exv10w5






Exhibit 10.5




EXECUTION COPY




	 	 	 

	MERRILL LYNCH, PIERCE, FENNER &

SMITH INCORPORATED 

BANK OF AMERICA, N.A. 

One Bryant Park 

New York, New York 10036
	 	UBS SECURITIES LLC

299 Park Avenue

New York, New York 10171



UBS LOAN FINANCE LLC

677 Washington Boulevard

Stamford, Connecticut 06901






MORGAN STANLEY & CO. LLC

MORGAN STANLEY SENIOR FUNDING, INC.

1585 Broadway

New York, New York 10036


July 29, 2011




Peabody Energy Corporation

701 Market Street

St. Louis, MO 63101





			
	Attention:	 	Michael C. Crews

Executive Vice President and Chief Financial Officer





Project Truman

Bridge Facility Commitment Letter



Ladies and Gentlemen:



We have been advised that Peabody Energy Corporation (the “Company” or “you”) intends to acquire,
via Bidco (as defined below), at least 50.01% of the shares of Macarthur Coal Limited (the
“Target”) either pursuant to offers made under a takeover bid or pursuant to a scheme of
arrangement (the “Tender”) and, in connection therewith, the Commitment Parties (as defined below)
are pleased to act in the capacities set forth below for an up to US$2.0 billion senior bridge
facility (the “Bridge Facility”, and senior unsecured loans thereunder, the “Bridge Loans”), where
you will be the borrower, and the proceeds of which may be used, in lieu of or in combination with
Capital Markets Proceeds (as defined below) (which Capital Markets Proceeds shall reduce the
commitments hereunder pro rata on a dollar-for-dollar basis), borrowings under any of your existing
bank credit facilities (as amended, modified, supplemented or refinanced) and cash on hand, to
finance, in part, a takeover bid by Bidco (as defined below) for at least 50.01% of the shares in
the Target, or a scheme of arrangement pursuant to which at least 50.01% of the shares in the
Target are proposed to be acquired by Bidco (the “Acquisition”). As we understand the transaction,
the acquisition of the shares of the Target will be effected by an existing subsidiary of the
Company, being either Peabody Acquisition Co. No. 3 Pty Ltd ACN 152 004 398 or another existing
subsidiary reasonably satisfactory to the Lead Arrangers (such subsidiary,
















 







“BidcoParent”; together with, Peabody Acquisition Co. No. 4 Pty Ltd ACN 152 004 772 or any wholly
owned subsidiary of it, which it may fund using debt or equity, and through which it will acquire
such shares, “Bidco”), at least 50.01% of whose equity will, following the close of the Tender, be
directly or indirectly owned by the Company or a subsidiary of the Company and up to 40% of whose
equity will, following the close of the Tender, be directly or indirectly owned by ArcelorMittal
S.A. or a subsidiary of ArcelorMittal S.A. (“Arcelor”). It is noted that it is possible that (1)
100% of the equity of BidcoParent may, following the close of the Tender, be directly or indirectly
owned by the Company or a subsidiary of the Company (with Arcelor having no involvement in
BidcoParent going forward); and (2) following the close of the Tender, the shareholders of
BidcoParent may comprise one or more members of the corporate group of companies consisting of the
Company and/or its subsidiaries, ArcelorMittal S.A. and/or its subsidiaries, CITIC Group and/or its
subsidiaries and/or POSCO Group and/or its subsidiaries. Bidco shall be a Restricted Subsidiary
(as defined in the Existing Credit Agreement (as defined in the Summary of Terms)) and shall not be
designated as an Unrestricted Subsidiary (as defined in the Existing Credit Agreement) under the
Bridge Facility.



We understand that you will enter into certain financing arrangements in order to finance the
Acquisition in part and that you will either:





     1. borrow amounts under existing credit facilities (as amended, modified, supplemented
or refinanced) and issue and sell or incur up to US$2.0 billion aggregate principal amount
or gross proceeds, as applicable, of (x) non-convertible debt securities (the “Senior
Notes”), (y) equity securities or equity-linked securities (the “Equity Securities” and,
together with any Senior Notes, the “Securities”), in each case, in a public offering or
private placement or (z) term loans pursuant to a syndicated credit facility (the “Term
Loans” and, together with any Securities, the “Additional Financing”), or




     2. if the full aggregate principal amount or gross proceeds, as applicable, of
Additional Financing referred to in clause (1) above are not received from the issuance or
borrowing of any Additional Financing, in each case, on or prior to the date on which Bidco
is first required to provide consideration for the purchase of shares in the Target (the
“Consideration Date”), borrow up to the difference between (x) US$2.0 billion and (y) the
aggregate principal amount or gross proceeds referred to in clause (1) that are received
from the issuance or borrowing of any Additional Financing on or prior to the Consideration
Date, of Bridge Loans under the Bridge Facility having substantially the terms set forth in
the Summary of Terms and Conditions attached as Exhibit A hereto (the “Summary of
Terms”). If you borrow under the Bridge Facility, you intend to (x) issue and sell in a
public or private placement debt or equity securities or (y) incur Term Loans, in each case,
the net cash proceeds of which will be used to repay any Bridge Loans provided thereunder
(such debt or equity securities or Term Loans, together with any Additional Financing, the
“Permanent Financing”).


The net cash proceeds from the Bridge Loans, together with other cash or sources of cash available
to the Company and Bidco will provide funds to (i) consummate the Acquisition and (ii) pay the fees
and expenses incurred in connection with the consummation of the Transaction (as described below).



Bank of America, N.A. (“Bank of America”) is pleased to offer its several (and not joint)
commitment to lend 33-1/3% of the Bridge Facility, UBS Loan Finance LLC (“UBS”) is pleased to offer
its several (and not joint) commitment to lend 33-1/3% of the Bridge Facility and Morgan Stanley
Senior Funding, Inc. (“MSSF”) is pleased to offer its several (and not joint) commitment to lend
33-1/3% of the Bridge Facility (Bank of America, UBS and MSSF, in such capacities, collectively,
the “Initial Lenders”), in each case, upon and subject to the terms and conditions set forth in
this letter (together with the Summary of Terms, this “Commitment Letter”) and in the Summary of
Terms. Each of Merrill Lynch, Pierce,






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Fenner & Smith Incorporated (“MLPFS”), UBS Securities LLC (“UBSS”) and Morgan Stanley & Co. LLC
(“MS”) is pleased to advise you of its willingness, in connection with the foregoing commitment, to
act as a joint lead arranger and a joint book manager (in such capacities, collectively, the “Lead
Arrangers”; the Lead Arrangers together with the Initial Lenders and the Administrative Agent, the
“Commitment Parties”; includes “we”,“us” and “our”) for the Bridge Facility and to use
commercially reasonable efforts to form a syndicate of financial institutions (including the
Initial Lenders) (collectively, the “Lenders”) in consultation with you for the Bridge Facility,
subject to such Lenders being reasonably acceptable to you. Bank of America is pleased to advise
you of its willingness to act as sole administrative agent (in such capacity, the “Administrative
Agent”) for the Bridge Facility. The Acquisition, the Tender, the entering into and funding of the
Bridge Facility and all related transactions are hereinafter collectively referred to as the
“Transaction.”



If you accept this Commitment Letter, you will enter into the letter agreement, dated the date
hereof, among the Borrower, the Initial Lenders and the Lead Arrangers (the “Fee Letter”) and any
other fee letter in respect of the Bridge Facility between you and one or more of us dated the date
hereof.



Bank of America will act as sole Administrative Agent for the Bridge Facility. You may appoint up
to three additional financial institutions to be joint lead arrangers and bookrunners for the
Bridge Facility, in each case, in a manner and with the economics determined by you, acting in
consultation with the Lead Arrangers; provided that (a) in no event shall the percentage of
economics received by any of Bank of America, UBS or MSSF be less than 20% of the aggregate
economics in respect of the Bridge Facility and (b) in no event shall the percentage of economics
received by any such financial institution with respect to the Bridge Facility exceed the
percentage of commitments made by it with respect to such Bridge Facility. If you appoint any
additional joint lead arrangers and joint bookrunners pursuant to the next preceding sentence,
subject to the proviso therein, the economics and commitment amounts of the then-existing joint
lead arrangers and joint bookrunners shall be reduced pro rata, subject to the Targeted Hold
Position (as defined in the Fee Letter) of each of Bank of America, UBS and MSSF, based on the
aggregate amount of the economics and commitment amounts of such additional joint lead arrangers or
joint bookrunners. Notwithstanding the appointment of any additional financial institutions
pursuant to this paragraph, it is understood and agreed that Bank of America and MLPFS shall have
“left” placement, and each of the other lead arrangers shall have placement below or to the right
of Bank of America and MLPFS, with UBS and UBSS on the immediate right of Bank of America and
MLPFS, with MSSF and MS on the immediate right of UBS and UBSS, and with other placements to be
below or to the right of MSSF and MS as agreed among us, you and such additional joint lead
arrangers, in any and all marketing materials and other documentation used in connection with the
Bridge Facility and the syndication thereof. Bank of America and MLPFS shall have the exclusive
rights and responsibilities customarily associated with such “left” placement, and each of the
Commitment Parties shall receive league table credit in connection with each of the capacities in
which it is acting pursuant hereto. You may appoint additional titled agents (without any
economics) for the Bridge Facility from among the Initial Lenders and the additional joint lead
arrangers referred to in this paragraph. Except as provided in the immediately preceding sentence
and the second sentence of this paragraph, no agents, co-agents or arrangers will be appointed and
no other titles or economics will be awarded without the prior written consent of the Lead
Arrangers and in consultation with you.



The several commitments of each Initial Lender hereunder and the several undertaking of each Lead
Arranger to provide the services described herein are subject only to the negotiation, execution
and delivery of definitive documentation for the Bridge Facility (the “Loan Documents”) consistent
with the Commitment Letter, including the Summary of Terms and subject to the Certain Funds
Provisions set forth below; provided that the conditions to funding the Bridge Loans are limited to
the conditions expressly described in this paragraph and the conditions (including the wording of
the conditions (it being understood and agreed that the Specified Representations for purposes of
any condition to borrowing shall






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be in the form specified in Addendum II to the Summary of Terms)) under “Conditions Precedent to
Closing” in the Summary of Terms.



Notwithstanding anything in this Commitment Letter, the Fee Letter or any other letter agreement or
other undertaking concerning the financing of the Transactions to the contrary, (i) the only
representations or warranties, the making and accuracy of which shall be a condition to
availability of the Bridge Facility on the Closing Date shall be the Specified Representations (as
defined below) made by the Company in the Loan Documents and (ii) the terms of the Loan Documents
shall be in a form such that they do not impair availability of the Bridge Facility on the Closing
Date if the conditions set forth in this Commitment Letter are satisfied. For purposes hereof, the
“Specified Representations” means the representations and warranties relating to the Company and
its subsidiaries (excluding the Target and its subsidiaries) set forth in Addendum II to the
Summary of Terms. For avoidance of doubt, for purposes of this Commitment Letter and the Summary
of Terms references to the subsidiaries of the Company shall not include the Target and its
subsidiaries unless expressly indicated. This paragraph, and the provisions herein, shall be
referred to as the “Certain Funds Provisions”.



MLPFS, UBSS and MS intend to commence syndication of the Bridge Facility promptly after the Tender
is publicly announced; provided that notwithstanding MLPFS’s, UBSS’s and MS’s right to syndicate
the Bridge Facility and receive commitments with respect thereto, (i) except to the extent that
such assignees shall become parties to this Commitment Letter, the Initial Lenders shall not be
relieved, released or novated from their obligations hereunder (including their obligation to fund
the Bridge Facility on the Closing Date) in connection with any syndication, assignment or
participation of the Bridge Facility, including its commitments in respect thereof, until after the
Closing Date has occurred, (ii) no assignment or novation shall become effective with respect to
all or any portion of the Initial Lenders’ commitments in respect of the Bridge Facility until the
initial funding of such facility and (iii) unless you otherwise agree in writing, the Initial
Lenders shall retain exclusive control over all rights and obligations with respect to their
commitments in respect of the Bridge Facility, including all rights with respect to consents,
modifications, supplements, waivers and amendments, until the Closing Date has occurred. You agree
to actively assist MLPFS, UBSS and MS in achieving a syndication of the Bridge Facility that is
reasonably satisfactory to MLPFS, UBSS and MS and you. Such assistance shall include you (a) using
commercially reasonable efforts to assist in the preparation of a confidential information
memorandum (the “Information Memorandum”) and other customary marketing materials to be used in
connection with the syndication of the Bridge Facility (collectively with the Summary of Terms, the
Information (as defined below) and the Projections (as defined below), the “Information Materials”)
and to deliver the Information Memorandum within 20 business days following the date of execution
and delivery by you of this Commitment Letter, (b) using commercially reasonable efforts to ensure
that the syndication efforts of MLPFS, UBSS and MS benefit materially from your existing banking
relationships and (c) using commercially reasonable efforts to make your senior officers and
advisors reasonably available from time to time to attend and make presentations regarding the
business and prospects of the Borrower and its subsidiaries (including the Target and its
subsidiaries), as appropriate, at one or more meetings of prospective Lenders to be mutually agreed
upon. Without limiting your obligations to assist with syndication efforts as set forth below, each
Initial Lender agrees that completion of such syndication is not a condition to its commitments
hereunder. This paragraph is paragraph nine of the Commitment Letter.



It is understood and agreed that MLPFS, UBSS and MS will manage and control all aspects of the
syndication in consultation with you, including decisions as to the selection of prospective
Lenders (provided that the selection of a prospective Lender as a Lender shall be subject to your
acceptance (acting reasonably)), when commitments will be accepted and the final allocations of the
commitments among the Lenders. It is understood and agreed that no Lender participating in the
Bridge Facility will receive compensation from you in order to obtain its commitment, except on the
terms contained herein






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and in the Summary of Terms. It is also understood and agreed that the amount and distribution of
the fees among the Lenders will be at the sole and absolute discretion of MLPFS, UBSS and MS.



You agree that, during the Syndication Period (as defined in the Fee Letter), there shall be no
offering, placement, syndication or arrangement of any debt securities or bank or other debt
financing by or on behalf of the Borrower or any of its subsidiaries that is reasonably likely to
adversely affect syndication of the Bridge Facility; provided that the foregoing shall not apply to
(x) any renewal, refinancing or replacement of any of the Company’s or any of its subsidiaries’
credit facilities existing on the date hereof on substantially the same terms (other than tenor or
pricing) and for substantially the same, or a lesser, aggregate principal amount as the relevant
existing credit facility, (y) any working capital or other ordinary course financings (in respect
of any domestic subsidiary, not to exceed $100.0 million in the aggregate at any time outstanding
for all such domestic subsidiaries), lease financing or limited recourse project financings or (z)
to the extent the Bridge Facility (or the commitments thereunder, as applicable) shall be reduced
dollar for dollar by the amount of the net cash proceeds thereof, the Permanent Financing (the
types of financings referenced in the foregoing clauses (x) and (y), regardless of when undertaken,
the “Permitted Ordinary Course Financings”); provided further that, notwithstanding anything herein
to the contrary, you agree that, from the date hereof until the date on which all outstanding
Bridge Loans shall have been repaid and all unused commitments in respect of the Bridge Facility
shall have been terminated, without the prior written consent of the Lead Arrangers (acting in
their sole discretion), there shall be no offering, placement, syndication or arrangement of any
debt securities or bank or other debt financing by or on behalf of the Borrower or any of its
subsidiaries, the proceeds of which would be used for any direct or indirect acquisition of any
capital stock or assets of any entity other than the Target (any such debt securities or bank or
other debt financing, the “Other Acquisition Financing”) unless the proceeds of such Other
Acquisition Financing shall be used, in part, to repay in full all amounts, if any, then owing in
respect of the Bridge Facility and to terminate all commitments in respect of the Bridge Facility
(such event, a “Bridge Facility Payoff”) (it being understood that, at any time after the date
hereof, there shall be no restriction on the offering, placement, syndication or arrangement of any
Other Acquisition Financing undertaken for the purpose of effecting a Bridge Facility Payoff).
This paragraph is paragraph eleven of the Commitment Letter.



You agree, at the request of MLPFS, UBSS and MS, to assist in the preparation of a version of the
Confidential Information Memorandum and other marketing materials and presentations to be used in
connection with the syndication of the Bridge Facility, consisting exclusively of information and
documentation that is either (i) publicly available or (ii) not material with respect to the
Company, the Target or their respective affiliates or any of their respective securities for
purposes of foreign, United States federal and state securities laws (all such information and
documentation being “Public Lender Information”). Any information and documentation that is not
Public Lender Information is referred to herein as “Private Lender Information”. You acknowledge
and agree that the following documents may be distributed to potential Lenders wishing to receive
only Public Lender Information (unless you promptly notify us otherwise and provided that you have
been given a reasonable opportunity to review such documents and comply with U.S. Securities and
Exchange Commission disclosure obligations): (a) administrative materials prepared by MLPFS, UBSS
and MS for prospective Lenders (such as a lender meeting invitation, allocations and funding and
closing memoranda); (b) notifications of changes to the terms of the Bridge Facility approved by
you; (c) drafts and final definitive documentation with respect to the Bridge Facility; and (d)
other materials approved by you. You also agree to, if requested, identify that portion of any
other Information to be distributed to “public side” lenders (i.e. lenders that do not wish to
receive material non-public information with respect to the Company, the Target or their
affiliates), including by clearly and conspicuously marking such materials “PUBLIC” which, at a
minimum, shall mean that the word “PUBLIC” shall appear prominently on the first page thereof. By
marking Information Materials “PUBLIC”, you shall be deemed to have authorized the Lead Arrangers
and the proposed Lenders to treat such Information as not containing any material non-public
information






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(although it may be confidential or proprietary) with respect to the Company, the Target or their
affiliates or their respective securities for the purpose of United States federal and state
securities laws.



You hereby represent and warrant (which representation and warranty shall be to your knowledge to
the extent it relates to the Target or its subsidiaries) that (a) all information (other than the
Projections (as defined below), and information of a general economic or industry nature) which has
been or is hereafter made available in writing to any Commitment Party by you or any of your
representatives (including, without limitation, counsel, advisors and accountants) in connection
with any aspect of the transactions contemplated hereby (the “Information”), as and when furnished,
taken as a whole, is and will be complete and correct in all material respects and does not and
will not contain any untrue statement of a material fact or omit to state a material fact necessary
to make the statements contained therein not materially misleading and (b) all information
consisting of projections and forward-looking statements that have been prepared by you, or on your
behalf or by any of your representatives, and made available to the Lead Arrangers (collectively,
the “Projections”) has been (or in the case of Projections made available after the date hereof,
will be) based on assumptions and estimates developed by management of the Borrower in good faith
and believed to be reasonable as of the date such Projections were or are made available (it being
understood that the Projections are not a guarantee of future performance and that actual results
during the period or periods covered by the Projections may materially differ from the projected
results and that no other representation or warranty is made by you with respect to the
Projections). You agree to furnish us with further reasonable and supplemental information from
time to time until the date of the initial borrowing under the Bridge Facility (the “Closing Date”)
and for a period thereafter (not to exceed 90 days) as we may notify you is necessary to complete
the syndication of the Bridge Facility so that the representation and warranty in the immediately
preceding sentence will be true in all material respects on the Closing Date and on such later date
on which the syndication of the Bridge Facility is completed as if the Information and Projections
were being furnished, and such representation and warranty was being made, on such date. In
issuing this commitment and in arranging and syndicating the Bridge Facility, the Commitment
Parties are and will be using and relying on the Information and Projections without independent
verification thereof.



You acknowledge that the Commitment Parties on your behalf will make available Information
Materials to the proposed syndicate of Lenders by posting the Information Materials on IntraLinks,
SyndTrak or another similar electronic system. Prior to distribution of Information Materials to
prospective Lenders, you shall provide us with a customary letter authorizing the dissemination
thereof, and, with respect to Information Materials made available to prospective Lenders wishing
to receive only Public Lender Information, confirming the absence of Private Lender Information
therefrom.



By executing this Commitment Letter, you agree to reimburse each Commitment Party from time to time
promptly after demand (together with a reasonably detailed invoice thereof) for all reasonable
out-of-pocket fees and expenses (including, but not limited to, (a) the reasonable fees,
disbursements and other charges of Shearman & Sterling LLP, as sole New York counsel to the Lead
Arrangers, (b) the reasonable fees, disbursements and other charges of any regulatory counsel and a
single local counsel to the Lead Arrangers in any material jurisdictions, in each case retained
with your consent (such consent not to be unreasonably withheld or delayed) and (c) due diligence
expenses) incurred in connection with the Bridge Facility, the syndication thereof, the preparation
of the definitive documentation therefor and the other transactions contemplated hereby (including,
without limitation, this Commitment Letter, the Fee Letter and any other fee letter in respect of
the Bridge Facility executed by you). You acknowledge that we may receive a future benefit,
including without limitation, a discount, credit or other accommodation on matters unrelated to
this transaction, from any of such counsel based on the fees such counsel may receive on account of
their relationship with us including, without limitation, fees paid pursuant hereto.







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You agree to indemnify and hold harmless Bank of America, MLPFS, UBS, UBSS, MSSF, MS and each of
their respective affiliates and their respective officers, directors, employees, agents, advisors
and other representatives (each, an “Indemnified Party”) from and against (and will reimburse each
Indemnified Party as the same are incurred for) any and all claims, damages, losses, liabilities
and expenses (including, without limitation, the reasonable fees, disbursements and other charges
of counsel) that may be incurred by or asserted or awarded against any Indemnified Party, in each
case arising out of or in connection with or by reason of (including, without limitation, in
connection with any investigation, litigation or proceeding or preparation of a defense in
connection therewith) (a) any matters contemplated by this Commitment Letter, the Fee Letter, any
other fee letter in respect of the Bridge Facility executed by you or the Transaction or (b) the
Bridge Facility or any use made or proposed to be made with the proceeds thereof, except to the
extent such claim, damage, loss, liability or expense is found in a final, nonappealable judgment
by a court of competent jurisdiction to have (x) resulted from such Indemnified Party’s gross
negligence, bad faith or willful misconduct or (y) resulted from such Indemnified Party’s material
breach of its obligations hereunder. In the case of any claim, investigation, litigation or
proceeding (any of the foregoing, a “Proceeding”) to which the indemnity in this paragraph applies,
such indemnity shall be effective whether or not such investigation, litigation or proceeding is
brought by you, your equityholders or creditors or an Indemnified Party, whether or not an
Indemnified Party is otherwise a party thereto and whether or not the transactions contemplated
hereby are consummated. You also agree that no Indemnified Party shall have any liability (whether
direct or indirect, in contract or tort or otherwise) to you or your subsidiaries or affiliates or
to your or their respective equityholders or creditors arising out of, related to or in connection
with any aspect of the transactions contemplated hereby, except to the extent of direct, as opposed
to special, indirect, consequential or punitive, damages determined in a final, nonappealable
judgment by a court of competent jurisdiction to have resulted from such Indemnified Party’s gross
negligence, bad faith or willful misconduct or a material breach of its obligations hereunder. It
is further agreed that each of Bank of America, MLPFS, UBS, UBSS, MSSF and MS shall be liable
solely in respect of its own commitment to the Bridge Facility on a several, and not joint, basis
with any other Lender. Notwithstanding any other provision of this Commitment Letter, no
Indemnified Party shall be liable for any damages arising from the use by others of information or
other materials obtained through electronic telecommunications or other information transmission
systems, except to the extent that such damages resulted directly from such Indemnified Party’s
gross negligence or willful misconduct as determined in a final non-appealable judgment by a court
of competent jurisdiction. You shall not, without the prior written consent of an Indemnified
Party, effect any settlement of any pending or threatened Proceeding against such Indemnified Party
in respect of which indemnity could have been sought hereunder by such Indemnified Party unless (x)
such settlement includes an unconditional release of such Indemnified Party from all liability or
claims that are the subject matter of such Proceeding and (y) does not include any statement as to
any admission by or on behalf of such Indemnified Person.



This Commitment Letter and the Fee Letter and the contents hereof and thereof are confidential and,
except for disclosure hereof or thereof on a confidential basis to you and your subsidiaries’
(excluding the Target’s and its subsidiaries’ until the consummation of the Acquisition) officers,
directors, employees, accountants, attorneys and other professional advisors retained by you or
them in connection with the Bridge Facility or as otherwise required by law (and, in the case of
any disclosure made as required by law, you agree to promptly inform us of such disclosure to the
extent permitted by applicable law), may not be disclosed by you in whole or in part to any person
or entity without our prior written consent; provided, however, it is understood and agreed that
you or Bidco may disclose (i) this Commitment Letter (including the Summary of Terms), but not the
Fee Letter or the contents thereof, to the Target (and its subsidiaries), Arcelor and each of their
respective directors, executive officers and professional advisors on a confidential basis, (ii)
this Commitment Letter (including the Summary of Terms), but not the Fee Letter or the contents
thereof, to any ratings agency and (iii) this Commitment Letter (including the Summary of Terms),
but not the Fee Letter or the contents thereof, after your acceptance of this






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Commitment Letter and the Fee Letter, in filings with the Securities and Exchange Commission and
other applicable regulatory authorities and stock exchanges (including in any bidder’s statement to
be issued by Bidco (if the Tender proceeds by way of a takeover bid) or in the scheme booklet to be
issued by Target (if the Tender proceeds by way of a scheme of arrangement). Further, Bank of
America, MLPFS, UBS, UBSS, MSSF and MS shall be permitted to use information related to the
syndication and arrangement of the Bridge Facility in connection with marketing, press releases or
other transactional announcements or updates provided to investor or trade publications, subject to
confidentiality obligations or disclosure restrictions provided herein or otherwise reasonably
requested by the Borrower provided that the content of any such press releases/transactional
updates shall be reasonably acceptable to the Borrower. The Commitment Parties hereby notify you
that pursuant to the requirements of the USA PATRIOT Act, Title III of Pub. L. 107-56 (signed into
law October 26, 2001) (the “Act”), each of them is required to obtain, verify and record
information that identifies you, which information includes your name and address and other
information that will allow such Commitment Party, as applicable, to identify you in accordance
with the Act.



You acknowledge that in the ordinary course of our trading, brokerage, investment management and
financing activities, each of the Commitment Parties or their affiliates may at any time hold long
or short positions, and may trade or otherwise effect transactions, for our own account or the
accounts of our customers, in debt or equity securities or senior loans of the Company, the Target
or any other company or may be providing financing or other services to parties whose interests may
conflict with yours. Each Commitment Party severally agrees that it will not furnish confidential
information obtained from you or the Target to any of its other customers or any other person and
that it will agree to treat confidential information relating to you and your affiliates, Arcelor
and its affiliates and the Target and its affiliates with the same degree of care as it treats its
own confidential information; provided that nothing herein will prohibit any Commitment Party from
disclosing any such information (a) upon the request or demand of any regulatory authority having
jurisdiction over such Commitment Party or any of its affiliates, (b) to the extent such
information is publicly available or becomes publicly available other than by reason of disclosure
by such Commitment Party in breach of this paragraph, (c) to such Commitment Party’s affiliates and
its officers, directors, partners, members, investors, employees, legal counsel, independent
auditors and other experts and agents who need to know such information to the extent such persons
are subject to customary confidentiality restrictions, (d) received by such Commitment Party on a
non-confidential basis from a source other than the Borrower or its affiliates or the Target or its
affiliates not known to such Commitment Party to be prohibited from disclosing such information by
a legal, contractual or fiduciary obligation, (e) to the extent such information is independently
developed by such Commitment Party, (f) for purposes of establishing a “due diligence” defense, (g)
in enforcing such Commitment Party’s rights with respect to this Commitment Letter or the Fee
Letter in a court of competent jurisdiction, (h) pursuant to the order of any court or
administrative agency or in any pending legal or administrative proceeding, or otherwise as
required by applicable law or compulsory legal process (in each of which cases the relevant
Commitment Party agrees to inform you promptly thereof prior to such disclosure to the extent not
prohibited by law, rule or regulation) or (i) to other Lenders and prospective Lenders,
participants and assignees which agree to bound by the confidentiality provisions set forth in this
paragraph or provisions substantially similar to those confidentiality provisions set forth in this
paragraph. Each Commitment Party further advises you that it will not make available to you
confidential information that they have obtained or may obtain from any other customer. In
connection with the services and transactions contemplated hereby, and only in such connection,
subject to the foregoing provisions of this paragraph, you agree that each Commitment Party is
permitted to access, use and share with any of its bank or non-bank affiliates, agents, advisors
(legal or otherwise) or representatives any information concerning you or any of your affiliates
that is reasonably related to the provision of such services and that is or may come into the
possession of such Commitment Party or any of such affiliates. Notwithstanding anything to the
contrary herein, the obligations of each Commitment






8









 







Party under this paragraph and of the Company under the immediately preceding paragraph shall
terminate on the second anniversary of the date hereof.



In connection with all aspects of each transaction contemplated by this Commitment Letter, you
acknowledge and agree, and acknowledge your affiliates’ understanding, that: (a) (i) the arranging
and other services described herein regarding the Bridge Facility are arm’s-length commercial
transactions between you and your affiliates, on the one hand, and each Commitment Party, on the
other hand, (ii) you have consulted your own legal, accounting, environmental, regulatory and tax
advisors to the extent you have deemed appropriate, and (iii) you are capable of evaluating, and
understand and accept, the terms, risks and conditions of the transactions contemplated hereby; (b)
(i) each Commitment Party has been, is, and will be acting solely as a principal and, except as
otherwise expressly agreed in writing by the relevant parties, has not been, is not, and will not
be acting as an advisor, agent or fiduciary for you, any of your affiliates or any other person or
entity and (ii) no Commitment Party has any obligation to you or your affiliates with respect to
the transactions contemplated hereby except those obligations expressly set forth herein; and (c)
each Commitment Party and its respective affiliates may be engaged in a broad range of transactions
that involve interests that differ from yours and those of your affiliates, and no Commitment Party
has any obligation to disclose any of such interests to you or your affiliates. In addition, the
Company acknowledges and agrees that the Commitment Parties and their respective affiliates may
have fiduciary or other relationships whereby we may exercise voting power over the securities of
various persons, which securities may from time to time include securities of the Company, the
Target, prospective investors in or lenders to the Company or the Target or others with interests
in respect of a potential transaction. The Company specifically acknowledges and agrees that the
Commitment Parties and their respective affiliates may exercise such powers and otherwise perform
their respective functions without regard to their relationships to the Company hereunder. To the
fullest extent permitted by law, you hereby waive and release any claims that you may have against
any Commitment Party with respect to any breach or alleged breach of agency or fiduciary duty in
connection with any aspect of any transaction contemplated by this Commitment Letter. The
Commitment Parties acknowledge that MLPFS, UBSS and MS or their respective affiliates may act as
advisors to the Company with respect to the Acquisition and agree that nothing in this paragraph
shall limit in any way any obligations under any mutually agreed engagement letter relating
thereto.



The provisions of the immediately preceding five paragraphs, the syndication provisions and
information provisions hereof, and the provisions of the second succeeding paragraph below shall
remain in full force and effect regardless of whether any definitive documentation for the Bridge
Facility shall be executed and delivered, and notwithstanding the termination of this Commitment
Letter or any commitment or undertaking of any Commitment Party hereunder; provided that the
syndication provisions and information provisions hereof shall not survive if the commitments and
undertakings of the Commitment Parties are terminated prior to the effectiveness of the Loan
Documents and funding of the Bridge Facility; provided further that your obligations under this
Commitment Letter (other than your obligations with respect to (x) confidentiality,
indemnification, reimbursement, compliance with the Fee Letter and any other fee letter in respect
of the Bridge Facility executed by you, governing law, submission to jurisdiction and waiver of
jury trial and (y) syndication provisions and information provisions, which syndication provisions
and information provisions shall survive until the later of the Syndication Period and the date of
the initial funding thereunder), shall automatically terminate and be superseded by the provisions
of the definitive loan documentation upon the initial funding thereunder, and at such time you
shall be automatically be released from all liability in connection therewith.



This Commitment Letter and the Fee Letter may be executed in counterparts which, taken together,
shall constitute an original. Delivery of an executed counterpart of this Commitment Letter or the
Fee Letter by telecopier or facsimile or as an e-mail attachment in pdf format shall be effective
as delivery of a manually executed counterpart thereof.







9









 







This Commitment Letter (including the Summary of Terms) and the Fee Letter shall be governed by,
and construed in accordance with, the laws of the State of New York. Each of you, Bank of America,
MLPFS, UBS, UBSS, MSSF and MS hereby irrevocably waives any and all right to trial by jury in any
action, proceeding or counterclaim (whether based on contract, tort or otherwise) arising out of or
relating to this Commitment Letter (including the Summary of Terms), the Fee Letter, the
transactions contemplated hereby (other than the transactions governed by any fully-executed
definitive loan documentation relating to the Bridge Facility) and thereby or the actions of any
Commitment Party in the negotiation, performance or enforcement hereof. You and we hereby
irrevocably and unconditionally submit to the exclusive jurisdiction of any state or Federal court
sitting in the Borough of Manhattan in the City of New York over any suit, action or proceeding
arising out of or relating to the Transaction or the other transactions contemplated hereby, this
Commitment Letter or the Fee Letter or the performance of services hereunder or thereunder, and
this paragraph shall remain in full force and effect notwithstanding the Closing Date. You and we
agree that service of any process, summons, notice or document by registered mail addressed to you
or us shall be effective service of process for any such suit, action or proceeding brought in any
such court. You and we hereby irrevocably and unconditionally waive any objection to the laying of
venue of any such suit, action or proceeding brought in any such court and any claim that any such
suit, action or proceeding has been brought in any inconvenient forum.



This Commitment Letter and the Fee Letter constitute the entire agreement between the parties
relating to the subject matter hereof and thereof and supersede any previous agreement, written or
oral, between the parties with respect to the subject matter hereof and thereof.



This Commitment Letter and all commitments and undertakings of any Commitment Party hereunder will
expire at 5:00 p.m. (New York City time) on the earlier of (i) 10 days after the date of this
Commitment Letter and (ii)(A) in the case of a Tender in the form of a takeover bid, the date on
which the bidder’s statement is posted to the Target’s shareholders or (B) in the case of a Tender
in the form of a scheme of arrangement, the date on which the scheme booklet in respect of the
Tender is posted to the Target’s shareholders, unless you execute this Commitment Letter, the Fee
Letter and any other fee letter in respect of the Bridge Facility between you and one or more of us
dated the date hereof and return them to us prior to that time (which may be by facsimile
transmission or as an e-mail attachment in pdf format), whereupon this Commitment Letter (including
the Summary of Terms) and the Fee Letter (each of which may be signed in one or more counterparts)
shall become binding agreements. Thereafter, all commitments and undertakings of each Commitment
Party hereunder will expire (such date of expiration, the “Commitment Termination Date”) on the
earliest of:





(a) if the Tender proceeds by way of a takeover bid, (i) the date which is 9 months after the
date on which the first offer under the takeover bid is made, (ii) the completion of the
compulsory acquisition of all outstanding shares in the Target under Chapter 6A of the
Australian Corporations Act 2001 (Cth), (iii) the date on which the takeover bid closes with
defeating conditions that have either not been “fulfilled” or in respect of which the takeover
bid has not been declared “free” (as those quoted terms are used in the Australian Corporations
Act 2001 (Cth)), (iv) the date which is six weeks after the end of the “offer period” (as
defined in the Australian Corporations Act 2001 (Cth)) in circumstances where the offers under
the takeover bid have been declared or become unconditional and (v) receipt by the Commitment
Parties of written notice from the Borrower of the Borrower’s election to terminate all
commitments hereunder in full; and




(b) if the Tender proceeds by way of a scheme of arrangement, (i) the date which is 9 months
after the date on which the scheme booklet is registered with the Australian Securities and
Investments Commission (“ASIC”), (ii) completion of the acquisition of all outstanding shares
in the Target pursuant to the terms of the scheme of arrangement, (iii) the date on which the
scheme implementation agreement to which Bidco and Target are parties is terminated in
accordance with its



10









 






terms and (iv) receipt by the Commitment Parties of written notice from the Borrower of the
Borrower’s election to terminate all commitments hereunder in full.


You may terminate all or a portion of the commitments hereunder at any time upon written notice to
the Commitment Parties.



This Commitment Letter may not be assigned by you without our prior written consent (and any
purported assignment without such consent will be null and void). The Commitment Parties may not
assign their respective commitments hereunder, in whole or in part, except (x) in accordance with
the syndication provisions set forth in the ninth paragraph of this Commitment Letter or (y) to any
of their respective affiliates (and any other purported assignment will be null and void). No Lead
Arranger shall assign its rights under this Commitment Letter or the Fee Letter as a Lead Arranger
in its capacity as such (other than to one of its affiliates or by operation of law) without the
prior written consent of each of the parties hereto (and any purported assignment without such
consent (other than to one of its affiliates or by operation of law) will be null and void).



This Commitment Letter is intended to be solely for the benefit of the parties hereto and is not
intended to confer upon any person other than the parties hereto, their successors and permitted
assigns hereunder and the Indemnified Parties, any benefit or any legal or equitable right, remedy
or claim to any person other than the parties hereto (and any Indemnified Parties to the extent
applicable).




[THE BALANCE OF THIS PAGE IS INTENTIONALLY LEFT BLANK]






11









 







We are pleased to have the opportunity to work with you in connection with this important
financing.




	 	 	 	 	 
	 	Very truly yours,





MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED

 	 
	 	By:  	/s/ Jeffrey Blumquist
 	 
	 	 	Name:  	Jeffrey Blumquist 	 
	 	 	Title:  	Managing Director 	 
	 
	 	BANK OF AMERICA, N.A.

 	 
	 	By:  	/s/ Jeffrey Blumquist
 	 
	 	 	Name:  	Jeffrey Blumquist 	 
	 	 	Title:  	Managing Director 	 
	 



Project Truman — Commitment Letter







 









 








	 	 	 	 	 
	 	UBS LOAN FINANCE LLC

 	 
	 	By:  	/s/ Simon Walker
 	 
	 	 	Name:  	Simon Walker 	 
	 	 	Title:  	Managing Director 	 
	 
	 	 	 
	 	By:  	                  /s/ John C. Duncanson
 	 
	 	 	Name:  	John C. Duncanson 	 
	 	 	Title:  	Director 	 
	 
	 	UBS SECURITIES LLC

 	 
	 	By:  	/s/ Simon Walker
 	 
	 	 	Name:  	Simon Walker 	 
	 	 	Title:  	Managing Director 	 
	 
	 	 	 
	 	By:  	                  /s/ John C. Duncanson
 	 
	 	 	Name:  	John C. Duncanson 	 
	 	 	Title:  	Director 	 
	 



Project Truman — Commitment Letter







 









 








	 	 	 	 	 
	 	MORGAN STANLEY SENIOR FUNDING, INC.

 	 
	 	By:  	/s/ Kevin D. Emerson
 	 
	 	 	Name:  	Kevin D. Emerson 	 
	 	 	Title:  	Authorized Signatory 	 
	 
	 	MORGAN STANLEY & CO. LLC

 	 
	 	By:  	/s/ Kevin D. Emerson
 	 
	 	 	Name:  	Kevin D. Emerson 	 
	 	 	Title:  	Authorized Signatory 	 
	 



Project Truman — Commitment Letter







 









 








ACCEPTED AND AGREED TO

AS OF THE DATE FIRST ABOVE WRITTEN:




PEABODY ENERGY CORPORATION




	 	 	 	 	 

	By:

	 	/s/ Carey J. Dubois
 

Name: Carey J. Dubois
	 	 
	 

	 	Title: Vice President and Treasurer	 	 







2











 





EXHIBIT A




SUMMARY OF TERMS AND CONDITIONS

PEABODY ENERGY CORPORATION

US$2,000,000,000 BRIDGE FACILITY1




	 	 	 

	Borrower:

	 	Peabody Energy Corporation, a Delaware corporation (the “Company” or “Borrower”).
	 
	 	 
	Administrative
	 	 
	Agent:

	 	Bank of America, N.A. (“Bank of America”) will act as sole administrative agent (the “Administrative Agent”).
	 
	 	 
	Syndication
	 	 
	Agent and
	 	 
	Co-Documentation 
	 	 
	Agents:

	 	To be determined.
	 
	 	 
	Joint Lead Arrangers and
	 	 
	Joint Book Managers:

	 	Merrill Lynch, Pierce, Fenner & Smith Incorporated (“MLPFS”), UBS
Securities LLC (“UBSS”) and Morgan Stanley & Co. LLC (“MS”) will act as joint
lead arrangers and joint book managers (in such
capacities, the “Lead Arrangers”).
	 
	 	 
	Lenders:

	 	A syndicate of financial institutions (including Bank of America, UBS Loan Finance
LLC and Morgan Stanley Senior Funding, Inc.) arranged by MLPFS, UBSS and MS, which institutions shall be reasonably acceptable to
the Borrower (such consent of the Borrower not to be unreasonably withheld or delayed) (collectively, the “Lenders”).
	 
	 	 
	Bridge
	 	 
	Facility:

	 	An aggregate principal amount of up to US$2,000,000,000 will be available in
multiple drawings (each such drawing, a “Post-Closing Borrowing”, and the aggregate principal amount of each Post-Closing Borrowing,
a “Post-Closing Draw Amount”) during the period from the Closing Date until the Maturity Date (as defined below) (the “Availability
Period”); provided, that no more than three drawings may be made during the Availability Period and each drawing shall be in an
aggregate principal amount of not less than US$500,000,000.
	 
	 	 
	Purpose:

	 	The proceeds of the Bridge Facility shall be used to finance in part the acquisition
of a controlling interest in Macarthur Coal Limited (the “Acquisition”) and to pay fees and expenses for the Acquisition and Bridge
Facility.








 




			
	1	 	Capitalized terms used in this Summary of
Terms and Conditions and not otherwise defined are used herein as defined in
the Commitment Letter to which this summary is attached.




 









 










	 	 	 

	Closing Date:

	 	The date of execution of definitive loan documentation and satisfaction or
waiver of the “Conditions Precedent to Closing” set forth below, to occur on or before the date which is 9 months after the date of
the Commitment Letter (the “Closing Date”).
	 
	 	 
	Interest Rates:

	 	As set forth in Addendum I.
	 
	 	 
	Maturity:

	 	All amounts outstanding under the Bridge Facility shall be due and payable 364 days
from the Closing Date (the “Maturity Date”).
	 
	 	 
	Security:

	 	The Bridge Facility and the borrowings thereunder will be unsecured.
	 
	 	 
	Guarantees:

	 	The Bridge Facility will be guaranteed by the subsidiaries of the Company that
guarantee the Existing Credit Agreement (as defined herein). For the avoidance of doubt, there shall be no requirement for Bidco,
the Target or any of their respective subsidiaries to give any guarantees.
	 
	 	 
	Optional
	 	 
	Prepayments
	 	 
	and Commitment
	 	 
	Reductions:

	 	The Borrower may permanently reduce the commitments under or prepay the Bridge
Facility in whole or in part at any time without premium or penalty, subject to reimbursement of the Lenders’ breakage and
redeployment costs in the case of prepayment of LIBOR borrowings on a day other than the last day of an interest period.
	 
	 	 
	Mandatory
	 	 
	Prepayments and
	 	 
	Commitment
	 	 
	Reductions:

	 	An amount equal to 100% of all Disposition Proceeds (as defined below) and
Capital Markets Proceeds (as defined below) shall be applied to prepay the loans under the Bridge Facility, except (x) in the case
of any non-domestic subsidiary, to the extent such application or prepayment would result in a material adverse tax consequence as
reasonably determined by the Borrower, (y) in the case of any non-wholly owned subsidiary of the Borrower that is a public company,
to the extent that such proceeds are not actually received by the Borrower or a wholly-owned subsidiary of the Borrower or, if
received, such application or prepayment is otherwise not required as a result of the operation of clause (x) above, or (z) in the
case of any non-wholly owned subsidiary of the Borrower that is not a public company, to the extent that such proceeds are not
actually received by the Borrower or a wholly-owned subsidiary of the Borrower (i) after using commercially reasonable efforts to
procure receipt by the Borrower or a wholly-owned subsidiary of the Borrower or (ii) as a result of a contractual prohibition in
effect or, in either case, such application or prepayment is otherwise not required as a result of the operation of clause (x)
above. Any Capital Markets Proceeds received on or prior to the Closing Date shall, together with the amount of any reduction in
the cash portion of the acquisition consideration on or prior to the Closing Date, automatically and






A-4









 






	 	 	 	 	 

	 	 	permanently reduce dollar-for-dollar the commitments of the Lenders in respect of the Bridge Facility as and when received, in each
case on a pro rata basis.
	 
	 	 	 	 
	 	 	“Capital Markets Proceeds” means, subject to exceptions as may be mutually agreed between the
Borrower and MLPFS, UBSS and MS, (x) all net cash proceeds from the issuance in the capital markets of additional equity and
equity-linked interests in the Borrower or any of its subsidiaries and (y) all net cash proceeds from the issuance or incurrence of
debt of the Borrower or any of its subsidiaries (other than Permitted Ordinary Course Financings or issuances or incurrences of debt
by Bidco or its subsidiaries, the proceeds of which are used in connection with the Acquisition (it being understood that the
Acquisition does not include any put by ArcelorMittal S.A. or a subsidiary of ArcelorMittal S.A. of its equity in Bidco to the
Company or any of its subsidiaries)), in each case that are actually received by the Borrower or any of its subsidiaries or funded
into escrow pending the closing of the Acquisition.
	 
	 	 	 	 
	 	 	“Disposition Proceeds” means all net cash proceeds of sales and
casualty or condemnation losses of property and assets of the
Borrower and its subsidiaries, in each case, that are actually
received by the Borrower or any of its subsidiaries (other than sales
made in the ordinary course of business and any other sale having net
cash proceeds less than US$50,000,000 and subject to other exceptions
to be agreed, including customary reinvestment rights during the 180
days following receipt of such net cash proceeds).
	 
	 	 	 	 
	Conditions Precedent
	 	 	 	 
	to Closing:
	 	 	 	 
	 
	 	 	 	 
	 	 	The closing and the initial extension of credit under the Bridge
Facility will only be subject to satisfaction of the following
conditions precedent (which shall be set forth in the definitive loan
documentation in the same form as below):
	 
	 	 	 	 
	 

	 	(i)
	 	The negotiation, execution and
delivery of definitive documentation for the Bridge Facility
reasonably satisfactory to the Lead Arrangers, the
Administrative Agent and the Lenders and consistent with the
Commitment Letter and this Summary of Terms (it being understood
and agreed that definitive documentation in substantially the
form of the Existing Credit Agreement (as defined below) with
such changes thereto as are necessary to reflect the terms and
conditions of the Commitment Letter and this Summary of Terms is
reasonably satisfactory to the Lead Arrangers). In addition,
the Administrative Agent shall have received (A) customary
opinions of counsel for the Borrower and the Guarantors as to
Company and the Loan Documents in substantially the same form
those delivered in connection with the Existing Credit
Agreement, (B) such corporate resolutions, certificates and
other customary closing documents in substantially the same form
as those delivered in






A-5









 






	 	 	 	 	 

	 

	 	 	 	connection with the Existing Credit Agreement, (C) at least
five business days prior to the Closing Date, all
documentation and other information required by regulatory
authorities under applicable “know your customer” and
anti-money laundering rules and regulations, and (D)
corporate resolutions of the Borrower’s board of directors
authorizing the Acquisition.
	 
	 	 	 	 
	 

	 	(ii)
	 	If the Tender proceeds by way of
a takeover bid, Bidco shall have acquired a “relevant interest”
(as defined in the Australian Corporations Act 2001 (Cth)) in at
least 50.01% of the shares in the Target.
	 
	 	 	 	 
	 

	 	 	 	If the Tender proceeds by way of a scheme of arrangement, the
scheme of arrangement has become “effective” (as that term is
used in Part 5.1 of the Australian Corporations Act 2001
(Cth) such that Bidco has acquired or will acquire a
“relevant interest” (as defined in the Australian
Corporations Act 2001 (Cth)) in at least 50.01% of the shares
in the Target.
	 
	 	 	 	 
	 

	 	(iii)
	 	All accrued fees and expenses
(including legal fees and expenses) and other compensation
payable to the Administrative Agent, the Lead Arrangers and the
Lenders, to the extent required under the Fee Letter or any
other fee letter in respect of the Bridge Facility executed by
you or invoiced at least two business days before the Closing
Date, shall have been paid.
	 
	 	 	 	 
	 

	 	(iv)
	 	The Specified Representations
shall be true and correct in all material respects on the date
of such extension of credit; it being understood and agreed that
the Specified Representations for purposes of any condition to
borrowing shall be in the form specified in Addendum II to the
Summary of Terms. 
	 
	 	 	 	 
	 

	 	(v)
	 	All conditions set forth in the
bidder’s statement to be issued by Bidco (if the Tender proceeds
by way of a takeover bid) or in the scheme booklet (if the
Tender proceeds by way of a scheme of arrangement) shall have
been (x) satisfied or (y) waived by Bidco (in the case of a
takeover bid) or by Bidco or the Target, as applicable (in the
case of a scheme of arrangement).
	 
	 	 	 	 
	 

	 	(vi)
	 	Evidence that one of the
following has occurred: (1) Bidco receiving notice from, or on
behalf of, the Australian Federal Treasurer to the effect that
there is no objection under the Australian Government’s foreign
investment policy or under the Foreign Acquisition and Takeovers
Act 1975 (Cth) (the “FATA”) to the acquisition by Bidco of the
Target shares under the Tender and that notice is not subject to
any condition; (2) the period provided under the FATA during
which the Australian Treasurer may make an order under section
18 or an interim order under section 22 of the FATA prohibiting
the acquisition by Bidco of the Target shares under the Tender
elapsing, without such an order being made; or (3) if an interim
order prohibiting






A-6









 






	 	 	 	 	 

	 

	 	 	 	the acquisition of the Target shares by Bidco under the
Tender is made by the Australian Treasurer under section 22
of the FATA, the subsequent period for making a final order
prohibiting the acquisition elapsing, without such a final
order being made.






	 	 	 

	Conditions Precedent
	 	 
	To Subsequent
	 	 
	borrowings:

	 	Following the Closing Date and the initial extension of credit under the Bridge Facility, any
extension of credit under the Bridge Facility shall be subject to the Specified
Representations being true and correct in all material respects on the date of such extension
of credit.
	 
	 	 
	Representations
	 	 
	and Warranties:

	 	Substantially the same as those in the Credit Agreement dated as of June 18, 2010 among the
Borrower, Peabody Holland B.V., Bank of America N.A. and the other agents and lenders party
thereto and including any amendments thereto as of the date hereof (the “Existing Credit
Agreement”) (with such changes thereto as may be reasonably satisfactory to the Borrower, the
Administrative Agent and the Lead Arrangers).
	 
	 	 
	Covenants:

	 	Substantially the same as those in the Existing Credit Agreement as of the date hereof (with
such changes as may be reasonably satisfactory to the Borrower, the Administrative Agent and
the Lead Arrangers) and Bidco shall use of all of the proceeds of any extension of credit
under the Bridge Facility for the acquisition of equity interests in the Target. For the
purpose of clarity, Bidco and its Subsidiaries (as defined in the Existing Credit Agreement),
unless designated as Unrestricted Subsidiaries (as defined in the Existing Credit Agreement),
shall be Restricted Subsidiaries; provided that Bidco shall not be designated as an
Unrestricted Subsidiary.
	 
	 	 
	Financial Covenant:

	 	Substantially the same as those in the Existing Credit Agreement.
	 
	 	 
	Events of Default:

	 	Substantially the same as those in the Existing Credit Agreement with such changes thereto as
may be reasonably satisfactory to the Borrower, Administrative Agent and, the Lead Arrangers.
	 
	 	 
	Assignments and
	 	 
	Participations:

	 	Assignments: Subject to the consents described below (which consents will not be unreasonably
withheld or delayed), each Lender will be permitted to make assignments to other financial
institutions in a minimum amount equal to US$5 million.
	 
	 	 
	 

	 	Consents: The consent of the Borrower will be required unless (i) an Event of Default has
occurred and is continuing or (ii) the assignment is to a Lender, an affiliate of a Lender or
an Approved Fund (as such term is defined in the Existing Credit Agreement). The consent of
the Administrative Agent will be required for any assignment to an entity that is not a
Lender, an affiliate of such Lender or an Approved Fund in respect of such Lender.






A-7









 






	 	 	 

	 

	 	Assignments Generally: An assignment fee in the amount of US$3,500 will be charged with
respect to each assignment unless waived by the Administrative Agent in its sole discretion.
Each Lender will also have the right, without consent of the Borrower or the Administrative
Agent, to assign as security all or part of its rights under the loan documentation to any
Federal Reserve Bank.
	 
	 	 
	 

	 	Participations: Lenders will be permitted to sell participations with voting rights limited
to customary matters such as changes in amount, rate and maturity date.
	 
	 	 
	Waivers and
	 	 
	Amendments:

	 	Amendments and waivers of the provisions of the loan agreement and other definitive credit
documentation will require the approval of Lenders holding loans and commitments representing
more than 50% of the aggregate amount of the loans and commitments under the Bridge Facility
(the “Required Lenders”), except that (a) the consent of each Lender shall be required with
respect to (i) the waiver of conditions precedent (other than the condition precedent
specified above in clause (ii) of “Conditions Precedent to Closing”) to the initial credit
extension under the Bridge Facility, (ii) the amendment of pro rata sharing provisions and
(iii) the amendment of the voting percentages of the Lenders, and (b) the consent of each
Lender affected thereby shall be required with respect to (i) increases or extensions in the
commitment of such Lender, (ii) reductions of principal, interest or fees, and (iii)
extensions of scheduled maturities or times for payment.
	 
	 	 
	Indemnification:

	 	The Borrower will indemnify and hold harmless the Administrative Agent, each Lead Arranger,
each Lender and their respective affiliates and their partners, directors, officers,
employees, agents and advisors from and against all losses, claims, damages, liabilities and
expenses arising out of or relating to the Bridge Facility, the Borrower’s use of loan
proceeds or the commitments, including, but not limited to, reasonable attorneys’ fees, except
to the extent found by a court of competent jurisdiction to have resulted from such
indemnified person’s or its partner’s, director’s, officer’s, employee’s, agent’s, or
advisor’s gross negligence, bad faith or willful misconduct or material breach of its
obligations under the Loan Documents. This indemnification shall survive and continue for the
benefit of all such persons or entities.
	 
	 	 
	Governing Law:

	 	State of New York.
	 
	 	 
	Pricing/Fees/
	 	 
	Expenses:

	 	As set forth in Addendum I.






A-8









 






ADDENDUM I

PRICING, FEES AND EXPENSES




	 	 	 

	Interest Rates:

	 	At the Borrower’s option, any loan under the Bridge Facility will bear
interest at a rate equal to (i) LIBOR plus the Applicable Margin, as determined in accordance
with the Duration Pricing table set forth below for LIBOR Loans, or (ii) the Base Rate (to be
defined as the highest of (a) the Bank of America prime rate, (b) the Federal Funds rate plus
0.50% and (c) one-month LIBOR plus 1.00%) plus the Applicable Margin, as determined in
accordance with the Duration Pricing table set forth below for Base Rate Loans.
	 
	 	 
	 

	 	The Borrower may select interest periods of one or two weeks or one,
two, three or six months for LIBOR Loans. Interest shall be payable
at the end of the selected interest period, but no less frequently
than quarterly.
	 
	 	 
	 

	 	During the continuance of any payment default under the Bridge
Facility the Applicable Margin on the amount of the payments
resulting in such default shall increase by 2.00% per annum. Upon
the request of the Required Lenders, during the continuance of an
Event of Default under the Bridge Facility, the Applicable Margin on
obligations owing thereunder shall increase by 2.00% per annum.
	 
	 	 
	Duration
	 	 
	Pricing:

	 	The Applicable Margin for LIBOR Loans and the Applicable
Margin for Base Rate Loans shall be, at any time, the
rate per annum set forth in the table below opposite
such time:






	 	 	 	 	 	 	 	 	 
	 	 	LIBOR Loans	 	 
	Period since the Closing	 	Applicable	 	Base Rate Loans
	Date	 	Margin	 	Applicable Margin
	0-29 days
	 	 	3.00	%	 	 	2.00	%
	30-59 days
	 	 	3.25	%	 	 	2.25	%
	60-89 days
	 	 	3.50	%	 	 	2.50	%
	90-119 days
	 	 	3.75	%	 	 	2.75	%
	120-364 days
	 	 	4.00	%	 	 	3.00	%






	 	 	 

	Duration Fees:

	 	The Borrower shall pay for the ratable benefit of the Lenders the following
fees, calculated as a percentage of the aggregate amounts outstanding under the Bridge
Facility, on the following dates if all advances (if any) have not been paid in full prior to
such date:
	 
	 	 
	 

	 	90th day following the Closing Date            1.00%

	 
	 	 
	 

	 	180th day following the Closing Date            1.50%







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	 	270th day following the Closing Date            2.00%

	 
	 	 
	Commitment Fees:

	 	The Borrower shall pay for the ratable benefit
of the Lenders a commitment fee calculated at
the rate of 0.40% per annum, on the average
daily undrawn commitments under the Bridge
Facility, payable quarterly in arrears and on
the Maturity Date.
	 
	 	 
	Calculation of
	 	 
	Interest and Fees:

	 	Other than calculations in respect of interest
at the Bank of America prime rate (which shall
be made on the basis of actual number of days
elapsed in a 365/366 day year), all
calculations of interest and fees shall be
made on the basis of actual number of days
elapsed in a 360 day year.
	 
	 	 
	Cost and Yield
	 	 
	Protection:

	 	Customary for transactions and facilities of
this type, including, without limitation, in
respect of breakage or redeployment costs
incurred in connection with prepayments,
changes in capital adequacy and capital
requirements or reserve requirements or their
interpretation, illegality, unavailability of
LIBOR deposits, reserves without proration or
offset and payments free and clear of
withholding or other taxes.
	 
	 	 
	Expenses:

	 	The Borrower will pay all reasonable and
documented costs and expenses associated with
the preparation, due diligence,
administration, syndication and closing of the
Bridge Facility, including, without
limitation, the legal fees of counsel to the
Lead Arrangers, regardless of whether or not
the Bridge Facility is closed. The Borrower
will also pay the reasonable and documented
expenses of the Administrative Agent and each
Lender in connection with the enforcement of
the Bridge Facility.






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ADDENDUM II

SPECIFIED REPRESENTATIONS



For purposes hereof, the term “Loan Party” shall mean any Person (as defined in the Existing Credit
Agreement) who is a US Loan Party (as defined in the Existing Credit Agreement) immediately prior
to the Closing Date (and excluding, for avoidance of doubt, the Target and its subsidiaries). When
a capitalized term used herein is defined with reference to its definition in the Existing Credit
Agreement (e.g. “Person”), all uses of such term in this Addendum II shall have such meaning.



1) Due Organization and Existence of Loan Parties. Each Loan Party is duly organized or formed and
validly existing.



2) Power and Authority. Each Loan Party has all requisite power and authority to execute, deliver
and perform its obligations under the Loan Documents to which it is a party.



3) Due Authorization, Execution, Delivery and Enforceability of Loan Documents. The execution,
delivery and performance by each Loan Party of each Loan Document to which such Person is a party
have been duly authorized by all necessary corporate or other organizational action. Each Loan
Document, when delivered hereunder, will have been, duly executed and delivered by each Loan Party
that is party thereto. Each Loan Document when so delivered will constitute, a legal, valid and
binding obligation of each Loan Party that is party thereto, enforceable against each Loan Party
that is party thereto in accordance with its terms, subject to applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other Laws (as defined in the Existing Credit
Agreement) relating to or affecting creditors’ rights generally, general principles of equity,
regardless of whether considered in a proceeding in equity or at law and an implied covenant of
good faith and fair dealing.



4) No Contravention. The execution, delivery and performance by each Loan Party of each Loan
Document to which such Person is a party, do not and will not (a) contravene the terms of any of
such Person’s Organization Documents (as defined in the Existing Credit Agreement), (b) conflict
with or result in any breach or contravention of (i) any Contractual Obligation (as defined in the
Existing Credit Agreement) to which such Person is a party or (ii) any order, injunction, writ or
decree of any Governmental Authority (as defined in the Existing Credit Agreement) to which such
Person or its property is subject or (c) violate any Law binding on such Person, except in each
case referred to in clause (b) or (c) to the extent that failure to do so could not reasonably be
expected to have a Material Adverse Effect (as defined below).



The term “Material Adverse Effect” means a material adverse effect upon (a) the business, assets,
operations, property or condition (financial or otherwise) of the Company and its Restricted
Subsidiaries (as defined in the Existing Credit Agreement, and excluding for avoidance of doubt,
the Target and its subsidiaries) immediately prior to the Closing Date taken as a whole or (b) the
validity or enforceability of this or any of the other Loan Documents or the rights or remedies of
the Administrative Agent or the Lenders hereunder or thereunder.




5) Margin Regulations; Investment Company Act.




     (a) The Company is not engaged and will not engage, principally or as one of its important
activities, in the business of purchasing or carrying margin stock (within the meaning of
Regulation U issued by the FRB (as defined in the Existing Credit Agreement)), or extending credit
for the purpose of purchasing or carrying margin stock. Following the application of the proceeds
of each Bridge Loan, not more than 25% of the value of the assets (either of the Company only or of
the Company and its Subsidiaries (as defined in the Existing Credit Agreement) on a consolidated
basis)



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subject to the provisions of Section 7.01, Section 7.04 or Section 7.05 (in each case, of the
Existing Credit Agreement) or subject to any restriction contained in any agreement or instrument
between the Company and any Lender or any Affiliate (as defined in the Existing Credit Agreement)
of any Lender relating to Indebtedness and within the scope of Section 8.01(e) (of the Existing
Credit Agreement) will be margin stock.



(b) None of the Company or any other Loan Party is or is required to be registered as an
“investment company” under the Investment Company Act of 1940.



(6) Status of Bridge Loans as Senior Debt. The Bridge Loans shall rank pari passu with any other
senior Indebtedness (as defined in the Existing Credit Agreement) of the Company.



(7) Solvency. The Company and its Restricted Subsidiaries on a consolidated basis are
Solvent.



The term “Solvent” and “Solvency” shall mean, with respect to any Person, as of any date of
determination, (a) the amount of the “present fair saleable value” of the assets of such Person
will, as of such date, exceed the amount of all “liabilities of such Person, contingent or
otherwise”, as of such date, as such quoted terms are determined in accordance with applicable
federal and state laws governing determinations of the insolvency of debtors, (b) the present fair
saleable value of the assets of such Person is, as of such date, greater than the amount that will
be required to pay the probable liability of such Person on its debts and other liabilities as such
debts and other liabilities become absolute and matured, (c) such Person does not, and will not,
have an unreasonably small amount of capital with which to conduct its business, and (d) such
Person will be able to pay its debts and liabilities as they mature. For purposes of this
definition, (i) “debt” means liability on a “claim”, and (ii) “claim” means any (x) right to
payment, whether or not such a right is reduced to judgment, liquidated, unliquidated, fixed,
contingent, matured, unmatured, subordinated, disputed, undisputed, legal, equitable, secured or
unsecured or (y) right to an equitable remedy for breach of performance if such breach gives rise
to a right to payment, whether or not such right to an equitable remedy is reduced to judgment,
fixed, contingent, matured or unmatured, subordinated, disputed, undisputed, secured or unsecured.



(8) Patriot Act. No Loan Party is in violation in any material respect of the USA Patriot Act
(Title III of Pub. L. 107-56 (signed into law October 26, 2001)).





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