**EXHIBIT 10.12**

 

SUPPLEMENTALINDENTURE (this “*Supplemental Indenture*”), datedas of September 6, 2005, among  Foundation Mining, LP, a Delaware limitedpartnership (the “*New Guarantor*”), a subsidiary ofFoundation Coal Corporation, a Delaware corporation (“*Holdings*”),Foundation PA Coal Company, LLC, a Delaware limited liability company (fkaFoundation PA Coal Company, a Delaware corporation) (the “*Company*”)and The Bank of New York, a New York banking corporation, as trustee under theIndenture referred to below (the “*Trustee*”).

 

WI T N E S S E T H

 

WHEREAS,the Company and the existing Guarantors have heretofore executed and deliveredto the Trustee an indenture (as amended, supplemented or otherwise modified,the “*Indenture*”), dated as of July 30,2004 providing for the issuance of 7 1⁄4% Senior Notes due 2014 (the “*Notes*”);

 

WHEREAS,Section 4.17 of the Indenture provides that under certain circumstancesthe New Guarantor shall execute and deliver to the Trustee a supplementalindenture pursuant to which the New Guarantor shall unconditionally guaranteeall of the Company’s  Obligations underthe Notes and the Indenture on the terms and conditions set forth herein (the “*Note Guarantee*”); and

 

WHEREAS,pursuant to Section 9.01 of the Indenture, the Trustee, the Company andthe existing Guarantors are authorized to execute and deliver this SupplementalIndenture.

 

NOW,THEREFORE, in consideration of the foregoing and for other good and valuableconsideration, the receipt of which is hereby acknowledged, the New Guarantor,the

 

----

 

Company and the Trusteemutually covenant and agree for the equal and ratable benefit of the Holders ofthe Notes as follows:

 

1.             DEFINED TERMS.  Defined terms used herein without definitionshall have the meanings assigned to them in the Indenture.

 

2.             AGREEMENT TO GUARANTEE.  The New Guarantor hereby agrees, jointly andseverally with all existing Guarantors (if any), to provide an unconditionalGuarantee on the terms and subject to the conditions set forth in Article 10of the Indenture and to be bound by all other applicable provisions of theIndenture and the Notes and to perform all of the obligations and agreements ofa Guarantor under the Indenture.

 

3.             NO RECOURSE AGAINST OTHERS.  No past, present or future director, manager,officer, employee, incorporator, stockholder or member of Holdings, any parententity of Holdings or any Subsidiary, as such, will have any liability for anyobligations of the Company or the Guarantors under the Notes, this Indenture,the Note Guarantees or for any claim based on, in respect of, or by reason of,such obligations or their creation.  EachHolder of Notes by accepting a Note waives and releases all suchliability.  The waiver and release arepart of the consideration for issuance of the Notes.  The waiver may not be effective to waiveliabilities under the federal securities laws.

 

4.             NOTICES.  All notices or other communications to theNew Guarantor shall be given as provided in Section 12.02 of theIndenture.

 

5.             RATIFICATION OF INDENTURE; SUPPLEMENTALINDENTURES PART OF INDENTURE. Except as expressly amended hereby, the Indenture is in all respectsratified and confirmed and all the terms, conditions and provisions thereofshall remain in full force and effect. This Supplemental Indenture shall form a part of the Indenture for allpurposes,

 

2

----

 

and every holder of Notesheretofore or hereafter authenticated and delivered shall be bound hereby.

 

6.             GOVERNING LAW.  THIS INDENTURE, THE NOTES AND THE NOTEGUARANTEES SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OFTHE STATE OF NEW YORK.

 

7.             COUNTERPARTS.  The parties may sign any number of copies ofthis Supplemental Indenture.  Each signedcopy shall be an original, but all of them together represent the sameagreement.

 

8.             EFFECT OF HEADINGS.  The Section headings herein are forconvenience only and shall not affect the construction hereof.

 

9.             TRUSTEE MAKES NO REPRESENTATION.  The Trustee makes no representation as to thevalidity or sufficiency of this Supplemental Indenture.  The statements and recitals herein are deemedto be those of the New Guarantor and the Company and not of the Trustee.

 

[Signature Page Follows]

 

3

----

 

INWITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture tobe duly executed, all as of the date first above written.

 

Dated:  September 6, 2005

 
|   | FOUNDATION MINING, LP           |
|--------|---------------------------------|
|   | By:                             | Pennsylvania Services  Corporation, |
|   |                            | General Partner |
|   |                            |
|   |                            |   |
|   | By:                             | /s/ Frank J. Wood |   |
|   | Name:                           | Frank J. Wood |
|   | Title:                          | Vice President |
|   |                            |   |
|   |                            |   |
|   | FOUNDATION PA COAL COMPANY, LLC |
|   |                            |   |
|   |                            |   |
|   | By:                             | /s/ James L.  Anderson, Jr. |   |
|   | Name:                           | James L. Anderson, Jr. |
|   | Title:                          | Vice President |
|   |                            |   |
|   |                            |   |
|   | THE BANK OF NEW YORK            |
|   | as Trustee                      |
|   |                            |   |
|   |                            |   |
|   | By:                             | /s/ Dorothy Miller |   |
|   | Name:                           | Dorothy Miller |
|   | Title:                          | Authorized Signatory |
|        |                                 |  |  |  |  |  |

 

 

4

----