respect thereto and with respect to advising the
Administrator, the Purchaser Agents, the Purchasers and their respective
Affiliates and agents as to their rights and remedies under this Agreement and
the other Transaction Documents, (ii) fees, costs and expenses payable by the
Conduit Purchasers or their Affiliates to any nationally recognized statistical
rating agency in connection with the transactions contemplated by the
Transaction Documents and obtaining or maintaining the credit ratings of the
Notes issued by such Conduit Purchaser to fund or maintain its Capital, and
(iii) all reasonable costs and expenses (including Attorney Costs), if any, of
the Administrator, the Purchaser Agents, the Purchasers and their respective
Affiliates and agents in connection with the enforcement of this Agreement and
the other Transaction Documents.
     (b) In addition, the Seller shall pay on demand any and all stamp and other
taxes and fees payable in connection with the execution, delivery, filing and
recording of this Agreement or the other documents or agreements to be delivered
hereunder, and shall save each Indemnified Party harmless from and against any
liabilities with respect to or resulting from any delay in paying or omission to
pay such taxes and fees.
     Section 5.5 No Proceedings; Limitation on Payments.
          Each of the Seller, Peabody, the Servicer, the Administrator, each
Purchaser Agent, the Purchasers and each assignee of the Purchased Assets or any
interest therein, and each Person that enters into a commitment to purchase or
make Investments in the Purchased Assets or any interest therein, hereby
covenants and agrees that it will not institute against, or join any other
Person in instituting against, any Conduit Purchaser any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceeding, or other
proceeding under any federal or state bankruptcy or similar law, for one year
and one day after the latest maturing Note issued by such Conduit Purchaser is
paid in full. The provision of this Section 5.5 shall survive any termination of
this Agreement.

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     Section 5.6 Confidentiality.
          Each of the Seller and the Servicer agrees to maintain the
confidentiality of this Agreement and the other Transaction Documents (and all
drafts thereof) in communications with third parties and otherwise; provided,
that this Agreement and the other Transaction Documents may be disclosed to:
(a) third parties to the extent such disclosure is made pursuant to a written
agreement of confidentiality in form and substance reasonably satisfactory to
the Administrator, (b) the Seller’s legal counsel and auditors if they agree to
hold it confidential, and (c) as otherwise required by applicable law (including
applicable SEC requirements); and provided, further, however, that the Seller
and the Servicer may disclose this Agreement and the other Transaction Documents
(other than the Fee Letters or any such Transaction Document that discloses the
Fees) to other financial institutions and their affiliates in connection with a
replacement of the receivables securitization facility represented by this
Agreement and the other Transaction Documents with a new receivables
securitization facility. The Seller and the Servicer shall cause any financial
institution and its affiliates described in the foregoing proviso to maintain
the confidentiality of the Transaction Documents in accordance with the Seller’s
and the Servicer’s obligations under this Section 5.6; provided, however, that
any such financial institution and its affiliates may disclose this Agreement
and the other Transaction Documents it receives in accordance with the
immediately preceding sentence to their legal counsel and auditors if they agree
to hold them confidential and to any regulatory authorities having jurisdiction
over such financial institution or its affiliates. Unless otherwise required by
applicable law, each of the Administrator, the Purchaser Agents and the
Purchasers agrees to maintain the confidentiality of non-public financial
information regarding Peabody and its Subsidiaries and Affiliates; provided,
that such information may be disclosed to: (i) third parties to the extent such
disclosure is made pursuant to a written agreement of confidentiality in form
and substance reasonably satisfactory to Peabody, (ii) legal counsel and
auditors of the Administrator, the Purchaser Agents and the Purchasers if they
agree to hold it confidential, (iii) the rating agencies rating the Notes,
(iv) any Program Support Provider or potential Program Support Provider (if they
agree to hold it confidential), (v) any placement agent placing the Notes (if
they agree to hold it confidential) and (vi) any regulatory authorities having
jurisdiction over PNC, any Purchaser Agent, any Purchaser or any Program Support
Provider.
     Section 5.7 GOVERNING LAW AND JURISDICTION.
     (a) THIS AGREEMENT SHALL BE DEEMED TO BE A CONTRACT MADE UNDER AND GOVERNED
BY THE INTERNAL LAWS OF THE STATE OF ILLINOIS EXCEPT TO THE EXTENT THAT THE
VALIDITY OR PERFECTION OF A SECURITY INTEREST OR REMEDIES HEREUNDER IN RESPECT
OF ANY PARTICULAR COLLATERAL ARE GOVERNED BY THE LAWS OF A JURISDICTION OTHER
THAN THE STATE OF ILLINOIS.
     (b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT MAY BE
BROUGHT IN THE COURTS OF THE STATE OF ILLINOIS OR OF THE UNITED STATES FOR THE
NORTHERN DISTRICT OF ILLINOIS; AND, BY EXECUTION AND DELIVERY OF THIS AGREEMENT,
EACH OF THE PARTIES HERETO CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY,
TO THE

40

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NON-EXCLUSIVE JURISDICTION OF THOSE COURTS. EACH OF THE PARTIES HERETO
IRREVOCABLY WAIVES, TO THE MAXIMUM EXTENT PERMITTED BY LAW, ANY OBJECTION,
INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM
NON CONVENIENS, THAT IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION
OR PROCEEDING IN SUCH JURISDICTION IN RESPECT OF THIS AGREEMENT OR ANY DOCUMENT
RELATED HERETO. EACH OF THE PARTIES HERETO WAIVES PERSONAL SERVICE OF ANY
SUMMONS, COMPLAINT OR OTHER PROCESS, WHICH SERVICE MAY BE MADE BY ANY OTHER
MEANS PERMITTED BY ILLINOIS LAW.
     Section 5.8 Execution in Counterparts.
          This Agreement may be executed in any number of counterparts, each of
which, when so executed, shall be deemed to be an original, and all of which,
when taken together, shall constitute one and the same agreement.
     Section 5.9 Survival of Termination; Non-Waiver.
          The provisions of Sections 1.9, 1.10, 1.21, 1.22, 3.1, 3.2, 4.7, 5.4,
5.5, 5.6, 5.7, 5.10 and 5.14 shall survive any termination of this Agreement.
Neither the Servicer nor any other Person may waive a breach of Exhibit III,
Section 1(g) of this Agreement for so long as the Notes are outstanding.
     Section 5.10 WAIVER OF JURY TRIAL.
          EACH OF THE PARTIES HERETO WAIVES THEIR RESPECTIVE RIGHTS TO A TRIAL
BY JURY OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF OR RELATED
TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY IN ANY ACTION,
PROCEEDING OR OTHER LITIGATION OF ANY TYPE BROUGHT BY ANY OF THE PARTIES AGAINST
ANY OTHER PARTY OR PARTIES, WHETHER WITH RESPECT TO CONTRACT CLAIMS, TORT CLAIMS
OR OTHERWISE. EACH OF THE PARTIES HERETO AGREES THAT ANY SUCH CLAIM OR CAUSE OF
ACTION SHALL BE TRIED BY A COURT TRIAL WITHOUT A JURY. WITHOUT LIMITING THE
FOREGOING, EACH OF THE PARTIES HERETO FURTHER AGREES THAT ITS RESPECTIVE RIGHT
TO A TRIAL BY JURY IS WAIVED BY OPERATION OF THIS SECTION AS TO ANY ACTION,
COUNTERCLAIM OR OTHER PROCEEDING THAT SEEKS, IN WHOLE OR IN PART, TO CHALLENGE
THE VALIDITY OR ENFORCEABILITY OF THIS AGREEMENT OR ANY PROVISION HEREOF. THIS
WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR
MODIFICATIONS TO THIS AGREEMENT.
     Section 5.11 Entire Agreement.
          This Agreement and the other Transaction Documents embody the entire
agreement and understanding between the parties hereto, and supersede all prior
or contemporaneous agreements and understandings of such Persons, verbal or
written, relating to the subject matter hereof and thereof.

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     Section 5.12 Headings.
          The captions and headings of this Agreement and any Exhibit, Schedule
or Annex hereto are for convenience of reference only and shall not affect the
interpretation hereof or thereof.
     Section 5.13 Sharing of Recoveries.
          Each Purchaser agrees that if it receives any recovery, through
set-off, judicial action or otherwise, on any amount payable or recoverable
hereunder in a greater proportion than should have been received hereunder or
otherwise inconsistent with the provisions hereof (including, without
limitation, Section 1.8(a) hereof), then the recipient of such recovery shall
purchase for cash an interest in amounts owing to the other Purchasers (as
return of Capital or otherwise), without representation or warranty except for
the representation and warranty that such interest is being sold by each such
other Purchaser free and clear of any Adverse Claim created or granted by such
other Purchaser, in the amount necessary to create proportional participation by
the Purchaser in such recovery. If all or any portion of such amount is
thereafter recovered from the recipient, such purchase shall be rescinded and
the purchase price restored to the extent of such recovery, but without
interest.
     Section 5.14 Purchaser Groups’ Liabilities.
          The obligations of each Purchaser Agent and each Purchaser under the
Transaction Documents are solely the corporate obligations of such Person.
Except with respect to any claim arising out of the willful misconduct or gross
negligence of the Administrator, any Purchaser Agent or any Purchaser, no claim
may be made by the Seller or the Servicer or any other Person against the
Administrator, any Purchaser Agent or any Purchaser or their respective
Affiliates, directors, officers, employees, attorneys or agents for any special,
indirect, consequential or punitive damages in respect of any claim for breach
of contract or any other theory of liability arising out of or related to the
transactions contemplated by this Agreement or any other Transaction Document or
any act, omission or event occurring in connection therewith; and each of Seller
and Servicer hereby waives, releases, and agrees not to sue upon any claim for
any such damages, whether or not accrued and whether or not known or suspected
to exist in its favor.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

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     IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
by their respective officers thereunto duly authorized, as of the date first
above written.
THE SELLER:

            P&L RECEIVABLES COMPANY, LLC,
as Seller         By:   /s/ Walter L. Hawkins, Jr.         Name:   Walter L.
Hawkins, Jr.        Title:   Senior Vice President and Treasurer   

         
 
  Address:   701 Market Street
 
      St. Louis, MO 63101
 
  Attention:   Treasurer
 
  Telephone:   314-342-3400
 
  Facsimile:   314-342-7740

THE SERVICER:

            PEABODY ENERGY CORPORATION,
as initial Servicer         By:   /s/ Walter L. Hawkins, Jr.         Name:  
Walter L. Hawkins, Jr.        Title:   Senior Vice President and Treasurer   

         
 
  Address:   701 Market Street
 
      St. Louis, MO 63101
 
  Attention:   Treasurer
 
  Telephone:   314-342-3400
 
  Facsimile:   314-342-7740

Amended and Restated
Receivables Purchase Agreement

S-1

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THE SUB-SERVICERS:

            ARCLAR COMPANY, LLC,
as Sub-Servicer         By:   /s/ Walter L. Hawkins, Jr.         Name:   Walter
L. Hawkins, Jr.        Title:   Senior Vice President and Treasurer   

         
 
  Address:   701 Market Street
 
      St. Louis, MO 63101
 
  Attention:   Treasurer
 
  Telephone:   314-342-3400
 
  Facsimile:   341-342-7740

            PEABODY MIDWEST MINING, LLC,
as Sub-Servicer
        By:   /s/ Walter L. Hawkins, Jr.         Name:   Walter L. Hawkins, Jr. 
      Title:   Senior Vice President and Treasurer   

         
 
  Address:   701 Market Street
 
      St. Louis, MO 63101
 
  Attention:   Treasurer
 
  Telephone:   314-342-3400
 
  Facsimile:   341-342-7740

Amended and Restated
Receivables Purchase Agreement

S-2

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            TWENTYMILE COAL, LLC,
as Sub-Servicer         By:   /s/ Walter L. Hawkins, Jr.         Name:   Walter
L. Hawkins, Jr.        Title:   Senior Vice President and Treasurer   

         
 
  Address:   701 Market Street
 
      St. Louis, MO 63101
 
  Attention:   Treasurer
 
  Telephone:   314-342-3400
 
  Facsimile:   341-342-7740

            CABALLO COAL, LLC,
as Sub-Servicer         By:   /s/ Walter L. Hawkins, Jr.         Name:   Walter
L. Hawkins, Jr.        Title:   Senior Vice President and Treasurer   

         
 
  Address:   701 Market St.
 
      St. Louis, MO 63101-1826
 
  Attention:   Treasurer
 
  Telephone:   314-342-3400
 
  Facsimile:   314-342-7740

Amended and Restated
Receivables Purchase Agreement

S-3

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            COALSALES II, LLC,
as Sub-Servicer         By:   /s/ Walter L. Hawkins, Jr.         Name:   Walter
L. Hawkins, Jr.        Title:   Senior Vice President and Treasurer   

         
 
  Address:   701 Market St.
 
      St. Louis, MO 63101-1826
 
  Attention:   Treasurer
 
  Telephone:   314-342-3400
 
  Facsimile:   314-342-7740

            PEABODY WESTERN COAL COMPANY,
as Sub-Servicer         By:   /s/ Walter L. Hawkins, Jr.         Name:   Walter
L. Hawkins, Jr.        Title:   Senior Vice President and Treasurer   

         
 
  Address:   701 Market St.
 
      St. Louis, MO 63101-1826
 
  Attention:   Treasurer
 
  Telephone:   314-342-3400
 
  Facsimile:   314-342-7740

Amended and Restated
Receivables Purchase Agreement

S-4

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            POWDER RIVER COAL, LLC,
as Sub-Servicer         By:   /s/ Walter L. Hawkins, Jr.         Name:   Walter
L. Hawkins, Jr.        Title:   Senior Vice President and Treasurer     

         
 
  Address:   701 Market St.
St. Louis, MO 63101-1826
 
  Attention:   Treasurer
 
  Telephone:    314-342-3400
 
  Facsimile:   314-342-7740

            PEABODY HOLDING COMPANY, LLC,
as Sub-Servicer
        By:   /s/ Walter L. Hawkins, Jr.         Name:   Walter L. Hawkins, Jr. 
      Title:   Senior Vice President and Treasurer     

         
 
  Address:   701 Market St.
St. Louis, MO 63101-1825
 
  Attention:   Treasurer
 
  Telephone:    314-342-3400
 
  Facsimile:   314-342-7740

Amended and Restated
Receivables Purchase Agreement

S-5

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            COALTRADE, LLC,
as Sub-Servicer
            By:   /s/ Walter L. Hawkins, Jr.         Name:   Walter L. Hawkins,
Jr.        Title:   Senior Vice President and Treasurer     

         
 
  Address:   701 Market St.
St. Louis, MO 63101-1825
 
  Attention:   Treasurer
 
  Telephone:   314-342-3400
 
  Facsimile:   314-342-7740

            COALSALES, LLC,
as Sub-Servicer
            By:   /s/ Walter L. Hawkins, Jr.         Name:   Walter L. Hawkins,
Jr.        Title:   Senior Vice President and Treasurer     

         
 
  Address:   701 Market St.
St. Louis, MO 63101-1825
 
  Attention:   Treasurer
 
  Telephone:   314-342-3400
 
  Facsimile:   314-342-7740

Amended and Restated
Receivables Purchase Agreement

S-6

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                        MARKET STREET FUNDING LLC’S
PURCHASER GROUP:

            PNC BANK, NATIONAL ASSOCIATION,
as Purchaser Agent for the Market Street Purchaser
Group
        By:   /s/ William Falcon         Name:   William Falcon        Title:  
Vice President     

         
 
  Address:   PNC Bank, National Association
One PNC Plaza, 26th Floor
249 Fifth Avenue
Pittsburgh, PA 15222-2707
 
  Attention:   William Falcon
 
  Telephone:   412-762-5442
 
  Facsimile:   412-762-9184
 
            Group Commitment: $175,000,000

Amended and Restated
Receivables Purchase Agreement

S-7

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            MARKET STREET FUNDING LLC,
as Related Committed Purchaser
            By:   /s/ Doris J. Hearn         Name:   Doris J. Hearn       
Title:   Vice President     

         
 
  Address:   Market Street Funding LLC
c/o AMACAR Group, LLC
6525 Morrison Boulevard, Suite 318
Charlotte, NC 28211
 
  Attention:   Doug Johnson
 
  Telephone:   704-365-0569
 
  Facsimile:   704-365-1362
 
            With a copy to its Purchaser Agent
 
            Commitment: $175,000,000

Amended and Restated
Receivables Purchase Agreement

S-8

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            MARKET STREET FUNDING LLC,
as Conduit Purchaser
      By:   /s/ Doris J. Hearn         Name:   Doris J. Hearn        Title:  
Vice President     

         
 
  Address:   Market Street Funding LLC
 
      c/o AMACAR Group, LLC
 
      6525 Morrison Boulevard, Suite 318
 
      Charlotte, NC 28211
 
  Attention:   Doug Johnson
 
  Telephone:   704-365-0569
 
  Facsimile:   704-365-1362
 
            With a copy to its Purchaser Agent

Amended and Restated
Receivables Purchase Agreement

S-9

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            PNC BANK, NATIONAL ASSOCIATION,
as the LC Bank and as an LC Participant
      By:   /s/ Richard Munsick         Name:   Richard Munsick        Title:  
Senior Vice President     

         
 
  Address:   PNC Bank, National Association
 
      500 First Avenue
 
      Third Floor
 
      Pittsburgh, PA 15219
 
  Attention:   Richard Munsick
 
  Telephone:   412-762-4299
 
  Facsimile:   412-762-9184
 
            Commitment: $175,000,000     Pro-Rata Share: 63.64%

Amended and Restated
Receivables Purchase Agreement

S-10

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ATLANTIC ASSET SECURITIZATION LLC’S
      PURCHASER GROUP:

            CALYON NEW YORK BRANCH,
as Purchaser Agent for the Atlantic Purchaser
Group
      By:   /s/ Kostantina Kourmpetis         Name:   Kostantina Kourmpetis     
  Title:   Managing Director              By:   /s/ Blake Wright         Name:  
Blake Wright        Title:   Managing Director     

         
 
  Address:   Calyon New York Branch
 
      1301 Avenue of the Americas
 
      New York, NY 10019
 
  Attention:   Debt Capital Markets-Securitization
 
  Telephone:   212-261-3894
 
  Facsimile:   212-459-3528
 
            Group Commitment: $100,000,000

Amended and Restated
Receivables Purchase Agreement

S-11

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            CALYON NEW YORK BRANCH,
as Related Committed Purchaser         By:   /s/ Kostantina Kourmpetis        
Name:   Kostantina Kourmpetis        Title:   Managing Director             
By:   /s/ Blake Wright         Name:   Blake Wright        Title:   Managing
Director     

             
 
  Address:   Calyon New York Branch    
 
      1301 Avenue of the Americas    
 
      New York, NY 10019    
 
  Attention:   Debt Capital Markets-Securitization    
 
  Telephone:   212-261-3894    
 
  Facsimile:   212-459-3528    
 
                With a copy to its Purchaser Agent
 
                Commitment: $100,000,000

Amended and Restated
Receivables Purchase Agreement

S-12

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            ATLANTIC ASSET SECURITIZATION LLC,
as Conduit Purchaser         By:   /s/ Kostantina Kourmpetis         Name:  
Kostantina Kourmpetis        Title:   Managing Director              By:   /s/
Blake Wright         Name:   Blake Wright        Title:   Managing Director     

             
 
  Address:   Atlantic Asset Securitization    
 
      c/o Calyon New York Branch    
 
      1301 Avenue of the Americas    
 
      New York, NY 10019    
 
  Attention:   Debt Capital Markets-Securitization    
 
  Telephone:   212-261-3894    
 
  Facsimile:   212-459-3528    
 
                With a copy to its Purchaser Agent

Amended and Restated
Receivables Purchase Agreement

S-13

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            CALYON NEW YORK BRANCH,
as an LC Participant         By:   /s/ Kostantina Kourmpetis         Name:  
Kostantina Kourmpetis        Title:   Managing Director              By:   /s/
Blake Wright         Name:   Blake Wright        Title:   Managing Director     

             
 
  Address:   Calyon New York Branch    
 
      1301 Avenue of the Americas    
 
      New York, NY 10019    
 
  Attention:   Debt Capital Markets-Securitization    
 
  Telephone:   212-261-3894    
 
  Facsimile:   212-459-3528    
 
                Commitment: $100,000,000     Pro-Rata Share: 36.36%

Amended and Restated
Receivables Purchase Agreement

S-14

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THE ADMINISTRATOR:

            PNC BANK, NATIONAL ASSOCIATION,
as Administrator         By:   /s/ William Falcon         Name:   William
Falcon        Title:   Vice President     

             
 
  Address:   PNC Bank, National Association
 
      One PNC Plaza, 26th Floor
 
      249 Fifth Avenue
 
      Pittsburgh, PA 15222-2707
 
  Attention:   William Falcon
 
  Telephone:   412-762-5442
 
  Facsimile:   412-762-9184

Amended and Restated
Receivables Purchase Agreement

S-15

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EXHIBIT I
DEFINITIONS
     As used in the Agreement (including its Exhibits, Schedules and Annexes),
the following terms shall have the following meanings (such meanings to be
equally applicable to both the singular and plural forms of the terms defined).
Unless otherwise indicated, all Section, Annex, Exhibit and Schedule references
in this Exhibit are to Sections of and Annexes, Exhibits and Schedules to the
Agreement.
     “Adjusted LC Participation Amount” means, at any time, the LC Participation
Amount less the amount of cash collateral held in the LC Collateral Account at
such time.
     “Administration Account” means the account number 1002422076 of the
Administrator maintained at the office of PNC at One PNC Plaza, 249 Fifth
Avenue, Pittsburgh, Pennsylvania 15222-2707, or such other account as may be so
designated in writing by the Administrator to the Servicer.
     “Administrator” has the meaning set forth in the preamble to the Agreement.
     “Adverse Claim” means a lien, security interest or other charge or
encumbrance, or any other type of preferential arrangement; it being understood
that any thereof in favor of, or assigned to, the Administrator (for the benefit
of the Purchasers) shall not constitute an Adverse Claim.
     “Affected Person” has the meaning set forth in Section 1.9 of the
Agreement.
     “Affiliate” means, as to any Person: (a) any Person that, directly or
indirectly, is in control of, is controlled by or is under common control with
such Person, or (b) who is a director or officer: (i) of such Person or (ii) of
any Person described in clause (a), except that, with respect to each Conduit
Purchaser, Affiliate shall mean the holder(s) of its capital stock or membership
interests, as the case may be. For purposes of this definition, control of a
Person shall mean the power, direct or indirect: (x) to vote 25% or more of the
securities having ordinary voting power for the election of directors or
managers of such Person, or (y) to direct or cause the direction of the
management and policies of such Person, in either case whether by ownership of
securities, contract, proxy or otherwise.
     “Aggregate Capital” means at any time the aggregate outstanding Capital of
all Purchasers at such time.
     “Aggregate Discount” at any time, means the sum of the aggregate for each
Purchaser of the accrued and unpaid Discount with respect to each such
Purchaser’s Capital at such time.
     “Agreement” has the meaning set forth in the preamble to the Agreement.
     “Alternate Rate” for any Settlement Period for any Portion of Capital means
an interest rate per annum equal to: (a) 3.25% per annum above the Euro-Rate for
such Settlement Period or, in the sole discretion of the applicable Purchaser,
(b) the Base Rate for such Settlement Period; provided, that the “Alternate
Rate” for any day while a Termination Event exists shall be

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an interest rate equal to the greater of (i) 3.00% per annum above the Base Rate
in effect on such day and (ii) the “Alternate Rate” as calculated in clause (a)
above.
     “Assumption Agreement” means an agreement substantially in the form set
forth in Annex F to this Agreement.
     “Attorney Costs” means and includes all reasonable fees and disbursements
of any law firm or other external counsel.
     “Bankruptcy Code” means the United States Bankruptcy Reform Act of 1978 (11
U.S.C. § 101, et seq.), as amended from time to time.
     “Base Rate” means, for any day, a fluctuating interest rate per annum as
shall be in effect from time to time, which rate shall be at all times equal to
the higher of:
     (a) the rate of interest in effect for such day as publicly announced from
time to time by the applicable Purchaser Agent (or the applicable Related
Committed Purchaser or, in the case of determining the Base Rate for purposes of
calculating the Yield Reserve, the Administrator) as its “reference rate” or
“prime rate”, as applicable. Such “reference rate” (or “prime rate”, as
applicable) is set by the applicable Purchaser Agent (or the applicable Related
Committed Purchaser or the Administrator) based upon various factors, including
the applicable Purchaser Agent’s (or the applicable Related Committed
Purchaser’s or the Administrator’s) costs and desired return, general economic
conditions and other factors, and is used as a reference point for pricing some
loans, which may be priced at, above or below such announced rate; and
     (b) 0.50% per annum above the latest Federal Funds Rate.
     “Base Rate Portion of Capital” shall mean a Portion of Capital, the
Discount with respect to which is calculated at a per annum rate based on the
interest rate determined by reference to the Base Rate.
     “BBA” means the British Bankers’ Association.
     “Benefit Plan” means any employee benefit pension plan as defined in
Section 3(2) of ERISA in respect of which the Seller, any Originator, Peabody or
any ERISA Affiliate is, or at any time during the immediately preceding six
years was, an “employer” as defined in Section 3(5) of ERISA.
     “Business Day” means any day (other than a Saturday or Sunday) on which:
(a) banks are not authorized or required to close in New York City, New York, or
Pittsburgh, Pennsylvania and (b) if this definition of “Business Day” is
utilized in connection with the Euro-Rate, dealings are carried out in the
London interbank market.
     “Capital” means, with respect to any Purchaser, the aggregate amount paid
to (or for the benefit of) the Seller in respect of Investments by such
Purchaser (including, without limitation, pursuant to Section 1.4(f)), as
reduced from time to time by Collections distributed and applied on account of
such Capital pursuant to Section 1.6(d) of the Agreement; provided, that if such

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Capital shall have been reduced by any distribution and thereafter all or a
portion of such distribution is rescinded or must otherwise be returned for any
reason, such Capital shall be increased by the amount of such rescinded or
returned distribution as though it had not been made.
     “Change in Control” means (a) Peabody ceases to own, directly or
indirectly, 100% of the membership interests of the Seller free and clear of all
Adverse Claims; (b) a “Change in Control” (as defined in the Senior Notes
Indenture as in effect on September 30, 2005); (c) with respect to any Material
Originator, Peabody ceases to be the beneficial owner (as defined in Rules
13(d)-3 and 13(d)-5 under the Securities Exchange Act of 1934, as amended),
directly or indirectly, of at least 75% of the outstanding shares of voting
securities of such Material Originator without the prior written consent of the
Administrator, such consent not to be unreasonably withheld; or (d) Peabody
ceases to have beneficial ownership (as defined in clause (c)), directly or
indirectly, of 100% of the outstanding shares of voting securities of Peabody
Holding Company, LLC.
     “Closing Date” means January 25, 2010.
     “Collateral” shall have the meaning set forth in Section 1.1 of the Sale
Agreement.
     “Collections” means, with respect to any Pool Receivable: (a) all funds
that are received by any Originator, Peabody, the Seller or the Servicer in
payment of any amounts owed in respect of such Receivable (including purchase
price, finance charges, interest and all other charges), or applied to amounts
owed in respect of such Receivable (including insurance payments and net
proceeds of the sale or other disposition of repossessed goods or other
collateral or property of the related Obligor or any other Person directly or
indirectly liable for the payment of such Pool Receivable and available to be
applied thereon), (b) all amounts deemed to have been received pursuant to
Section 1.6(e) of the Agreement and (c) all other proceeds of such Pool
Receivable.
     “Commitment” means, with respect to any Related Committed Purchaser, LC
Participant or LC Bank, as applicable, the maximum aggregate amount which such
Purchaser is obligated to pay hereunder on account of all Investments and all
drawings under all Letters of Credit, on a combined basis, as set forth below
its signature to this Agreement or in the Assumption Agreement or other
agreement pursuant to which it became a Purchaser, as such amount may be
modified in connection with any subsequent assignment pursuant to Section 5.3(c)
or in connection with a change in the Purchase Limit pursuant to Section 1.1(c).
As the context so requires, “Commitment” with respect to any Related Committed
Purchaser, LC Participant or LC Bank, as applicable, shall also be deemed to
include such Related Committed Purchaser’s, LC Participant’s or LC Bank’s
obligation hereunder to make Investments, Reinvestments or participation
advances to the LC Bank or, in the case of the LC Bank, to issue Letters of
Credit, as applicable, on the terms and subject to the conditions set forth
herein.
     “Commitment Percentage” means, for each Related Committed Purchaser or
related LC Participant in a Purchaser Group, the Commitment of such Related
Committed Purchaser or related LC Participant, as the case may be, divided by
the total of all Commitments of all Related Committed Purchasers or related LC
Participants, as the case may be, in such Purchaser Group.

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     “Company Note” has the meaning set forth in Section 3.1 of the Sale
Agreement.
     “Concentration Percentage” means: (a) for any Group A Obligor, 15%, (b) for
any Group B Obligor, 7.5%, (c) for any Group C Obligor, 5.0% and (d) for any
Group D Obligor, 3.0%.
     “Concentration Reserve” means the product of (a) the Aggregate Capital plus
the LC Participation Amount, and (b)(i) the Concentration Reserve Percentage
divided by (ii) 1 minus the Concentration Reserve Percentage.
     “Concentration Reserve Percentage” means the (a) largest of the following
(i) the sum of the five (5) largest Group D Obligor Receivables balances (up to
the Concentration Percentage for each Obligor), (ii) the sum of the three
(3) largest Group C Obligor Receivables balances (up to the Concentration
Percentage for each Obligor), (iii) the sum of the two (2) largest Group B
Obligor Receivables balances (up to the Concentration Percentage for each
Obligor), and (iv) the one (1) largest Group A Obligor Receivables balance (up
to the Concentration Percentage for such Obligor), divided by (b) the Eligible
Receivables.
     “Conduit Purchaser” means each commercial paper conduit that is a party to
this Agreement, as a purchaser, or that becomes a party to this Agreement, as a
purchaser pursuant to an Assumption Agreement or otherwise.
     “Contract” means, with respect to any Receivable, any and all contracts,
instruments, agreements, leases, invoices, notes or other writings pursuant to
which such Receivable arises or that evidence such Receivable or under which an
Obligor becomes or is obligated to make payment in respect of such Receivable.
     “Contributed Assets” has the meaning set forth in Section 1.1 of the
Contribution Agreement.
     “Contribution Agreement” means that certain Contribution Agreement dated as
of February 20, 2002 by and between the Contributor and the Seller, as the same
may be amended from time to time.
     “Contribution Indemnified Amounts” has the meaning set forth in Section 7.1
of the Contribution Agreement.
     “Contribution Indemnified Party” has the meaning set forth in Section 7.1
of the Contribution Agreement.
     “Contribution Termination Date” has the meaning set forth in Section 1.3 of
the Contribution Agreement.
     “Contribution Termination Event” has the meaning set forth in Section 6.1
of the Contribution Agreement.
     “Contributor” means Peabody Energy Corporation, a Delaware corporation.

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     “CP Rate” means, for any Conduit Purchaser and for any Settlement Period
for any Portion of Capital, (a) the per annum rate equivalent to the weighted
average cost (as determined by the applicable Purchaser Agent and which shall
include commissions of placement agents and dealers, incremental carrying costs
incurred with respect to Notes of such Person maturing on dates other than those
on which corresponding funds are received by such Conduit Purchaser, other
borrowings by such Conduit Purchaser (other than under any Program Support
Agreement) and any other costs associated with the issuance of Notes) of or
related to the issuance of Notes that are allocated, in whole or in part, by the
applicable Purchaser Agent to fund or maintain such Portion of Capital (and
which may be also allocated in part to the funding of other assets of such
Conduit Purchaser); provided, that if any component of such rate is a discount
rate, in calculating the “CP Rate” for such Portion of Capital for such
Settlement Period, the applicable Purchaser Agent shall for such component use
the rate resulting from converting such discount rate to an interest bearing
equivalent rate per annum; provided, further, that notwithstanding anything in
the Agreement or the other Transaction Documents to the contrary, the Seller
agrees that any amounts payable to the Purchasers in respect of Discount for any
Settlement Period with respect to any Portion of Capital funded by such
Purchaser at the CP Rate shall include an amount equal to the portion of the
face amount of the outstanding Notes issued to fund or maintain such Portion of
Capital that corresponds to the portion of the proceeds of such Notes that was
used to pay the interest component of maturing Notes issued to fund or maintain
such Portion of Capital, to the extent that such Purchaser had not received
payments of interest in respect of such interest component prior to the maturity
date of such maturing Notes (for purposes of the foregoing, the “interest
component” of Notes equals the excess of the face amount thereof over the net
proceeds received by such Purchaser from the issuance of Notes, except that if
such Notes are issued on an interest-bearing basis its “interest component” will
equal the amount of interest accruing on such Notes through maturity) or (b) any
other rate designated as the “CP Rate” for such Conduit Purchaser in an
Assumption Agreement or Transfer Supplement pursuant to which such Person
becomes a party as a Conduit Purchaser to this Agreement, or any other writing
or agreement provided by such Conduit Purchaser to the Seller, the Servicer and
the applicable Purchaser Agent from time to time. Notwithstanding the foregoing,
the “CP Rate” for any day while a Termination Event exists shall be an interest
rate equal to the greater of (i) 3.00% above the Base Rate in effect on such day
and (ii) the Alternate Rate as calculated in the definition thereof.
     “Credit Agreement” means that certain Third Amended and Restated Credit
Agreement, dated as of September 15, 2006, among Peabody, as borrower, the
several lenders from time to time parties thereto, Bank of America Securities,
LLC and Citigroup Global Markets, Inc., as arrangers, the various other parties
thereto, and Bank of America, N.A., as administrative agent, and shall include,
except as otherwise expressly provided herein, such agreement as amended,
restated and/or otherwise modified from time to time in accordance with the
terms thereof, and any extension, replacement, substitution, and/or refinancing
thereof.
     “Credit and Collection Policy” means, as the context may require, those
receivables credit and collection policies and practices of the Originators in
effect on the date of the Agreement and described in Schedule I to the
Agreement, as modified in compliance with the Agreement.
     “Cut-off Date” has the meaning set forth in the Sale Agreement.

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     “Days’ Sales Outstanding” means, at any time, an amount computed as of the
last day of each calendar month equal to: (a) the average of the Outstanding
Balance of all Pool Receivables as of the last day of each of the three most
recent calendar months ended on the last day of such calendar month divided by
(b) (i) the aggregate credit sales made by the Originators during the three
calendar months ended on or before the last day of such calendar month divided
by (ii) 90.
     “Debt” means: (a) indebtedness for borrowed money, (b) obligations
evidenced by bonds, debentures, notes or other similar instruments,
(c) obligations to pay the deferred purchase price of property or services,
(d) obligations as lessee under leases that shall have been or should be, in
accordance with generally accepted accounting principles, recorded as capital
leases, and (e) obligations under direct or indirect guaranties in respect of,
and obligations (contingent or otherwise) to purchase or otherwise acquire, or
otherwise to assure a creditor against loss in respect of, indebtedness or
obligations of others of the kinds referred to in clauses (a) through (d) above.
     “Declining Conduit Purchaser” has the meaning set forth in
Section 1.6(b)(ii) of the Agreement.
     “Declining Notice” has the meaning set forth in Section 1.6(b)(ii) of the
Agreement.
     “Defaulted Receivable” means a Receivable:
     (a) as to which any payment, or part thereof, remains unpaid for more than
60 days from the due date for such payment (which shall be determined without
regard to any credit memos or credit balances available to the Obligor);
provided, that, any Receivable the related Obligor of which is TVA that would
otherwise have become a Defaulted Receivable pursuant to this clause (a) during
the calendar month of March 2007 shall not be deemed a Defaulted Receivable, or
     (b) without duplication (i) as to which an Insolvency Proceeding shall have
occurred with respect to the Obligor thereof or any other Person obligated
thereon or owning any Related Security with respect thereto, or (ii) that has
been written off the Seller’s books as uncollectible.
     “Default Ratio” means the ratio (expressed as a percentage and rounded to
the nearest 1/100 of 1%, with 5/1000th of 1% rounded upward) computed as of the
last day of each calendar month by dividing: (a) the aggregate Outstanding
Balance of all Pool Receivables that became Defaulted Receivables during such
month (other than Receivables that became Defaulted Receivables as a result of
an Event of Bankruptcy with respect to the Obligor thereof during such month),
by (b) the aggregate credit sales made by the Originators during the month that
is three calendar months before such month.
     “Deferred Purchase Price” has the meaning set forth in Section 1.4(c) of
the Agreement.
     “Delinquency Ratio” means the ratio (expressed as a percentage and rounded
to the nearest 1/100 of 1%, with 5/1000th of 1% rounded upward) computed as of
the last day of each calendar month by dividing: (a) the aggregate Outstanding
Balance of all Pool Receivables that

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were Delinquent Receivables on such day by (b) the aggregate Outstanding Balance
of all Pool Receivables on such day.
     “Delinquent Receivable” means a Receivable as to which any payment, or part
thereof, remains unpaid for more than 60 days from the due date for such
payment.
     “Dilution Horizon” means, for any calendar month, the ratio (expressed as a
percentage and rounded to the nearest 1/100th of 1%, with 5/l000th of 1% rounded
upward) computed as of the last day of such calendar month of: (a) the aggregate
credit sales made by the Originators during the two most recent calendar months
to (b) the Net Receivables Pool Balance at the last day of the most recent
calendar month.
     “Dilution Ratio” means the ratio (expressed as a percentage and rounded to
the nearest 1/100th of 1%, with 5/1000th of 1% rounded upward), computed as of
the last day of each calendar month by dividing: (a) the aggregate amount of
payments required to be made by the Seller pursuant to Section 1.6(e)(i) of the
Agreement during such calendar month by (b) the aggregate credit sales made by
the Originators during the month that is one month prior to the current month.
     “Dilution Reserve” means, on any date, an amount equal to: (a) the sum of
the Aggregate Capital plus the LC Participation Amount at the close of business
of the Seller on such date multiplied by (b) (i) the Dilution Reserve Percentage
on such date, divided by (ii) 100% minus the Dilution Reserve Percentage on such
date.
     “Dilution Reserve Percentage” means on any date, the product of (i) the
Dilution Horizon multiplied by (ii) the sum of (x) 2.25 times the average of the
Dilution Ratio for the twelve most recent calendar months and (y) the Spike
Factor.
     “Discount” means, with respect to any Purchaser:
     (a) for any Portion of Capital of such Purchaser for any Settlement Period
to the extent such Purchaser will be funding such Portion of Capital during such
Settlement Period through the issuance of Notes:
CPR x C x ED/360
     (b) for any Portion of Capital of such Purchaser for any Settlement Period
to the extent such Purchaser will not be funding such Portion of Capital during
such Settlement Period through the issuance of Notes or, to the extent the LC
Bank and/or any LC Participant has made an Investment in connection with any
drawing under a Letter of Credit, which Investment accrues Discount pursuant to
Section 1.4(f) of the Agreement:
AR x C x ED/Year + TF
     where:

             
 
  AR   =   the Alternate Rate for such Portion of Capital for such Settlement
Period,

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  C   =   such Portion of Capital during such Settlement Period,
 
           
 
  CPR   =   the CP Rate for such Portion of Capital for such Settlement Period,
 
           
 
  ED   =   the actual number of days during such Settlement Period,
 
           
 
  Year   =   if such Portion of Capital is funded based upon: (i) the Euro-Rate,
360 days, and (ii) the Base Rate, 365 or 366 days, as applicable, and
 
           
 
  TF   =   the Termination Fee, if any, for the Portion of Capital for such
Settlement Period;

provided, that no provision of the Agreement shall require the payment or permit
the collection of Discount in excess of the maximum permitted by applicable law;
and provided further, that Discount for any Portion of Capital shall not be
considered paid by any distribution to the extent that at any time all or a
portion of such distribution is rescinded or must otherwise be returned for any
reason.
     “Drawing Date” has the meaning set forth in Section 1.16 of the Agreement.
     “Eligible Assignee” means any bank or financial institution acceptable to
the LC Bank and the Administrator.
     “Eligible Receivable” means, at any time, a Pool Receivable:
     (a) the Obligor of which is (i) a United States resident or if such Obligor
is not a United States resident: (A) such Pool Receivable must result from goods
sold and shipped from the Originator in the United States and payment for such
goods must be denominated and payable only in U.S. dollars and payable to an
Originator at a Lock-Box Account, (B) if such Obligor is a resident of Canada,
the total of all Eligible Receivables the Obligors of which are Canadian
residents does not exceed 3% (or, if at any time the foreign currency rating of
Canada falls below A by Standard & Poor’s or A2 by Moody’s, 2%) of all Eligible
Receivables and (C) if such Obligor is neither a U.S. nor a Canadian resident,
the total of all Eligible Receivables the Obligors of which are both non-U.S.
and non-Canadian residents does not exceed 5% of all Eligible Receivables,
(ii) not a government or a governmental subdivision, affiliate or agency, except
that up to 3% of all Eligible Receivables may consist of Receivables the
Obligors of which are governments, governmental subdivisions, affiliates or
agencies, provided, however, that TVA shall not be subject to the restrictions
of this subsection (ii), (iii) not subject to any action of the type described
in paragraph (f) of Exhibit V to the Agreement, (iv) not an Affiliate of Peabody
or any other Originator, and (v) not an Obligor as to which the Administrator,
in its reasonable business judgment, has notified the Seller that such Obligor
is not acceptable,
     (b) that is denominated and payable only in U.S. dollars in the United
States to the Originator at a Lockbox Account,

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     (c) that does not have a stated maturity which is more than 60 days after
the original invoice date of such Receivable,
     (d) that arises under a duly authorized Contract for the sale and delivery
of goods or services in the ordinary course of the Originator’s business,
     (e) that arises under a duly authorized Contract that is in full force and
effect and that is a legal, valid and binding obligation of the related Obligor,
enforceable against such Obligor in accordance with its terms,
     (f) that conforms in all material respects with all applicable laws,
rulings and regulations in effect,
     (g) that is not the subject of any asserted dispute, offset, hold back
defense, Adverse Claim or other claim, provided, that, with respect to any
Receivable which is subject to any such a claim, the amount of such Receivable
which shall be treated as an Eligible Receivable shall equal the excess of the
amount of such Receivable over the amount of such claim asserted by or available
to the account party or other obligor,
     (h) that satisfies all applicable requirements of the applicable Credit and
Collection Policy,
     (i) that has not been modified, waived or restructured since its creation,
except as permitted pursuant to Section 4.2 of the Agreement,
     (j) in which the Seller owns good and marketable title, free and clear of
any Adverse Claims, and that is freely assignable by the Seller (including
without any consent of the related Obligor),
     (k) for which the Administrator (on behalf of the Purchasers) shall have a
valid and enforceable ownership or security interest and a valid and enforceable
first priority perfected ownership or security interest therein and in the
Related Security and Collections with respect thereto, in each case free and
clear of any Adverse Claim,
     (l) that constitutes an account as defined in the UCC, and that is not
evidenced by instruments or chattel paper,
     (m) that is neither a Defaulted Receivable nor a Delinquent Receivable,
     (n) for which neither the Originator thereof, the Seller nor the Servicer
has established any offset arrangements with the related Obligor,
     (o) for which Defaulted Receivables of the related Obligor do not exceed
25% of the Outstanding Balance of all such Obligor’s Receivables,
     (p) that represents amounts earned and payable by the Obligor that are not
subject to the performance of additional services by the Originator thereof,

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          (q) that is not a Receivable considered to be a “quality accrual” (as
reported on the monthly Information Package), except that up to 5% of Eligible
Receivables may be “quality accruals”, and
          (r) the Obligor of which is not the Mohave Project.
     “ERISA” means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and any successor statute of similar import, together
with the regulations thereunder, in each case as in effect from time to time.
References to sections of ERISA also refer to any successor sections.
     “ERISA Affiliate” means: (a) any corporation that is a member of the same
controlled group of corporations (within the meaning of Section 414(b) of the
Internal Revenue Code) as the Seller, any Originator or Peabody, (b) a trade or
business (whether or not incorporated) under common control (within the meaning
of Section 414(c) of the Internal Revenue Code) with the Seller, any Originator
or Peabody, or (c) a member of the same affiliated service group (within the
meaning of Section 414(m) of the Internal Revenue Code) as the Seller, any
Originator, any corporation described in clause (a) or any trade or business
described in clause (b).
     “Euro-Rate” means with respect to any Settlement Period the interest rate
per annum determined by the applicable Purchaser Agent by dividing (the
resulting quotient rounded upwards, if necessary, to the nearest 1/100th of 1%
per annum) (i) the rate of interest determined by such Purchaser Agent in
accordance with its usual procedures (which determination shall be conclusive
absent manifest error) to be the average of the London interbank market offered
rates for U.S. dollars quoted by the BBA as set forth on Dow Jones Markets
Service (formerly known as Telerate) (or appropriate successor or, if the BBA or
its successor ceases to provide display page 3750 (or such other display page on
the Dow Jones Markets Service system as may replace display page 3750) at or
about 11:00 a.m. (London time) on the Business Day which is two (2) Business
Days prior to the first day of such Settlement Period for an amount comparable
to the Portion of Capital to be funded at the Alternate Rate and based upon the
Euro-Rate during such Settlement Period by (ii) a number equal to 1.00 minus the
Euro-Rate Reserve Percentage. The Euro-Rate may also be expressed by the
following formula:

         
 
  Euro-Rate =   Average of London interbank offered rates quoted by BBA as shown
on Dow Jones Markets Service display page 3750 or appropriate successor
 
       
 
      1.00 — Euro-Rate Reserve Percentage

where “Euro-Rate Reserve Percentage” means, the maximum effective percentage in
effect on such day as prescribed by the Board of Governors of the Federal
Reserve System (or any successor) for determining the reserve requirements
(including without limitation, supplemental, marginal, and emergency reserve
requirements) with respect to eurocurrency funding (currently referred to as
“Eurocurrency Liabilities”). The Euro-Rate shall be adjusted with respect to any
Portion of Capital funded at the Alternate Rate and based upon the Euro-Rate
that is outstanding on the effective date of any change in the Euro-Rate Reserve
Percentage as of such effective date. The applicable Purchaser Agent shall give
prompt notice to the Seller of the Euro-Rate as

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determined or adjusted in accordance herewith (which determination shall be
conclusive absent manifest error).
     “Event of Bankruptcy” means (a) any case, action or proceeding before any
court or other governmental authority relating to bankruptcy, reorganization,
insolvency, liquidation, receivership, dissolution, winding-up or relief of
debtors or (b) any general assignment for the benefit of creditors of a Person
or any composition, marshalling of assets for creditors of a Person, or other
similar arrangement in respect of its creditors generally or any substantial
portion of its creditors; in each of cases (a) and (b) undertaken under U.S.
Federal, state or foreign law, including the Bankruptcy Code.
     “Excess Concentration” means the sum of the amounts by which the
Outstanding Balance of Eligible Receivables of each Obligor then in the
Receivables Pool exceeds an amount equal to: (a) the Concentration Percentage
for such Obligor multiplied by (b) the Outstanding Balance of all Eligible
Receivables then in the Receivables Pool.
     “Exiting Notice” has the meaning set forth in Section 1.6(b)(ii) of the
Agreement.
     “Exiting Purchaser” has the meaning set forth in Section 1.6(b)(ii) of the
Agreement.
     “Facility Termination Date” means the earliest to occur of: (a) with
respect to each Purchaser, May 12, 2012, subject to any extension thereof
pursuant to Section 1.12, (b) the date determined pursuant to Section 2.2 of the
Agreement, (c) the date the Purchase Limit reduces to zero pursuant to
Section 1.1(c) of the Agreement, (d) with respect to each Purchaser Group, the
date on which the commitments of the Liquidity Banks under the related Liquidity
Agreement terminate, it being understood that, as of the Closing Date, the
termination date of such commitments for Market Street Funding LLC’s and
Atlantic Asset Securitization LLC’s Purchaser Groups are scheduled to occur on
May 11, 2010, subject to any extension thereof pursuant to Section 1.12,
(e) with respect to each Purchaser Group, the date that the commitment of all of
the Related Committed Purchasers of such Purchaser Group terminate pursuant to
Section 1.12 and (f) the Seller shall fail to cause the amendment or
modification of any Transaction Document or related opinion as required by
Moody’s or Standard & Poor’s, and such failure shall continue for 30 days after
such amendment is initially requested.
     “Federal Funds Rate” means, for any day, the per annum rate set forth in
the weekly statistical release designated as H.15(519), or any successor
publication, published by the Federal Reserve Board (including any such
successor, “H.15(519)”) for such day opposite the caption “Federal Funds
(Effective).” If on any relevant day such rate is not yet published in H.
15(519), the rate for such day will be the rate set forth in the daily
statistical release designated as the Composite 3:30 p.m. Quotations for U.S.
Government Securities, or any successor publication, published by the Federal
Reserve Bank of New York (including any such successor, the “Composite 3:30 p.m.
Quotations”) for such day under the caption “Federal Funds Effective Rate.” If
on any relevant day the appropriate rate is not yet published in either
H.15(519) or the Composite 3:30 p.m. Quotations, the rate for such day will be
the arithmetic mean as determined by the Administrator of the rates for the last
transaction in overnight Federal funds arranged before 9:00 a.m. (New York time)
on that day by each of three leading brokers of Federal funds transactions in
New York City selected by the Administrator.

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     “Federal Reserve Board” means the Board of Governors of the Federal Reserve
System, or any entity succeeding to any of its principal functions.
     “Fee Letters” has the meaning set forth in Section 1.7 of the Agreement.
     “Fees” means the fees payable by the Seller pursuant to the Fee Letters.
For the avoidance of doubt, “Fees” excludes any Servicing Fees.
     “Final Payout Date” means the date on or after the Facility Termination
Date on which (i) the Purchase Limit and all Commitments have been reduced to
zero ($0), (ii) the Aggregate Capital has been reduced to zero ($0), (iii) the
Aggregate Discount has been paid in full, (iv) all accrued Fees have been paid
in full, (v) the Adjusted LC Participation Amount has been reduced to zero ($0)
and (vi) all other amounts owing by the Seller and the Servicer to the
Administrator, the Purchaser Agents, the Purchasers, the Indemnified Parties and
the other Affected Persons hereunder and under the other Transaction Documents
have been paid in full.
     “Governmental Authority” means any nation or government, any state or other
political subdivision thereof, any central bank (or similar monetary or
regulatory authority) thereof, any body or entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government, including any court, and any Person owned or controlled, through
stock or capital ownership or otherwise, by any of the foregoing.
     “Group A Obligor” means any Obligor with a short-term rating of at least:
(a) “A1” by Standard & Poor’s, or if such Obligor does not have a short-term
rating from Standard & Poor’s, a rating of “A+” or better by Standard & Poor’s
on its long-term senior unsecured and uncredit-enhanced debt securities, and (b)
“P-1” by Moody’s, or if such Obligor does not have a short-term rating from
Moody’s, “Al” or better by Moody’s on its long-term senior unsecured and
uncredit-enhanced debt securities, and any Special Group A Obligor.
     “Group B Obligor” means an Obligor, not a Group A Obligor, with a
short-term rating of at least: (a) “A-2” by Standard & Poor’s, or if such
Obligor does not have a short-term rating from Standard & Poor’s, a rating of
“BBB+” to “A” by Standard & Poor’s on its long-term senior unsecured and
uncredit-enhanced debt securities, and (b) “P-2” by Moody’s, or if such Obligor
does not have a short-term rating from Moody’s, “Baal” to “A2” by Moody’s on its
long-term senior unsecured and uncredit-enhanced debt securities, and any
Special Group B Obligor.
     “Group C Obligor” means an Obligor, not a Group A Obligor or a Group B
Obligor, with a short-term rating of at least: (a) “A-3” by Standard & Poor’s,
or if such Obligor does not have a short-term rating from Standard & Poor’s, a
rating of “BBB-” to “BBB” by Standard & Poor’s on its long-term senior unsecured
and uncredit-enhanced debt securities, and (b) “P-3” by Moody’s, or if such
Obligor does not have a short-term rating from Moody’s, “Baa3” to “Baa2” by
Moody’s on its long-term senior unsecured and uncredit-enhanced debt securities,
and any Special Group C Obligor.
     “Group Capital” means with respect to any Purchaser Group, an amount equal
to the aggregate of all Capital of the Purchasers within such Purchaser Group.

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     “Group Commitment” means with respect to any Purchaser Group the aggregate
of the Commitments of each Purchaser within such Purchaser Group, which amount
is set forth on the related Purchaser Agent’s signature page hereto; it being
understood that any such Group Commitment may be less than the sum of the
Commitments of the Purchasers within the relevant Purchaser Group.
     “Group D Obligor” means any Obligor that is not a Group A Obligor, Group B
Obligor or Group C Obligor, and any Special Group D Obligor.
     “Indemnified Amounts” has the meaning set forth in Section 3.1 of the
Agreement.
     “Indemnified Party” has the meaning set forth in Section 3.1 of the
Agreement.
     “Independent Director” has the meaning set forth in paragraph 3(c) of
Exhibit IV to the Agreement.
     “Information Package” means a report, in substantially the form of Annex A
to the Agreement, furnished to the Administrator and each Purchaser Agent
pursuant to the Agreement.
     “Insolvency Proceeding” means: (a) any case, action or proceeding before
any court or other Governmental Authority relating to bankruptcy,
reorganization, insolvency, liquidation, receivership, dissolution, winding-up
or relief of debtors, or (b) any general assignment for the benefit of creditors
of a Person, composition, marshaling of assets for creditors of a Person, or
other, similar arrangement in respect of its creditors generally or any
substantial portion of its creditors, in each of cases (a) and (b) undertaken
under U.S. Federal, state or foreign law, including the Bankruptcy Code.
     “Intercreditor Agreement” means that certain Intercreditor Agreement dated
as of February 20, 2002, by and between the Administrator and Bank One, NA, in
its capacity as administrative agent under the Credit Agreement, as such
Intercreditor Agreement may be amended, restated and/or otherwise modified from
time to time in accordance with the terms thereof.
     “Internal Revenue Code” means the Internal Revenue Code of 1986, as amended
from time to time, and any successor statute of similar import, together with
the regulations thereunder, in each case as in effect from time to time.
References to sections of the Internal Revenue Code also refer to any successor
sections.
     “Investment” has the meaning set forth in Section 1.1(a) of the Agreement.
     “Investment Date” means the date on which an Investment or a Reinvestment
is made pursuant to this Agreement.
     “Investment Notice” has the meaning set forth in Section 1.2(a) of this
Agreement.
     “ISP98 Rules” has the meaning set forth in Section 1.14 of the Agreement.
     “LC Bank” has the meaning set forth in the preamble to the Agreement.

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     “LC Collateral Account” means the account designated as the LC Collateral
Account established and maintained by the Administrator (for the benefit of the
LC Bank and the LC Participants), or such other account as may be so designated
as such by the Administrator.
     “LC Commitment” means the “Commitment” of each LC Participant party hereto
as set forth under its name on the signature pages to the Agreement or as set
forth in any Assumption Agreement pursuant to which it became a party hereto.
     “LC Participant” means each Person listed as such (and its respective
Commitment) for each Purchaser Group as set forth on the signature pages of this
Agreement or in any Assumption Agreement or Transfer Supplement.
     “LC Participation Amount” shall mean, at any time, the then aggregate face
amount of the outstanding Letters of Credit.
     “Letter of Credit” shall mean any stand-by letter of credit issued by the
LC Bank for the account of the Seller pursuant to the Agreement.
     “Letter of Credit Application” has the meaning set forth in Section 1.14 of
the Agreement.
     “Liquidity Agreement” means any agreement entered into in connection with
this Agreement pursuant to which a Liquidity Bank agrees to make purchases or
advances to, or purchase assets from, any Conduit Purchaser in order to provide
liquidity for such Conduit Purchaser’s Investments.
     “Liquidity Bank” means each bank or other financial institution that
provides liquidity support to any Conduit Purchaser pursuant to the terms of a
Liquidity Agreement.
     “LLC Agreement” means the Second Amended and Restated Limited Liability
Company Agreement of P&L Receivables Company, LLC.
     “Lock-Box Account” means an account in the name of the Seller and
maintained by the Seller at a bank or other financial institution for the
purpose of receiving Collections.
     “Lock-Box Agreement” means an agreement, in form and substance satisfactory
to the Administrator, among the Seller, the Servicer, the Administrator and a
Lock-Box Bank.
     “Lock-Box Bank” means any of the banks or other financial institutions
holding one or more Lock-Box Accounts.
     “Loss Reserve” means, on any date, an amount equal to: (a) the sum of the
Aggregate Capital plus the LC Participation Amount at the close of business of
the Seller on such date multiplied by (b) (i) the Loss Reserve Percentage on
such date divided by (ii) 100% minus the Loss Reserve Percentage on such date.
     “Loss Reserve Percentage” means, on any date, the product of (i) 2.25 times
(ii) the highest average of the Default Ratios for any three consecutive
calendar months during the

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twelve most recent calendar months and (iii) (A) the aggregate credit sales made
by the Originators during the four most recent calendar months divided by
(B) the Net Receivables Pool Balance as of such date.
     “Majority LC Participants” means, at any time, LC Participants whose Pro
Rata Shares aggregate 51% or more.
     “Majority Purchaser Agents” means, at any time, the Purchaser Agents which
in their related Purchaser Group have Related Committed Purchasers whose
Commitments aggregate more than 50% of the aggregate of the Commitments of all
Related Committed Purchasers in all Purchaser Groups; provided, that so long as
any one Related Committed Purchaser’s Commitment is greater than 50% of the
aggregate Commitments and there is more than one Purchaser Group, then “Majority
Purchaser Agents” shall mean a minimum of two Purchaser Agents which in their
related Purchaser Group have Related Committed Purchasers whose Commitments
aggregate more than 50% of the aggregate Commitment of all Related Committed
Purchasers in all Purchaser Groups.
     “Material Adverse Effect” means with respect to any event or circumstance,
a material adverse effect on:
     (a) the assets, operations, business or financial condition of (i) the
Seller, or (ii) Peabody and its Subsidiaries taken as a whole,
     (b) the ability of any of the Originators, the Contributor, the Servicer,
any of the Sub-Servicers, the Transferee or the Seller to perform its
obligations under the Agreement or any other Transaction Document to which it is
a party,
     (c) the validity or enforceability of the Agreement or any other
Transaction Document, or the validity, enforceability or collectibility of a
material portion of the Pool Receivables, or
     (d) the status, perfection, enforceability or priority of the
Administrator’s, the Purchasers’ or the Seller’s interest in the Pool Assets.
     “Material Originator” means any of the following at any time, so long as
such Person is an Originator: (i) COALSALES II, LLC, a Delaware limited
liability company, (ii) Powder River Coal, LLC, a Delaware limited liability
company, (iii) Peabody Western Coal Company, a Delaware corporation,
(iv) Peabody Midwest Mining, LLC, an Indiana limited liability company and
(v) any other Originator now or hereafter party to the Sale Agreement whose
Receivables represent 15% or more of the aggregate Receivables originated by the
Originators in any calendar month during the immediately preceding 12 Settlement
Periods.
     “Member” shall have the meaning set forth in Schedule A to the LLC
Agreement.
     “Mohave Project” means that certain joint venture that developed, built and
operates the Mohave Generating Station located in Laughlin, Nevada, which joint
venture is owned by Southern California Edison (56%), Nevada Power Company
(14%), Salt River Project

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Agricultural Improvement and Power District (10%), and Department of Water and
Power of Los Angeles (20%).
     “Monthly Settlement Date” means the twenty-third day of each calendar month
(or the next succeeding Business Day if such day is not a Business Day),
beginning May 23, 2008.
     “Moody’s” means Moody’s Investors Service, Inc.
     “Navajo Project” means that certain joint venture that developed, built and
operates the Navajo Electric Generating Station located in Page, Arizona, which
joint venture is owned by Nevada Power Company, Salt River Project Agricultural
Improvement and Power District, Department of Water and Power of Los Angeles,
Arizona Public Service Co., and Tucson Gas and Electric Co.
     “Net Receivables Pool Balance” means, at anytime: (a) the Outstanding
Balance of Eligible Receivables then in the Receivables Pool minus (b) Excess
Concentration.
     “Notes” means short-term promissory notes issued, or to be issued, by any
Conduit Purchaser to fund its investments in accounts receivable or other
financial assets.
     “Obligor” means, with respect to any Receivable, the Person obligated to
make payments pursuant to the Contract relating to such Receivable.
     “Obligor Group” means any of the following: Group A Obligor, Group B
Obligor, Group C Obligor or Group D Obligor.
     “Order” has the meaning set forth in Section 1.22 of the Agreement.
     “Original Agreement” has the meaning set forth in the preliminary
statements of the Agreement.
     “Original Agreement Outstanding Amounts” has the meaning set forth in the
preliminary statements of the Agreement.
     “Originator” and “Originators” have the meaning set forth in the Sale
Agreement, as the same may be modified from time to time by adding new
Originators or removing Originators, in each case with the prior written consent
of the Administrator.
     “Originator Assignment Certificate” means the assignment by each Originator
to the Contributor, and subsequently to the Seller, in substantially the form of
Exhibit C to the Sale Agreement, evidencing Seller’s ownership of the
Receivables generated by the Originators, as the same may be amended,
supplemented, amended and restated, or otherwise modified from time to time in
accordance with the Sale Agreement.
     “Other Material Financing Agreement” has the meaning set forth in paragraph
(j) of Exhibit V of the Agreement.

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     “Outstanding Balance” of any Receivable at any time means the then
outstanding principal balance thereof.
     “Participant” has the meaning set forth in Section 5.3(b) of this
Agreement.
     “Paydown Notice” has the meaning set forth in Section 1.6(f)(i) of the
Agreement.
     “Payment Date” has the meaning set forth in Section 2.1 of the Sale
Agreement.
     “Peabody” has the meaning set forth in the preamble to the Agreement.
     “Percentage” means, for each Purchaser Group, a fraction (expressed as a
percentage), (a) the numerator of which is such Purchaser Group’s Group
Commitment and (b) the denominator of which is the aggregate Group Commitments
of all Purchaser Groups.
     “Performance Reserve” means the sum of the Loss Reserve and the Dilution
Reserve.
     “Permitted Lock-Box Bank” means a bank or other financial institution with
minimum capital of at least $250,000.
     “Person” means an individual, partnership, corporation (including a
business trust), joint stock company, trust, unincorporated association, joint
venture, limited liability company or other entity, or a government or any
political subdivision or agency thereof.
     “PNC” has the meaning set forth in the preamble to the Agreement.
     “Pool Assets” has the meaning set forth in Section 1.4(e) of the Agreement.
     “Pool Receivable” means a Receivable in the Receivables Pool.
     “Portion of Capital” means, with respect to any Purchaser and its Capital,
any separate portion of such Capital being funded or maintained by such
Purchaser (or its successors or permitted assigns) by reference to a particular
interest rate basis. In addition, at any time when such Capital is not divided
into two or more such portions, “Portion of Capital” means 100% of such Capital.
     “Program Support Agreement” means and includes any Liquidity Agreement and
any other agreement entered into by any Program Support Provider providing for:
(a) the issuance of one or more letters of credit for the account of any Conduit
Purchaser, (b) the issuance of one or more surety bonds for which any Conduit
Purchaser is obligated to reimburse the applicable Program Support Provider for
any drawings thereunder, (c) the sale by any Conduit Purchaser to any Program
Support Provider of the Purchased Assets (or portions thereof) and/or (d) the
making of loans and/or other extensions of credit to any Conduit Purchaser in
connection with such Conduit Purchaser’s securitization program contemplated in
the Agreement, together with any letter of credit, surety bond or other
instrument issued thereunder.
     “Program Support Provider” means and includes, with respect to any Conduit
Purchaser, any Liquidity Bank and any other Person (other than any customer of
such Conduit Purchaser)

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now or hereafter extending credit or having a commitment to extend credit to or
for the account of, or to make purchases from, such Conduit Purchaser pursuant
to any Program Support Agreement.
     “Pro Rata Share” means, as to any LC Participant, a fraction, the numerator
of which equals the Commitment of such LC Participant at such time and the
denominator of which equals the aggregate of the Commitments of all LC
Participants at such time.
     “Purchase and Sale Indemnified Amounts” has the meaning set forth in
Section 9.1 of the Sale Agreement.
     “Purchase and Sale Indemnified Party” has the meaning set forth in
Section 9.1 of the Sale Agreement.
     “Purchase and Sale Termination Date” has the meaning set forth in
Section 1.4 of the Sale Agreement.
     “Purchase and Sale Termination Event” has the meaning set forth in
Section 8.1 of the Sale Agreement.
     “Purchased Assets” has the meaning set forth in Section 1.3(b) of the
Agreement.
     “Purchased Assets Coverage Percentage” means, at any time and subject to
Section 1.5 of the Agreement, the percentage computed as:

         
 
  Aggregate Capital + Adjusted LC Participation Amount + Total Reserves
 
Net Receivables Pool Balance    

The Purchased Assets Coverage Percentage shall be determined from time to time
in accordance with Section 1.5 of the Agreement.
     “Purchase Limit” means $275,000,000, as such amount may be reduced pursuant
to Sections 1.1(c) or 1.12 of the Agreement. References to the unused portion of
the Purchase Limit shall mean, at any time, the Purchase Limit minus the sum of
the Aggregate Capital plus the LC Participation Amount.
     “Purchase Price” has the meaning set forth in Section 2.1 of the Sale
Agreement.
     “Purchase Report” has the meaning set forth in Section 2.1 of the Sale
Agreement.
     “Purchasers” means each Conduit Purchaser, each Related Committed
Purchaser, the LC Bank and each LC Participant.
     “Purchaser Agent” means each Person acting as agent on behalf of a
Purchaser Group and designated as a Purchaser Agent for such Purchaser Group on
the signature pages to this Agreement or any other Person who becomes a party to
this Agreement as a Purchaser Agent pursuant to an Assumption Agreement or a
Transfer Supplement.

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     “Purchaser Group” means, for any Conduit Purchaser, such Conduit Purchaser,
its Related Committed Purchaser, related Purchaser Agent, related LC
Participants and, in the case of Market Street Funding LLC as a Conduit
Purchaser, the LC Bank.
     “Purchasing Related Committed Purchaser” has the meaning set forth in
Section 5.3(c) of the Agreement.
     “Receivable” means any indebtedness and other obligations owed to the
Seller (as assignee of the Contributor and each Originator), the Contributor or
any Originator by, or any right of the Seller, the Contributor or any Originator
to payment from or on behalf of, an Obligor, whether constituting an account,
chattel paper, instrument or general intangible, arising in connection with the
sale of goods or the rendering of services by any Originator, and includes the
obligation to pay any finance charges, fees and other charges with respect
thereto. Indebtedness and other obligations arising from any one transaction,
including indebtedness and other obligations represented by an individual
invoice or agreement, shall constitute a Receivable separate from a Receivable
consisting of the indebtedness and other obligations arising from any other
transaction.
     “Receivables Pool” means, at any time, all of the then outstanding
Receivables purchased by the Contributor pursuant to the Sale Agreement prior to
the Facility Termination Date.
     “Reimbursement Obligation” has the meaning set forth in Section 1.16 of the
Agreement.
     “Reinvestment” has the meaning set forth in Section 1.4(b) of the
Agreement.
     “Related Committed Purchaser” means each Person listed as such (and its
respective Commitment) for each Conduit Purchaser as set forth on the signature
pages of the Agreement or in any Assumption Agreement or Transfer Supplement.
     “Related Rights” has the meaning set forth in Section 1.1 of the Sale
Agreement.
     “Related Security” means, with respect to any Receivable:
     (a) all of the Seller’s, the Contributor’s and each Originator’s interest
in any goods (including returned goods), and documentation of title evidencing
the shipment or storage of any goods (including returned goods), relating to any
sale giving rise to such Receivable,
     (b) all instruments and chattel paper that may evidence such Receivable,
     (c) all other security interests or liens and property subject thereto from
time to time purporting to secure payment of such Receivable, whether pursuant
to the Contract related to such Receivable or otherwise, together with all UCC
financing statements or similar filings relating thereto, and
     (d) all of the Seller’s, the Contributor’s and each Originator’s rights,
interests and claims under the Contracts and all guaranties, indemnities,
insurance and other agreements (including the related Contract) or arrangements
of whatever character from

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time to time supporting or securing payment of such Receivable or otherwise
relating to such Receivable, whether pursuant to the Contract related to such
Receivable or otherwise.
     “Required LC Participants” means, at any time, the LC Participants whose
Pro Rata Shares aggregate 66⅔% or more.
     “Responsible Officer” means, with respect to each Originator, the
Contributor, the Servicer, the Transferee and the Seller, any president, vice
president, treasurer, assistant treasurer, secretary, assistant secretary, chief
financial officer, controller or any other officer of any such Person charged
with the responsibility for administration of any Transaction Document.
     “Restricted Payments” has the meaning set forth in Section 1(n) of Exhibit
IV of the Agreement.
     “Sale Agreement” means the Purchase and Sale Agreement, dated as of
February 20, 2002, between the Contributor and the Originators as such agreement
may be amended, amended and restated, supplemented or otherwise modified from
time to time.
     “Seller” has the meaning set forth in the preamble to the Agreement.
     “Senior Notes Indenture” means that certain Indenture, dated as of
March 21, 2003, among Peabody, the guarantors named therein, and U.S. Bank
National Association, as trustee.
     “Servicer” has the meaning set forth in the preamble to the Agreement.
     “Servicer Note” means that certain Amended and Restated Promissory Note,
dated as of the Closing Date, made by Peabody in favor of the Seller, as the
same may be amended from time to time.
     “Servicing Fee” means the fee referred to in Section 4.6 of the Agreement.
     “Servicing Fee Rate” means the rate referred to in Section 4.6 of the
Agreement.
     “Settlement Date” means with respect to any Portion of Capital for any
Settlement Period, (i) prior to the Facility Termination Date, the Monthly
Settlement Date and (ii) on and after the Facility Termination Date, each day
selected from time to time by the Administrator (with the consent or at the
direction of the Majority Purchaser Agents); it being understood that the
Administrator may select such Settlement Date to occur as frequently as daily,
or, in the absence of such selection, the Monthly Settlement Date.
     “Settlement Period” means: (a) before the Facility Termination Date, each
period commencing on the second Business Day prior to each Monthly Settlement
Date and ending on (but not including) the second Business Day prior to the next
Monthly Settlement Date, and (b) on and after the Facility Termination Date,
such period (including a period of one day) as shall be selected from time to
time by the Administrator or, in the absence of any such selection, each period
of 30 days from the last day of the preceding Settlement Period.

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     “Similar Businesses” means coal production, coal mining, coal brokering,
coal transportation, mine development, power marketing, electricity generation,
power/ energy sales and trading, energy transactions/ asset restructurings, risk
management products associated with energy, fuel/ power integration and other
energy related businesses, ash disposal, environmental remediation, coal,
natural gas, petroleum or other fossil fuel exploration, production, marketing,
transportation and distribution and other related businesses, and activities of
Peabody and its Subsidiaries as of the Closing Date and any business or activity
that is reasonably similar thereto or a reasonable extension, development or
expansion thereof or ancillary thereto.
     “Solvent” means, with respect to any Person at any time, a condition under
which:
     (i) the fair value and present fair saleable value of such Person’s total
assets is, on the date of determination, greater than such Person’s total
liabilities (including contingent and unliquidated liabilities) at such time;
     (ii) the fair value and present fair saleable value of such Person’s assets
is greater than the amount that will be required to pay such Person’s probable
liability on its existing debts as they become absolute and matured (“debts,”
for this purpose, includes all legal liabilities, whether matured or unmatured,
liquidated or unliquidated, absolute, fixed, or contingent);
     (iii) such Person is and shall continue to be able to pay all of its
liabilities as such liabilities mature; and
     (iv) such Person does not have unreasonably small capital with which to
engage in its current and in its anticipated business.
For purposes of this definition:
     (A) the amount of a Person’s contingent or unliquidated liabilities at any
time shall be that amount which, in light of all the facts and circumstances
then existing, represents the amount which can reasonably be expected to become
an actual or matured liability;
     (B) the “fair value” of an asset shall be the amount which may be realized
within a reasonable time either through collection or sale of such asset at its
regular market value;
     (C) the “regular market value” of an asset shall be the amount which a
capable and diligent business person could obtain for such asset from an
interested buyer who is willing to Purchase such asset under ordinary selling
conditions; and
     (D) the “present fair saleable value” of an asset means the amount which
can be obtained if such asset is sold with reasonable promptness in an
arm’s-length transaction in an existing and not theoretical market.
     “Special Member” has the meaning set forth in Schedule A to the LLC
Agreement.

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     “Special Obligor” means the Navajo Project, for so long as, with respect to
such Navajo Project, (a) the agreement among the project participants requires
that upon the default of any participant, the non-defaulting participants are
required to cure any such default, and (b) Peabody represents and warrants that,
to its knowledge, the statement set forth in subsection (a) above is true,
complete and correct. The Navajo Project shall be deemed to be a “Special Group
A Obligor” hereunder for so long as such Navajo Project has at least one project
participant with the rating of a Group A Obligor; the Navajo Project shall be
deemed to be a “Special Group B Obligor” hereunder for so long as such Navajo
Project has at least one project participant with the rating of a Group B
Obligor (but no project participants with the rating of a Group A Obligor); the
Navajo Project shall be deemed to be a “Special Group C Obligor” hereunder for
so long as such Navajo Project has at least one project participant with the
rating of a Group C Obligor (but no project participants with the rating of a
Group A Obligor or a Group B Obligor); and the Navajo Project shall be deemed to
be a “Special Group D Obligor” hereunder for so long as such Navajo Project has
no project participants with the rating of a Group A Obligor, a Group B Obligor
or a Group C Obligor.
     “Special Obligor Group” means any one of the following: Special Group A
Obligor, Special Group B Obligor, Special Group C Obligor, or Special Group D
Obligor.
     “Spike Factor” means, for any calendar month, (a) the positive difference,
if any, between: (i) the highest Dilution Ratio for any one calendar month
during the twelve most recent calendar months and (ii) the arithmetic average of
the Dilution Ratios for such twelve months times (b) (i) the highest Dilution
Ratio for any one calendar month during the twelve most recent calendar months
divided by (ii) the arithmetic average of the Dilution Ratios for such twelve
months.
     “Standard & Poor’s” means Standard & Poor’s Ratings Services, a Standard
and Poor’s Financial Services LLC business.
     “Sub-Servicer” has the meaning set forth in Section 4.1 of the Agreement.
     “Subsidiary” means, as to any Person, a corporation, partnership, limited
liability company or other entity of which shares of stock of each class or
other interests having ordinary voting power (other than stock or other
interests having such power only by reason of the happening of a contingency) to
elect a majority of the Board of Directors or other managers of such entity are
at the time owned, or management of which is otherwise controlled: (a) by such
Person, (b) by one or more Subsidiaries of such Person or (c) by such Person and
one or more Subsidiaries of such Person.
     “Termination Day” means: (a) each day on which the conditions set forth in
Section 2 of Exhibit II to the Agreement are not satisfied or (b) each day that
occurs on or after the Facility Termination Date.
     “Termination Event” has the meaning specified in Exhibit V to the
Agreement.
     “Termination Fee” means, for any Settlement Period during which a
Termination Day occurs, the amount, if any, by which: (a) the additional
Discount (calculated without taking into account any Termination Fee or any
shortened duration of such Settlement Period pursuant to the

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definition thereof) that would have accrued during such Settlement Period on the
reductions of Capital relating to such Settlement Period had such reductions not
been made, exceeds (b) the income, if any, received by the applicable Purchaser
from investing the proceeds of such reductions of Capital, as determined by the
applicable Purchaser Agent, which determination shall be binding and conclusive
for all purposes, absent manifest error.
     “Total Reserves” means, at any time the sum of: (a) the Yield Reserve, plus
the greater of (b) (i) the Performance Reserve, or (ii) the Concentration
Reserve.
     “Transaction Documents” means the Agreement, the Lock-Box Agreements, the
Fee Letters, the Sale Agreement, the Contribution Agreement, the Intercreditor
Agreement, the Servicer Note, and all other certificates, instruments, UCC
financing statements, reports, notices, agreements and documents executed or
delivered under or in connection with the Agreement, in each case as the same
may be amended, supplemented or otherwise modified from time to time in
accordance with the Agreement.
     “Transfer Supplement” has the meaning set forth in Section 5.3(c) of the
Agreement.
     “TVA” means Tennessee Valley Authority, an Obligor of the Originators.
     “UCC” means the Uniform Commercial Code as from time to time in effect in
the applicable jurisdiction.
     “UCP 600” has the meaning set forth in Section 1.14 of the Agreement.
     “Unmatured Contribution Termination Event” means any event which, with the
giving of notice or lapse of time, or both, would become a Contribution
Termination Event.
     “Unmatured Purchase and Sale Termination Event” means any event which, with
the giving of notice or lapse of time, or both, would become a Purchase and Sale
Termination Event.
     “Unmatured Termination Event” means an event that, with the giving of
notice or lapse of time, or both, would constitute a Termination Event.
     “Yield Reserve” means, on any date, an amount equal to: (a) the sum of the
Aggregate Capital plus the LC Participation Amount at the close of business of
the Seller on such date multiplied by (b) (i) the Yield Reserve Percentage on
such date divided by (ii) 100% minus the Yield Reserve Percentage on such date.
     “Yield Reserve Percentage” means at any time:
(BR+SFR) x l.5 x DSO
     360
     where:

         
BR
  =   the Base Rate computed for the most recent Settlement Period,

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DSO

SFR
  =

=   Days’ Sales Outstanding, and

the Servicing Fee Rate

     Other Terms. All accounting terms not specifically defined herein shall be
construed in accordance with generally accepted accounting principles. All terms
used in Article 9 of the UCC in the State of Illinois, and not specifically
defined herein, are used herein as defined in such Article 9. Unless the context
otherwise requires, “or” means “and/or,” and “including” (and with correlative
meaning “include” and “includes”) means including without limiting the
generality of any description preceding such term.

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EXHIBIT II
CONDITIONS PRECEDENT
     1. Conditions Precedent to Effectiveness of this Agreement. The
effectiveness of this Agreement is subject to the following conditions precedent
that the Administrator shall have received on or before the Closing Date, each
in form and substance (including the date thereof) satisfactory to the
Administrator:
     (a) Counterparts of this Agreement executed by each of the parties hereto.
     (b) Counterparts of the Fee Letters executed by the parties thereto and
confirmation by the applicable Purchaser Agent that any fees payable thereunder
by the Seller on the Closing Date have been paid in full.
     (c) Counterparts of that certain third amendment to the Lock-Box Agreement
with PNC Bank, National Association, dated as of the Closing Date, executed by
the parties thereto as the Administrator may reasonably request in order to give
effect to the transactions contemplated by this Agreement.
     (d) Counterparts of that certain Originator Release, dated as of the date
hereof, regarding the removal of Peabody Coaltrade International (CTI), LLC as
an Originator and a Sub-Servicer executed by each of the parties thereto.
     (e) Counterparts of that certain eighth amendment to the Sale Agreement,
dated as of the Closing Date, executed by the Contributor and the Originators
(for the avoidance of doubt, other than Peabody Coaltrade International (CTI),
LLC).
     (f) Counterparts of that certain first amendment to the Contribution
Agreement, dated as of the Closing Date, executed by the Seller and the
Contributor.
     (g) The executed Servicer Note (as defined in the Agreement) and an allonge
thereto executed by the Seller endorsing the Servicer Note in blank.
     (h) Copies of the resolutions of the Board of Directors of each of the
Seller, the Sub-Servicers and Peabody authorizing the execution, delivery and
performance by the Seller, the Sub-Servicers and Peabody of the Agreement and
the other Transaction Documents to which they are parties.
     (i) A certificate of the Secretary or Assistant Secretary of each of the
Seller, the Sub-Servicers and Peabody certifying the names and true signatures
of its officers who are authorized to sign the Agreement and the other
Transaction Documents to which they are parties. Until the Administrator
receives a subsequent incumbency certificate from the Seller, the Sub-Servicers
or Peabody, as the case may be, the Administrator shall be entitled to rely on
the last such certificate delivered to it by the Seller, the Sub-Servicers or
Peabody, as the case may be.
     (j) A copy of the Seller’s certificate of formation, certified as of a
recent date by the Delaware Secretary of State and the Seller’s LLC Agreement.

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     (k) Good standing certificates with respect to each of the Seller, the
Originators, and Peabody issued by the Secretary of State (or similar official)
of the state of each such Person’s organization or formation and principal place
of business.
     (l) Favorable opinions, in form and substance reasonably satisfactory to
the Administrator and each Purchaser Agent, of: (i) Thompson Coburn, counsel for
the Seller, the Originators, and Peabody, (ii) Ziemer, Stayman, Weitzel &
Shoulders, LLP, counsel for Arclar Company, LLC and Peabody Midwest Mining, LLC,
and (iii) Alexander C. Schoch, Executive Vice President Law and Chief Legal
Officer to the Seller, the Originators and Peabody, regarding such corporate,
enforceability, no-conflicts, Investment Company Act, security interest, true
sale and non-consolidation matters as the Administrator and the Purchaser Agents
may reasonably request.
     (m) All information with respect to the Receivables as the Administrator or
the Purchaser Agents may reasonably request.
     (n) Such other approvals, opinions or documents as the Administrator or the
Purchaser Agents may reasonably request.
     2. Conditions Precedent to All Investments, Issuances of Letters of Credit
and Reinvestments. Each Investment (including the initial Investment, but
excluding the deemed Investment made pursuant to the first sentence of
Section 1.2(c), the assignments and assumptions made pursuant to Section 1.2(d)
and any deemed Investment pursuant to Section 1.4(f) of the Agreement) and the
issuance of any Letters of Credit and each Reinvestment shall be subject to the
further conditions precedent that:
     (a) in the case of each Investment and the issuance of any Letters of
Credit, the Servicer shall have delivered to the Administrator and each
Purchaser Agent on or before such Investment or issuance, as the case may be, in
form and substance satisfactory to the Administrator and each Purchaser Agent, a
completed pro forma Information Package to reflect the level of Aggregate
Capital, the LC Participation Amount and related reserves and the calculation of
the Purchased Asset Coverage Percentage after such subsequent Investment or
issuance, as the case may be, and a completed Investment Notice in the form of
Annex B; and
     (b) on the date of such Investment, issuance or Reinvestment, as the case
may be, the following statements shall be true (and acceptance of the proceeds
of such Investment, issuance or Reinvestment shall be deemed a representation
and warranty by the Seller that such statements are then true):
     (i) the representations and warranties contained in Exhibit III to the
Agreement are true and correct in all material respects on and as of the date of
such Investment, issuance or Reinvestment as though made on and as of such date
(except to the extent that such representations and warranties expressly relate
to an earlier date, and in which case such representations and warranties shall
be true and correct in all material respects as of such earlier date);
     (ii) no event has occurred and is continuing, or would result from such
Investment, issuance or Reinvestment, that constitutes a Termination Event;

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     (iii) solely in the case of any Investment (but not Reinvestment) or any
such issuance, no Unmatured Termination Event shall exist and be continuing;
     (iv) the sum of the Aggregate Capital plus the LC Participation Amount,
after giving effect to any such Investment, issuance or Reinvestment, as the
case may be, shall not exceed the Purchase Limit;
     (v) after giving effect to any such Investment, issuance or Reinvestment,
as the case may be, the Purchased Assets Coverage Percentage shall not exceed
100%; and
     (vi) the Facility Termination Date shall not have occurred.

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EXHIBIT III
REPRESENTATIONS AND WARRANTIES
     1. Representations and Warranties of the Seller. The Seller represents and
warrants as follows:
     (a) The Seller is a limited liability company duly organized, validly
existing and in good standing under the laws of the State of Delaware, and is
duly qualified to do business and is in good standing as a foreign limited
liability company in every jurisdiction where the nature of its business
requires it to be so qualified, except where the failure to be so qualified
would not have a Material Adverse Effect.
     (b) The execution, delivery and performance by the Seller of the Agreement
and the other Transaction Documents to which it is a party, including its use of
the proceeds of Investments and Reinvestments: (i) are within its organizational
powers; (ii) have been duly authorized by all necessary organizational action;
(iii) do not contravene or result in a default under or conflict with: (A) its
certificate of formation or any other organizational document of the Seller,
(B) any law, rule or regulation applicable to it, (C) any indenture, loan
agreement, mortgage, deed of trust or other material agreement or instrument to
which it is a party or by which it is bound, or (D) any order, writ, judgment,
award, injunction or decree binding on or affecting it or any of its property;
and (iv) do not result in or require the creation of any Adverse Claim upon or
with respect to any of its properties. The Agreement and the other Transaction
Documents to which it is a party have been duly executed and delivered by the
Seller.
     (c) No authorization, approval or other action by, and no notice to or
filing with, any Governmental Authority or other Person is required for its due
execution, delivery and performance by the Seller of the Agreement or any other
Transaction Document to which it is a party, other than the Uniform Commercial
Code filings referred to in Exhibit II to the Agreement, all of which shall have
been filed on or before the Closing Date.
     (d) Each of the Agreement and the other Transaction Documents to which the
Seller is a party constitutes its legal, valid and binding obligation
enforceable against the Seller in accordance with its terms, except as
enforceability may be limited by bankruptcy, insolvency, reorganization or other
similar laws from time to time in effect affecting the enforcement of creditors’
rights generally and by general principles of equity, regardless of whether such
enforceability is considered in a proceeding in equity or at law.
     (e) There is no pending or, to Seller’s best knowledge, threatened action
or proceeding affecting Seller or any of its properties before any Governmental
Authority or arbitrator.
     (f) No proceeds of any Investment or Reinvestment will be used to acquire
any equity security of a class that is registered pursuant to Section 12 of the
Securities Exchange Act of 1934.
     (g) The Seller is the legal and beneficial owner of, and has good and
marketable title to, the Pool Receivables, the Lock-Box Accounts (and related
lock-boxes) and Related Security,

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free and clear of any Adverse Claim. Upon each Investment or Reinvestment, the
Administrator (on behalf of the Purchasers) shall acquire a valid and
enforceable perfected ownership or security interest in each Pool Receivable
then existing or thereafter arising and in the Related Security, Collections and
other proceeds with respect thereto, free and clear of any Adverse Claim. The
Agreement creates a valid and continuing ownership or security interest (as
defined in the applicable UCC) in favor of the Administrator in the Pool Assets
and the Lock-Box Accounts (and related lock-boxes), which ownership or security
interest is prior to all other Adverse Claims, and is enforceable as such
against creditors of and purchasers from the Seller. The Pool Assets constitute
“accounts”, “general intangibles” or “tangible chattel paper” within the meaning
of the applicable UCC. Each Lock-Box Account constitutes a “deposit account”
within the meaning of the applicable UCC. The Seller has caused or will have
caused, within ten (10) days, the filing of all appropriate UCC financing
statements in the proper filing offices in the appropriate jurisdictions under
applicable laws in order to perfect the ownership or security interest in the
Pool Assets and the Lock-Box Accounts (and related lock-boxes) granted to the
Administrator (on behalf of the Purchasers) hereunder. Other than the ownership
or security interest granted to the Administrator (on behalf of the Purchasers)
pursuant to this Agreement, Seller has not pledged, assigned, sold, granted a
security interest in, or otherwise conveyed any of the Pool Assets or the
Lock-Box Accounts (and related lock-boxes). Seller has not authorized the filing
of and is not aware of any UCC financing statements against Seller that include
a description of collateral covering the Pool Assets, other than any UCC
financing statement relating to the security interest granted to the
Administrator (on behalf of the Purchasers) hereunder or that has been
terminated. Seller is not aware of any judgment, ERISA or tax lien filings
against the Seller. With respect to any Pool Receivable that constitutes
“tangible chattel paper”, the Servicer is in possession of the original copies
of the tangible chattel paper that constitutes or evidences such Pool
Receivables, and the Seller has filed or has caused to be filed within ten
(10) days after the date hereof the financing statements described in this
section above, each of which will contain a statement that “A purchase of or a
grant of a security interest in any property described in this financing
statement will violate the rights of the Administrator.” The Pool Receivables to
the extent they are evidenced by “tangible chattel paper” do not have any marks
or notations indicating that they have been pledged, assigned or otherwise
conveyed to any Person other than the Seller or the Administrator (on behalf of
the Purchasers).
     (h) Each Information Package (if prepared by the Seller or one of its
Affiliates, or to the extent that information contained therein is supplied by
the Seller or one of its Affiliates), information, exhibit, financial statement,
document, book, record or report furnished or to be furnished at any time by or
on behalf of the Seller to the Administrator or any Purchaser Agent in
connection with the Agreement or any other Transaction Document to which it is a
party is or will be complete and accurate in all material respects as of its
date or (except as otherwise disclosed to the Administrator or such Purchaser
Agent, as applicable, at such time) as of the date so furnished.
     (i) The Seller’s principal place of business, chief executive office and
state of formation (as such terms are used in the UCC) and the office where it
keeps its records concerning the Receivables are located at the address referred
to in Sections l(b) and 2(b) of Exhibit IV to the Agreement.

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     (j) The names and addresses of all the Lock-Box Banks, together with the
account numbers of the Lock-Box Accounts at such Lock-Box Banks, are specified
in Schedule II to the Agreement (or at such other Lock-Box Banks and/or with
such other Lock-Box Accounts as have been notified to the Administrator in
accordance with the Agreement) and all Lock-Box Accounts are subject to Lock-Box
Agreements. With respect to all Lock-Box Accounts (and related lock-boxes), the
Seller has delivered to the Administrator, on behalf of the Purchasers, a fully
executed Lock-Box Agreement pursuant to which the applicable Lock-Box Bank has
agreed, following the occurrence and continuation of a Termination Event, to
comply with all instructions given by the Administrator with respect to all
funds on deposit in such Lock-Box Account (and all funds sent to the respective
lock-box), without further consent by the Seller or the Servicer. None of the
Lock-Box Accounts (and the related lock-boxes) are in the name of any Person
other than the Seller or the Administrator (on behalf of the Purchasers). The
Seller has not consented to any Lock-Box Bank’s complying with instructions of
any person other than the Administrator.
     (k) The Seller is not in violation of any order of any court, arbitrator or
Governmental Authority.
     (l) Neither the Seller nor any of its Affiliates has any direct or indirect
ownership or other financial interest in any Conduit Purchaser.
     (m) No proceeds of any Investment or Reinvestment will be used for any
purpose that violates any applicable law, rule or regulation, including
Regulations T, U or X of the Federal Reserve Board.
     (n) Each Pool Receivable included as an Eligible Receivable in the
calculation of the Net Receivables Pool Balance is an Eligible Receivable.
     (o) No event has occurred and is continuing, or would result from an
Investment or Reinvestment or from the application of the proceeds therefrom,
that constitutes a Termination Event or an Unmatured Termination Event.
     (p) The Seller has accounted for each sale of the Receivables and the other
Purchased Assets in its books and financial statements as sales, consistent with
generally accepted accounting principles.
     (q) The Seller has complied in all material respects with the Credit and
Collection Policy of the Originators with regard to each Receivable originated
by the Originators.
     (r) The Seller has complied in all material respects with all of the terms,
covenants and agreements contained in the Agreement and the other Transaction
Documents that are applicable to it.
     (s) The Seller’s complete organizational name is set forth in the preamble
to the Agreement, and it does not use and has not during the last six years used
any other organizational name, trade name, doing-business name or fictitious
name, except as set forth on Schedule III to the Agreement and except for names
first used after the date of the Agreement and set forth in a

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notice delivered to the Administrator pursuant to Section 1(1)(iv) of Exhibit IV
to the Agreement.
     (t) The Seller is not an “investment company,” or a company “controlled” by
an “investment company” within the meaning of the Investment Company Act of
1940, as amended.
     2. Representations and Warranties of Peabody (including in its capacity as
the Servicer). Peabody, individually and in its capacity as the Servicer,
represents and warrants jointly and severally as follows:
     (a) Peabody is a corporation duly formed, validly existing and in good
standing under the laws of the State of Delaware, and is duly qualified to do
business and is in good standing as a foreign corporation in every jurisdiction
where the nature of its business requires it to be so qualified, except where
the failure to be so qualified would not have a Material Adverse Effect.
     (b) The execution, delivery and performance by Peabody of the Agreement and
the other Transaction Documents to which it is a party, including the Servicer’s
use of the proceeds of Investments and Reinvestments: (i) are within its
organizational powers; (ii) have been duly authorized by all necessary
organizational action; (iii) do not contravene or result in a default under or
conflict with: (A) its certificate of incorporation or any other organizational
document of Peabody, (B) any law, rule or regulation applicable to it, (C) any
indenture, loan agreement, mortgage, deed of trust or other material agreement
or instrument to which it is a party or by which it is bound, or (D) any order,
writ, judgment, award, injunction or decree binding on or affecting it or any of
its property; and (iv) do not result in or require the creation of any Adverse
Claim upon or with respect to any of its properties. The Agreement and the other
Transaction Documents to which Peabody is a party have been duly executed and
delivered by Peabody.
     (c) No authorization, approval or other action by, and no notice to or
filing with any Governmental Authority or other Person, is required for the due
execution, delivery and performance by Peabody of the Agreement or any other
Transaction Document to which it is a party.
     (d) Each of the Agreement and the other Transaction Documents to which
Peabody is a party constitutes the legal, valid and binding obligation of
Peabody enforceable against Peabody in accordance with its terms, except as
enforceability may be limited by bankruptcy, insolvency, reorganization or other
similar laws from time to time in effect affecting the enforcement of creditors’
rights generally and by general principles of equity, regardless of whether such
enforceability is considered in a proceeding in equity or at law.
     (e) The balance sheets of Peabody and its consolidated Subsidiaries as at
December 31, 2008, and the related statements of income and retained earnings
for the fiscal year then ended, copies of which have been furnished to the
Administrator, fairly present in all material respects the financial condition
of Peabody and its consolidated Subsidiaries as at such date and the results of
the operations of Peabody and its consolidated Subsidiaries for the period ended
on such date, all in accordance with generally accepted accounting principles
consistently applied,

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and since December 31, 2008 there has been no event or circumstances which have
had a Material Adverse Effect.
     (f) Except as disclosed in the most recent audited financial statements of
Peabody furnished to the Administrator, there is no pending or, to its best
knowledge, threatened action or proceeding affecting it or any of its
Subsidiaries before any Governmental Authority or arbitrator that is reasonably
likely to have a Material Adverse Effect.
     (g) No proceeds of any Investment or Reinvestment will be used to acquire
any equity security of a class that is registered pursuant to Section 12 of the
Securities Exchange Act of 1934. No proceeds of any Investment or Reinvestment
will be used for any purpose that violates any applicable law, rule or
regulation, including Regulations T, U or X of the Federal Reserve Board.
     (h) Each Information Package (if prepared by Peabody or one of its
Affiliates, or to the extent that information contained therein is supplied by
Peabody or an Affiliate), information, exhibit, financial statement, document,
book, record or report furnished or to be furnished at any time by or on behalf
of the Servicer to the Administrator or any Purchaser Agent in connection with
the Agreement is or will be complete and accurate in all material respects as of
its date or (except as otherwise disclosed to the Administrator or such
Purchaser Agent, as applicable, at such time) as of the date so furnished.
     (i) The principal place of business, chief executive office and state of
formation (as such terms are used in the UCC) of Peabody and the office where it
keeps its records concerning the Receivables are located at the address referred
to in Section 2(b) of Exhibit IV to the Agreement.
     (j) Peabody is not in violation of any order of any court, arbitrator or
Governmental Authority, which is reasonably likely to have a Material Adverse
Effect.
     (k) Neither Peabody nor any of its Affiliates has any direct or indirect
ownership or other financial interest in any Conduit Purchaser.
     (l) The Servicer has complied in all material respects with the Credit and
Collection Policy of the Originators with regard to each Receivable originated
by the Originators.
     (m) Peabody has complied in all material respects with all of the terms,
covenants and agreements contained in the Agreement and the other Transaction
Documents that are applicable to it.
     (n) Peabody is not an “investment company” or a company “controlled” by an
“investment company” within the meaning of the Investment Company Act of 1940,
as amended.
     (o) [Reserved].

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     (p) The agreement among the project participants of the Navajo Project
requires that upon the default of any participant, the non-defaulting
participants are required to cure any such default.

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EXHIBIT IV
COVENANTS
     1. Covenants of the Seller. Until the Final Payout Date:
     (a) Compliance with Laws, Etc. The Seller shall comply in all material
respects with all applicable laws, rules, regulations and orders, and preserve
and maintain its organizational existence, rights, franchises, qualifications
and privileges, except to the extent that the failure so to comply with such
laws, rules, regulations and orders or the failure so to preserve and maintain
such rights, franchises, qualifications and privileges would not have a Material
Adverse Effect.
     (b) Offices, Records and Books of Account, Etc. The Seller: (i) shall keep
its principal place of business, chief executive office and state of formation
(as such terms or similar terms are used in the UCC) and the office where it
keeps its records concerning the Receivables at the address of the Seller set
forth on Schedule IV or, pursuant to clause (1)(iv) below, at any other
locations in jurisdictions where all actions reasonably requested by the
Administrator to protect and perfect the interest of the Administrator in the
Receivables and related items (including the Pool Assets) have been taken and
completed and (ii) shall provide the Administrator with at least 30 days’
written notice before making any change in the Seller’s name or making any other
change in the Seller’s identity or organizational structure (including a Change
in Control) that could render any UCC financing statement filed in connection
with this Agreement “seriously misleading” as such term (or similar term) is
used in the UCC; each notice to the Administrator pursuant to this sentence
shall set forth the applicable change and the effective date thereof. The Seller
also will maintain and implement (or cause the Servicer to maintain and
implement) administrative and operating procedures (including an ability to
recreate records evidencing Receivables and related Contracts in the event of
the destruction of the originals thereof), and keep and maintain (or cause the
Servicer to keep and maintain) all documents, books, records, computer tapes and
disks and other information reasonably necessary or advisable for the collection
of all Receivables (including records adequate to permit the daily
identification of each Receivable and all Collections of and adjustments to each
existing Receivable). Notwithstanding the above, in no event shall the Seller
have or maintain, or be a partner in any partnership that has or maintains, its
jurisdiction of organization, principal place of business or principal assets in
any of the states of Colorado, Kansas, New Mexico, Oklahoma, Utah or Wyoming.
     (c) Performance and Compliance with Contracts and Credit and Collection
Policy. The Seller shall (and shall cause the Servicer to), at its expense,
timely and fully perform and comply with all material provisions, covenants and
other promises required to be observed by it under the Contracts related to the
Receivables, and timely and fully comply in all material respects with the
applicable Credit and Collection Policy with regard to each Receivable and the
related Contract.
     (d) Ownership Interest, Etc. The Seller shall (and shall cause the Servicer
to), at its expense, take all action necessary or desirable to establish and
maintain a valid and enforceable ownership or security interest in the Pool
Receivables, the Related Security and Collections with respect thereto, and a
first priority perfected ownership or security interest in the Pool Assets, in

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each case free and clear of any Adverse Claim, in favor of the Administrator (on
behalf of the Purchasers), including taking such action to perfect, protect or
more fully evidence the interest of the Administrator (on behalf of the
Purchasers), as the Administrator, may reasonably request. The Seller shall from
time to time and within the time limits established by law prepare and present
to the Administrator for the Administrator’s authorization and approval all
financing statements, amendments, continuations or initial financing statements
in lieu of a continuation statement, or other filings necessary to continue,
maintain and perfect the Administrator’s (on behalf of the Purchasers) ownership
or security interest in the Pool Assets as a first-priority interest. The
Administrator’s approval of such filings shall authorize the Seller to file such
financing statements under the UCC without the signature of the Seller, or the
Administrator, any Purchaser Agent or any Purchaser where allowed by applicable
law. Notwithstanding anything else in the Transaction Documents to the contrary,
neither the Seller, the Servicer nor any other Person shall have any authority
to file a termination, partial termination, release or partial release or any
amendment that deletes the name of a debtor or excludes collateral of any such
financing statements without the prior written consent of the Administrator.
     (e) Sales, Liens, Etc. The Seller shall not sell, assign (by operation of
law or otherwise) or otherwise dispose of, or create or suffer to exist any
Adverse Claim upon or with respect to, any or all of its right, title or
interest in, to or under any Pool Assets (including the Seller’s interest in any
Receivable, Related Security or Collections, or upon or with respect to any
account to which any Collections of any Receivables are sent), or assign any
right to receive income in respect of any items contemplated by this paragraph.
     (f) Extension or Amendment of Receivables. Except as provided in the
Agreement, the Seller shall not, and shall not permit the Servicer to, alter the
delinquency status or adjust the Outstanding Balance or otherwise modify the
terms of any Pool Receivable in any material respect, or amend, modify or waive,
in any material respect, any term or condition of any related Contract (which
term or condition relates to payments under, or the enforcement of, such
Contract).
     (g) Change in Business or Credit and Collection Policy. Without the prior
written consent of the Administrator and each Purchaser Agent, the Seller shall
not make (or permit the Originators to make) any material change in the
character of its business or in any Credit and Collection Policy, or any change
in any Credit and Collection Policy that would have a Material Adverse Effect
with respect to the Receivables. The Seller shall not make (or permit the
Originators to make) any other change in any Credit and Collection Policy
without giving 30 days’ prior written notice thereof to the Administrator and
each Purchaser Agent.
     (h) Audits. The Seller shall (and shall cause the Originators to), from
time to time during regular business hours as reasonably requested in advance
(unless a Termination Event or Unmatured Termination Event exists) by the
Administrator, permit the Administrator or its agents or representatives: (i) to
examine and make copies of and abstracts from all books, records and documents
(including computer tapes and disks) in the possession or under the control of
the Seller (or the Originators) relating to Receivables and the Related
Security, including the related Contracts, (ii) to visit the offices and
properties of the Seller and the Originators for the purpose of examining such
materials described in clause (i) above, and to

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discuss matters relating to Receivables and the Related Security or the
Seller’s, Peabody’s or any Originator’s performance under the Transaction
Documents or under the Contracts with any of the officers, employees, agents or
contractors of the Seller, Peabody or any Originator having knowledge of such
matters and (iii) without limiting the clauses (i) and (ii) above, to engage
certified public accountants or other auditors acceptable to the Seller and the
Administrator to conduct, at the Seller’s expense, a review of the Seller’s
books and records with respect to such Receivables, provided, that at any time
when no Termination Event exists and is continuing, the Seller shall be required
to reimburse the Administrator for only one (1) such audit per year.
     (i) Change in Lock-Box Banks, Lock-Box Accounts and Payment Instructions to
Obligors. The Seller shall not, and shall not permit the Servicer or any
Originator to, add or terminate any bank as a Lock-Box Bank or any account as a
Lock-Box Account from those listed in Schedule II to the Agreement, or make any
change in its instructions to Obligors regarding payments to be made to the
Seller, any Originator, the Servicer or any Lock-Box Account (or related post
office box), unless the Administrator shall have received ten (10) days prior
written notice of assignment to a Permitted Lock-Box Bank and the Administrator
shall have received copies of all agreements and documents (including Lock-Box
Agreements) that it may request in connection therewith.
     (j) Deposits to Lock-Box Accounts. The Seller shall (or shall cause the
Servicer to): (i) instruct all Obligors to make payments of all Receivables to
one or more Lock-Box Accounts or to post office boxes to which only Lock-Box
Banks have access (and shall instruct the Lock-Box Banks to cause all items and
amounts relating to such Receivables received in such post office boxes to be
removed and deposited into a Lock-Box Account on a daily basis), and
(ii) deposit, or cause to be deposited, any Collections received by it, the
Servicer or any Originator into Lock-Box Accounts not later than two
(2) Business Days after receipt thereof. Each Lock-Box Account shall at all
times be subject to a Lock-Box Agreement. The Seller will not (and will not
permit the Servicer to) deposit or otherwise credit, or cause or permit to be so
deposited or credited, to any Lock-Box Account cash or cash proceeds other than
Collections.
     (k) Marking of Records. At its expense, the Seller shall: (i) mark (or
cause the Servicer to mark) its master data processing records relating to Pool
Receivables and related Contracts, including with a legend evidencing that the
Receivables and related Contracts included in the Purchased Assets have been
sold in accordance with the Agreement, and (ii) cause each Originator so to mark
its master data processing records pursuant to the Sale Agreement.

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     (l) Reporting Requirements. The Seller will provide to the Administrator
and each Purchaser Agent (in multiple copies, if requested by the Administrator
or any Purchaser Agent) the following:
     (i) as soon as available and in any event within 120 days after the end of
each fiscal year of the Seller, a copy of the financial statements for such year
for the Seller, certified as to accuracy by the chief financial officer or
treasurer of the Seller;
     (ii) as soon as possible and in any event within five days after the
occurrence of each Termination Event or Unmatured Termination Event, a statement
of the chief financial officer of the Seller setting forth details of such
Termination Event or Unmatured Termination Event and the action that the Seller
has taken and proposes to take with respect thereto;
     (iii) promptly after the filing or receiving thereof, copies of all reports
and notices that the Seller or any Affiliate files under ERISA with the Internal
Revenue Service, the Pension Benefit Guaranty Corporation or the U.S. Department
of Labor or that the Seller or any Affiliate receives from any of the foregoing
or from any multiemployer plan (within the meaning of Section 400l(a)(3) of
ERISA) to which the Seller or any of its Affiliates is or was, within the
preceding five years, a contributing employer, in each case in respect of the
assessment of withdrawal liability or an event or condition that could, in the
aggregate, result in the imposition of liability on the Seller and/or any such
Affiliate;
     (iv) at least thirty days before any change in the Seller’s name or any
other change requiring the amendment of UCC financing statements, a notice
setting forth such changes and the effective date thereof;
     (v) promptly after any Responsible Officer of the Seller obtains knowledge
thereof, notice of any: (A) material litigation, investigation or proceeding
that may exist at any time between the Seller and any Person or (B) material
litigation or proceeding relating to any Transaction Document;
     (vi) promptly after the occurrence thereof, notice of a material adverse
change in the business, operations, property or financial or other condition of
the Seller, the Servicer or the Originator; and
     (vii) such other information respecting the Receivables or the condition or
operations, financial or otherwise, of the Seller or any of its Affiliates as
the Administrator or any Purchaser Agent may from time to time reasonably
request.
     (m) Certain Agreements. Without the prior written consent of the
Administrator and the Majority Purchaser Agents, the Seller will not (and will
not permit the Originators to) amend, modify, waive, revoke or terminate any
Transaction Document to which it is a party or any provision of Seller’s
certificate of formation or other organizational document of the Seller.

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     (n) Restricted Payments. (i) Except pursuant to clause (ii) below, the
Seller will not: (A) purchase or redeem any shares of its capital stock,
(B) declare or pay any dividend or set aside any funds for any such purpose,
(C) prepay, purchase or redeem any Debt, (D) lend or advance any funds or
(E) repay any loans or advances to, for or from any of its Affiliates (the
amounts described in clauses (A) through (E) being referred to as “Restricted
Payments”).
     (ii) Subject to the limitations set forth in clause (iii) below, the Seller
may make Restricted Payments so long as such Restricted Payments are made only
in the following way: the Seller may declare and pay distributions and make
loans and advances to Peabody (provided that any such loans and advances shall
be treated as a dividend within no less than 30 days following the making
thereof).
     (iii) The Seller may make Restricted Payments only out of the funds it
receives pursuant to Sections 1.6(b)(ii) and (iv) and 1.6(d) of the Agreement.
Furthermore, the Seller shall not pay, make or declare: (A) any distributions,
loans or advances if, after giving effect thereto, the Seller’s tangible net
worth would be less than $10,000,000, or (B) any Restricted Payment (including
any dividend) if, after giving effect thereto, any Termination Event or
Unmatured Termination Event shall have occurred and be continuing.
     (o) Other Business. The Seller will not: (i) engage in any business other
than the transactions contemplated by the Transaction Documents; (ii) create,
incur or permit to exist any Debt of any kind (or cause or permit to be issued
for its account any letters of credit or bankers’ acceptances) other than
pursuant to this Agreement or any Company Note; or (iii) form any Subsidiary or
make any investments in any other Person; provided, however, that the Seller
shall be permitted to incur minimal obligations to the extent necessary for the
day-to-day operations of the Seller (such as expenses for stationery, audits,
maintenance of legal status, etc.).
     (p) Use of Collections. The Seller shall apply the Collections that are
available to the Seller in accordance with the Agreement to make payments in the
following order of priority: (i) the payment of its expenses (including all
obligations payable to the Purchasers, the Purchaser Agents and the
Administrator under the Agreement and under the Fee Letters); (ii) the payment
of accrued and unpaid interest on any Company Note; and (iii) other legal and
valid organizational purposes.
     (q) Tangible Net Worth. The Seller will not permit its tangible net worth,
at any time, to be less than $10,000,000.
     2. Covenants of the Servicer and Peabody. Until the Final Payout Date:
     (a) Compliance with Laws, Etc. The Servicer and, to the extent that it
ceases to be the Servicer, Peabody shall comply (and shall cause the Originators
to comply) in all material respects with all applicable laws, rules, regulations
and orders, and preserve and maintain its organizational existence, rights,
franchises, qualifications and privileges, except to the extent that the failure
so to comply with such laws, rules and regulations or the failure so to preserve
and

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maintain such existence, rights, franchises, qualifications and privileges would
not have a Material Adverse Effect.
     (b) Offices, Records and Books of Account, Etc. The Servicer and, to the
extent that it ceases to be the Servicer, Peabody, (i) shall keep its principal
place of business, chief executive office and state of formation (as such terms
or similar terms are used in the applicable UCC) and the office where it keeps
its records concerning the Receivables at the address of the Servicer set forth
on Schedule IV and (ii) shall cause Peabody Holding Company, LLC and each
Originator to keep its state of formation (as such term is defined in the
applicable UCC) and the office where it keeps its records concerning the
Receivables at the applicable address set forth on Schedule IV, in the case of
Peabody Holding Company, LLC, and Exhibit E to the Sale Agreement, in the case
of any Originator or, in the case of either sub-clause (i) or (ii) of this
clause (b), upon at least 30 days’ prior written notice of a proposed change to
the Administrator, at any other locations in jurisdictions where all actions
reasonably requested by the Administrator to protect and perfect the interest of
the Administrator in the Receivables and related items (including the Pool
Assets) have been taken and completed. The Servicer and, to the extent that it
ceases to be the Servicer, Peabody, also will (and will cause the Originators
to) maintain and implement administrative and operating procedures (including an
ability to recreate records evidencing Receivables and related Contracts in the
event of the destruction of the originals thereof), and keep and maintain all
documents, books, records, computer tapes and disks and other information
reasonably necessary or advisable for the collection of all Receivables
(including records adequate to permit the daily identification of each
Receivable and all Collections of and adjustments to each existing Receivable).
     (c) Performance and Compliance with Contracts and Credit and Collection
Policy. The Servicer and, to the extent that it ceases to be the Servicer,
Peabody, shall (and shall cause the Originators to), at its expense, timely and
fully perform and comply with all material provisions, covenants and other
promises required to be observed by it under the Contracts related to the
Receivables, and timely and fully comply in all material respects with the
Credit and Collection Policy with regard to each Receivable and the related
Contract.
     (d) Extension or Amendment of Receivables. Except as provided in the
Agreement, the Servicer and, to the extent that it ceases to be the Servicer,
Peabody, shall not alter the delinquency status or adjust the Outstanding
Balance or otherwise modify the terms of any Pool Receivable in any material
respect, or amend, modify or waive, in any material respect, any term or
condition of any related Contract (which term or condition relates to payments
under, or the enforcement of, such Contract).
     (e) Change in Business or Credit and Collection Policy. The Servicer and,
to the extent that it ceases to be the Servicer, Peabody, shall not make (and
shall not permit the Originators to make) any material change in the character
of its business, other than Similar Businesses, or any change in any Credit and
Collection Policy that would have a Material Adverse Effect. The Servicer and,
to the extent that it ceases to be the Servicer, Peabody, shall not make (and
shall not permit the Originators to make) any other change in any Credit and
Collection Policy without giving prior written notice thereof to the
Administrator and each Purchaser Agent.

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     (f) Audits. The Servicer and, to the extent that it ceases to be the
Servicer, Peabody, shall (and shall cause the Originators to), from time to time
during regular business hours as reasonably requested in advance (unless a
Termination Event or Unmatured Termination Event exists) by the Administrator or
any Purchaser Agent, permit the Administrator or its agents or representatives:
(i) to examine and make copies of and abstracts from all books, records and
documents (including computer tapes and disks) in its possession or under its
control relating to Receivables and the Related Security, including the related
Contracts; (ii) to visit its offices and properties for the purpose of examining
such materials described in clause (i) above, and to discuss matters relating to
Receivables and the Related Security or its performance hereunder or under the
Contracts with any of its officers, employees, agents or contractors having
knowledge of such matters and (iii), without limiting the clauses (i) and (ii)
above, to engage certified public accountants or other auditors acceptable to
the Servicer and the Administrator to conduct, at the Servicer’s expense, a
review of the Servicer’s books and records with respect to such Receivables,
provided, that at any time when no Termination Event exists and is continuing,
the Servicer shall be required to reimburse the Administrator for only one
(1) such audit per year.
     (g) Change in Lock-Box Banks, Lock-Box Accounts and Payment Instructions to
Obligors. The Servicer and, to the extent that it ceases to be the Servicer,
Peabody, shall not (and shall not permit the Originators to) add or terminate
any bank as a Lock-Box Bank or any account as a Lock-Box Account from those
listed in Schedule II to the Agreement, or make any change in its instructions
to Obligors regarding payments to be made to the Servicer or any Lock-Box
Account (or related post office box), unless the Administrator shall have
received ten (10) days advance written notice of assignment to a Permitted
Lock-Box Bank and the Administrator shall have received copies of all agreements
and documents (including Lock-Box Agreements) that it may request in connection
therewith.
     (h) Deposits to Lock-Box Accounts. The Servicer shall: (i) instruct all
Obligors to make payments of all Receivables to one or more Lock-Box Accounts or
to post office boxes to which only Lock-Box Banks have access (and shall
instruct the Lock-Box Banks to cause all items and amounts relating to such
Receivables received in such post office boxes to be removed and deposited into
a Lock-Box Account on a daily basis); and (ii) deposit, or cause to be
deposited, any Collections received by it into Lock-Box Accounts not later than
two (2) Business Days after receipt thereof. Each Lock-Box Account shall at all
times be subject to a Lock-Box Agreement.
     (i) Preservation of Security Interest. The Servicer shall (and shall cause
the Seller to) take any and all action as the Administrator may require to
preserve and maintain the perfection and priority of the ownership or security
interest of the Administrator in the Pool Assets pursuant to this Agreement.
     (j) Marking of Records. At its expense, the Servicer shall mark its master
data processing records relating to Pool Receivables and related Contracts with
a legend evidencing that such Receivables and related Contracts have been sold
in accordance with the Agreement.
     (k) Navajo Project. Peabody shall notify the Administrator and each
Purchaser Agent if a Responsible Officer of Peabody obtains actual knowledge
that the documents and

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agreements governing the Navajo Project are amended in any manner which would
cause the representations and warranties set forth in Section 2(p) to be
incorrect or untrue in any respect.
     (l) Reporting Requirements. Peabody shall provide to the Administrator and
each Purchaser Agent (in multiple copies, if requested by the Administrator or
any Purchaser Agent) the following:
     (i) as soon as available and in any event within 60 days after the end of
the first three quarters of each fiscal year of Peabody balance sheets of
Peabody and the consolidated Subsidiaries of Peabody as of the end of such
quarter and statements of income, retained earnings and cash flow of Peabody and
the consolidated Subsidiaries of Peabody for the period commencing at the end of
the previous fiscal year and ending with the end of such quarter, certified by
the chief financial officer of Peabody;
     (ii) as soon as available and in any event within 120 days after the end of
each fiscal year of Peabody, a copy of the annual report for such year for
Peabody and its consolidated Subsidiaries, containing financial statements for
such year audited by independent certified public accountants of nationally
recognized standing;
     (iii) together with the financial statements required in (i) and
(ii) above, a compliance certificate in substantially the form of Annex D signed
by the senior financial officer of the Seller or Peabody, or such other Person
as may be acceptable to the Administrator;
     (iv) as to the Servicer only, as soon as available and in any event not
later than two Business Days prior to the Monthly Settlement Date, an
Information Package as of the most recently completed calendar month or, if in
the opinion of the Administrator reasonable grounds for insecurity exist with
respect to the collectibility of the Pool Receivables or with respect to the
Seller or Servicer’s performance or ability to perform its obligations under the
Agreement, within six Business Days of a request by the Administrator, an
Information Package for such periods as is specified by the Administrator (but
in no event more frequently than weekly);
     (v) as soon as possible and in any event within five days after becoming
aware of the occurrence of each Termination Event or Unmatured Termination
Event, a statement of the chief financial officer of Peabody setting forth
details of such Termination Event or Unmatured Termination Event and the action
that such Person has taken and proposes to take with respect thereto;
     (vi) promptly after the sending or filing thereof, copies of all reports
that Peabody sends to any of its security holders, and copies of all reports and
registration statements that Peabody or any Subsidiary files with the Securities
and Exchange Commission or any national securities exchange; provided, that any
filings with the Securities and Exchange Commission that have been granted
“confidential” treatment shall be provided promptly after such filings have
become publicly available;

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     (vii) promptly after the filing or receiving thereof notice of and, upon
the request of the Administrator, copies of all reports and notices that Peabody
or any Affiliate of Peabody files under ERISA with the Internal Revenue Service,
the Pension Benefit Guaranty Corporation or the U.S. Department of Labor or that
such Person or any of its Affiliates receives from any of the foregoing or from
any multiemployer plan (within the meaning of Section 4001(a)(3) of ERISA) to
which such Person or any Affiliate of Peabody is or was, within the preceding
five years, a contributing employer, in each case in respect of the assessment
of withdrawal liability or an event or condition that could, in the aggregate,
result in the imposition of liability on Peabody and/or any such Affiliate;
     (viii) at least thirty days before any change in Peabody or any
Originator’s name or any other change requiring the amendment of UCC financing
statements, a notice setting forth such changes and the effective date thereof;
     (ix) promptly after a Responsible Officer of Peabody obtains knowledge
thereof, notice of any: (A) litigation, investigation or proceeding that may
exist at any time between Peabody or any of its Subsidiaries and any
Governmental Authority that is reasonably likely to have a Material Adverse
Effect; (B) litigation or proceeding adversely affecting such Person or any of
its Subsidiaries in which the amount involved is $25,000,000 or more after
deducting (x) the amount with respect to which such Person or any such
Subsidiary is insured and with respect to which the insurer has assumed
responsibility in writing, and (y) the amount for which such Person or any such
Subsidiary is otherwise indemnified if the terms of indemnification are
satisfactory to the Administrator or in which injunctive or similar relief is
sought; or (C) litigation or proceeding relating to any Transaction Document;
     (x) promptly after the occurrence thereof, notice of a material adverse
change in the business, operations, property or financial or other condition of
Peabody and its Subsidiaries taken as a whole, or any individual Material
Originator;
          (xi) the occurrence of a default or any event of default under any
other financing arrangement evidencing $50,000,000 or more of indebtedness
pursuant to which Peabody is a debtor or an obligor; and
          (xii) such other information respecting the Receivables or the
condition or operations, financial or otherwise, of Peabody or any of its
Affiliates as the Administrator or any Purchaser Agent may from time to time
reasonably request.
     3. Separate Existence. Each of the Seller and Peabody hereby acknowledges
that the Purchasers, the Purchaser Agents and the Administrator are entering
into the transactions contemplated by this Agreement and the other Transaction
Documents in reliance upon the Seller’s identity as a legal entity separate from
Peabody and its Affiliates. Therefore, from and after the date hereof, each of
the Seller and Peabody shall take all steps specifically required by the
Agreement or reasonably required by the Administrator to continue the Seller’s
identity as a

IV-9

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separate legal entity and to make it apparent to third Persons that the Seller
is an entity with assets and liabilities distinct from those of Peabody and any
other Person, and is not a division of Peabody, its Affiliates or any other
Person. Without limiting the generality of the foregoing and in addition to and
consistent with the other covenants set forth herein, each of the Seller and
Peabody shall take such actions as shall be required in order that:
     (a) The Seller will be a limited purpose limited liability company whose
activities are restricted in its certificate of formation to: (i) purchasing or
otherwise acquiring from the Originators or Peabody (or their Affiliates),
owning, holding, granting security interests or selling interests in Pool Assets
(or other receivables originated by the Originators or their Affiliates, and
certain related assets), (ii) entering into agreements for the selling and
servicing of the Receivables Pool (or other receivables pools originated by the
Originators or their Affiliates), and (iii) conducting such other activities as
are necessary or appropriate to carry out such activities;
     (b) The Seller shall not engage in any business or activity except as set
forth in this Agreement nor incur any indebtedness or liability, other than as
expressly permitted by the Transaction Documents;
     (c) Not less than one of the Seller’s Directors (the “Independent
Director”) shall be a natural person who (A) for the five-year period prior to
his or her appointment as Independent Director has not been, and during the
continuation of his or her service as Independent Director is not: (i) an
employee, director, stockholder, member, manager, partner or officer of the
Seller, Peabody or any of their respective Affiliates (other than his or her
service as an Independent Director of the Seller); (ii) a customer or supplier
of the Seller, Peabody or any of their respective Affiliates (other than his or
her service as an Independent Director of Seller); or (iii) any member of the
immediate family of a person described in clause (i) or (ii) above, and (B) has,
(i) prior experience as an Independent Director for a corporation or limited
liability company whose charter documents required the unanimous consent of all
independent directors thereof before such corporation or limited liability
company could consent to the institution of bankruptcy or insolvency proceedings
against it or could file a petition seeking relief under any applicable federal
or state law relating to bankruptcy and (ii) at least three years of employment
experience with one or more entities that provide, in the ordinary course of
their respective businesses, advisory, management or placement services to
issuers of securitization or structured finance instruments, agreements or
securities. Such Independent Director of the Seller shall have been appointed as
such in strict compliance with the Seller’s LLC Agreement. The Seller’s LLC
Agreement shall provide that (i) the Seller’s Board of Directors shall not
approve, or take any other action to cause the filing of, or join in any filing
of, a voluntary bankruptcy or insolvency petition, dissolution, liquidation,
consolidation, merger, sale of all or substantially all of its assets,
assignment for the benefit of creditors, admit in writing its inability to pay
its debts generally as they become due, or to engage in any other business or
activity with respect to the Seller unless (x) there is at least one Independent
Director then serving as a director of the Seller and appointed pursuant to and
in strict compliance with the Seller’s LLC Agreement, and (y) all such
Independent Directors of the Seller shall have approved the taking of such
action in writing prior to the taking of such action and (ii) such provision
cannot be amended without the prior written consent of the Independent Director
and the Administrator;

IV-10

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     (d) Upon the occurrence of any event that causes the Member to cease to be
a member of the Seller (other than (i) upon an assignment by the Member of all
of its limited liability company interest in the Seller and the admission of the
transferee pursuant to Sections 21 and 23 of the LLC Agreement, or (ii) the
resignation of the Member and the admission of an additional member of the
Seller pursuant to Sections 22 and 23 of the LLC Agreement), each person acting
as an Independent Director pursuant to Section 10 of the LLC Agreement shall,
without any action of any Person and simultaneously with the Member ceasing to
be a member of the Seller, automatically be admitted to the Seller as a Special
Member and shall continue the Seller without dissolution. No Special Member may
resign from the Seller or transfer its rights as a Special Member unless (i) a
successor Special Member has been admitted to the Seller as Special Member by
executing a counterpart to the LLC Agreement, and (ii) such successor has also
accepted its appointment as Independent Director pursuant to Section 10 of the
LLC Agreement; provided, however, the Special Members shall automatically cease
to be members of the Seller upon the admission to the Seller of a substitute
Member.
     (e) The Independent Director shall not at any time serve as a trustee in
bankruptcy for the Seller, Peabody or any Affiliate thereof;
     (f) Any employee, consultant or agent of the Seller will be compensated
from the Seller’s funds for services provided to the Seller. The Seller will not
engage any agents other than its attorneys, auditors and other professionals,
and a servicer and any other agent contemplated by the Transaction Documents for
the Receivables Pool, which servicer will be fully compensated for its services
by payment of the Servicing Fee, and a manager, which manager will be fully
compensated from the Seller’s funds;
     (g) The Seller will contract with the Servicer to perform for the Seller
all operations required on a daily basis to service the Receivables Pool. The
Seller will pay the Servicer the Servicing Fee pursuant hereto. The Seller will
not incur any material indirect or overhead expenses for items shared with
Peabody (or any other Affiliate thereof) that are not reflected in the Servicing
Fee. To the extent, if any, that the Seller (or any Affiliate thereof) shares
items of expenses not reflected in the Servicing Fee or the manager’s fee, such
as legal, auditing and other professional services, such expenses will be
allocated to the extent practical on the basis of actual use or the value of
services rendered, and otherwise on a basis reasonably related to the actual use
or the value of services rendered; it being understood that Peabody shall pay
all expenses relating to the preparation, negotiation, execution and delivery of
the Transaction Documents, including legal, agency and other fees;
     (h) The Seller’s operating expenses will be paid by the Seller and not by
Peabody or any other Affiliate thereof;
     (i) All of the Seller’s business correspondence and other communications
shall be conducted in the Seller’s own name and on its own separate stationery;
     (j) The Seller’s books and records will be maintained separately from those
of Peabody and any other Affiliate thereof and any other Person;

IV-11

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     (k) All financial statements of Peabody or any Affiliate thereof that are
consolidated to include Seller will contain detailed notes clearly stating that:
(i) a special purpose limited liability company exists as a Subsidiary of
Peabody, and (ii) the Originators have sold receivables and other related assets
to the Contributor, which has contributed such receivables and other related
assets to such special purpose Subsidiary that, in turn, has sold such
receivables and other related assets to certain financial institutions and other
entities;
     (l) The Seller’s assets will be maintained in a manner that facilitates
their identification and segregation from those of Peabody or any Affiliate
thereof and any other Person;
     (m) The Seller will strictly observe organizational formalities in its
dealings with Peabody or any Affiliate thereof, and funds or other assets of the
Seller will not be commingled with those of Peabody or any Affiliate thereof
except as permitted by the Agreement in connection with servicing the Pool
Receivables. The Seller shall not maintain joint bank accounts or other
depository accounts to which Peabody or any Affiliate thereof or any other
Person has independent access, and the Seller shall use separate invoices and
checks from any other Person. The Seller is not named, and has not entered into
any agreement to be named, directly or indirectly, as a direct or contingent
beneficiary or loss payee on any insurance policy with respect to any loss
relating to the property of Peabody or any Subsidiary or other Affiliate of
Peabody (other than the Seller) The Seller will pay to the appropriate Affiliate
the marginal increase or, in the absence of such increase, the market amount of
its portion of the premium payable with respect to any insurance policy that
covers the Seller and such Affiliate;
     (n) The Seller will maintain arm’s-length relationships with Peabody (and
any Affiliate thereof). Any Person that renders or otherwise furnishes services
to the Seller will be compensated by the Seller at market rates for such
services it renders or otherwise furnishes to the Seller. Neither the Seller nor
Peabody will be or will hold itself out to be responsible for the debts of the
other or the decisions or actions respecting the daily business and affairs of
the other. The Seller and Peabody will immediately correct any known
misrepresentation with respect to the foregoing, and they will not operate or
purport to operate as an integrated single economic unit with respect to each
other or in their dealing with any other entity;
     (o) Peabody shall not pay the salaries of Seller’s employees, if any;
     (p) The Seller does not and will not hold itself responsible for the
obligations of any other Person, and shall not guarantee or become liable for
the debts of any other Person;
     (q) The Seller will conduct its business in its own name and shall hold
itself out as a separate entity from any other Person;
     (r) The Seller shall maintain a sufficient number of employees and adequate
capital in light of its contemplated business activities;
     (s) The Seller shall not acquire the obligations or securities of any of
its members; and

IV-12

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     (t) The Seller shall not pledge its assets for the benefit of any other
Person or make any loans or advances to any other Person, except pursuant to the
Transaction Documents.

IV-13

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EXHIBIT V
TERMINATION EVENTS
     Each of the following shall be a “Termination Event”:
     (a) (i) the Seller, Peabody, any Originator or the Servicer (if Peabody or
any of its Affiliates) shall fail to perform or observe any term, covenant or
agreement under the Agreement (other than those terms, covenants or agreements
contained in Exhibit IV, Sections 1(a), 1(l) (except clause (iv) thereof), 2(a),
and 2(l) (except clause (viii) thereof)) or any other Transaction Document and,
except as otherwise provided herein, such failure shall continue for five
consecutive Business Days after knowledge or notice thereof, (ii) the Seller or
the Servicer shall fail to make when due any payment or deposit to be made by it
under the Agreement and such failure shall continue unremedied for one Business
Day, (iii) Peabody shall resign as Servicer, and no successor Servicer
reasonably satisfactory to the Administrator shall have been appointed, or
(iv) the Seller, Peabody, any Originator or the Servicer (if Peabody or any of
its Affiliates) shall fail to perform or observe any term covenant or agreement
in any of Exhibit IV, Sections 1(a), 1(l) (except clause (iv) thereof), 2(a), or
2(l) (except clause (viii) thereof) and, except as otherwise provided herein,
such failure shall continue for thirty days after knowledge or notice thereof;
     (b) Peabody (or any Affiliate thereof) shall fail to transfer to any
successor Servicer when required any rights pursuant to the Agreement that
Peabody (or such Affiliate) then has as Servicer;
     (c) any representation or warranty made or deemed made by the Seller,
Peabody or any Originator (or any of their respective officers) under or in
connection with the Agreement or any other Transaction Document, or any
information or report delivered by the Seller, Peabody or any Originator or the
Servicer pursuant to the Agreement or any other Transaction Document, shall
prove to have been incorrect or untrue in any material respect when made or
deemed made or delivered, and shall remain incorrect or untrue for 10 Business
Days after notice to the Seller or the Servicer of such inaccuracy;
     (d) the Seller or the Servicer shall fail to deliver the Information
Package pursuant to the Agreement, and such failure shall remain unremedied for
two Business Days;
     (e) the Agreement or any Investment or Reinvestment pursuant to the
Agreement shall for any reason: (i) cease to create a valid and enforceable
perfected ownership or security interest in each Pool Receivable, the Related
Security and Collections with respect thereto, free and clear of any Adverse
Claim, or (ii) cease to create with respect to the Pool Assets, or the interest
of the Administrator with respect to such Pool Assets shall cease to be, a valid
and enforceable first priority perfected ownership or security interest, free
and clear of any Adverse Claim;
     (f) the Seller, Peabody or any Originator shall generally not pay its debts
as such debts become due, or shall admit in writing its inability to pay its
debts generally, or shall make a general assignment for the benefit of
creditors; or any proceeding shall be instituted by or against the Seller,
Peabody or any Originator seeking to adjudicate it as bankrupt or insolvent, or
seeking

V-1

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liquidation, winding up, reorganization, arrangement, adjustment, protection,
relief or composition of it or its debts under any law relating to bankruptcy,
insolvency or reorganization or relief of debtors, or seeking the entry of an
order for relief or the appointment of a receiver, trustee, custodian or other
similar official for it or for any substantial part of its property and, in the
case of any such proceeding instituted against it (but not instituted by it),
either such proceeding shall remain undismissed or unstayed for a period of
60 days, or any of the actions sought in such proceeding (including the entry of
an order for relief against, or the appointment of a receiver, trustee,
custodian or other similar official for, it or for any substantial part of its
property) shall occur; or the Seller, Peabody or any Originator shall take any
corporate or organizational action to authorize any of the actions set forth
above in this paragraph;
     (g) (i) the (A) Default Ratio shall exceed 2.25% or (B) the Delinquency
Ratio shall exceed 4.50% or (ii) the average for three consecutive calendar
months of: (A) the Default Ratio shall exceed 1.75%, (B) the Delinquency Ratio
shall exceed 3.50% or (C) the Dilution Ratio shall exceed 2.50%;
     (h) a Change in Control shall occur;
     (i) at any time the Purchased Assets Coverage Percentage exceeds 100%, and
such circumstance shall not have been cured within two Business Days;
     (j) (i) the occurrence of any Event of Default under and as defined in the
Credit Agreement, provided that if the Credit Agreement is terminated but not
replaced, the covenants in effect in the Credit Agreement immediately prior to
termination of the Credit Agreement shall be deemed to be effective for the
purposes of the Agreement; (ii) any other event shall occur or condition shall
exist under the Credit Agreement and shall continue after the applicable grace
period, if any, specified in such Credit Agreement if, in either case: (a) the
effect of such non-payment, event or condition is to give the applicable
debtholders the right (whether acted upon or not) to accelerate the maturity of
such Debt, or (b) any such Debt shall be declared to be due and payable, or
required to be prepaid (other than by a regularly scheduled required
prepayment), redeemed, purchased or defeased, or an offer to repay, redeem,
purchase or defease such Debt shall be required to be made, in each case before
the stated maturity thereof; (iii) in the event that the Credit Agreement shall
have terminated, and there exists any other financing arrangement evidencing
$25,000,000 or more of indebtedness pursuant to which Peabody is a debtor or an
obligor (an “Other Material Financing Agreement”); either (A) the occurrence of
any event of default under such Other Material Financing Agreement, or (B) any
other event shall occur or condition shall exist under and shall continue after
the applicable grace period, if any, specified in such Other Material Financing
Agreement, if, in either case of (A) or (B): (i) the effect of such non-payment,
event or condition is to give the applicable debtholders the right (whether
acted upon or not) to accelerate the maturity of such Other Material Financing
Agreement, or (b) any such Other Material Financing Agreement shall be declared
to be due and payable, or required to be prepaid (other than by a regularly
scheduled required prepayment), redeemed, purchased or defeased, or an offer to
repay, redeem, purchase or defease such Debt shall be required to be made, in
each case before the stated maturity thereof;
     (k) except as could not reasonably be expected, individually or in the
aggregate, to have a Material Adverse Effect, either: (i) a contribution failure
shall occur with respect to any

V-2

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Benefit Plan sufficient to give rise to a lien on any of the assets of Seller,
any Originator, Peabody or any ERISA Affiliate under Section 302(f) of ERISA,
(ii) the Internal Revenue Service shall file a notice of lien asserting a claim
or claims pursuant to the Internal Revenue Code with regard to any of the assets
of Seller, any Originator, Peabody or any ERISA Affiliate and such lien shall
have been filed and not released within 10 days, or (iii) the Pension Benefit
Guaranty Corporation shall, or shall indicate its intention in writing to the
Seller, any Originator, Peabody or any ERISA Affiliate to, either file a notice
of lien asserting a claim pursuant to ERISA with regard to any assets of the
Seller, any Originator, Peabody or any ERISA Affiliate or terminate any Benefit
Plan that has unfunded benefit liabilities, or any steps shall have been taken
to terminate any Benefit Plan subject to Title IV of ERISA so as to result in
any liability and such lien shall have been filed and not released within
10 days;
     (l) the Days’ Sales Outstanding exceed 40.0 days;
     (m) a default shall occur under the Intercreditor Agreement, or any Person
shall attempt to terminate or assert the invalidity or unenforceability of the
Intercreditor Agreement or any provision thereof; or
     (n) any Letter of Credit is drawn upon and, unless as a result of the LC
Bank’s failure to provide the notice required by Section 1.16(b), not fully
reimbursed pursuant to Section 1.16 (including, if applicable, with the proceeds
of any funding by any Purchaser) within two Business Days from the date of such
draw.

V-3

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SCHEDULE I
CREDIT AND COLLECTION POLICY
(Attached)

Schedule I-1

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SCHEDULE II
LOCK-BOX BANKS AND LOCK-BOX ACCOUNTS
BANK: PNC BANK
               PITTSBURGH, PA

                  NAME OF ORIGINATOR   ACCOUNT NUMBER   LOCK-BOX NUMBER
Powder River Coal, LLC
    1008971367       642396  
 
               
COALSALES II, LLC
    1008971287       642381  
 
               
COALTRADE, LLC
    1008971359       642406  
 
               
Peabody Western Coal Company
    1008971308       N/A     
 
               
Arclar Company, LLC
    1017292948       643445  
 
               
Peabody Midwest Mining, LLC
    1017293238       643461  
 
               
Twentymile Coal, LLC
    1017307281       643625  
 
               
COALSALES, LLC
    1019275295       643772  

Schedule II-1

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SCHEDULE III
TRADE NAMES
None.

Schedule III-1

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SCHEDULE IV
OFFICE LOCATIONS
The Principal Place of Business, Chief Executive Office and state of formation
of the Seller is:
701 Market Street, St. Louis, Missouri 63101; Seller is a Delaware limited
liability company
The Seller maintains its master books and records relating to Receivables at:
701 Market Street, St. Louis, Missouri 63101
The Principal Place of Business, Chief Executive Office and state of formation
of Peabody is:
701 Market Street, St. Louis, Missouri 63101; Peabody is a Delaware corporation
Peabody maintains its master books and records relating to the Receivables at:
701 Market Street, St. Louis, Missouri 63101
The Principal Place of Business, Chief Executive Office and state of formation
of Peabody Holding Company, LLC is:
701 Market Street, St. Louis, Missouri 63101; Peabody Holding Company, LLC is a
Delaware limited liability company
Peabody Holding Company, LLC maintains its master books and records relating to
the Receivables at:
701 Market Street, St. Louis, Missouri 63101

Schedule IV-1

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ANNEX A
to Receivables Purchase Agreement
FORM OF INFORMATION PACKAGE
(Attached)

Annex A-1

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ANNEX B
to Receivables Purchase Agreement
FORM OF INVESTMENT NOTICE
                                        , [20                    ]
PNC Bank, National Association
One PNC Plaza, 26th Floor
249 Fifth Avenue
Pittsburgh, PA 15222-2707
[Each Purchaser Agent]
Ladies and Gentlemen:
     Reference is hereby made to the Third Amended and Restated Receivables
Purchase Agreement, dated as of January 25, 2010 (as heretofore amended or
supplemented, the “Receivables Purchase Agreement”), among P&L Receivables
Company, LLC (“Seller”), Peabody Energy Corporation, as Servicer, the Persons
from time to time party thereto as Sub-Servicers, the Persons from time to time
party thereto as Conduit Purchasers, Related Committed Purchasers, Purchaser
Agents and LC Participants, and PNC Bank National Association, as administrator
(in such capacity, the “Administrator”) and as the issuer of letters of credit
thereunder (in such capacity, the “LC Bank”). Capitalized terms used in this
Investment Notice and not otherwise defined herein shall have the meanings
assigned thereto in the Receivables Purchase Agreement.
     [This letter constitutes an Investment Notice pursuant to Section 1.2(a) of
the Receivables Purchase Agreement. Seller requests that the Purchasers make an
Investment in a pool of receivables on                                         ,
[20                    ], in the amount of $          
                              . Subsequent to this Investment, the Aggregate
Capital will be $                                        .]1
     [This letter constitutes a notice pursuant to Section 1.14(a) of the
Receivables Purchase Agreement. Seller desires that LC Bank issue a Letter of
Credit with a face amount of $                    . Subsequent to this issuance,
the LC Participation Amount will be $                     and the Aggregate
Capital will be $                    .]2
     Seller hereby represents and warrants as of the date hereof, and as of the
date of such [Investment] [issuance], as follows:

  (i)   the representations and warranties contained in Exhibit III to the
Receivables Purchase Agreement are true and correct in all material respects
(except to the extent that such representations and warranties expressly relate
to an earlier date,

 

1   In the case of a Borrowing Request.   2   In the case of a request for an
issuance of a Letter of Credit. In the event of a request for the issuance of a
Letter of Credit, a Letter of Credit Application in the form of Annex E to the
Receivables Purchase Agreement must also be delivered by the Seller.

Annex B-1

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

 

      and in which case such representations and warranties are true and correct
in all material respects as of such earlier date);     (ii)   no event has
occurred and is continuing, or would result from the Investment or issuance
requested hereby that constitutes a Termination Event;     (iii)   no Unmatured
Termination Event exists and is continuing;     (iv)   the sum of the Aggregate
Capital plus the LC Participation Amount, after giving effect to the Investment
or issuance requested hereby, will not exceed the Purchase Limit;     (v)  
after giving effect to the Investment or issuance requested hereby, the
Purchased Assets Coverage Percentage shall not exceed 100%; and     (vi)   the
Facility Termination Date has not occurred.

Annex B-2

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     IN WITNESS WHEREOF, the undersigned has caused this Investment Notice to be
executed by its duly authorized officer as of the date first above written.

            P&L RECEIVABLES COMPANY, LLC
      By:           Name:           Title:      

Annex B-3

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ANNEX C
to Receivables Purchase Agreement
FORM OF PAYDOWN NOTICE
                          , 20                    
PNC Bank, National Association
One PNC Plaza, 26th Floor
249 Fifth Avenue
Pittsburgh, Pennsylvania 15222-2707
[Each Purchaser Agent]
Ladies and Gentlemen:
     Reference is hereby made to the Third Amended and Restated Receivables
Purchase Agreement, dated as of January 25, 2010 (as amended, supplemented or
otherwise modified, the “Receivables Purchase Agreement”), among P&L Receivables
Company, LLC, as Seller, Peabody Energy Corporation, as Servicer, the Persons
from time to time party thereto as Sub-Servicers, the Persons from time to time
party thereto as Conduit Purchasers, Related Committed Purchasers, Purchaser
Agents and LC Participants, and PNC Bank, National Association, as Administrator
and as the LC Bank. Capitalized terms used in this paydown notice and not
otherwise defined herein shall have the meanings assigned thereto in the
Receivables Purchase Agreement.
     This letter constitutes a paydown notice pursuant to Section 1.6(f)(i) of
the Receivables Purchase Agreement. The Seller desires to reduce the Aggregate
Capital on                                         ,                     3 by
the application of $                                         in cash to pay
Capital and Discount to accrue (until such cash can be used to pay commercial
paper notes) with respect to such Capital, together with all costs related to
such reduction of the Aggregate Capital. Subsequent to this Paydown, the
Aggregate Capital will be $                                        .
     IN WITNESS WHEREOF, the undersigned has caused this paydown notice to be
executed by its duly authorized officer as of the date first above written.

            P&L RECEIVABLES COMPANY, LLC
      By:           Name:           Title:        

 

3   Notice must be given at least five Business Days’ prior to the requested
paydown date, in the case of reductions in excess of $20,000,000, or at least
two Business Days’ prior to the requested paydown date, in the case of
reductions of $20,000,000 or less.

Annex C-1

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ANNEX D
to Receivables Purchase Agreement
FORM OF COMPLIANCE CERTIFICATE
To: PNC Bank, National Association, as Administrator, and [each Purchaser Agent]
     This Compliance Certificate is furnished pursuant to that certain Third
Amended and Restated Receivables Purchase Agreement, dated as of January 25,
2010, by and among P&L Receivables Company, LLC (“Seller”), Peabody Energy
Corporation (the “Servicer”), the Persons from time to time party thereto as
Sub-Servicers, the Persons from time to time party thereto as Conduit
Purchasers, Related Committed Purchasers, Purchaser Agents and LC Participants,
and PNC Bank, National Association (the “Administrator”) and as the LC Bank (the
“Agreement”). Capitalized terms used herein and not otherwise defined herein
shall have the meanings assigned to them in the Agreement.
     THE UNDERSIGNED HEREBY CERTIFIES THAT:
     1. I am the duly elected                                          of
Seller.
     2. I have reviewed the terms of the Agreement and I have made, or have
caused to be made under my supervision, a detailed review of the transactions
and condition of Seller during the accounting period covered by the attached
financial statements.
     3. The examinations described in paragraph 2 did not disclose, and I have
no knowledge of, the existence of any condition or event which constitutes a
Termination Event or an Unmatured Termination Event, as each such term is
defined under the Agreement, during or at the end of the accounting period
covered by the attached financial statements or as of the date of this
Certificate, except as set forth in paragraph 5 below.
     4. Schedule I attached hereto sets forth financial data and computations
evidencing the compliance with certain covenants of the Agreement (and the
Credit Agreement), all of which data and computations are true, complete and
correct.
     5. Described below are the exceptions, if any, to paragraph 3 by listing,
in detail, the nature of the condition or event, the period during which it has
existed and the action which Seller has taken, is taking, or proposes to take
with respect to each such condition or event:

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The foregoing certifications, together with the computations set forth in
Schedule I hereto and the financial statements delivered with this Certificate
in support hereof, are made and delivered this                      day of
                                        , 20      .

          P&L RECEIVABLES COMPANY, LLC
      By:         Name:         Title:      

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SCHEDULE I TO COMPLIANCE CERTIFICATE
     A. Schedule of Compliance as of                                         ,
20           with Section(s)                      of the Agreement. Unless
otherwise defined herein, the terms used in this Compliance Certificate have the
meanings ascribed thereto in the Agreement.
     This schedule relates to the month
ended:                                        

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ANNEX E
to Receivables Purchase Agreement
FORM OF LETTER OF CREDIT APPLICATION
(Attached)

Annex E-1

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ANNEX F
to Receivables Purchase Agreement
FORM OF ASSUMPTION AGREEMENT
Dated as of [__________ __, 20__]
     THIS ASSUMPTION AGREEMENT (this “Agreement”), dated as of [______ ___,
___], is among P&L RECEIVABLES COMPANY, LLC (the “Seller”), [___], as purchaser
(the “[___] Conduit Purchaser”), [___], as the related committed purchaser (the
“[___] Related Committed Purchaser”), [___], as related lc participant (the
“[___] LC Participant” and together with the Conduit Purchaser and the Related
Committed Purchaser, the “[___] Purchasers”), and [___], as agent for the [___]
Purchasers (the “[___] Purchaser Agent” and together with the [___] Purchasers,
the “[___] Purchaser Group”).
BACKGROUND
     The Seller and various others are parties to that certain Third Amended and
Restated Receivables Purchase Agreement dated as of January 25, 2010 (as
amended, restated, supplemented or otherwise modified through the date hereof,
the “Receivables Purchase Agreement”). Capitalized terms used and not otherwise
defined herein have the respective meaning assigned to such terms in the
Receivables Purchase Agreement.
     NOW, THEREFORE, the parties hereto hereby agree as follows:
     SECTION 1. This Agreement constitutes an Assumption Agreement pursuant to
Section 1.4(g) of the Receivables Purchase Agreement. The Seller desires [the
[___] Purchasers] [the [___] Related Committed Purchaser] [the [___] related LC
Participant] to [become Purchasers under] [increase its existing Commitment
under] the Receivables Purchase Agreement and upon the terms and subject to the
conditions set forth in the Receivables Purchase Agreement, the [___] Purchasers
agree to [become Purchasers thereunder] [increase its Commitment in an amount
equal to the amount set forth as the “Commitment” under the signature of such
[___] Related Committed Purchaser hereto] [increase its Commitment in an amount
equal to the amount set forth as the “Commitment” under the signature of such
[___] related LC Participant hereto].
     Seller hereby represents and warrants to the [___] Purchasers as of the
date hereof, as follows:
     (i) the representations and warranties of the Seller contained in
Exhibit III of the Receivables Purchase Agreement are true and correct in all
material respects on and as the date hereof as though made on and as of such
date (except for representations and warranties which

Annex F-1

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apply as to an earlier date, in which case such representations and warranties
shall be true and correct as of such earlier date);
     (ii) no event has occurred and is continuing that constitutes a Termination
Event or an Unmatured Termination Event; and
     (iii) the Facility Termination Date has not occurred.
     SECTION 2. Upon execution and delivery of this Agreement by the Seller and
each member of the [___] Purchaser Group, satisfaction of the other conditions
to assignment specified in Section 1.4(g) of the Receivables Purchase Agreement
(including the written consent of the Administrator and each Purchaser Agent)
and receipt by the Administrator and Seller of counterparts of this Agreement
(whether by facsimile or otherwise) executed by each of the parties hereto, [the
[___] Purchasers shall become a party to, and have the rights and obligations of
Purchasers under, the Receivables Purchase Agreement][the [___] Related
Committed Purchaser shall increase its Commitment in the amount set forth as the
“Commitment” under the signature of the [___] Related Committed Purchaser
hereto][the [___] related LC Participant shall increase its Commitment in the
amount set forth as the “Commitment” under the signature of the [___] related LC
Participant hereto].
     SECTION 3. Each party hereto hereby covenants and agrees that it will not
institute against, or join any other Person in instituting against, any Conduit
Purchaser, any bankruptcy, reorganization, arrangement, insolvency or
liquidation proceeding, or other proceeding under any federal or state
bankruptcy or similar law, for one year and one day after the latest maturing
Note issued by such Conduit Purchaser is paid in full. The covenant contained in
this paragraph shall survive any termination of the Receivables Purchase
Agreement.
     SECTION 4. THIS AGREEMENT SHALL BE DEEMED TO BE A CONTRACT MADE UNDER AND
GOVERNED BY THE INTERNAL LAWS OF THE STATE OF ILLINOIS EXCEPT TO THE EXTENT THAT
THE VALIDITY OR PERFECTION OF A SECURITY INTEREST OR REMEDIES HEREUNDER, IN
RESPECT OF ANY PARTICULAR COLLATERAL ARE GOVERNED BY THE LAWS OF A JURISDICTION
OTHER THAN THE STATE OF ILLINOIS. This Agreement may not be amended,
supplemented or waived except pursuant to a writing signed by the party to be
charged. This Agreement may be executed in counterparts, and by the different
parties on different counterparts, each of which shall constitute an original,
but all together shall constitute one and the same agreement.
(continued on following page)

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     IN WITNESS WHEREOF, the parties hereto have executed this Agreement by
their duly authorized officers as of the date first above written.

                  [___________], as a Conduit Purchaser
 
           
 
  By: 

 

      Name Printed:    
 
    Title:      
 
                [Address]    
 
                [___________], as a Related Committed Purchaser
 
           
 
  By: 

 

      Name Printed:    
 
    Title:      
 
                [Address]         [Commitment]    
 
                [___________], as a related LC Participant
 
           
 
  By: 

 

      Name Printed:    
 
    Title:      
 
                [Address]         [Commitment]    
 
                [_____________], as Purchaser Agent for [_________]
 
           
 
  By: 

 

      Name Printed:    
 
    Title:      
 
                [Address]    

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              P&L RECEIVABLES COMPANY, as Seller
 
           
By:
                      Name Printed:      
Title:
         
 
            Consented and Agreed:    
 
            PNC BANK, NATIONAL ASSOCIATION, as Administrator
 
           
By:
                      Name Printed:      
Title:
         
 
            Address:   PNC Bank, National Association
One PNC Plaza
249 Fifth Avenue
Pittsburgh, Pennsylvania 15222-2707
 
            PNC BANK, NATIONAL ASSOCIATION, as LC Bank
 
           
By:
                      Name Printed:      
Title:
         
 
            Address:   PNC Bank, National Association
500 First Avenue
Third Floor
Pittsburgh, Pennsylvania 15219
 
            [THE PURCHASER AGENTS]    
 
           
By:
                      Name Printed:      
Title:
         
 
            [Address]        

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ANNEX G
to Receivables Purchase Agreement
FORM OF TRANSFER SUPPLEMENT
Dated as of [                             , 20        ]
Section 1.

     
Commitment assigned:
  $                    
Assignor’s remaining Commitment:
  $                    
Capital allocable to Commitment assigned:
  $                    
Assignor’s remaining Capital:
  $                    
Discount (if any) allocable to Capital assigned:
  $                    
Discount (if any) allocable to Assignor’s remaining Capital:
  $                    

Section 2.
     Effective Date of this Transfer Supplement: [                    ]
     Upon execution and delivery of this Transfer Supplement by transferee and
transferor and the satisfaction of the other conditions to assignment specified
in Section 5.3(c) of the Receivables Purchase Agreement (as defined below), from
and after the effective date specified above, the transferee shall become a
party to, and have the rights and obligations of a Related Committed Purchaser
under, the Third Amended and Restated Receivables Purchase Agreement, dated as
of January 25, 2010 (as amended, restated, supplemented or otherwise modified
through the date hereof, the “Receivables Purchase Agreement”), among P&L
Receivables Company, LLC, as Seller, Peabody Energy Corporation, as initial
Servicer, the various Sub-Servicers, Purchasers and Purchaser Agents from time
to time party thereto, and PNC Bank, National Association, as Administrator and
as LC Bank.

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ASSIGNOR: [                    ], as a Related Committed Purchaser

                  By:           Name:           Title:        

ASSIGNEE: [                    ], as a Purchasing Related Committed Purchaser

                  By:           Name:           Title:             [Address]    

Accepted as of date first above written:
[                                 ], as Purchaser Agent for
the [                    ] Purchaser Group

                  By:           Name:           Title:        

Annex G-2