Exhibit 10.1

Deed

 
Implementation deed
 
PEAMCoal Pty Ltd
 
Macarthur Coal Limited

 
tony.damian@freehills.com

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MLC Centre Martin Place Sydney NSW 2000 Australia
GPO Box 4227 Sydney NSW 2001 Australia

Sydney Melbourne Perth Brisbane Singapore
  Telephone +61 2 9225 5000 Facsimile +61 2 9322 4000
www.freehills.com DX 361 Sydney

Correspondent offices in Hanoi Ho Chi Minh City Jakarta

 

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Contents
Table of contents

             
 
  The deed     3  
 
           
1
  Definitions, interpretation and deed components     4  
 
  1.1 Deed components     4  
 
  1.2 Definitions     4  
 
  1.3 Interpretation     8  
 
  1.4 Inclusive expressions     9  
 
           
2
  Recommendation     9  
 
           
3
  Public announcements     10  
 
           
4
  Facilitating the Offer     10  
 
  4.1 Target’s Statement     10  
 
  4.2 Promoting the Takeover Bid     10  
 
  4.3 Bid Conditions     10  
 
           
5
  Appointment of directors     11  
 
           
6
  Reimbursement Fee     11  
 
  6.1 Background to Reimbursement Fee     11  
 
  6.2 Reimbursement Fee trigger     11  
 
  6.3 Timing of payment of Reimbursement Fee     12  
 
  6.4 Basis of Reimbursement Fee     12  
 
  6.5 Compliance with law     12  
 
  6.6 Reimbursement Fee payable only once     12  
 
  6.7 Other Claims     13  
 
           
7
  Exclusivity arrangements     13  
 
  7.1 Prohibition     13  
 
  7.2 Fiduciary exception to no talk and notification provisions     13  
 
  7.3 Provision of information     14  
 
  7.4 Notification of approaches     14  
 
  7.5 Matching right     14  
 
  7.6 Cease discussions     15  
 
           
8
  Confidentiality     15  
 
  8.1 Permitted disclosure     15  
 
  8.2 Survival of obligations     15  
 
           
9
  Warranties     16  
 
  9.1 Macarthur Warranties     16  
 
  9.2 PEAMCoal Warranties     17  
 
  9.3 Reliance on representations and warranties     18  
 
  9.4 Notification     18  
 
           
10
  Termination     18  
 
  10.1 Termination rights     18  

Implementation deed            page 1

 

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  10.2 Effect of termination     18  
 
  10.3 Termination     18  
 
           
11
  Duties, costs and expenses     19  
 
  11.1 Duties     19  
 
  11.2 Parties to bear own other costs     19  
 
           
12
  GST     19  
 
  12.1 Interpretation     19  
 
  12.2 GST gross up     19  
 
  12.3 Reimbursements and indemnifications     19  
 
  12.4 Tax invoice     20  
 
           
13
  General     20  
 
  13.1 Notices     20  
 
  13.2 Governing law and jurisdiction     21  
 
  13.3 Service of process     21  
 
  13.4 Waivers and variation     22  
 
  13.5 Assignment     22  
 
  13.6 Further assurances     22  
 
  13.7 Approvals and consent     22  
 
  13.8 Remedies cumulative     22  
 
  13.9 Counterparts     22  
 
  13.10 Prohibition and enforceability     22  
 
  13.11 No merger     23  
 
  13.12 Entire agreement     23  
 
  13.13 Contra proferentem excluded     23  
 
  13.14 Attorneys     23  

Implementation deed            page 2

 

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The deed
Implementation deed
Date►   30 August 2011
Between the parties

     
PEAMCoal
  PEAMCoal Pty Ltd
 
   
 
  ACN 152 004 772 of Level 13, BOQ Centre, 259 Queen Street, Brisbane Queensland
4000  
 
  (PEAMCoal)
 
   
Macarthur
  Macarthur Coal Limited
 
   
 
  ACN 096 001 955 of 100 Melbourne Street, South Brisbane Queensland 4101  
 
  (Macarthur)
 
   
Recitals
  1 PEAMCoal has made a takeover bid for all the fully paid ordinary shares in
Macarthur.  
 
  2 The Directors are proposing to recommend the takeover bid in the absence of
a Superior Proposal.  
 
  3 The parties have agreed that the takeover bid will be facilitated on the
terms and conditions set out in this deed.

This deed witnesses as follows:
Implementation deed            page 3

 

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

      Term   Meaning
Agreed Announcements
 
1   an announcement proposed to be released to ASX by Macarthur relating to the
Takeover Bid in the form agreed in writing between the parties; and
 
 
 
2   an announcement proposed to be released to ASX by PEAMCoal relating to the
Takeover Bid in the form agreed in writing between the parties.
 
   
Arcelor
  ArcelorMittal S.A. of 19 avenue de la Liberté, L-2930 Luxembourg City,
Luxembourg.
 
   
ASIC
  the Australian Securities and Investments Commission.
 
   
ASX
  ASX Limited ABN 98 008 624 691 or the stock market operated by it, as the
context requires.
 
   
Associate
  has the meaning given in Division 2 of Part 1.2 of the Corporations Act as if
section 12(1) of the Corporations Act included a reference to this deed.
 
   
Bid Conditions
  the conditions to the Takeover Bid included in section 11.7 of the Bidder’s
Statement.
 
   
Bidder’s Statement
  the replacement bidder’s statement issued by PEAMCoal and dated 15
August 2011.
 
   
Business Day
  a day on which banks are open for business in Brisbane, other than a Saturday,
Sunday or public holiday in Brisbane and ASX is open for trading.

Implementation deed            page 4

 

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1      <Definitions, interpretation and deed components

      Term   Meaning
Claim
  any claim, demand, legal proceeding or cause of action including any claim,
demand, legal proceeding or cause of action:  
 
  1 based in contract (including breach of any warranty);  
 
  2 based in tort (including misrepresentation or negligence);  
 
  3 under common law or equity; or  
 
 
4   under statute (including the Competition and Consumer Act 2010 (Cth), or
like provisions in any state or territory legislation),
 
 
  in any way relating to this deed or the transaction contemplated by it.
 
   
Competing Proposal
  any proposal, agreement, arrangement or transaction, which, if entered into or
completed, would mean a Third Party (either alone or together with any
Associate) may:  
 
 
1   directly or indirectly acquire a Relevant Interest in, or have the right to
acquire, a legal, beneficial or economic interest in, or control of, 10% or more
of the Shares or of the share capital of any Subsidiary of Macarthur;
 
 
 
2   acquire Control of Macarthur or a Subsidiary of Macarthur;
 
 
 
3   otherwise acquire (whether directly or indirectly) or become the holder of,
or otherwise acquire, have a right to acquire or have an economic interest in
all or a material part of Macarthur’s business or assets or the business or
assets of any Subsidiary of Macarthur;
 
 
 
4   otherwise acquire (whether directly or indirectly) or merge with Macarthur
or a Subsidiary of Macarthur; or
 
 
 
5   enter into any agreement, arrangement or understanding requiring Macarthur
or any of the Directors to change, withdraw or modify the Directors’
recommendation of the Takeover Bid,
 
 
  whether by way of takeover bid, scheme of arrangement, securityholder approved
acquisition, capital reduction or buy back, sale or purchase of shares,
securities or assets, global assignment of assets and liabilities, incorporated
or unincorporated joint venture, dual-listed company (or other synthetic
merger), or other transaction or arrangement.
 
   
Confidentiality
Agreement
  the confidentiality agreement dated 14 July 2011 between Peabody, Arcelor and
Macarthur.
 
   
Control
  has the meaning given in section 50AA of the Corporations Act.
 
   
Corporations Act
  the Corporations Act 2001 (Cth).

Implementation deed            page 5

 

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1      <Definitions, interpretation and deed components

      Term   Meaning
Director
  a director of Macarthur other than any director who is on leave of absence.
 
   
Duty
  any stamp, transaction or registration duty or similar charge imposed by any
Governmental Agency and includes any interest, fine, penalty, charge or other
amount imposed in respect of any of them, but excludes any Tax.
 
   
Encumbrance
  an interest or power:  
 
 
1   reserved in or over an interest in any asset, including any retention of
title; or
 
 
 
2   created or otherwise arising in or over any interest in any asset under a
bill of sale, mortgage, charge, lien, pledge, trust or power,
 
 
  by way of security for the payment of a debt, any other monetary obligation or
the performance of any other obligation, and includes, any agreement to grant or
create any of the above.
 
   
Exclusivity Period
  the period from and including the date of this deed to the earlier of:  
 
  1 the termination of this deed in accordance with its terms;  
 
  2 the end of the Offer Period; or  
 
  3 the date which is 6 months after the date of this deed.
 
   
Governmental Agency
  any government or any governmental, semi governmental, statutory or judicial
entity, regulatory body, agency or authority, whether in Australia, or
elsewhere, including any self regulatory organisation established under statute
or otherwise discharging substantially public or regulatory functions.
 
   
GST
  goods and services tax or similar value added tax levied or imposed in
Australia under the GST Law or otherwise on a supply.
 
   
GST Law
  the A New Tax System (Goods and Services Tax) Act 1999 (Cth).
 
   
Macarthur Board
  the board of directors of Macarthur, other than any director who is on leave
of absence.
 
   
Macarthur Group
  Macarthur and each of its Subsidiaries.
 
   
Offer
  Each offer to acquire Shares dated 18 August 2011 and made pursuant to the
Takeover Bid, the terms of which are contained in the Bidder’s Statement, as are
proposed to be increased in accordance with the Agreed Announcements.

Implementation deed            page 6

 

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1      <Definitions, interpretation and deed components

      Term   Meaning
Offer Period
  the period during which the Offer is open for acceptance.
 
   
Peabody
  Peabody Energy Corporation of 701 Market Street, St Louis, Missouri, United
States of America.
 
   
Public Authority
  any government or any governmental, semi-governmental, statutory or judicial
entity, agency or authority, whether in Australia, or elsewhere, including any
self-regulatory organisation established under statute or otherwise discharging
substantially public or regulatory functions, and ASX or any other stock
exchange.
 
   
Reimbursement Fee
  the amount of $48,300,000 (exclusive of GST, if any).
 
   
Related Body Corporate
  has the meaning given in section 50 of the Corporations Act.
 
   
Related Person
  1  a Related Body Corporate of Macarthur;  
 
 
2  an adviser or consultant of Macarthur or an adviser or consultant of a
Related Body Corporate of Macarthur; or
 
 
 
3  a director, officer or employee of Macarthur or any entity referred to in
paragraph 1 or 2 of this definition.
 
   
Relevant Interest
  has the meaning given in sections 608 and 609 of the Corporations Act.
 
   
Share
  a fully paid ordinary share in the capital of Macarthur.
 
   
Shareholder
  a holder of Shares.
 
   
Subsidiary
  has the meaning given in section 9 of the Corporations Act.
 
   
Superior Proposal
  a bona fide Competing Proposal of the kind referred to in any of paragraphs 2,
3 or 4 of the definition of Competing Proposal (and not resulting from a breach
by Macarthur of any of its obligations under clause 7 (it being understood that
any actions by the Related Persons of Macarthur in breach of clause 7 shall be
deemed to be a breach by Macarthur for the purposes hereof)) which the Macarthur
Board, acting in good faith, and after receiving written legal advice from its
legal advisers and written advice from its financial advisers, determines:

Implementation deed            page 7

 

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1      <Definitions, interpretation and deed components

      Term   Meaning
 
 
1   is reasonably capable of being valued and completed taking into account all
aspects of the Competing Proposal, including any timing considerations and any
conditions precedent; and
 
 
 
2   would, if completed substantially in accordance with its terms, be more
favourable to Shareholders (as a whole) than the Takeover Bid (as such Takeover
Bid has been amended or varied following a previous application of the matching
right set out in clause 7.5), taking into account all terms and conditions of
the Competing Proposal.
 
   
Takeover Bid
  the off-market takeover bid made by PEAMCoal for the Shares.
 
   
Target’s Statement
  the target’s statement to be prepared by Macarthur in relation to the Takeover
Bid.
 
   
Tax
  any tax, levy, charge, impost, fee, deduction, goods and services tax,
compulsory loan or withholding, that is assessed, levied, imposed or collected
by any Governmental Agency and includes any interest, fine, penalty, charge, fee
or any other amount imposed on, or in respect of any of the above but excludes
Duty.
 
   
Third Party
  a party other than Macarthur, and any Subsidiary of Macarthur, Peabody and
PEAMCoal, and any Subsidiary of Peabody.
 
   
Unacceptable
Circumstances
  has the meaning set out in section 657A of the Corporations Act.

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

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

Implementation deed            page 8

 

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2      Recommendation

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

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

2   Recommendation

  (a)   Macarthur represents and warrants that the Macarthur Board has met and
considered the Offer and all of the Directors have informed Macarthur that they
will:

  (1)   unanimously recommend that Shareholders accept the Offer; and     (2)  
accept, or procure the acceptance of, the Offer, in respect of any Shares that
they, or their Associates, own or control or otherwise have a Relevant Interest
in,

      in each case, in the absence of a Superior Proposal.     (b)   Macarthur
must use its best endeavours to procure that all of the Directors publicly state
in all public announcements in relation to the Offer, including in Macarthur’s
Agreed Announcement and in the Target’s Statement, that:

  (1)   they unanimously recommend that Shareholders accept the Offer; and

Implementation deed            page 9

 

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(FREEHILLS LOGO) [c66069c6606901.gif]   3 Public announcements

  (2)   they will accept or procure the acceptance of the Offer, in respect of
any Shares that they, or their Associates, own or control or otherwise have a
Relevant Interest in,

      in each case, in the absence of a Superior Proposal.

  (c)   Subject to clause 7, Macarthur must use its best endeavours to procure
that the Macarthur Board collectively does not, and that the Directors
individually do not, change, withdraw or modify his or her recommendation unless
the Macarthur Board has obtained written legal advice from its external legal
advisers and determined that not to change, withdraw or modify his or her
recommendation would reasonably be likely to involve a breach of the statutory
or fiduciary duties owed by any Director or would otherwise be unlawful.

3 Public announcements

      As soon as reasonably practicable after both parties have executed this
deed, PEAMCoal and Macarthur must each release to ASX its Agreed Announcement.

4 Facilitating the Offer
4.1 Target’s Statement

  (a)   Macarthur will give PEAMCoal a reasonable opportunity to review an
advanced draft of the Target’s Statement before Macarthur lodges the Target’s
Statement with ASIC, and will consult in good faith with PEAMCoal in relation to
any comments PEAMCoal may have on the Target’s Statement.     (b)   PEAMCoal
agrees to support any application by Macarthur to ASIC for an extension of the
time under items 11, 12, 13 and 14 of subsection 633(1) of the Corporations Act
for sending a copy of the Target’s Statement to PEAMCoal, ASX and Shareholders
and lodging a copy with ASIC, in each case from 2 September 2011 to 9
September 2011.     (c)   PEAMCoal agrees that it will extend its Offer Period
by at least one week, or any further reasonable period required by ASIC in
granting the extension referred to in clause 4.1(b).

4.2 Promoting the Takeover Bid

      During the Offer Period, in the absence of a Superior Proposal, Macarthur
must use its best endeavours to procure that the Directors will support the
Takeover Bid.

4.3   Bid Conditions

  (a)   A party must promptly notify the other party if it becomes aware that
any Bid Condition has been fulfilled or breached. If any event occurs or becomes
apparent which would or would reasonably be likely to cause any of the Bid
Conditions to be breached or cause fulfilment of any of them to be materially
delayed, the relevant party must, to the extent that it is actually aware of
such information, notify the other party of that event as soon as reasonably
practicable.

          Implementation deed       page 10

 

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(LOGO FREEHILLS) [c66069c6606901.gif]   5 Appointment of directors

  (b)   A reference in this clause 4.3 to a Bid Condition being breached
includes a reference to the Bid Condition not being, or not being capable of
being, fulfilled.     (c)   PEAMCoal acknowledges and agrees that it will not
rely on any Bid Condition in respect of any information fairly disclosed in
writing by Macarthur to Peabody or Arcelor before the execution of this deed.  
  (d)   PEAMCoal acknowledges and agrees that it will not rely on the Bid
Condition in section 11.7(f) (No material adverse change) of the Bidder’s
Statement merely as a result of a change in coal prices.

5 Appointment of directors

      As soon as practicable after PEAMCoal acquires a Relevant Interest in
50.01% of the Shares and the Offer becomes unconditional, Macarthur will use
reasonable endeavours to procure the appointment of such persons as directors of
Macarthur as are nominated by PEAMCoal in writing so as to ensure that
PEAMCoal’s nominees comprise a majority of the directors of Macarthur.

6 Reimbursement Fee
6.1 Background to Reimbursement Fee

  (a)   PEAMCoal and Macarthur acknowledge that, if they enter into this deed
and the Takeover Bid (the consideration under which is proposed to be increased
in accordance with the Agreed Announcements) is subsequently not implemented,
PEAMCoal, Peabody, Arcelor and certain of the respective Subsidiaries of Peabody
and Arcelor will incur significant costs.     (b)   In these circumstances,
PEAMCoal has requested that provision be made for the payments outlined in
clause 6.2, without which PEAMCoal would not have entered into this deed or
otherwise agreed to increase the consideration payable under the Takeover Bid.

6.2 Reimbursement Fee trigger

      Macarthur must pay the Reimbursement Fee to PEAMCoal, without set-off or
withholding:

  (a)   if a Competing Proposal of any kind is announced during the Exclusivity
Period (whether or not such proposal is stated to be subject to any
pre-conditions) and, within one year of the date of such announcement, the Third
Party or any Associate of that Third Party:

  (1)   completes a Competing Proposal of a kind referred to in any of
paragraphs 2 to 5 of the definition of Competing Proposal; or     (2)   without
limiting clause 6.2(a)(1), acquires (either alone or in aggregate) a Relevant
Interest in more than 50% of the Shares or acquires (either alone or in
aggregate) Control of Macarthur; or

  (b)   where a Bid Condition, or an aspect of a Bid Condition, is within
Macarthur’s control and Macarthur fails to use reasonable endeavours to prevent
the breach of that Bid Condition or to prevent that Bid Condition becoming
incapable of being fulfilled, in either case due to an act or omission of
Macarthur, a Related

          Implementation deed       page 11

 

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(FREEHILLS LOGO) [c66069c6606901.gif]   6 Reimbursement Fee

      Body Corporate of Macarthur or a director of Macarthur or a director of
any Related Body Corporate of Macarthur provided that:

  (1)   in any such case PEAMCoal publicly announces that it will, as a result
of such act or omission, allow the Takeover Bid to lapse without freeing the
Offer from the relevant Bid Condition; and     (2)   no Reimbursement Fee will
be payable if any of the conditions in sections 11.7(a), (b), (c) or (d) of the
Bidder’s Statement are breached or become incapable of being fulfilled.

6.3 Timing of payment of Reimbursement Fee

  (a)   A demand by PEAMCoal for payment of the Reimbursement Fee under clause
6.2 must be in writing and state the circumstances which give rise to demand.  
  (b)   Macarthur must pay the Reimbursement Fee to PEAMCoal, without set-off or
withholding, within 2 Business Days of receipt by PEAMCoal of a demand for
payment where PEAMCoal is entitled under clause 6.2 to the Reimbursement Fee.

6.4 Basis of Reimbursement Fee

      The Reimbursement Fee has been calculated to reimburse PEAMCoal, Peabody,
Arcelor and certain of the respective Subsidiaries of Peabody and Arcelor for
costs, including the following:

  (a)   fees for legal, financial and other professional advice in planning and
implementing the Takeover Bid;     (b)   reasonable opportunity costs incurred
in engaging in the Takeover Bid or in not engaging in other alternative
acquisitions or strategic initiatives;     (c)   costs of management and
directors’ time in planning and implementing the Takeover Bid; and     (d)   out
of pocket expenses incurred in planning and implementing the Takeover Bid.

6.5 Compliance with law

      This clause 6 does not impose an obligation on Macarthur to pay the
Reimbursement Fee to the extent (and only to the extent) that the obligation to
pay the Reimbursement Fee:

  (a)   is declared by the Takeovers Panel to constitute Unacceptable
Circumstances; or     (b)   is determined to be unenforceable as determined by a
court.

6.6 Reimbursement Fee payable only once

      Where the Reimbursement Fee becomes payable to PEAMCoal under clause 6.2
and is actually paid to PEAMCoal, PEAMCoal cannot make any Claim against
Macarthur for payment of any subsequent Reimbursement Fee.

          Implementation deed       page 12

 

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(FREEHILLS LOGO) [c66069c6606901.gif]   7 Exclusivity arrangements

6.7 Other Claims

      Where an amount becomes payable to PEAMCoal under clause 6.2 and is
actually paid to PEAMCoal (or is payable, but no demand is made under clause
6.3), PEAMCoal cannot make any Claim (other than a Claim under this clause 6)
against Macarthur which relates to the event that gave rise to the right to make
a demand under clause 6.3.

7 Exclusivity arrangements
7.1 Prohibition

      During the Exclusivity Period, Macarthur must not, and must ensure that
each of its Related Persons does not, directly or indirectly:

  (a)   (no shop) solicit, invite, encourage or initiate (including by the
provision of non-public information) any inquiry, expression of interest, offer,
proposal or discussion by any person in relation to, or which would reasonably
be expected to encourage or lead to the making of, an actual, proposed or
potential Competing Proposal or communicate to any person an intention to do
anything referred to in this clause 7.1(a); or     (b)   (no talk) subject to
clause 7.2:

  (1)   participate in or continue any negotiations or discussions with respect
to any inquiry, expression of interest, offer, proposal or discussion by any
person to make or which would reasonably be expected to encourage or lead to the
making of an actual, proposed or potential Competing Proposal or participate in
or continue any negotiations or discussions with respect to any actual, proposed
or potential Competing Proposal;     (2)   negotiate, accept or enter into, or
offer or agree to negotiate, accept or enter into, any agreement, arrangement or
understanding regarding an actual, proposed or potential Competing Proposal;    
(3)   disclose or otherwise provide any material non-public information about
the business or affairs of Macarthur or its Subsidiaries to any person (other
than a Public Authority) with a view to obtaining or which would reasonably be
expected to encourage or lead to receipt of an actual, proposed or potential
Competing Proposal; or     (4)   communicate to any person an intention to do
anything referred to in this clause 7.1(b).

7.2 Fiduciary exception to no talk and notification provisions

      Clause 7.1(b) does not prohibit any action or inaction by Macarthur or any
of its Related Persons in relation to an actual, proposed or potential Competing
Proposal if compliance with that clause would, in the opinion of the Macarthur
Board, formed in good faith after receiving written advice from its external
legal advisers, constitute, or would reasonably be likely to involve, a breach
of any of the fiduciary or statutory duties of the Directors, provided that the
actual, proposed or potential Competing Proposal was not directly or indirectly
brought about by, or facilitated by, a breach of clause 7.1(a).

          Implementation deed      page 13

 

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(FREEHILLS LOGO) [c66069c6606901.gif]   7 Exclusivity arrangements

7.3 Provision of information

      During the Exclusivity Period, Macarthur must as soon as possible provide
PEAMCoal with:

  (a)   in the case of written materials, a copy of; and     (b)   in any other
case, a written statement of,

      any material non-public information about the business or affairs of
Macarthur or its Subsidiaries disclosed or otherwise provided after the date of
this deed to any person in connection with an actual, proposed or potential
Competing Proposal, which has not previously been provided to PEAMCoal.

7.4 Notification of approaches

  (a)   During the Exclusivity Period, Macarthur must as soon as possible notify
PEAMCoal in writing if it, or any of its Related Persons, becomes aware of any
direct or indirect:

  (1)   approach or attempt to initiate any negotiations or discussions, or
intention to make such an approach or attempt to initiate any negotiations or
discussions in respect of any expression of interest, offer, proposal or
discussion in relation to an actual, proposed or potential Competing Proposal;  
  (2)   proposal made to Macarthur or any of its Related Persons, in connection
with, or in respect of any exploration or completion of, an actual, proposed or
potential Competing Proposal; or     (3)   provision by Macarthur or any of its
Related Persons of any material confidential information concerning Macarthur’s
or its Subsidiaries’ operations to any person in relation to an actual, proposed
or potential Competing Proposal.

  (b)   A notification given under clause 7.4(a) must include the identity of
the relevant person making or proposing the relevant actual, proposed or
potential Competing Proposal, together with all material terms and conditions of
the actual, proposed or potential Competing Proposal.

7.5 Matching right

      Without limiting clause 7.1, during the Exclusivity Period, Macarthur:

  (a)   must not enter into any legally binding agreement, arrangement or
understanding (whether or not in writing) pursuant to which a Third Party and/or
Macarthur proposes to undertake or give effect to an actual, proposed or
potential Competing Proposal; and     (b)   must use its best endeavours to
procure that none of its Directors change their recommendation in favour of the
Takeover Bid to publicly recommend an actual, proposed or potential Competing
Proposal,

          Implementation deed      page 14

 

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(FREEHILLS LOGO) [c66069c6606901.gif]   8 Confidentiality

      unless:

  (c)   the Macarthur Board acting in good faith determines that the actual,
proposed or potential Competing Proposal would be or would be likely to be a
Superior Proposal;     (d)   Macarthur has provided PEAMCoal with the material
terms and conditions of the actual, proposed or potential Competing Proposal,
including price and the identity of the Third Party making the actual, proposed
or potential Competing Proposal; and     (e)   Macarthur has given PEAMCoal at
least 2 Business Days after the provision of the information referred to in
clause 7.5(d) to provide a matching or superior proposal to the terms of the
actual, proposed or potential Competing Proposal.

7.6 Cease discussions

      Macarthur must, and must ensure that each of its Related Persons, cease
any discussions or negotiations existing as at the date of this deed and revoke
any due diligence and/or data room access existing as at the date of this deed,
each relating to:

  (a)   any actual, proposed or potential Competing Proposal; or     (b)   any
transaction that would, or would reasonably expected to, reduce the likelihood
of success of the Takeover Bid.

8 Confidentiality
8.1 Permitted disclosure

  (a)   Macarthur acknowledges and agrees that, except as provided for in
clauses 8.1(c) and 8.1(d), it continues to be bound by the Confidentiality
Agreement.     (b)   PEAMCoal acknowledges and agrees that, except as provided
for in clauses 8.1(c) and 8.1(d), it is bound by the Confidentiality Agreement
as if it were a party to it and had the rights and obligations of the Joint
Bidders (as defined in the Confidentiality Agreement) under it.     (c)   Each
party agrees that either party may release a full copy of this deed to ASX and
that a full copy of this deed may be filed with the U.S. Securities and Exchange
Commission.     (d)   Each party releases the other party from any
confidentiality obligations that it owes to the other to the extent that each
party is required by law to disclose the applicable confidential information
pursuant to the implementation of the Takeover Bid.

8.2 Survival of obligations

      The rights and obligations of the parties under the Confidentiality
Agreement survive termination of this agreement.

          Implementation deed      page 15

 

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(LOGO FREEHILLS) [c66069c6606901.gif]   9 Warranties

9 Warranties
9.1 Macarthur Warranties

  (a)   Macarthur represents and warrants that as at the date of this deed and
on each day up to and including the last day of the Offer Period:

  (1)   (incorporation) it is validly incorporated, organised and subsisting
under the laws of the place of its incorporation;     (2)   (power and capacity)
it has full power and capacity to:

  (A)   own its property and carry on its business; and     (B)   enter into and
perform its obligations under this deed;

  (3)   (due execution) this deed has been duly executed and is a legal, valid
and binding agreement, enforceable against it in accordance with its terms;    
(4)   (authorisations) all necessary authorisations for the execution, delivery
and performance by it of this deed in accordance with its terms have been
obtained;     (5)   (no contractual restrictions) it is not bound by any
agreement that would prevent or restrict it from entering into and performing
its obligations under this deed; and     (6)   (no insolvency) no resolutions
have been passed or steps taken, and no petition or other process has been
presented or threatened in writing against it, for winding-up or dissolution,
and no receiver, receiver and manager, liquidator, administrator or like
official has been appointed, or is threatened or expected to be appointed, over
the whole or any part of its assets other than the winding up application in
relation to MCG Coal Holdings Pty Ltd.

  (b)   In addition to the warranties set out in clause 9.1(a), Macarthur
represents and warrants that, as at the date of this deed:

  (1)   (bid conditions) it is not aware of any event or circumstance that would
result in one or more of the Bid Conditions being breached or becoming incapable
of fulfilment (other than as fairly disclosed in writing by Macarthur to Peabody
or Arcelor before the execution of this deed); and     (2)   (joint ventures):
no joint venture agreement, shareholders’ agreement or any other material
agreement, deed, arrangement or instrument to which Macarthur or any of its
Subsidiaries is a party relating to any mine project including the Middlemount
and Monto Coal mine projects (each a Specified Agreement), contains a change of
control provision or any other provision which could be triggered as a result of
the implementation of the Takeover Bid and which could result in:

  (A)   any Specified Agreement being terminated or modified or any action being
taken or arising thereunder (including the

          Implementation deed      page 16

 

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(FREEHILLS LOGO) [c66069c6606901.gif]   9 Warranties

      acceleration of the performance of any obligations thereunder);     (B)  
the interest of Macarthur or any of its Subsidiaries in the relevant mine
project or any related incorporated or unincorporated joint venture or entity
(or any arrangements relating to such interest) being terminated, modified or
being required to be disposed of; or     (C)   an obligation on Macarthur or any
of its Subsidiaries to buy out the interest in the relevant mine project of any
party to any Specified Agreement.

9.2 PEAMCoal Warranties

  (a)   PEAMCoal represents and warrants that as at the date of this deed and on
each day up to and including the last day of the Offer Period:

  (1)   (incorporation) it is validly incorporated, organised and subsisting
under the laws of the place of its incorporation;     (2)   (power and capacity)
it has full power and capacity to:

  (A)   own its property and carry on its business; and     (B)   enter into and
perform its obligations under this deed;

  (3)   (due execution) this deed has been duly executed and is a legal, valid
and binding agreement, enforceable against it in accordance with its terms;    
(4)   (authorisations) all necessary authorisations for the execution, delivery
and performance by it of this deed in accordance with its terms have been
obtained;     (5)   (no contractual restrictions) it is not bound by any
agreement that would prevent or restrict it from entering into and performing
its obligations under this deed; and     (6)   (no insolvency) no resolutions
have been passed or steps taken, and no petition or other process has been
presented or threatened in writing against it, for winding-up or dissolution,
and no receiver, receiver and manager, liquidator, administrator or like
official has been appointed, or is threatened or expected to be appointed, over
the whole or any part of its assets.

  (b)   In addition to the warranties set out in clause 9.2(a) PEAMCoal
represents and warrants that, as at the date of this deed it is not aware of any
event or circumstance that would result in one or more of the Bid Conditions
being breached or becoming incapable of fulfilment (other than as fairly
disclosed in writing by Macarthur to Peabody or Arcelor before the execution of
this deed).

          Implementation deed      page 17

 

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(FREEHILLS LOGO) [c66069c6606901.gif]   10 Termination

9.3 Reliance on representations and warranties

  (a)   Each party acknowledges that no party (nor any person acting on its
behalf) has made any representation or other inducement to it to enter into this
deed, except for representations or inducements expressly set out in this deed.
    (b)   Each party acknowledges and confirms that it does not enter into this
deed in reliance on any representation or other inducement by or on behalf of
any other party, except for any representation or inducement expressly set out
in this deed.     (c)   Each party acknowledges and confirms that clauses 9.3(a)
and 9.3(b) do not prejudice any rights a party may have in relation to
information which has been filed by the other party with ASIC and ASX.

9.4 Notification

      Each party will promptly advise the other in writing if it becomes aware
of any fact, matter or circumstance that constitutes or may constitute a breach
of any of the representations and warranties given by it under this clause 9.

10 Termination
10.1 Termination rights

      A party may terminate this deed by written notice to the other party only
if PEAMCoal withdraws the Takeover Bid or the Takeover Bid lapses or does not
proceed for any reason, including non-fulfilment of a Bid Condition which
non-fulfilment is not waived by PEAMCoal.

10.2 Effect of termination

      If this deed is terminated by a party:

  (a)   each party will be released from its obligations under this deed, except
that clauses 1, 6, 8, 9, 10, 11, 12 and 13 shall survive termination;     (b)  
each party will retain the rights it has or may have against the other party in
respect of any past breach of this deed; and     (c)   in all other respects,
all future obligations of the parties under this deed will immediately terminate
and be of no further force or effect, including any further obligations in
respect of the Takeover Bid.

10.3 Termination

      Where a party has a right to terminate this deed, that right for all
purposes will be validly exercised if the party delivers a notice in writing to
the other party stating that it terminates this deed and the provision under
which it is terminating the deed.

          Implementation deed      page 18

 

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(FREEHILLS LOGO) [c66069c6606901.gif]   11 Duties, costs and expenses

11 Duties, costs and expenses
11.1 Duties

      PEAMCoal must pay all Duty in respect of the execution, delivery and
performance of this deed.

11.2 Parties to bear own other costs

  (a)   Except as set out in clause 11.1 and unless otherwise provided for in
this deed, each party must pay its own costs and expenses in respect of the
negotiation, preparation, execution, delivery and registration of this deed and
any other agreement or document entered into or signed under this deed or in
connection with the Offer.     (b)   Any action to be taken by any party in
performing its obligations under this deed must be taken at its own cost and
expense unless otherwise provided in this deed.

12 GST
12.1 Interpretation

      In this clause 12, a word or expression defined in the GST Law has the
meaning given to it in the GST Law.

12.2   GST gross up

  (a)   Subject to clause 12.2(b), if a party makes a supply under or in
connection with this deed in respect of which GST is payable, the consideration
for the supply but for the application of this clause 12.2 (GST exclusive
consideration) is increased by an amount equal to the GST exclusive
consideration multiplied by the rate of GST prevailing at the time the supply is
made.     (b)   Clause 12.2(a) does not apply to any consideration that is
expressed in this deed to be inclusive of GST.     (c)   Any consideration or
payments that are not expressed to be inclusive of GST are exclusive of GST.

12.3 Reimbursements and indemnifications

      If a party must reimburse or indemnify the other party for a loss, cost or
expense, the amount to be reimbursed or indemnified is first reduced by any
input tax credit the other party is entitled to for the loss, cost or expense,
and then increased in accordance with clause 12.2.

          Implementation deed      page 19

 

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(FREEHILLS LOGO) [c66069c6606901.gif]   13 General

12.4   Tax invoice       A party need not make a payment for a taxable supply
made under or in connection with this deed until it receives a tax invoice for
the supply to which the payment relates.   13   General

13.1 Notices

  (a)   Any notice or other communication (including any request, demand,
consent or approval) to or by a party to this deed must be in legible writing
and in English addressed as shown below (or as specified to the sender by any
party by notice):

              Party   Address   Attention   Facsimile  
PEAMCoal
  Level 13, BOQ Centre,
259 Queen Street,
Brisbane Queensland
4000   The Company Secretary

with a copy to Freehills:

Attention:
Tony / Damian Andrew
Rich

Address:
Level 32, MLC Centre
19 Martin Place
Sydney NSW 2000
Australia

Fax:
+61 2 9322 4000

and a copy to Mallesons
Stephen Jaques:

Attention:
David Friedlander /
Greg Golding

Address:
Level 61, Governor
Phillip Tower
1 Farrer Place
Sydney NSW 2000
Australia

Fax:
+61 2 9296 3999

  +61 7 3225 5555
Macarthur
  100 Melbourne Street,
South Brisbane
Queensland 4101,
Australia   Lisa Dalton, Company
Secretary

with a copy to Corrs
Chambers Westgarth:

Attention:
Teresa Handicott /
Jeremy Horwood

Address:
Level 35, Waterfront
Place
1 Eagle Street
Brisbane QLD 4000
Australia

Fax: +61 7 3228 9444

  +61 7 3229 1776

Implementation deed            page 20

 

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(FREEHILLS LOGO) [c66069c6606901.gif]   13 General

      If the sender is a company, the notice or communication must be signed by
an officer or under the common seal of the sender.     (b)   A notice or
communication given in accordance with clause 13.1(a) can be relied on by the
addressee and the addressee is not liable to any other person for any
consequences of that reliance if the addressee believes it to be genuine,
correct and authorised by the sender.     (c)   Any notice or other
communication to or by a party to this deed is regarded as being given by the
sender and received by the addressee:

  (1)   if by delivery in person, when delivered to the addressee;     (2)   if
by post within Australia, 2 Business Days from and including the date of
postage;     (3)   if by post to or from a place outside Australia, 5 Business
Days from and including the date of postage; or     (4)   if by facsimile
transmission, when a facsimile confirmation receipt is received indicating
successful delivery,

      but if the delivery or receipt is on a day that is not a Business Day or
is after 5.00pm (addressee’s time) it is regarded as received at 9.00am on the
following Business Day.     (d)   A facsimile transmission is regarded as
legible unless the addressee telephones the sender within 2 hours after the
transmission is received or regarded as received under clause 13.1(c) and
informs the sender that it is not legible.     (e)   In this clause 13.1,
reference to an addressee includes a reference to an addressee’s officers,
agents or employees.

13.2 Governing law and jurisdiction

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

13.3 Service of process

    Without preventing any other mode of service, any document in an action
(including any writ of summons or other originating process or any third or
other party notice) may be

Implementation deed            page 21

 

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(FREEHILLS LOGO) [c66069c6606901.gif]   13 General

    served on any party by being delivered to or left for that party at its
address for service of notices under clause 13.1.

13.4 Waivers and variation

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

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

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

13.5   Assignment       A party may not assign its rights or delegate its
obligations under this deed without the written consent of each other party.  
13.6   Further assurances       Subject to clause 8, each party must do all
things and execute all further documents reasonably necessary to give full
effect to this deed and the transactions contemplated by it.   13.7   Approvals
and consent       If the doing of any act, matter or thing under this deed is
dependent on the approval or consent of a party, that party may give
conditionally or unconditionally or withhold its approval or consent in its
absolute discretion, unless this deed expressly provides otherwise.   13.8  
Remedies cumulative       Except as provided in this deed and permitted by law,
the rights, powers and remedies provided in this deed are cumulative with and
not exclusive to the rights, powers or remedies provided by law independently of
this deed.   13.9   Counterparts       This deed may be executed in any number
of counterparts which together will constitute one instrument. A party may
execute this deed by signing any counterpart.   13.10   Prohibition and
enforceability       Any provision of, or the application of any provision of,
in this deed that is void, illegal or unenforceable in any jurisdiction is to be
read down for the purpose of that jurisdiction, if possible, so as to be valid
and enforceable, and otherwise shall be severed to the extent of the invalidity,
illegality or unenforceability, without affecting the remaining provisions of

Implementation deed            page 22

 

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(FREEHILLS LOGO) [c66069c6606901.gif]   13 General

    this deed or affecting the validity or enforceability of that provision in
any other jurisdiction.   13.11   No merger       The rights and obligations of
the parties under this deed do not merge on completion of any transaction
contemplated by this deed.   13.12   Entire agreement       This deed embodies
the entire agreement between the parties and supersedes any prior negotiation,
conduct, arrangement, understanding or agreement, express or implied, with
respect to the subject matter of this deed other than the Confidentiality
Agreement.   13.13   Contra proferentem excluded       No term or condition of
this deed will be construed adversely to a party solely on the ground that the
party was responsible for the preparation of this deed or that provision.  
13.14   Attorneys       Each of the attorneys executing this deed states that
the attorney has no notice of the revocation of the power of attorney appointing
that attorney.

Implementation deed            page 23

 

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(FREEHILLS LOGO) [c66069c6606901.gif]

      Executed as a deed

         
 
  Signed, sealed and delivered by
PEAMCoal Pty Ltd
by
   
 
       
sign here ►
  /s/ Richard A. Navarre
 
   
 
  Director    
 
       
print name
  Richard A. Navarre
 
   
 
       
sign here ►
  /s/ Eric Ford
 
   
 
  Director    
 
       
print name
  Eric Ford
 
   

         
 
  Signed, sealed and delivered by
Macarthur Coal Limited
by
   
 
       
sign here ►
  /s/ Lisa Jane Dalton
 
   
 
  Company Secretary    
 
       
print name
  Lisa Jane Dalton
 
   
 
       
sign here ►
  /s/ Nicole Maree Hollows
 
   
 
  Director    
 
       
print name
  Nicole Maree Hollows
 
   

Implementation deed            page 24